Opening a Restaurant and Writing the Business Plan: The Business Environment

This section sets out the background of the environment wherein your enterprise is going to operate and also the factors that are going to have an effect on its path.

Market size:
Working out what size your possible market can become a difficult job and it will include a degree of guesswork based upon sensible assumptions. The majority of small companies develop a good picture of the market by way of daily operations instead of committing to analytical studies. This is done by speaking to customers, suppliers as well as competitors.

Measuring the market size at the national level is not hard but as you get towards local level this gets much harder. Since the food marketplace is typically a visible sector among the simplest ways to determine an estimate of your direct market is to check out the local business index or white pages. Using the number of direct competitors present in these directories multiplied by the average sales volume (can often be found on Governmental sites). This can give you the rough size of the marketplace you are operating in.

Some sampling of the marketplace can help, but in the end you will not be fully sure. So do not invest too much effort stressing about market size if you can not obtain the data. Focus alternately on figuring out your target market.

Target market:
You must determine your target audience, this should be the most common sort of customer that's more likely to purchase from you. By meticulously describing your target market and next building promotional techniques targeted just at these individuals, you are decreasing waste in the cash you spend on marketing and advertising. This point is strengthened in more detail within the marketing area of ​​this business system. Do not fit into the lure of declaring most people are the target market because you will fairly quickly learn that you are investing in sections of the marketplace who 'll never call at your restaurant.

Industry characteristics
Speak about why the industry you are working in distinct, such as being labor intensive (if you are a market gardener) or maybe the requirement for technical expertise or equipment.

When opening a restaurant you need to identify critical trends in your business area. For instance a number of companies are rapidly becoming far more technology based (such as Dominos Pizza utilizing smart phone apps to place orders) also the recent economic downturn has meant that a number of people have been scaling back their spending on going out for meals. It has meant some tough times for the higher end restaurants but has been a boon for the lower end and fast food markets. McDonalds, KFC, Dominos and Subway to mention a few from the big names have all released plans for growth during this period.

You should not get caught in the trap of saying, "we do not have competition." If you're indeed destined to not have any direct competitors (incredibly illegally) you'll still be competitive for that disposable dollar. For instance, let's say you are the lone takeaway in a small community. You will still be competitive against all the other food providers, the local Lotto store, picture theater as well as the bank (which desires customers to invest or save their money). Any way in which that dollar might be diverted from your company is competition. You need to list the main threats and lightly mention the way you mean to eliminate these competitors.

Summarize just how e-commerce will impact on your organization, and what you have planned in order to take advantage of this change. This could not simply mean building a website, as e-commerce is much more about how you choose to do business and connect with vendors and customers.