If you read our article on raising investment, you’ll have seen that every single route starts with a BUSINESS PLAN. But what does that look like, and where do you start? We’re here to tell you.

Whether you’re setting up a restaurant or cafe, starting a product line or WHATEVER, crafting a robust and comprehensive business plan is essential for the success of your business. It’s not only key for attracting potential investors and securing funding, or for being granted a property lease, but it also serves as a roadmap, guiding your decisions and keeping you on track in your day-to-day operations.

In this detailed guide, we will walk you through the step-by-step process to create a compelling business plan that impresses investors and helps you achieve your goals.

1. EXECUTIVE SUMMARY

• It should be concise, engaging, and informative, providing a clear overview of your hospitality business and its potential for success.
• It should capture the attention and the imagination of your readers immediately, encouraging them to read further into the business plan to gain a more comprehensive understanding of your venture.

2. BUSINESS OBJECTIVES

3. MARKET ANALYSIS

A detailed description of your business, including type of establishment, services, location, and any unique features that set you apart from competitors. Here’s what you need to define your business objectives effectively:

• Mission Statement: This will reflect  what your business aims to achieve and the value it intends to provide to customers.
• Long-Term Goals: Outline your vision for what you want to achieve in the future. For example, expanding to multiple locations, achieving a certain market share, or becoming a recognized industry leader.
• Short-Term Objectives: Break down your long-term goals into smaller, actionable short-term objectives which contribute to the attainment of your long-term goals – for example launching new menu items, or implementing efficient cost-control measures.
• Financial Targets: Set financial targets that outline your desired financial performance. This includes revenue projections, profitability margins, return on investment (ROI) targets, and other financial metrics. These targets should be based on market research, industry benchmarks, and realistic assessments of growth potential.
• Competitive Positioning: How do you want to differentiate your hospitality business from others in the market? Think about your offering, the customer experience, quality standards, branding, or any other aspects that set you apart from competitors.
• Sustainability and Social Responsibility: Mention of this can make your business more attractive to customers and to investors. This could involve reducing environmental impact, implementing ethical sourcing policies, supporting local communities, or promoting diversity and inclusion within your organisation.
• Employee Development: This may include goals such as providing ongoing training programs, fostering a positive work culture, promoting career growth opportunities, or maintaining a high employee retention rate.

• Identify Your Target Market: Look at demographics (age, gender, income), psychographics (lifestyle, preferences), and behaviours (travel patterns, dining habits). Who are your potential customers? What are they looking for and how will you provide it?
• Research Industry Trends: What are the latest trends and developments in the hospitality industry, and how are they relevant to your offering? Explore industry reports, trade publications, and online resources.
• Analyse Competitors: Who are they? Study their offerings, pricing strategies, marketing approaches and customer reviews. How will you differentiate your business?
• Assess Market Demand: Analyse factors such as population in your location, house prices, office locations, tourism trends, business travel or hospitality, and local events that can impact customer demand.
• Conduct Customer Surveys and Interviews: Gather feedback directly from potential customers through surveys, interviews, or focus groups. Ask about their preferences, needs, and pain points related to hospitality services.
• Show a SWOT Analysis: (Strengths, Weaknesses, Opportunities, Threats) analysis will assess your business’s internal strengths and weaknesses, as well as external opportunities and threats in the market. This analysis will help you identify areas of advantage and areas that will need continued attention to retain competitive advantage.

4. PRODUCTS AND SERVICES

5. MARKETING AND SALES STRATEGY

• Offering: Explain what you will do. What is the type of food? Do you have rooms? Will you offer takeaway? Will you hold events, and if so when and for how many people? On or off site? Describe what makes your offerings unique and how they fulfil the needs and desires of your target market.
• Menu: Include a sample menu (or product list) that outlines the specific options and offerings available to customers
• Pricing Structure: Provide details on your pricing strategy, explaining how you arrived at these prices and justify them based on factors such as market research, competitive analysis, and the value provided to customers.
• Quality Standards: Emphasise the quality standards and service excellence that your hospitality business will uphold.
• Expansion and Development Opportunities: If you plan to expand or develop your offerings in the future, briefly mention these opportunities in this section to demonstrate your long-term vision and growth potential.

• Online Presence: Discuss your strategy, including your website design and functionality and online booking systems. Emphasise the importance of online reviews and reputation management to attract and retain customers.
• Marketing Channels: Which channels will you use to showcase your offering to reach your target market? Social media, your website, press? Explain why you’ve chosen these channels and how you plan to leverage them effectively.
• Campaigns: Are you going to implement any initiatives, either when you first open or ongoing? This could include a soft launch, a loyalty program, promotions, partnerships with influencers or local businesses, or working with a PR agency. Provide details on the timing, budget, and expected outcomes of each campaign. Ensure your budget aligns with your overall financial projections and business goals. How will you measure the success of your efforts?

6. ORGANISATION AND MANAGEMENT

7. FINANCIAL PROJECTIONS

• Key Personnel: This includes owners, partners, executives, managers, and any other important roles. Highlight their qualifications, relevant experience, and responsibilities.
• Organisational Chart: Illustrate the hierarchy and reporting relationships within your hospitality business. Show the different departments or functional areas and how they interact.
• Staffing Plan: Outline your staffing needs, including the number of employees required in each department or role. What are your recruitment and training strategies? Rota? Labour cost?
• Advisory Board or Consultants: If applicable, mention anyone who will provide expertise or guidance to your hospitality business. This could include industry experts, legal advisors, or financial consultants. Their involvement can make your business more attractive.
• Key Partnerships: Mention any  strategic partnerships or supplier relationships and explain how these partnerships contribute to your business’s success.
• Company Culture: What are the values, mission, and culture of your company? How will these be felt by the teams, and why is that important?

• Revenue Forecast: Break down all the sources of revenue (Services? Events? Takeaway?) and provide realistic estimates based on market research, industry benchmarks, and your business’s growth potential.
• Cost Analysis: This should include operational expenses like rent, utilities, payroll, inventory, marketing, and maintenance. Consider both fixed costs (e.g., rent) and variable costs (e.g. cost of goods sold).
• Profit and Loss Statement: Put together a profit and loss statement that demonstrates your projected revenue, costs, and resulting net profit or loss for each year. You can find out how to put one together here.
• Cash Flow Projection: This will show how money moves through your business over time and help identify potential cash flow issues or opportunities for growth.
• Break-Even Analysis: Determine the minimum sales you need to cover all your costs and start making a profit, and help you understand the minimum level of sales you need to achieve in order to cover your expenses.
• Financial Assumptions: This can include factors such as number of covers, table turns, average daily rates, food and beverage sales per guest, and other relevant metrics. Justify your assumptions based on market research, industry trends, and any other supporting data.
• Sensitivity Analysis: This is a ‘what-if’ analysis. Consider different scenarios or risks that could affect your finances and explain how you plan to handle them.
• Financial Ratios: Calculate and include important financial ratios, such as gross profit margin, net profit margin, return on investment (ROI), and liquidity ratios. These ratios provide insights into the financial health and performance of your hospitality business.

8. FUNDING REQUEST

• Funding Amount: Clearly state the specific amount you are requesting. You’ll be referring to that cost analysis, taking into account start-up costs, operational expenses, marketing and advertising expenses, equipment purchases, working capital, and any other relevant financial needs.
• Use of Funds: Provide a breakdown of the major expenses.you may need funds for immediate renovations, inventory purchase, marketing campaigns, staff recruitment and training, technology infrastructure, or debt repayment.
• Funding Sources: Where will the money come from? This could include a combination of equity financing (such as personal investment or contributions from partners), debt financing (loans from banks or financial institutions), or other (angel investors, crowdfunding, government grants, etc.). Explain why you have chosen these funding sources and how they align with your business goals.
• Repayment Plan: If you are seeking debt financing, describe the terms, interest rates, and repayment schedule you are seeking or negotiating with potential lenders. Provide a clear timeline for when you expect to start repaying the borrowed funds and demonstrate how your projected cash flow will support the repayment obligations.
• Supporting Documents: e.g. financial statements, business valuations, collateral information, or letters of intent from potential investors or lenders. These documents can provide additional credibility and assurance to the funding request.

9. RISK ANALYSIS

10. APPENDIX

• Risks: Identify potential risks and challenges that your hospitality business may encounter. These may include the economic climate, regulatory changes, supplier issues, consumer behaviour, staffing and more.
• Strategies: Show what strategies will mitigate these risks and explain how you will adapt to changing circumstances.

Include any supporting documentation – that could be references and recommendations, building plans, example marketing collateral, menus and more. The more you have to build a full picture of your operation, the better. Although it goes without saying that you need to be realistic about how much people are going to be able to plough through! Keep it to the necessary bits – they can always ask for more.

AND FINALLY…

• Make it visually pleasing, polished and professional – we recommend using a tool such as Canva or Powerpoint.
• Use a logical structure and language that is concise, jargon-free, and easily understandable.
• Support your statements with relevant data, charts, and graphs to enhance readability and provide a bit of visual interest.
• Ensure that the document is error-free and consistently formatted!!
• If you need to, seek professional guidance. There are business consultants, accountants and other industry experts who can provide valuable insights and ensure the accuracy, realism, and effectiveness of your plan. That may mean some financial outlay now, but you may find it worth it in the long run if they enable you to reach your goals!