Have a go at our Restaurant Business Planning Quiz below. The results of previous respondents are then explained throughout this blog:

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Whether it is dates nights, birthday parties, catching up with friends or just enjoying some damn good food the UK has a restaurant market to suit every occasion. It is a notoriously tough sector but for those entrepreneurs who develop and apply clear and focused business plans, there are lucrative rewards to be had.

 

You have landed here because of your expressed interest in learning more about the restaurant business. Please enjoy the blog below and learn more about this ever more popular sector.

Industry Stats

The figure below shows some of the key industry stats. Market value, customer frequency and the number of UK based sites are all growing at steady rates. The success of the industry and the active customer base has always encouraged a number of fresh entrepreneurs to begin their own ventures, each adopting and adapting subtly different business plans to carve out their own unique offering.

The UK restaurant industry has steadily grown over a number of decades the UK consumer has seen increases to personal disposable income and expanding culinary tastes. Dining out has become increasingly common with the average UK adult now eating out up to two times per week.

An industry previously dominated by larger chains the restaurant sector has seen increasing numbers of independent businesses as consumer tastes move towards finding unique and alternative dining experiences.

The average footprint for a restaurant in the UK is just over 1000 square feet. This number can vary widely depending on the type of offering and the location but is reflective of smaller, family style restaurants with around 20 covers with a two-chef kitchen.

Every restaurant has its own individuality which is based around a specific cuisine. Certain establishments may offer multiple cuisine types on the same menu, or fuse two or more together. The graphic below shows the most popular restaurant types in the UK. There are countless variables on each category type as well as a wide range of consumer price points, all of which enable businesses to create their own unique service offerings.

The UK is blessed with a whole spectrum of multiculturism and tastes. As a result it’s restaurant offerings are widely varied. The most common choice Italian closely followed by Chinese and Indian but in truth the market is represented by cuisines from all over the globe. This varied demand provides excellent opportunity for the inclusion of new businesses.

Average Customer Spend at a Restaurant

The average spend at a restaurant is £36 per person, which includes any accompanying drinks costs. The range of pricing is as varied as the range of food available. From the cheap and cheerful £5 burger to the £70 steak there are price points to suit all budgets and business models.

How Do Restaurants Get Financed?

Restaurants can potentially incur huge start-up costs depending on the size, location and specific offering. Small, family-sized restaurants, however, can be started on very reasonable budgets.

The most popular methods of financing a new restaurant venture is via personal savings and bank loans. As there are generally a number of assets connected to a restaurant business from lease to kitchen equipment these can often be leveraged to seek the necessary funds to open the doors to the paying public.

‘Chish and Fips’ is owned and run by Malcolm Mckenzie. This modern fish and chip restaurant sources local ingredients from fisherman on the South Devonshire coast. After securing a small bank loan of £8,000 and investing £6,000 of his own money Malcolm was able to sign a lease of an old café. After spending a portion of funds on renovating the small space and paying for some local advertising the site opened its doors in the summer of 2017 serving the local residents and tourist market with ‘catch of the day’ paired with locally brewed beer and cider. 

By outsourcing his business planning to a third-party Malcolm was able to have the confidence that the financial numbers and the business strategy were sound and that they fit with his dream.

The table below shows the main sources of business finance and their associated percentage. In some cases, for larger projects, businesses may need to obtain finance from more than one source.

The layperson may be misled into thinking a fully written business plan would only be a requirement if looking for outside finance. Whilst it is true a solid business plan would be a pre-requisite for any form of form debt or equity finance the value of having a quality business plan cannot be underestimated. Even for those self-funding, a viable and robust business plan is a sure way to keep focused and accountable which will ultimately lead to better business decision making.

Importance of a business plan

The right location and handle on cashflow is critical to the long term success of any restaurant business. Understanding what number of customers is required to hit breakeven is key to establishing a quality and viable restaurant business.

Given it has a reputation as a tough industry for start-ups, with new business closures the highest out of any UK sector, there is paramount importance to enter a new restaurant venture with a fully working business plan. The charts below show the high proportion of restaurant owners who have recognised this value and invested in a professional business plan.

So what can we say about starting your own restaurant business?

Pros

  • The industry continues to grow
  • Consumers always looking for a new dining experience
  • Right operation can be run with a small team

Cons

  • Competitive market place
  • Industry has a high rate of business closures

 

How you can succeed

The best way to get ahead of the competition and eliminate the biggest unknowns and risks when starting your own restaurant business is to invest in a high-quality business plan. The investment is invaluable. We at MyBizPlan provide the highest quality and yet lowest cost business plan in the UK, for a minimal outlay you can obtain a high-quality, visually stunning, financially robust business plan. It will give you a greater chance of seeking that vital finance and in the long run, could save you thousands.

If owning and running a restaurantsounds like the kind of business for you, get started with a Restaurant Business Plan from MyBizPlan. See which of our solutions is right for you by having a go at our – Do You Really Need a Business Plan Questionnaire?

 

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