Tips for an Effective Business Plan

I want it to cover really quick and get into the different sections of the business plan and how to effectively write one. Or if you're going to have someone write one for you to understand the different sections and the bits of information that will create a really successful business plan. If you plan on going to a bank to get a loan, if you're looking to have someone invest in your business, or if you're just looking to sit down and kind of create a vision for your food business, no matter the type of food business that it is, I highly recommend that you take the time to do this, and it's not something to be honest with you, that you're going to sit down and about an hour and brainstorm and have it completely done.

It'll take some time for you to really effectively come up with all of the information that will definitely give you an advantage. If you sit down in front of a bank or inside in front of an investor, and you're looking for money to grow the business now really quick tidbit of information, the video I posted beforehand, I heard from quite a few of you that you were looking for some more information about the business plan, the outline, what is the content? Not necessarily having someone just write one for you, but what would, what does the business plan really include? So, um, for any of you that saw that and you gave that comment, thank you for letting me know, I've actually turned around and wanted to do this video to kind of clarify the information that goes into the business plan, and then you could take a step forward to get some assistance in writing it.

Okay. Now, number one, when I first started my business to be a hundred percent Frank and honest with you, uh, my wife and I, we did not create a business plan because I didn't understand the importance of it at the time. Um, I had just simply wanted to open up a business and jump right into it. Uh, what I have written one and kind of thought about it beforehand, probably, but I've never been the person to actually double guess or second guess my decision making, I pretty much make a decision of what I do when I do it. And if it pans out well, that's great. If it doesn't the way I think it should, then I kind of learned from those and then just move on. So I'm not really gonna, uh, I don't really dwell on that or anything, but I've, since then I've written one have come up with some great information and it helps me guide the vision and the goals that I have for our business.

Um, and it's been a huge help. So if it's not necessarily a document that you're going to make to get a loan or get some type of investor, it's still going to be a good document for you to have for yourself. And of course, for your business now, um, business plans, I'm going to get into the different sections and I'm going to break it down and explain what they are. This is plans. The way they're structured are relatively the same for any type of business, but the content inside of it is going to be probably completely different. Um, for instance, if you're starting a food truck, your information is obviously going to be in your goals and maybe even the amount of money you're looking for all of that content inside of the business plan, obviously will be different if you're opening a bakery or if a cafe.

So when I say that the structure of it, there is a certain organization that comes to, um, uh, laying out the business plan itself. Uh, but then again, once you get into those different categories, the information specific information, it's going to be different. Okay? So I'll give you an outline. I've got some notes here that I just pulled up from my computer from, uh, the one that I did. So I'm going to cover them. I actually have eight sections, eight different parts to the business plan. There'll be a lot of people who will tell you, Hey, I know I have the one page, there's this a thing going around about a one page business plan. You know what, if that works for you, that's fine. Everybody has a different viewpoint. And everybody has a different take on their own business plans. Some people may omit or keep out some of the information I'm going to cover with you now, from my notes here on my laptop.

Um, but then some, some people may say, you know what? Eight sections, these eight specific topics are not enough. You have to have this. So I'm going to give you my opinion about what would be that make up the best tidbits of information that you need to have. And of course you need to basically fine tune that to whatever type of business you have. So if you're starting from home and you have a home based business, obviously your goals and the things that you're going to have set in front of you are going to be different. If you're looking to start a retail candy shop, okay. If you're going to have a food truck, or maybe you're just going to have a vending service where you're going to have a portable vending machines that you go to different events and you have maybe a hot dog, maybe it's a freestanding hamburger, or maybe you're just serving ice cream.

All of those things are going to be different, but the types of information you need to put together are going to be relatively the same. So, number one, it's the executive summary. Now the executive summary is going to go in the opening, the beginning of your business plan. What it's going to encompass is a general overview of what you're looking to do for your business. Where are you looking to take it? Um, let me show you some of the notes that I've got here. So for instance, I'm going to use it as an example, when we opened our cafe, um, as a kind of a restaurant, I'm going to use some of this information as a sampling for what you may put in yours. Okay? So if you're looking to have, like, let's say, you're going to have a restaurant now you're going to go into a certain neighborhood.

You're gonna go into a certain area, probably preferably where you are, where you live and what you want to do is you want to encompass in this executive summary, who is your competition? Okay. Have you checked around in the area for the type of food you have? Do you understand the clientele that you have in your area who are going to be your customers? Um, give a basic understanding of how are you going to attract them? What is some of the marketing ideas that you've got in place? How are you going to advertise? What is your objective? As far as starting it and growing it, if you open, let's say there's like, you're going to a Mexican restaurant and you have a fantastic lineup of Mexican food that you want, but there's like seven or eight other Mexican restaurants in your area. Would it make sense for you to open up yours?

If you do then, have you identified, what's going to separate your restaurant from the other six or seven that are selling very similar foods in your, in your area. Okay. Um, if you want it to set up a bakery within you would do that too. You would research the bakeries that are in your area. Uh, what type of baked goods are they selling? Maybe you want to open a bakery that has a bakery that has specific types of baked goods and breads and pastries and cookies. And there's four or five other bakeries, but they don't sell the type of food that you're looking at. Do you want to sell? That would be an advantage for you because you're selling and creating something that's not already there. Okay. So the clientele would be there because they're probably looking for something new. Okay. So you want to do a little bit of research.

You want to check into it and you want to encompass this information. You want to have about two to three pages on average. I probably wouldn't go more than three pages, but two to three pages of information, kind of covering the gist of all of what you've planned on doing. Who's going to be doing it. Um, everything that you can to bring together the information about what it is you really want to do, knowing that knowing the demographics, knowing that the people in the area, uh, knowing the area that you're in, if it even would merit having that type of a business. So you got to do just a little bit of research, of course, and look into some of these things prior to even establishing your vision or your goal. Because if you're opening a brick and mortar location, again, that is a different type of information.

If you want it to sell baked goods online, well, then you would want to research online businesses that are selling baked goods similar to yours. Okay. But if you had a, a physical location that you're going to be offering from just that, not through the computer, not being online. So then you would look locally. If you were doing a business online, you would go online and check out other websites. So that's the kind of information you want to start with. Okay. So next up you would have, what would be known as your company's description, basically a description about the company itself, um, all of the owners there, their experience with this type of food business, you want to have a address, where is it that you're going to be setting up? Um, taking a look at some of my notes here. So you want to provide also, uh, the legal names, legal descriptions.

If you're, if you're doing a D doing a business as a certain legal name, you want to make sure that's in there. Um, any information such as contact information, if you've got other, uh, owners or people who are investors, every person or every one who was financially and involved with it, you also want to kind of bring up who they are. Uh, what experience do they have a little bit of background on who it is. Um, so if you're going to sit in front of a, of an investor, they're going to know that the people who are running it, maybe he's had his 20 or 30 years in the restaurant business. And now he wants to open his own. Uh, maybe, um, the half of the owners that would have been in it are retired, uh, from the restaurant business, but they want to just invest money in it.

But they're going to, they're going to be stakeholders. They're going to have a portion of a financial interest as well. So the people that are involved with the company itself and some of the legalities, some of the, the legal, um, information that needs to be on these applications need to be on the company description section. So you want to make sure you have that in there as well. So it might be think yourself, you know what, David, I'm just starting out. I don't have that information. Well, you do have some of it. If you're not necessarily, again, if you're working from home, like I mentioned in the opening, the information you'd put in here would be slightly different. So you're not necessarily opening a restaurant per se, that has a physical location. You're looking to start from home and you're going to start with just yourself.

That's perfectly fine. Then you need to put information about yourself. How many years of experience you might have in the food business? Have you done this before? Are you a sole proprietorship? Do you have a husband or maybe your wife's involved and maybe you're involved, you know, so you want to bring out all of that information and have it on there as well. Again, you don't want to get too lengthy. You're not writing a book or a thesis, so you don't want to go too deep into it because the other thing is, is that the more concise the information is, um, into the point, the better off that the business plan will look as well as the more professional it would look. Now, one thing, as I mentioned in my video before the one I posted before this one was in regards to having someone write it for you.

So they're going to basically ask you all of this information, but they're going to have the ability to write it in a way that's very fluid and it's very smooth. And it consists of all of the necessary information that's needed in order for you to make a really good impression on that investor or the banker. Who's going to give you the loan. Okay. So next step, you've got the organization in management. So, uh, what you want to include on this is going to be everyone who has any type of a job or occupation within the restaurant, anywhere from, uh, restaurant managers, to the owners, to the waiters, to the cooks, everyone, that's going to be a part of it. And what exactly is the responsibility? What type of equipment are going to be needed for the organization or for the restaurant to operate properly? Um, everything from, uh, deep fryers to walk in coolers, if you've got freezers, uh, prep, tables, um, everything, and every one, all this stuff and all the equipment that would, would make the restaurant work.

Um, even as far as how many tables you're going to have, how many stools you need, all of that stuff needs to be broken down. So that information could be conveyed again to the person that you presented this to. And even just for yourself. So you understand, if you've got a 2,500 square foot restaurant, how many restaurants, or how many tables do you need? How many waiters are you going to need? How many cooks are you going to have in there? Do you, how many managers do you have explain their job duties and responsibilities? So this is the biggest part, the biggest chunk, if you will, of information, that's going to explain how the organization or how the restaurant, as this example is how the restaurant is going to operate with those people and the types of equipment and the things that are going to be needed.

Uh, the tangible things that are going to be needed to get the restaurant up and running management. Again, how many are you going to have to have on shift? Or what is their salaries? What are you projecting to, to pay everybody? How is your pay scale going to be set up all of that information too, would be in line with the different types of job responsibilities and the different jobs that these people will have. So again, that's going to give you a better understanding of what you're going to need going forward, as well as what you're going to need to present to an investor or to a bank. If they're looking to give you a a hundred thousand or $200,000 loan or more, they're going to need to know every aspect before they say yes or no. So not that again, not that you want to keep this into something that's going to be four or five pages, but this section is going to be a little bit more heavier, as far as the amount of information that's going to be needed, because they're going to need to understand every facet of the people and how much money am I going to be giving you for tables and spoons and napkins and shelves, everything that we do need to get it up and running.

So you would need to have that type of understanding. You need to kind of have an understanding of all of those things prior to creating this section, because it's got quite a bit of information. Okay. So the next update deck of your business plan, sorry about that. Okay. What needs to be a market analysis? Now I touched a little bit on this in the beginning. Um, and the market analysis means that you need to know within your area, within your neighborhood, within your city or County, um, you need to do a little research and find out about the different types of restaurants. As I mentioned before, that may have similar types of foods. Um, what is exactly is your target market. So who are going to be the customers that are going to be coming in that you're looking for? You can literally separate them by demographic.

You can do a financial earnings. If you're looking, it may maybe if you have a high end restaurant and you're seeking to find, um, high end clientele, if you're looking for something that's more of a fast food, you know, family oriented, you want to understand what it is. You're actually getting yourself into with the type of food you're selling or preparing and who is going to be the one to buy that. Okay. Because in a lot of cases, if you're looking at really, you know, high end five star Michelin award, uh, restaurants, those are really at high, high class high, um, economic areas where there's a high income as opposed to just a fast food. And there's nothing saying that there's nothing wrong with fast food, but understanding that the type of clientele that you have, uh, you don't want to, um, kind of out price yourself in a situation where you're selling something that's very, very expensive and the clientele's just not there.

Okay. Other thing is the market analysis is I'm double checking to see how are you going to attract those customers? Um, when I say that, is, are you going to advertise in the newspapers? Are you going to do Facebook ads, maybe in the community to attract people and get people to notice you, um, are you going to go to events locally to do charitable work and those types of things where you can get out in the community, they make yourself visible. So people know that you're there. There's actually here. Let me think of the name of it. There's a ice cream place. I'm here where I live, that is in like every single community event. Um, I have my dad actually volunteers for a men's club. Um, locally here, they do a lot of charitable events, this ice cream, uh, local ice cream family run shop is there all the time.

And it's great because they give out tons of ice cream and they give out a lot of coupons and such which draws in the people. So they do a lot of stuff locally and in the community. And that really pays off because their, their ice cream shop is always slammed busy, but they reach out. They let people know they're there. People who may not realize that they're there, um, and then give them an incentive to come back. So something similar to what you're looking to do, like if you're going to do a market analysis, you want to make sure that you double check and see how it is that you're going to attract the local people, figure that out. What would work best? Is it going to be just a, um, a local ad in the newspaper that's given out every single day to the residents?

Um, are you going to join up with some of the community centers, but then people don't. So that's something you need to put in to let people know how it is. You're actually going to attract people. You can't necessarily just open a business and then cross your fingers and hope people will walk by, you got to do something to get them to come in. Okay. So next step, you've got the, a, this one's kind of a really cool, and I like it a lot because it is a section that can allow you to kind of think outside the box when it comes to generating revenue, um, it's going to be your product lineup. Okay? So the types of products that you're going to have in your lineup. So if you're having a restaurant, what is your menu going to be about? How much is it?

What are the prices, everything to the tee, as far as you need to know what your costs are, obviously in order for you to create a retail price. So you need to have that written down a menu and a list of, uh, of, um, food items that you're going to offer in your restaurant. So what other types of items and why am I excited about this section? Well, there's a lot of restaurants and this is something a lot of people don't think about, but there's a lot of restaurants that capitalize on the idea of, uh, driving sales through other merchandise. Like t-shirts, if you've got a barbecue, I know here in the South, we have a lot of barbecue restaurants, but a lot of them actually sell hats, tee shirts. And you'd be surprised at how much on an annual basis, how much revenue, all of those extra streams of revenue and products and things really generate when you're not just selling food, but you're selling in the community.

People begin to wear your tee shirt, they have your hat, or they've got some stationary, whatever it is, they've got their local barbecue logo on all of this stuff. So if you're a big fan of that barbecue place, you drop 20, 20, four and 30 bucks on a tee shirt, maybe 15, 20 bucks on a hat. And you sell a few thousand of those a year. You can generate a lot of other revenue without having to rely solely upon the food that you're selling. So if you open again, this is all about a restaurant. If you open a bakery, maybe you have a cute little whimsical bakery, t-shirt with a little character baking, but those types of products too, are something that can drive a lot of sales and drive extra money. And they're huge also is you could sell them because they're going to make you a lot of money because you're not having to make something for it.

And what I mean by that is that you can get a tee shirt company to produce the tee shirts. And you're just selling them. You're not making the tee shirts, but if you're spending all day in the, in the kitchen, you're baking up all these baked goods, you're spending a lot of time generating the money, try to figure out other way to sell products, right. That you're not having to make, to generate other forms of revenue. Okay. So creating a product lineup in this case, the scenario in a restaurant would be the menu. And then of course, the pricing as such, think about the other additional ways that you can generate revenue, not just through the sale of the food. Okay. So this section is one that's probably a lot of, you may not enjoy having to do, but it's definitely something that's super important.

And it would give you a good understanding, a good foothold on where you want to be financially. That's going to be the financial projections. So this is something where you have to kind of be realistic and kind of visionary at the same time. And I'll explain what I mean. So what you want to do out front is you want to create financial statements that include personal financial information about the people who are going to be the owners. Okay. If people are involved with this financially, um, you want to kind of open up a little bit and let them know what kind of assets that you have, what exactly is, um, in your bank accounts, how much are you putting forth in this endeavor? Are you going to max out your credit cards and that type of thing, uh, which I highly would not recommend you do, but if you've got financials that are available where you can use some funds of your own, I would definitely highly recommend some of that prior to seeking financial assistance outside of like a loan and such reason being is that a lot of times, one aspect of a banker and I sat in front of three different banks when I seek out our loan, when you sit in front of them and you tell them that you've taken a risk financially as well, and it's paid off, that is a big incentive and a big plus for anyone making a decision on getting a loan for a business, no matter what it is, it does have to be a food business, any type of business where you put bunny up and you've taken that risk, and you've kind of pushed through the storms and the challenges of starting a business, and you've created a profit.

You have a profitable product. People love that. Okay. And that also shows financial responsibility, and it shows the ability for you to run a business period. But when you're seeking it alone, a banker is going to be much more impressed with, Hey, this guy put a hundred thousand up and turned it into half a million. I'm more comfortable giving you money than oppose a guy that says, well, I put like $2,000 up and I'm gonna make a hundred thousand in the hole. It doesn't sound like you're really understanding what you're doing. So financial projections are great. And what I, what I said earlier was that you need to be realistic and also have a little bit of a vision is that as you set the goals for your first year, three years, five, seven years out, be not necessarily conservative, but understand what you're selling and what your margins are and how much you think you can sell.

So as you begin to create these financial projections, you're not living on the moon, you're not living in Lala land. Um, if you start a business and the first year you did a hundred thousand in the next year, you think you're gonna do 5 million. That's pretty unrealistic. Um, unless you've got a big pot of gold somewhere. So if you did a hundred thousand and you said, you know what, I could probably do about 250, maybe double that, but the next year, that seems a little more realistic. And plus it gives you a little bit of a vision. Um, so you're not living in LA LA land thinking that you're going to be doing, you know, a hundred or a thousand times what you did the first year. Lastly, I want to talk about is the appendix. It is the last section it is to follow in the business plan.

It wasn't normally what is put in, let me just move this out of the way. What is normally put in the appendix is going to be information that recaps everything that you did. And what I mean by that is actually going to be a lot of times supporting documents, maybe some graphs, maybe some information, the printouts, some other hard copies of information that will support everything you just talked about. Okay. What do you want to do is you want to give that person again, the perspective investor, the opportunity for you to show what you have to prove, what you've spoke of. Okay. Um, and that could be any tidbit of information or graphs or, um, anything that you think would give more validity to what you're trying to do. And when you're seeking that funding, or if you're doing it just for yourself, it's going to reinforce basically everything you spoke about in your business plan, because you've got documentation to kind of back it up or to support what you're saying.

So in the appendix, again, don't, don't make it too, too long, put a couple of documents, maybe a few documents in the back of it. And that's going to be the final section of your business plan. So keep in mind as business plans and your business, actually, as your business evolves, your business plan will change. And if it stays the same for the first couple of years, that's great if you're achieving those goals, but everything evolves and grows. And because some becomes something different than it was when it started. I can attest to that with our business. But we did behind us here is much bigger scale than when we first started out, you know, selling a few things locally. It was a lot different. So be aware that it's not in concrete, it's not in stone, right. A great business plan. Give that, allow that to be the momentum you need, sorry about that, uh, to get your business up and running, but keep in mind that it will change as time goes on.

So I hope that breaks down a little bit of information. And I thank you guys for bringing this up to me, uh, in regards to this information, when I just put that video out there about business plan writing. Um, so once you understand this, then you can kind of go back to that other video and get somebody to assist you on fiber to incorporate all that information that we just spoke about. So if this was helpful as always, please do give me a thumbs up. I appreciate you guys' support. Um, if you have any questions about this as well, please let me know down below and I will hop on that question as soon as I possibly can. Thanks guys.