What to Mention in a Restaurant Business Plan

A well framed business plan will not only help in smooth running of the business but also it will fetch customers, clients and most importantly financial loan and financial needs provided by the bank. This business plan will stand tall alongside your ideas and will help you in winning the trust of the investors.

NRAI IFSR 2016 estimates that the total contribution of the restaurant industry alone will contribute 2.1% to the GDP of India by the year 2021.

Riyaaz Amlani, President, NRAI has said, "The total food services market today stands at INR 3, 09, 110 crores and has grown at 7.7 % since our last report in 2013. This is projected to grow to INR 4, 98, 130 crores at a CAGR of 10% by 2021."

Every foodie, more than once in his/her life, would have surely given thought to the idea of opening a café or restaurant, where he/ she can exchange the tastes of life with a few bucks.

Here are a few points to remember while writing a business plan:

Executive Summary:

Do not over explain things in details like never ever disclose the uniqueness of our company or service. Keep it simple yet complicated.

No company displays their core business plan to others, for example the restaurant might allow you to see the kitchen, might let you talk to the chef, but it would never ever let the secret recipe out to the customers, and that is the baseline of restaurant business.

Objective of the business:

This is required to put forth the idea and intention of opening a restaurant in front of the bank or the investor, who are going to show you the green flag for the restaurant.

Investors and banks are people, who need to trust that their money is not going in some black hole; they need to get assured that the objective is clear and they are not being fooled or given false hopes.

One needs to keep transparency with the investors, when it comes to financial distribution. It also will help in keeping the focus of the business rather than beating around the bush.

Market Analysis:

While planning to open a restaurant business, it is very important to study the market and analyse it thoroughly before jumping into the line.

Market analysis will clear the clouds from the surface by addressing some very important questions, such as what are you going to serve to your customers, where does your restaurant stand in the market, is there any demand for any particular cuisines or food type in the market now or in future, who all are your competitors in the market, how can you attract the customers and what are your expectations from the market?

Product\ Service:

Some things one has to be very clear with self and with the audience is: What is the idea behind your service or your product?

The brain child of the idea should be to provide the best food and best customer service, before calculating or estimating the profit percentage.

Only a happy customer and a happy staff can make you earn profit. So there is no space for quality compromise.

Thus hiring smart and skillful staff is as important as deciding the menu, only then one can expect quality of service is being justified.

Financial Plan:

The basic of restaurant business or any business is to earn the profit and that is fair enough only if you work on the finance or hire a trust worthy accountant.

The financial plan should reflect the details of how much needs to be invested, how much should be asked from the investors, what is the expected profit, how can more profit be earned and overall financial projection.

Keeping details of profits and loss along with the details of expenditure, paying the staff well, and distribution of profits will show your devotion and dedication towards the business.

In an interview with Franchise India Rohan Arora talks about his business plan, the legalities involved and the menu tweaks that have worked for him.

How did you formulate a business plan for your restaurant? 
For a robust biz plan the mission and vision of the business has to be clear. I've formulated and documented our vision - top 5 global brands across categories by 2025- and our values which the entire team adheres to religiously.  A correct analysis/assumption of various costs- capital and operating- and potential revenues was done with industry experts. The quality of equipment, rentals, people and raw materials are all a function of the objective which is the corporate mission and hence we've invested in them ahead of the curve.
The most important aspect is to keep learning and refining the plan on a periodic basis. It is also important to have a 3- year roadmap, deliverables and milestones which has become the guiding light.

It has been an exciting journey and we have a real long way to go before we're India's number 1 brand, No 1 employer and the best place to work.

How did you arrive at the concept of Opening Bueno? 
Bueno is all about goodness of self, society and the planet. I always wanted to create a truly world class and conscious brand in the food retail space which can rival the junk food theory and can democratise ‘good sustainable and healthy lifestyle’. I also wanted the concept to be emotional- of an everyday affinity, of impact and transformation one which solves the consumer's problem of healthy and global meal- not cooked at home yet delivered at the doorstep in a short time. There was an ever widening gap between the haves and the have nots.  That’s how Bueno was born.  Bueno is about making an impact and transforming how things are done. It’s about taking a challenging responsibility and the only way to do it is to do it at an unparalleled global scale with far reaching consequences.

Tell us the market analysis you did before starting the new venture?
 I did a lot of research; we went through many industry reports and studied key players-location, footfall, conversion, spends, consumers behaviour towards eating out/dine in and that’s how I came to open my restaurant.

Tell us about the funds?

50% funds were self or came from friends while 50% through a collateral free loan from State Bank of India.

Tell us something about the design aspect?

Our brand colours are green, white and orange and they play a big role in outlet design. Ours is a kiosk in a food court and these colours help us to stand out. Moreover, as space is at a premium at the store, design plays a key role in optimum utilisation and for telling the brand story efficiently.

How has been the response of people towards your Restaurant?
In the last three months, we served over 7000 guests with 30 percent being repeat customers. Despite our somewhat higher costs due to our relentless focus on quality and brand building, we could break just even in three months.

What menu tweaks are you working to stand out in the food-driven society? 
We've already worked upon the current menu to give it an international appeal with nutrition being our driving force. Our mainstay are our freshly baked whole-wheat breads and flatbreads which form an integral part of the entire food menu all day- breakfast, salads, sandwiches, wraps, taco, pasta, thin crust stone oven pizza and snacks. The beverages and desserts are made of fresh fruits, vegetables, skim milk, probiotic yogurt and antioxidant rich dark chocolate, coffee and freshly brewed tea.

Team effort contributes to a restaurant’s growth. Please elaborate.
Good people make good business. At Bueno, we don't have employees and suppliers. We only have partners. All team members at bueno are equity partners and share profits. Suppliers are not vendors but active participants on business strategy and execution. Our members have extensive experience across the best fine dines across the globe and they have built a capable team who can understand and execute on a day-to-day basis.

How much hand does quality have in a restaurant’s success? 
A good business, especially the one that we plan to run, is redundant without quality products and execution. To ensure we deliver the same quality every time, we have formulated stringent sop's for all products and processes in a 'Bueno operations manual' which is a bible for us and all people who are joining in.

How can a restaurateur employ a good chef? 
At Bueno, our chef team has a lot of creative freedom to chart their own path keeping the ethos constant and consistent. Efficient people are attracted by creative freedom, responsibility, opportunity to contribute and create, clear direction and ownerships.

What marketing strategy did you employ to make it popular among people? Has technology been a boon or bane for your restaurant? 
Word-of-mouth, social media and local activation-standees fliers across cyber city and fliers across nearby localities-were the marketing techniques that we used.

We love tech and its limitless possibilities for internal controls. We also rely on android based apps for mobile swiping of credit/debit cards.

How are you planning to expand in the near future? 
We have grand prize plans of expansion but will take a measured approach in the first 2-3 years with expansion in Gurgaon first, then in Delhi and then in Noida. The expansions would give us time to settle our model/processes/communication. The model would be a fair mix of strategically positioned store sales and round-the-clock deliveries through satellite kitchens. After stabilising the shops in NCR, the rollout to other top 10 cities in India should be completed in the subsequent 3 years.

How is pricing done in your restaurant? 
Everything at Bueno is customer centric. Pricing at bueno is inclusive of taxes and the guests pay what they see. We refrain from a lot of misleading '99/149/199' price points and conditions apply strategies. Also, pricing is simple and 2- tiered only. All vegetarian and egg salads, sandwiches, wraps, taco, pasta are priced at 150. Non-vegetarian version is 170; all veg pizzas are 300 while non veg ones are 350; all veg/non veg breakfast is 100; all fruit/yogurt based beverages are Rs 100 and everything else on the beverage menu is Rs 80.

Who all are the suppliers in your restaurant? Tell us about the supply chain management process at your restaurant?

We get vegetables and fruits from Azadpur, Dairy and dry store (locally in NCR especially from INA), meat from meat market (Daryaganj), and packaging is done from sugarcane pulp made disposable boxes/plates/dip bowls/salad boxes/spoons and forks.

The suppliers deliver their goods at our base kitchen on a daily basis to ensure freshness. Only dry stores are procured once a month.
The supplies go through primary processing at the base kitchen which is sent to the main kitchen for final processing. The base kitchen prepares all sauces/dips, marination, pickles, bread premixes for use at the front kitchen. The main kitchen at infinity tower, cyber city has a triple decker oven imported from Italy to take care of all our baking/grilling/roasting/steaming needs and managing the production process of nearly everything that goes out of our kitchens to the customers ensures that we have a tight fisted control on the quality of our products. We intend to source directly from farms.

Having worked in the top media companies, what inspired you to venture into liquor industry?

I was born and brought up in the UK, and after university I specialized in International Marketing and consumer behaviour and felt marketing management was the right field for me in the UK.

However, I have long been inspired by the liquor industry. Being exposed to Double Dutch, a beer brand that my father launched in the UK 15 years ago, I noticed that products in the price sensitive bracket in India were of very low quality standard and good quality products were extremely expensive. In the liquor industry, I found a very specific gap in the market. The premium liquor segment in India’s mass market was completely under-utilized. This is when I envisioned building a liquor business in this country that provided the market with value for money products.

You started I Brands in 2010. How has been the journey so far?

Today, I Brands Beverages is an award winning company and one of the fastest growing liquor startup companies in India. We have 4 fantastic products in our portfolio - a premium whisky brand - Three Royals (MRP: INR 350 – 735 for 750 ml), a deluxe whisky brand – Granton (MRP: 230 – 495 for 750 ml), which has recently been awarded for its packaging at the INDSpirit 2014 Awards, Jamaican flavored dark rum - Rum 99 (MRP: 210 -330 for 750 ml) as well as a rare French brandy – Granton XO Brandy (MRP: 280 for 750 ml).  We have won four awards both from the industry and nationally, that too in our fourth year of operations, which is a huge appreciation for the hard work my team and I have put in.

In our fourth year of operation, we are present in Punjab, Haryana, Chandigarh, Assam, Arunachal Pradesh and Uttarakhand in the North and Goa and Pondicherry in South India and across 5000 point of sales. We have just received our first paramilitary orders as well. Our products have been gaining noticeable market acceptance and Granton Whisky, our flagship product has been flying off shelves.

What were the initial challenges you faced in starting a liquor business?

We faced a lot of challenges initially. The biggest challenge was perhaps that the liquor industry was a financial intensive industry, and at the point I didn’t have the kind of funds to play with. That is the norm of the industry.  Also, being an unknown company, we had a hard time getting distributors to work with us. Regulations in each state is also very different from the other in terms of excise duties, tastes, language liquor preferences, licenses required etc., which makes this business incredibly challenging.

Today, there has been a phenomenal response to I Brands’ products across the country, and it is the popularity and quality of the products that have allowed the company to not only sustain itself in this incredibly tough and complex industry, up against some massive players but has also double turnover in just 3 years, surpassing the million dollar mark!

Alcohol industry is considered as one of the most criticised industries in the world, so being a woman, did you face any kind of criticism from the society?

There will always be people who are anti-liquor, but this industry is just like any other industry and obviously a lucrative industry. You can understand this from the number of foreign players consolidating this market. Alcohol is no longer taboo. And according to me prohibition doesn’t work. One should be able to have the choice whether to drink or not. This industry is now no longer controlled by the thekawalas. It is constantly evolving and is moving towards FMCG which means we can provide consumers who wish to drink, the best choice in good quality products.

The liquor industry in India is estimated around $9 billion. What are the opportunities and challenges do you see in this industry?

The liquor industry is a very capital intensive industry and it takes longer to break even. Most liquor start ups have been known to shut shop with the first six months of operations. Also, it is very male dominated – for a woman to find feet in this industry or making a mark, it is extremely difficult. Additionally every state in India is like a different country with different excise policies, labelling laws, tastes, palates etc. 

There is a big opportunity here for the government to create the conditions to do business in India much easier. A uniform, harmonised state excise policy and simplified labelling regulations would help grow revenues, lessen complexity in the trading environment and make it easier for the authorities to reduce illicit alcohol production.

We see that lots of innovation is happening in the beverages segment but not in alcohols. What is your comment? Can we see innovations happening in the segment?

In the alcohol industry, there is not much that you can do with the dark spirits, especially because of the traditional drinking habits. We know this from research that if you tend to experiment with these drinks, they might not necessarily work in the mass market premium segment that all our brands are positioned in – Our consumers prefer certain drinks a certain way.

The only way you could innovate and customise is in the form of packaging. In the industry there are various forms of packaging – Open cased, Mono Cartons, Canisters etc. that provides innovation.

And we at I Brands Beverages have always been at the forefront using the latest technology and designing to our advantage. Be it Guala Caps for the bottles or our award winning canister packaging which was the first in its segment. Embossed bottles give our consumers the feel of affordable, yet luxury products. Our company has always tried to give a superior offering to the consumer. 

From where did you manage the investments? Have you raised any funds or are you planning for the same?

Col. Mahinder Singh Khaira, a property developer in Bangalore is the chief investor at I Brands Beverages Ltd.

Having set a solid base foundation for I Brands Beverages, we are driving the business forward ambitiously. We are currently looking at strategic partners to consolidate our business, driving our sales upwards. It is the right time for institutional funding and linking with strategic partners who see the potential in the $ 9 billion industry growing at 10% p.a. With 450 million people of drinking age and another 150 million joining in the next five years, it is a highly lucrative industry with few pan-India players.

Now more than ever is the right time for us to gain further distribution as we now possess a grand portfolio of products and our company is winning Best Start-up in an overcrowded liquor industry.

What is your expansion plan?

At this moment, plans are afoot to open up new markets. We plan to launch in Delhi, Rajasthan, Tripura and Maharashtra. We are also looking at launching in Karnataka, Andhra Pradesh, Telangana, West Bengal and Andaman & Nicobar Islands in the next couple of years. Gaining pan India presence is the plan of action at the moment.

Where do you see yourself and your business in the next five years?

We are working towards a pan India presence in the next 5 years. Talks are also on for developing our own bottling unit in the east and in Punjab. I envision taking I Brands Beverages to being one of India’s top 5 liquor companies in the near foreseeable future!