| The Financial Analysis section of a restaurant | | | | software as well as software for reservations, |
| business plan consists of pro forma (projected) | | | | table assignment, credit card processing, and |
| financial statements for the business. Before | | | | bookkeeping. A rule-of-thumb is to include any |
| creating these statements, consideration must be | | | | one-time purchases expected to serve the |
| paid to these three key concepts: | | | | restaurant for years. Build in a buffer for |
| Capital Expenditures | | | | unforeseen expenses, as running out of money in |
| Likely the most pertinent portion of the Financial | | | | this stage and attempting to secure another |
| Analysis section will be the statement of how | | | | source of funding can be detrimental to the |
| much capital the restaurant will need in order start | | | | company's launch and long-term prospects. |
| the venture. The trouble is that too conservative | | | | Operating Costs and Revenue |
| of a projection will leave you with an investment | | | | Operating costs primarily include COGS (cost of |
| amount that is either unattainable or too large | | | | goods sold) and labor costs for a restaurant. |
| (creating excessive interest payments), while an | | | | These costs can be determined surprisingly |
| overly conservative projection will leave you | | | | accurately after operation begins because they |
| vulnerable to running out of funds during startup | | | | simply aggregate the sum of how much it costs |
| or operations. | | | | to produce the food you are cooking and how |
| When assessing the cost of capital expenditures, | | | | much you must pay your staff. The problem, |
| it is best to err on the high side. Attempt to | | | | however, arises when projecting the traffic your |
| create a comprehensive list of all capital | | | | restaurant will see on a day-to-day basis and the |
| expenditures that your restaurant will need even | | | | average purchase per customer. Try to be as |
| before it opens its doors. Go beyond the bricks | | | | realistic as possible and take into account the type |
| and mortar of the location and include decoration, | | | | of clientele you are attempting to attract, what |
| furniture, tabletop items, serving trays, and | | | | geographic area you are operating in, and the |
| kitchen equipment. Also include software - | | | | foot-traffic that your establishment expects. |
| restaurants commonly use POS (point of sale) | | | | |