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A Business Plan For Restaurant Startup Add in library

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Write an essay on a business plan of a new venture concept?



A conceptual business startup venture that would prove to be beneficial and profitable in this assignment is the fast food restaurant. The new venture concept of business crucially defines some of the relevant questions that would help to understand the new venture like what kind of business must be initiated? What sections of the customers must be focused? What are required for the commencement of the business? and many more questions. These questions when answered help the entrepreneur to understand and develop a business strategy for his new venture. In this regard the venture concept statement is crucial with respect to what the business is. Now for the commencement of the business of a fast food restaurant a commercial space for the restaurant is needed, heater, ventilator, boiler, capital, labour, raw materials and customers are needed for the initiation of the business. Initially, the number of employees can be restricted to 20-30. Some facilities that are important include dining, toilet, bar, cash counter, service counter and kitchen must be implemented. The interiors and the infrastructure must comply with the ambience which must be soothing and entertaining for the customers. The next is the customer segmentation which means the targeting of the customers. Now based on the survey and the statistics, the children and teenagers are the top customers of the fast food restaurants; hence the advertisements and the marketing strategies must be in compliance with them. The advertisements must be catchy along with the portrayal of cartoons and pictures of pizzas, burgers and French fries and hence it would attract more of the children and teenage customers.

It has been surveyed that about 15% of the meals are eaten at the commercial restaurants and about 67% of the customers who were surveyed has stated that they visit the quick food outlets at least twice a week. The numbers does not seem quite impressive, but it is true that amongst the rising of the fast food restaurants around the world, there still remains the opportunity gap in this industry. The opportunity gap is identified through the statistics where consumers are now willingly sacrificing or not consuming the fast food products like the burgers, pizzas, French fries mainly because of the problem of obesity and hygienic food options. Most of the people are becoming highly health conscious and ethical in which they are choosing the alternative food option which are healthy and hygienic like fresh fruits and vegetables. The major problem of the fast food restaurants is the problem that is widespread which obesity is. The survey and statistics reveal that almost 3 in every 100 person suffer from obesity and that the main contributor to the problem is the evolution of the fast food restaurants. But if the restaurants become conscious and careful about their quality of food and the ingredients that are used, then the opportunity gap can be narrowed and even closed down. Thus, the fast food restaurant business can be a success.

Food is the most integral and the most inevitable part of our lives. It is not possible to survive without air, water and food. A fast food restaurant can be attributed to the mode of the availability of the food to the consumers easily. The startup restaurant business will be a success because children and the teenage form around 50% of the total population of any country who demand food. Now the food is available through many modes. It can be through the dining restaurants, the take home restaurant and through the fast food restaurants. Considering that the market for the fast food restaurants are quite high, it is mainly attributed by the fact that the consumers are now seeking food within the lowest possible time which is not possible in a dining restaurant or the take home restaurants. But for a fast food restaurants the type of food products that are delivered are easy and simple to make with simple ingredients, hence people of all age can engage n the fast food restaurants in order to access food at the lowest possible time. N this regard the food choice of the children and the teenagers are preferably the fast food like burgers and pizzas which are tasty, spicy and delicious for them. This would enable their parents to take them to these fast food outlets very often to pacify their children. Hence, it is thought that the fast food restaurants would be a success. The confidence that can be derived from the restaurant business depends upon the food habits of the consumers. Considering the fact that the fast food products are sourced, produced and distributed ethically, it is then that the success of the fast food restaurant business is ensured.


According to the article of 2007 Business Week, about one fourth of the fast food restaurants shuts down or changes the ownership pattern within a year from the time of the opening. Thus, this is the reason why the entrepreneurs must carefully plan the business which must include licensing and staffing which will help to combat the odds of the starting the restaurant business. Some of the requirements that are needed for the commencement of the fast food restaurant are discussed under:

  • Commercial workplace- the land or the space is an important factor of production of any business. in this case the entrepreneur can start the new restaurant by leasing or buying a vacant space. He can also renovate a space according to the needs or requirements. The former option of buying or leasing a vacant space would give the freedom to decorate and design the restaurant under its own means which can also be expensive whereas the latter option of renovating would restrict the scope of the designing. There is also a positive side to leasing a restaurant space which is directly related to the significant savings. This is because the restaurant also has the infrastructural facilities like the plumbing, heating and cooling systems and the electrical works. This would save a lot of money for the entrepreneurs in starting the new restaurant business.
  • Equipments and the supplies- for the restaurant business to start machines, equipments, raw materials and the supplies form an essential part. The new restaurant requires appliances like refrigerator, oven, freezer, dishwater, cook-wares, utensils and many other types of equipment. Apart from the appliances and equipments, restaurant also need tables, chairs for dining purpose, storage shelves, sinks and basins and other equipments for the toilets and other infrastructural equipments. The most important requirement for the restaurant business is the supply of the raw materials such as the fruits, vegetables and meats which are required for the cooking. To acquire the supply of the raw materials, the restaurant owner must establish contracts with the wholesalers and with the markets of the farmers.
  • Financing- for the commencement of the restaurant business substantial amount of finance is required which is the role of the entrepreneurs to attract the investors. For the financing of the restaurant the banks, private investors and small business agencies can be approached. Thus, the requirement of the finance and the capital is very crucial for the commencement of the restaurant business.
  • Permits and Licenses- one of the first steps that the restaurant business owner must incorporate is the filling articles of incorporation and acquiring the federal tax identification number. After this, they need to acquire a lot of permits. One of the first permits is the health permit and zoning permit that is issued when the inspection of the workplace or the kitchen of the restaurants is done. Now if the restaurant serves alcohol then it must acquire the liquor license. Apart from the license and the permits, the chefs of the restaurants needs to pass a food safety course and fire inspection that is required to surpass the safety levels within the restaurants. For the commencement business the permits are required which takes around nine months to be acquired. The restaurant business also needs the sign permits and workers compensation.
  • Hiring Staffs- the main important factor of the restaurant business is the services that are rendered by the restaurant staffs. To make the dining experience of the customers pleasant, the restaurants staff that will be hired must be skilled and prepare quality meals and deliver excellent service. Before the hiring of the restaurant staffs, it is important to analyze the type of the food that the restaurant is going to offer fast food products so the food items would include burgers, pizzas, French fries and other beverages. So the staffs that will be hired must have the skill to prepare the fast food items. For the number for chefs that need to be hired it is also necessary to evaluate the accommodation of the restaurants and the capacity of the deliveries of the food items. It is suggested by the Food Service Warehouse that the entrepreneur must start with less employees than the actual ones that are needed; this is because there is a possibility that some of them may quit the work at the initial stages of the start of the business.
  • Management Skills- the success of a business is ensured if the staffs of the restaurants are skilled and have the ability to comply with the management skills. The first management skill that is important is the leadership skill in which the managers of the restaurant have the responsibility of the waiters, cooks, the front house staff and other personnel in the business. it is also the r4sponsibility of the entrepreneurs and the managers to deal with the inventories so that the customer experience are maintained. The next skill is related to managing the team and having good team building skill. Managing the team is crucial which includes the motivating and training of the team members. The other skills that are required in this case are the people’s skill which helps the staffs to deliver the customers with goods and services with efficiency, Flexibility skills, the skill of patience, managing of finance and the skill of perseverance.

Business Model describes the process by which the company must offer, reach its customers and earn increased profits from the exchange of goods and money. According to Alex Osterwalder the business model generally comprises of the nine elements which includes:

  • Customer Segments which comprises of the specific group of customers that are crucial for the commencement of the restaurant business.
  • Value Proposition describes the offerings of the restaurants, the process of solving the problem and creating a value for the customers.
  • Channels through which the customer segments are reached by communicating and delivering products and services to them.
  • Customer Relationships which is the important in establishing connection and association with the target customer segments.
  • Revenue streams which expresses the process of income generation and the mechanism of collection within the restaurant business.
  • Key Resources which include the most important assets that is required for the working of the business model.
  • Key activities are the performance of the restaurant business which augments the business model.
  • Key Partnerships includes the network of suppliers and partners that forms the integral part of the business model.
  • Cost structures which comprises of the costs that are required to be minimized in order improve the financial performance of the business.

The above mentioned nine building blocks of the business model can be derived through the Business Model Canvas. The major focus of the model is the value proposition. The business model canvas forms the best model that can be incorporated for the startup business of the entrepreneurs. In this assignment, the startup business is that of the restaurant business and the following is the business model canvas for the fast food restaurant business. (Pride, Hughes and Kapoor, 2012)

The Business Model Canvas And Its Nine Building Blocks

Key partners

Key activities

Value propositions

Customer relationships

Customer segments


Grocery owners




Other commercial equipments



Marketing and B2C distribution,

Delivery of products and services on time,

Excellent customer service, Excellent quality of food, skilled employees.


Customers will have the choice to combine their meals under healthy terms.

Some health professionals will be appointed who would guide the customers to choose the healthy meal option.

Customers will also get the facilities of home delivery within a stipulated time period.

If the food quality is not up to the mark and does not comply with the food quality standards then the customers have the option to change their orders and provide relevant feedback.

The employees would have the information about the regular customers’ likes, dislikes, health requirements and the other requirements which will speed up the process of the food delivery.

Children between the age group of 7 to 12.

Teenagers from the age group of 13-19 and all other people from the age group of 18-50 and all of a busy schedule

Key Resources


Food providers

There will be food outlets that will offer the food products and services.

Presence of a delivery system,

Online webpage where the facilities of the online ordering food products can be commenced, speeding up the process of lunching or dining.

Cost structure

Revenue streams

The cost structure will be comprised of the fixed costs of the machines and the rent for the lands, local lease, salaries of the staffs, cost related to other facilities etc.

The revenues will be generating from the Lunches, Nutritional Service, food products and beverages. (Robbins and Coulter, 2012)

The Business Model Canvas for the commencement of the restaurants business helps to analyze the business situation of the restaurants.


Key partners- The partners those are required for the restaurant business at the start up stage are the suppliers of the raw materials like the grocery owners, farmers and wholesalers who would provide the fruits, vegetables and spices at discounting rates. This will reduce the cost of the raw materials. The other partners include machines, equipments and co-owners of the business (if applicable). (Rosa and Soffer, 2013)

Key Activities- the man activity of the restaurant business is the production of the food items like burgers, pizza and other fast food items. The next activity is the promotion and marketing process which will increase the sale of the products of the restaurant. B2C distribution is also an important business activity which commences a relationship between the business and the customers. The product delivery is crucial in reaching the products to the customers within a stipulated time period. The other important activities of the restaurant business are the delivery of quality food and service and ensuring that the food is hygiene. (Debelak, 2006)

Value Proposition- the customer forms the integral parts of any business which means that satisfying the customers is important for the maximizing the sale of the products of the business. Customers must have the option to select their meals by combining different types of food product so that the diversity in the sale of the food products is maintained. Also the customers must be offered happy hours were there will be combo offers and discounting offers that will eventually increase the sale of the food products during that time. The restaurant must hire health professionals that will provide with health charts and guides that will help the health conscious customers to select the healthy food options. The most important is the satisfaction of the customers which can be commenced when the service delivery is impressive and efficient. In this case, the restaurants owners must offer the free home delivery of the food products within a time period so that accessing the fast food will become easier for the customers. This would enable the customers to increase the transaction from this restaurant as the cost of the customers to visit the store decreases and they can save more money for lunching or dining. (Weber, 2005)

Customer Relationships- it is very important for the business to establish a communication and association with the customers which can be commenced with the delivery of food and services efficiently and maintaining the punctuality. Not only this, the customers can also be given the opportunity to share their feedbacks and suggestions through a paper based questionnaires that will be offered with the bill. The customers also have option to complain if they feel that the food quality is not in compliance with the food standards where they will also be given the choice of cancelling their orders.

Customer segments- the children and the teenagers form the crucial part of the of the fast food business. Hence all the offers and the food items must be targeted towards these types of customers. Apart from these customer segments, people of all age groups who have a busy schedule form the part of the fast food business.

Key Resources- the food providers form the key resources of the fast food business.

Channels- the food outlets form the channels through which the food items and the products are distributed. Also there should be an online webpage in which the customers can order their meals online through which the process of acquiring the food speeds up.

Cost structure- all the fixed costs like the machines, equipments local lease etc. as well as the variable cost like the employees’ wages and other cost related to the production are included in this section which is required to be minimized in order to increase the profit of the business.

Revenue Streams- the revenue is generated through the different types of meal that are offered to all the customer segments. Through the introduction of happy hours and discounting days, the sale of the food products can be increased which will increase the profits of the company.

The business model canvas will enable the entrepreneurs to understand the structure of the business. This will help the business to flourish and increase the sales of the restaurants. The nine elements of the business model had focused on the financial performance of the restaurant business. the different methods of customer satisfaction and relationship will increase the sales of the food products which will enable the company to improve their financial performance by increasing the profit. The cost structure of the company will help to understand the extra cost or excess cost that is necessarily incurred by the company which will enable the company to take the decisions of eliminating the extra cost and reducing them. This will automatically increase the profit of the company and thereby improve the financial performance of the restaurant business. Thus, the financial performance of the business can be achieved and improved. The positive financial performance of the company can be achieved within two years from the start of the operation of the business. Since, the fast food restaurant is the inevitable part of everyone’s lives, thus, the sales of the fast food items cannot be decreased. But there is an potentiality of decrease in the sales when the consciousness among the consumers about the hygienic food comes in. In this case, it is important for the restaurant owners to set food standards prior to the preparation of food products so that there is no complaining or controversies regarding the quality of the food. (Clark et al., 2012)

The commencement of any business involves certain amount of risk which complicates the path of the business. The risk can have serious damage to the reputation and the goodwill of the business. The potential risks of the business can cause dollar losses, wastage of time, loss of productivity and the negative impact on the business can be minimized by appointing a risk management team that will help the business to run smoothly.


The risk related to the fast food business can be categorized into segments and types of risks which are discussed below:

  • Physical risks- this includes the common type of risks like the risk of fire, explosion which can arise from the kitchen of the restaurants which is prone to fire and explosion.
  • Ways to manage risk include facility of direct access to telephone at the time of disaster so that 911 can be called for help, installing fire alarms and smoke detectors, installation of a sprinkler system and personal safety drill must be taught to the employees prior.
  • Location risks- if the restaurant is near to the flood prone, storm prone or earthquake prone areas then the building will be under risk of severe destruction. In this case the employees must be aware of the exit of the buildings and the location of all the streets that lead out of the location. In order to manage this risk the vehicles must be full with fuel for speedy escape.
  • Human risk- A major risk in the workforce is the alcoholism and drug abuse within the work force. This human risk must also include accidents that occur within the premises of the workplace. Protecting the employees and the staffs are the important aspect of managing risks within the workplace. the human risk can also include the risk of theft, robbery and fraud. The human risks can be managed by the offering the employees with treatment, counseling and rehabilitation process which will benefit the health of the employees. In this case certain insurance policies can also be offered by the companies that will partially cover the cost of the treatments. To manage the risk related to fraud double signature for checks and invoice and payables verification can be beneficial.
  • Technological risks- power outage is the basic technological risks that can hamper the operation of the business. To manage this risk power generator must be used as backup to the power generation. The computers that are to be used must have high performance batteries to cope up with the power outage.
  • The reason behind business failure is diverse in nature and can be attributed to several factors some of which are discussed below:

Poor Management- Business can face failure due to weak and poor management skill. If the employees of the restaurant do not comply with the skills and standards of the business, then there can be business failure. The new business requires professionals from the field of finance, marketing, HR failure to appoint the expertise will result in distortion in the business resulting the loss of the productivity and thereby reduce the profit of the company. A successful manager with improved business management skill will cause the business not to drift apart and business failure will be prevented.

Lack of capital- capital forms the crucial part of any business as with the capital, all the other factors of production and the requirements of the business are acquired. With insufficient capital the business failure can occur which must be combat with relevant hiring of capital from banks and other private investors must be incorporated. It is responsibility of the accountants and the other financial officials that will understand the requirements of the startup of business. Thus, the efficiency and productivity of the capital must be improved in order to drive away the business failure.

Location- sometimes the location plays an important role in the occurrence of the business failure. If the restaurant is within the traffic zone and do not have proper parking and lighting facilities then the customers might not prevail such restaurants and this would cause business failure. The location of the competitors is also crucial in this regard as the intensity of the competition will be much higher comparatively. The business failure can be combated by analyzing the location and the other facilities and amenities related to the location while deciding the site for the restaurant business.

Overexpansion- one of the major cause of the business failure is the over expansion of the business. This may lead to bankruptcy in many cases. This situation can be combated by expanding at the appropriate time like when the customer base and the cash flow is improved, then the business can be expanded to some extent. For the new businesses, a minimum of five years must be monitored before the expansion of the business. in this a careful review, research and analysis of the business condition must be conducted.



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