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The Business of Writing a Business Plan.

When I ask clients to write up a business plan, I often hear objections such as "I don't know

where to begin", "I'm not sure what information to include", or "Is it really necessary?".


A well-written business plan is essential for any small business owner to give themselves the best chance of success.


It can be intimidating to write a business plan, but taking the time to do it properly can make all the difference in the success or failure of your restaurant.

A good business plan has to provide answers to some basic questions;

  • What inspired you to start this restaurant?

  • What are your strengths and weaknesses?

  • What experience do you have?

  • Who will be your target market and what need will your restaurant fill?

  • Can you demonstrate how your restaurant will make a profit?

  • What are your startup costs and running costs?

These are all important questions to ask, but for a lot of people it can be difficult to come up with the answers.

In this post I'm going to explain the basics of what goes into a good business plan.

Before developing a business plan for a restaurant, for example, it is essential to conduct research on the area where you want to open the restaurant. This research should consider

demographics, competition analysis and local trends in terms of cuisine and dining preferences. With this information, you can determine the needs and wants of your target market and develop a concept that meets those needs.

Japan Hospitality Consultants

Covering the Basics.


It's important to remember that even if you are writing this plan up for a loan or visa application that essentially you are writing this for yourself. You need to know your numbers inside out. You need to know your competition. You need to be aware of your business strengths and weaknesses.


Start with your background and concept.

Let's say you want to open a small restaurant in Tokyo, perhaps you can start by writing about your love of cooking, meeting new people and sharing your love of food with them. Maybe you worked in a restaurant previously and feel like you have spotted a opportunity in the market. Or, you want to introduce cuisine from your native country that you are sure will be a hit with Japanese customers.

This could then be developed into a concept: " Working in restaurants many customers would ask me about food from my country. This gave me the idea to open up my own restaurant specializing in authentic cuisine from my homeland. Our restaurant concept is centered around bringing a taste of my home country to Japan, with a menu that features authentic dishes and flavors rarely found outside of its locale. We want to create a warm and welcoming atmosphere that reflects the true culture of my homeland, from the decor to the music playing in the background"


This will then lead you into location and competition.

I have written a blog on location hunting previously(see link at the bottom of this post).

Your budget will decide where you can and cannot open.. Lets say you want to open close to Yoyogi Park in the Meiji Jingumae area, a popular spot for tourists and locals alike. Opening a restaurant in the Meiji Jingumae area, and more specifically close to Yoyogi Park, can be an excellent opportunity for success. However, it is important to consider the competition in the area. There are already several popular restaurants and cafes nearby, so it is crucial to understand their strengths and weaknesses in order to gain a competitive edge. Factors such as access, visibility and foot traffic should also be taken into consideration when selecting the restaurant's site.


Next we need to research the demographics of Meiji Jingumae. When you get deep into your location hunting, sites such as inshokuten.com will provide you with a basic breakdown of the demographics of your preferred area.

Once you know who your potential customers will be, you can then determine the appropriate price point for your restaurant. It is important to identify your potential customers for your restaurant in order to tailor your menu, decor and marketing efforts accordingly. By analyzing factors such as location demographics, nearby points of interest (POIs) and customer reviews, you can identify potential customers for your restaurant.

For example, if your restaurant is located near a university, you may want to design your menu and ambiance around affordable, quick-service options that appeal to college students.


Numbers Game.

Lastly and most importantly this brings us to your numbers. Whether it is for a loan or a visa application the numbers are the most critical aspect of any business plan since they show the viability and profitability of your restaurant.


To create a solid business plan for your restaurant, you need to determine the startup costs, projected revenue and expenses, profit margins, and break-even point. Startup costs include expenses such as rent, deposit, equipment purchases or rentals (kitchen appliances and furniture), initial inventory purchases (food and beverages), licenses, company establishment fee, marketing costs, and salaries for employees. Projected revenue and expenses should take into account the estimated number of customers you expect to serve, how much each customer will spend, the profit margin for every item on your menu etc. etc.


Ideally you can provide:

  • Lunch, Tea Time & Night Time Sales Projections,

  • Daily, Monthly & Yearly Sales Projections,

  • Start Up & Monthly Running Costs,

  • Projections for your first 3 years in business. This should include all expenses, sales, cogs, taxes that you will incur etc., etc.


It is important to have a solid understanding of your expenses and revenue potential when creating your business plan. You may find it hard to make projections at first, but it's important to be realistic and conservative with your estimates. This is why it is imperative that you don't spend all your capital up front, as you'll need room for unforeseen expenses to keep you going for the first few years.


Ultimately, your business should turn a profit and not have to be reliant on constant external investment or loans to stay afloat. It is a business after all and not a hobby.


Starting a new restaurant can be an exciting adventure but it also requires careful planning and preparation. Before you quit your job or decide on a location, developing and writing a suitable business plan can strongly assess the future success of your restaurant. Take your time ( it took me two years to find a location for my bar),do your research and leave nothing to chance.






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