Italian restaurant business plan – freelance marketing 100 business plan

Italian restaurant business plan

Executive Summary

This section briefly tells your reader where your company is, where you want to take it, and why your restaurant business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.

Example:ABC Italian Restaurant LLC” is the second location for Mr. Yasser who has operated successfully for 20 years. The ABC Italian Restaurant LLC based out of St. Louis, and now has over 34 successful company and franchise locations in the United States and Mexico. We will be a position to take over the SBA loan, and with additional funds added, convert this location to a profitable ABC Italian Restaurant LLC franchise restaurant.

Mission

It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, the target market, products/services and expectations of growth and profitability. The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence.

Example: ABC Italian Restaurant LLC’s” Mission is to provide a unique & relaxing dining experience- similar to dining at home. We will strive to achieve this goal by: A. Providing menu items incorporating quality ingredients at reasonable price. B. We will be mind full of the well being of our customers & staff treating each & everyone with respect.

Objectives

Well-chosen goals and objectives point a new business in the right direction and keep an established company on the right track. Just think about what football would be without end zones or what the Indianapolis 500 would be without a finish line.

Example: ABC Italian Restaurant LLC’s” objective is to achieve the following goals:

  • Averaging sales between $1,200,000 – 1,500,000 per year.
  • Promoting and expanding the ABC Italian Restaurant LLC concept as a unique Midtown destination restaurant.
  • Expanding our marketing and advertising in USA and in the neighboring suburbs to increase our customer base.
  • Achieving a profitable investment return for investors for Years 3 – 7.

 

Chart: Highlights

 

 Keys to Success

For a restaurant business plan, keep these five points top of mind:

  • Combine the corporate marketing strategies with my own to build volume quickly.
  • First year sales to hit between $1.5 and $2 million with 10% growth in first few years.
  • High Gross margins.
  • Maintain food and labor costs consistent with High Ridge.
  • Maintain and expand my outstanding reputation.
  • Remain a neighborhood family restaurant.

Example:  ABC Italian Restaurant LLC’s follows two steps for its key success,

  1. The menu will appeal to a wide and varied clientele. Our eclectic menu features regional specialties around the globe, from Spanish crevice to Thai and Indian curries.
  2. Our business location is very close to market, which create more customers to our restaurant.

 Company Summary

The Company Summary of a business plan provides a high level look at how all of the different elements of your business fit together, including information about the nature of your business and the success factors that you feel will make your business successful and consequently, profitable.

Example: ABC Italian Restaurant LLC’s is a start up managed by vastly experienced and visionary entrepreneur Mr. Yasser With his vast experience and knowhow of the market, the company is taking giant leaps in the restaurant business. The company is looking for expansion and applying for $68,000 loan from the Business Association (BA). This will help in covering the cash requirement and upgrading equipments as well as office.

 Company Ownership

As one of the company’s goals is to focus on high quality workmanship, retaining as much talent as possible is crucial. Therefore, the company plans to add more partners to the firm as opportunities arise.

 Start-up Summary

Start-up summary covers the Non-recurring costs associated with setting up a business, such as accountant’s fees, legal fees, registration charges, as well as advertising, promotional activities, and employee training. Also called startup expenses, preliminary expenses, or pre-opening expenses.

Example:

 ABC Italian Restaurant LLC’s start-up costs & initial financing are shown on the following table & Chart.

Some of the following current assets as follow.

  • Fixtures and Lighting
  • bar Equipment
  • Sound and Televisions
  • Office Equipment

Table: Start-Up

Start-up Requirements
Start-up Expenses
Expensed Items $0
Smallwares $3,000
Liquor License $400
Crew and Manger Training at High Ridge $10,000
Advertising $1,000
Insurance Deposits $3,000
Other Expensed Items $0
Total Start-up Expenses $17,400
Start-up Assets
Cash Required $90,000
Start-up Inventory $10,000
Other Current Assets $10,000
Long-term Assets $547,600
Total Assets $657,600
Total Requirements $675,000

 

Start-up Funding
Start-up Expenses to Fund $17,400
Start-up Assets to Fund $657,600
Total Funding Required $675,000
Assets
Non-cash Assets from Start-up $567,600
Cash Requirements from Start-up $90,000
Additional Cash Raised $0
Cash Balance on Starting Date $90,000
Total Assets $657,600
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $600,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $75,000
Total Liabilities $675,000
Capital
Planned Investment
Owner $0
Investor $0
Additional Investment Requirement $0
Total Planned Investment $0
Loss at Start-up (Start-up Expenses) ($17,400)
Total Capital ($17,400)
Total Capital and Liabilities $657,600
Total Funding $675,000

 

Chart: Start-up

 

 

Products & Services

By service we mean functionalities or support provided. Accounting, design, maintenance, printing, and supply of temporary personnel, etc., provided by specialized firms to other firms are deemed as service.

Example: ABC Italian Restaurant LLC’s provides restaurant services, with a primary focus on large market structure growth. This includes all types of dishes ranging from Italian to Mexican style.

ABC Italian Restaurant LLC’s also provides the services of all required operation systems such as

The list below offers a small selection of our opening menu offerings:

Tapas

  • Shrimp Baskets w/ sweet & sour peanut coulis Minced curry beef/chicken w/ onions in roti wrap (or spring roll)

Appetizers

  • Bread basket served with Olive oil, Black Pepper, and Goat Cheese dip
  • Blue Crab Fritters with Mango-Tamarind sauce

Salads

  • Mixed Greens with Spanish sherry wine vinaigrette
  • Asian Pear and Endive Salad with Blue Cheese & Walnuts

Entrees

  • Tequila Scallops w/ a Spanish sherry reduction
  • Thai Red Chili rubbed shrimp

Desserts, Specialty Drinks & Coffees

 

  • Chocolate Chunk Bread Pudding w/ Bourbon Cherry sauce

Pricing and Profitability

The fundamental part of a restaurant business plan is decide the pricing theory, on which profit part depends. Prices will be competitive with other upscale restaurants in the area. However, it is the strategy to give a perception of higher value than its competitors, through its food, service and entertainment.

Example: ABC Italian Restaurant LLC’s anticipates our total sales allocation to be 86% restaurant sales and 18% catering sales. The combined cost of sales will be 35% producing a gross profit of 66% on total sales.

Prices will be competitive with other upscale restaurants in the area. However, it is the strategy of ABC Italian Restaurant LLC’s to give a perception of higher value than its competitors, through its food, service and entertainment.

Market Analysis Summary

The market analysis is one of the most important parts of any start-up strategy for a restaurant. If you do it right, and you will have a clear idea of the path down which you are headed. A good market analysis will enable you to lure investors, sidestep pitfalls, and most importantly, attract customers. A market analysis studies the attractiveness and the dynamics of a special market within a special industry.

 

 Market Segmentation

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers, businesses, or countries that have common needs and priorities, and then designing and implementing strategies to target them.

Example: A good market analysis will enable you to lure investors, sidestep pitfalls, and most importantly, attract customers The following tables and charts show the growth of potential customers by years.

 

 

 

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Population in Families 5% 1,13,793 1,19,710 1,25,935 1,32,484 1,39,373 5.20%
Population in Non-families 5% 13,698 14,410 15,159 15,947 16,776 5.20%
Population in Group Quarters 5% 1,348 1,415 1,486 1,560 1,638 4.99%
Total 5.20% 1,28,839 1,35,535 1,42,580 1,49,991 1,57,787 5.20%

 

Chart: Market Analysis (Pie)

 

 Target Market Segment Strategy

A target market segment strategy is an essential plan of action for any organization to adopt. Essentially, the strategy outlines your business’s plans for reaching its intended customers. It takes into account consumer demand, your company’s response to that demand and its plan of action for delivering high-quality products coupled with solid customer service.

Example: ABC Italian Restaurant LLC’s want the customers like business man, couples, high-end singles, families, tourists persons and compulsive spenders. ABC Italian Restaurant LLC’s focus on these specific groups because these are the types of people who frequent other restaurants and bars in the area. They are the ones that are willing to spend their money on good dining and service at a value price. ABC Italian Restaurant LLC’s generally knows the characteristics of our clientele.

 

 Strategy and Implementation Summary

Understanding your competition’s strengths and weaknesses is certainly important, but defining a strategy that highlights your superiority in the market is just as essential. A Restaurant business plan’s Strategy and Implementation Summary emphasizes on what makes your business concept compelling and how you will attract and maintain a client/customer base. The first component of your Strategy and Implementation plan is a strategic position

Example: ABC Italian Restaurant LLC’s strategic plan is very simple. We understand our brand value in the market & quality of our product. Our target market is our happy customers. ABC Italian Restaurant LLC offers discount coupons for his reputed customers & dealers.

 Competitive Edge

Competitive edge is an important part of the feasibility study you do prior to writing your startup apartment business plan or your year-end strategic planning for next year’s business expansion. It entails research into your competition, how their buildings differ from yours, how their operations differ from yours and how their marketing differs from yours.

Example: ABC Italian Restaurant LLC environment is elegant and comfortable and our decor is warm and relaxing. Great service is very important to us. The management and servers will handle every detail to make customer’s special evening even more special.

 Main Competitors

The main part of this type business is to check the competitors. How they react in the market? How their business can impact to your strategy?

Example: With the redevelopment in ABC Italian Restaurant LLC, we will convince these people to stay in ABC Italian Restaurant LLC and eat at our restaurant. ABC Italian Restaurant LLC’s has three competitors in his market locality.

 Marketing Strategy

Marketing strategy is the goal of increasing sales and achieving a sustainable competitive advantage.

Over recent years, marketing strategy has evolved from a one-way communication base — projecting messages — to a two-way communication base involving active conversations with potential customers.

Example: ABC Italian Restaurant LLC strategic plan help the customer to attract the key features inbuilt in our restaurant. We follow both print media & digital media for our promotional strategy. Pre-existing contacts also helps us in the growth of our strategies. SEO, SMO, affiliate marketing process, mass mailing are the key strategies that are followed by ABC Italian Restaurant LLC.

 Marketing Program

Marketing Program is the process through which a business can grow & become well known to its customers. Our most important tactic will be word-of-mouth/in-store marketing process. It is the cheapest & more effective strategy.

Example:  ABC Italian Restaurant LLC’s marketing program follows some of the strategies

  • Grand Opening celebration.
  • Once a month invite a new local artist to show their work in the lounge.
  • “Restaurant Night” –  Every Monday night we will have a special evening for restaurant people

 

 Sales Strategy

A sales strategy for a business plan consists of a plan that positions a company’s brand or product to gain a competitive advantage. Successful strategies help the sales force to focus on target market customers and communicate with them in relevant, meaningful ways. Sales representatives need to know how their products or services can solve customer problems. A successful sales strategy conveys this so that the sales force spends time targeting the correct customers at the right time.

Example: ABC Italian Restaurant LLC’s strategy is to build more customers in order to increase revenue. Sales in our business are client service. It is repeat business. We will focus on making all our customers happy with our food, service and entertainment options.

 Sales Forecast

Sales forecasts are estimates of your sales for the forecast period. The sales forecast establishes the level of activity used in all the other forecasts and budgets for the business. If your sales forecast varies wildly from your actual results, your cash flow and profitability forecasts will similarly be inaccurate.

 

Example: The following tables and charts show the growth of potential customers by years.

 

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Food & Liquor $818,267 $940,965 $1,082,110
Catering $125,562 $194,500 $166,175
Other $0 $0 $0
Total Sales $843,882 $1,985,465 $1,878,287
Direct Cost of Sales Year 1 Year 2 Year 3
Food & Liquor $279,016 $310,518 $357,096
Catering $41,469 $47,685 $54,838
Other $0 $0 $0
Subtotal Direct Cost of Sales $311,486 $358,205 $411,933

 

Chart: Sales Monthly

 

Chart: Sales by Year

 

 Milestones

Milestones are a tool used in project management to mark specific points along a project timeline. These points may signal anchors such as a project start and end date, a need for external review or input and budget checks, among others. In many instances, milestones do not impact restaurant project duration.

Example: ABC Italian Restaurant LLC’s marketing program follows some of the strategic plan vs actual analysis as sown.

 

 

Chart: Milestones

 

Table: Milestones

Milestones
Milestone Start Date End Date Budget Manager Department
Painting/Reconstruction of Restaurant 10/1/2011 2/1/2012 $91,000 Wayne Holmes Architect/Contractor
Office Furnitures & Supplies 1/20/2012 1/30/2012 $5,500 Linda/John Owners
Lighting & Lamps 1/1/2012 2/1/2012 $16,000 John Manager
Furniture for Restaurant & Lounge 2/1/2012 2/15/2012 $42,000 Linda/John Owners
Decorations and Cash Register 2/1/2012 2/20/2012 $16,000 Linda/Andrea Owner
Production and Completion of Menus 1/1/2012 2/1/2012 $3,000 Linda Linda
Buy Kitchen Supplies 1/15/2012 2/15/2012 $62,000 Linda Kitchen/Linda
Open Gabri’s 3/1/2012 3/1/2012 $0 Linda/John Owners
VIP Party 3/1/2012 3/1/2012 $3,000 Linda/John Owners
VIP Party 3/2/2012 3/2/2012 $3,000 Linda/John Owners
Upgrade Mailer 3/1/2012 3/15/2012 $0 Andrea Marketing
Advertising 2/1/2012 2/15/2012 $2,500 Andrea Marketing
Advertising 5/1/2012 5/15/2012 $600 Andrea Marketing
Advertising 9/1/2012 9/15/2012 $400 Andrea Marketing
Advertising 11/15/2012 11/20/2012 $400 Andrea Marketing
Advertising 12/1/2012 12/5/2012 $400 Andrea Marketing
Direct Mail 2/1/2012 2/15/2012 $1,000 Andrea Marketing
Business Plan Review 2/1/2012 2/3/2012 $0 Linda Owner
Website 1/1/2012 2/15/2012 $3,500 John Manager
Corporate Brochure 1/1/2012 2/15/2012 $1,500 Linda Dorup Friend
Brochure 8/1/2012 8/1/2012 $1,000 Linda Dorup Friend
New Catering Accounts (5) 3/1/2012 5/1/2012 $250 Linda Owner
New Catering Accounts (5) 9/1/2012 11/1/2012 $250 Linda Owner
Wine Class for all Employees 2/20/2012 2/25/2012 $1,000 John Wine Distributor
Employee Training 2/20/2012 2/25/2012 $1,000 Linda/Andrea Owner/Manager
Swedish Midsummer 6/20/2012 6/20/2012 $300 Linda Owner
Direct Mail 8/1/2012 8/15/2012 $500 Andrea Marketing
Direct Mail 11/1/2012 11/15/2012 $500 Andrea Marketing
Swedish Christmas Introduction 12/14/2012 12/14/2012 $300 Linda Owner
Upgrade Mailer 5/1/2012 5/5/2012 $8,000 Andrea Marketing
Totals $251,900

 

 Web Plan Summary

Web plan summary is the fundamental part any business effort. After the market analysis, a web plan summary is prepared, the virtual place for any industry.

Example: ABC Italian Restaurant LLC has some fundamental web plans which include the web presence of the restaurant & the virtual position. Today market strategy mostly follows this one.

 Management Summary

A management summary is a short document or section of a document, produced for business purposes, that summarizes a longer report or proposal or a group of related reports in such a way that readers can rapidly become acquainted with a large body of material without having to read it all.

 

Example: ABC Italian Restaurant LLC’s planning to expand its personnel to add a number of job superintendents as soon as the number of projects increases. These superintendents will have the following duties:

  • Quality control of product & service.
  • Scheduling subcontractors and material deliveries.

Management Team

Mr. Yung has 15 years of experience in the food and hospitality industry, receiving her culinary training at several leading restaurants in her native. We have team to share best knowledge throughout the market.

 Personnel Plan

. It is necessary to determine the natural attrition of the personnel in future years. The difference between supply and demand will indicate the future quantitative and qualitative need for personnel. This information has an effect on the recruitment and development planning of the personnel and on the measures taken.

Example: ABC Italian Restaurant LLC the staff will include 21 full-time employees and 9 part-time employees, who will work a total of 900 hours per week and generate an average weekly gross payroll of $5,988 for the first year in business.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
General Manager $0 $37,000 $37,000
Front Manager $22,160 $24,880 $26,900
Captain 1 $6,265 $6,210 $6,273
Captain 2 $6,384 $6,384 $6,384
Waitperson $5,040 $5,040 $5,040
Waitperson $3,864 $3,864 $3,864
Waitperson $4,200 $4,200 $4,200
Wait/Barperson $6,840 $6,840 $6,840
Bartender $10,800 $10,800 $10,800
Busboy 1 $7,920 $7,920 $7,920
Busboy 2 $10,560 $10,560 $10,560
Busboy 3 $6,000 $6,000 $6,000
Head Chef Linda $32,400 $32,400 $32,400
Sous Chef $32,400 $32,400 $32,400
Cook 1 $23,040 $23,040 $23,040
Cook 2 $17,760 $17,760 $17,760
Prep Cook/Dishwasher $11,088 $11,088 $11,088
Prep/Dishwasher/Cleaning $11,760 $11,760 $11,760
Dishwasher $8,400 $8,400 $8,400
Cleaning/Dishwasher $11,760 $11,760 $11,760
Additional Cook $0 $9,600 $9,600
Additional Dishwasher $0 $8,400 $8,400
Additional Waitperson $0 $4,200 $4,200
Additional Busboy $0 $0 $6,000
Total People 20 24 25
Total Payroll $256,594 $331,515 $327,419

 

 Financial Plan

Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives.

 

Example: $165,000 of funding is needed over the next year for renovations, furniture, kitchen equipment, liquor license, food & restaurant supplies, legal fees and personnel.

 

Important Assumptions

Entrepreneurs often make two basic assumptions about a new restaurant business: that they have product consumers will want and that the restaurant business owner can make and sell the product profitably. An investor or partner will want to see that you’ve done you are homework and can support more key assumptions than those two, with research and data.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 0.00% 0.00% 0.00%
Long-term Interest Rate 7.00% 7.00% 7.00%
Tax Rate 35.55% 34.00% 33.55%
Other 0 0 0

 

 Break-even Analysis

Breakeven analysis is used to determine when your business will be able to cover all its expenses and begin to make a profit. It is important to identify your start-up costs, which will help you determine your sales revenue needed to pay ongoing business expenses.

 

 

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even $46,455
Assumptions:
Average Percent Variable Cost 33%
Estimated Monthly Fixed Cost $31,125

 

Chart: Break-even Analysis

 

Projected Profit and Loss

A projected profit and loss statement is a financial document that  will be a useful tracking tool for objectively determining whether your business is likely to make a profit and be successful or generate losses and eventually fail. Your projected profit and loss statement will list revenues, your cost for goods or services provided, operating expenses, and net income or loss. Depending on whether you are preparing a projected profit and loss statement for an existing business or a start up enterprise, you may have some difficulty coming up with reliable estimates.

Example: ABC Italian Restaurant LLC’s Month-by-month assumptions for profit and loss are as follows, shown in chart & table.

Chart: Profit Monthly

 

 

Example: ABC Italian Restaurant LLC’s gross margin on profit and loss is as follows, shown in chart & table.

 

Chart: Gross Margin Monthly

 

Chart: Gross Margin Yearly

 

Example: ABC Italian Restaurant LLC’s gross margin same-day collection is critical, and is reasonable and customary in the restaurant industry. The yearly gross margin is shown below on table.

Table: Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $943,999 $1,085,823 $1,248,742
Direct Cost of Sales $311,481 $358,203 $411,934
Other $0 $0 $0
Total Cost of Sales $311,481 $358,203 $411,934
Gross Margin $632,401 $727,262 $836,351
Gross Margin % 67.00% 67.00% 67.00%
Expenses
Payroll $236,592 $301,512 $307,512
Sales and Marketing and Other Expenses $55,897 $75,564 $85,291
Depreciation $0 $0 $0
Leased equipment $2,004 $2,004 $2,004
Proffesional fees accounting $2,004 $2,400 $3,000
Proffesional fees legal $2,004 $2,400 $3,000
Licences and permits $996 $1,152 $1,320
Office Supplies $2,004 $3,200 $4,800
Postage $996 $2,300 $3,300
Utilities $20,004 $21,996 $22,992
Insurance $15,000 $18,000 $21,600
Rent $36,000 $36,000 $36,000
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $373,501 $466,528 $490,819
Profit Before Interest and Taxes $258,900 $260,734 $345,532
EBITDA $258,900 $260,734 $345,532
Interest Expense $13,139 $11,532 $9,747
Taxes Incurred $84,637 $87,220 $116,125
Net Profit $162,167 $162,909 $229,686
Net Profit/Sales 16.87% 15.02% 18.20%

 

 Projected Cash Flow

The cash flow depends on assumptions for inventory turnover, payment days, and accounts receivable management. Our projected same-day collection is critical, and is reasonable and customary in the restaurant industry. We do not expect to need significant additional support even when we reach the less profitable months, as they are expected.

Example: ABC Italian Restaurant LLC’s projected yearly collection is shown and is reasonable and customary in the restaurant industry.

Table: Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $943,882 $1,085,465 $1,248,285
Subtotal Cash from Operations $943,882 $1,085,465 $1,248,285
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $943,882 $1,085,465 $1,248,285
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $236,592 $301,512 $307,512
Bill Payments $524,954 $592,064 $712,965
Subtotal Spent on Operations $761,546 $893,576 $1,020,477
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $22,950 $24,607 $26,388
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $22,200 $22,200 $27,750
Subtotal Cash Spent $806,696 $940,383 $1,074,615
Net Cash Flow $137,186 $145,082 $173,670
Cash Balance $222,186 $367,268 $540,938

 

Chart: Cash

 

 Projected Balance Sheet

A projected balance sheet communicates expected changes in future asset investments, outstanding liabilities and equity financing. Businesses may consider the creation of a projected balance sheet as a way to facilitate long-term, strategic planning. A business’ long-term plans often concern future asset growth and how it may be supported by increased financing through both debt and equity.

Example: It show that how Mr. Yung succeed in his business & spread the brand value all over the world. The same quality & the same categories of food.

Table: Balance Sheet

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $342,186 $427,267 $465,931
Other Current Assets $0 $0 $0
Total Current Assets $342,186 $427,267 $465,931
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $222,186 $367,268 $540,938
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $21,213 $51,121 $59,270
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $21,213 $51,121 $59,270
Long-term Liabilities $177,050 $152,443 $126,055
Total Liabilities $198,263 $203,564 $185,325
Paid-in Capital $185,000 $185,000 $185,000
Retained Earnings ($322,200) ($183,277) ($49,046)
Earnings $161,123 $161,981 $219,659
Total Capital $23,923 $163,704 $355,613
Total Liabilities and Capital $222,186 $367,268 $540,938
Net Worth $24,921 $153,700 $415,615

 

 Business Ratios

It includes dozens of standard restaurant business ratios calculated from restaurant business plans financials, and used and expected by bankers, financial analysts, and investors. It also includes a column of statistical indicators for the specific type of business.

Example: Business ratio of ABC Italian Restaurant LLC is much high as expected by the bankers from Mr Yung, that shown in Table below.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 16.00% 16.00% 0.00%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 100.00%
Total Current Assets 100.00% 100.00% 100.00% 100.00%
Long-term Assets 0.00% 0.00% 0.00% 0.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 9.55% 13.92% 10.96% 0.00%
Long-term Liabilities 79.69% 41.51% 23.30% 0.00%
Total Liabilities 89.23% 55.43% 34.26% 0.00%
Net Worth 10.77% 44.57% 65.74% 100.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 67.00% 67.00% 67.00% 0.00%
Selling, General & Administrative Expenses 64.07% 66.34% 63.47% 0.00%
Advertising Expenses 1.98% 2.31% 2.05% 0.00%
Profit Before Interest and Taxes 27.43% 24.02% 27.68% 0.00%
Main Ratios
Current 10.47 7.18 9.13 0
Quick 10.47 7.18 9.13 0
Total Debt to Total Assets 89.23% 55.43% 34.26% 0.00%
Pre-tax Return on Net Worth 1027.28% 152.23% 94.42% 0.00%
Pre-tax Return on Assets 110.61% 67.85% 62.07% 0.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 17.07% 14.92% 17.60% n.a
Return on Equity 673.50% 98.95% 61.77% n.a
Activity Ratios
Accounts Payable Turnover 25.75 12.17 12.17 n.a
Payment Days 27 21 28 n.a
Total Asset Turnover 4.25 2.96 2.31 n.a
Debt Ratios
Debt to Net Worth 8.29 1.24 0.52 n.a
Current Liab. to Liab. 0.11 0.25 0.32 n.a
Liquidity Ratios
Net Working Capital $200,973 $316,147 $481,668 n.a
Interest Coverage 19.7 22.61 35.45 n.a
Additional Ratios
Assets to Sales 0.24 0.34 0.43 n.a
Current Debt/Total Assets 10% 14% 11% n.a
Acid Test 10.47 7.18 9.13 n.a
Sales/Net Worth 39.45 6.63 3.51 n.a
Dividend Payout 0.18 0.18 0.16 n.a

 

 Exit Strategy

ABC Italian Restaurant LLC will first attempt to sell the operation and use the proceeds to clear all outstanding balances. If unable to sell the operation for sufficient proceeds we will force to default whereby the SBA loan will be in senior standing.

Table: Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Sales
Food & Liquor 0% $79,670 $79,670 $79,670 $101,680 $101,680 $101,680
Catering 0% $10,200 $10,200 $12,750 $16,500 $12,750 $12,750
Other 0% $0 $0 $0 $0 $0 $0
Total Sales $89,870 $89,870 $92,420 $118,180 $114,430 $114,430
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Food & Liquor 33% $26,291 $26,291 $26,291 $33,554 $33,554 $33,554
Catering 33% $3,366 $3,366 $4,208 $5,445 $4,208 $4,208
Other $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $29,657 $29,657 $30,499 $38,999 $37,762 $37,762

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$48,300 $31,050 $31,050 $101,680 $31,050 $31,050
$5,313 $5,313 $12,750 $16,500 $5,313 $5,313
$0 $0 $0 $0 $0 $0
$53,613 $36,363 $43,800 $118,180 $36,363 $36,363
Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$15,939 $10,247 $10,247 $33,554 $10,247 $10,247
$1,753 $1,753 $4,208 $5,445 $1,753 $1,753
$0 $0 $0 $0 $0 $0
$17,692 $12,000 $14,454 $38,999 $12,000 $12,000

 

 

Table: Personal plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
General Manager 0% $0 $0 $0 $0 $0 $0
Front Manager 0% $1,680 $1,680 $1,680 $1,680 $1,680 $1,680
Captain 1 0% $518 $518 $518 $518 $518 $518
Captain 2 0% $532 $532 $532 $532 $532 $532
Waitperson 0% $420 $420 $420 $420 $420 $420
Waitperson 0% $322 $322 $322 $322 $322 $322
Waitperson 0% $350 $350 $350 $350 $350 $350
Wait/Barperson 0% $570 $570 $570 $570 $570 $570
Bartender 0% $900 $900 $900 $900 $900 $900
Busboy 1 0% $660 $660 $660 $660 $660 $660
Busboy 2 0% $880 $880 $880 $880 $880 $880
Busboy 3 0% $500 $500 $500 $500 $500 $500
Head Chef Linda 0% $2,700 $2,700 $2,700 $2,700 $2,700 $2,700
Sous Chef 0% $2,700 $2,700 $2,700 $2,700 $2,700 $2,700
Cook 1 0% $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Cook 2 0% $1,480 $1,480 $1,480 $1,480 $1,480 $1,480
Prep Cook/Dishwasher 0% $924 $924 $924 $924 $924 $924
Prep/Dishwasher/Cleaning 0% $980 $980 $980 $980 $980 $980
Dishwasher 0% $700 $700 $700 $700 $700 $700
Cleaning/Dishwasher 0% $980 $980 $980 $980 $980 $980
Additional Cook 0% $0 $0 $0 $0 $0 $0
Additional Dishwasher 0% $0 $0 $0 $0 $0 $0
Additional Waitperson 0% $0 $0 $0 $0 $0 $0
Additional Busboy 0% $0 $0 $0 $0 $0 $0
Total People 20 20 20 20 20 20
Total Payroll $19,716 $19,716 $19,716 $19,716 $19,716 $19,716

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $0 $0 $0 $0 $0
$1,680 $1,680 $1,680 $1,680 $1,680 $1,680
$518 $518 $518 $518 $518 $518
$532 $532 $532 $532 $532 $532
$420 $420 $420 $420 $420 $420
$322 $322 $322 $322 $322 $322
$350 $350 $350 $350 $350 $350
$570 $570 $570 $570 $570 $570
$900 $900 $900 $900 $900 $900
$660 $660 $660 $660 $660 $660
$880 $880 $880 $880 $880 $880
$500 $500 $500 $500 $500 $500
$2,700 $2,700 $2,700 $2,700 $2,700 $2,700
$2,700 $2,700 $2,700 $2,700 $2,700 $2,700
$1,920 $1,920 $1,920 $1,920 $1,920 $1,920
$1,480 $1,480 $1,480 $1,480 $1,480 $1,480
$924 $924 $924 $924 $924 $924
$980 $980 $980 $980 $980 $980
$700 $700 $700 $700 $700 $700
$980 $980 $980 $980 $980 $980
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
20 20 20 20 20 20
$19,716 $19,716 $19,716 $19,716 $19,716 $19,716

 

Table: General Assumption

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Plan Month 1 2 3 4 5 6
Current Interest Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Tax Rate 30.00% 35.00% 35.00% 35.00% 35.00% 35.00%
Other 0 0 0 0 0 0

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
7 8 9 10 11 12
0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
35.00% 35.00% 35.00% 35.00% 35.00% 35.00%
0 0 0 0 0 0

 

Table: Profit & loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Sales $89,870 $89,870 $92,420 $118,180 $114,430 $114,430
Direct Cost of Sales $29,657 $29,657 $30,499 $38,999 $37,762 $37,762
Other $0 $0 $0 $0 $0 $0
Total Cost of Sales $29,657 $29,657 $30,499 $38,999 $37,762 $37,762
Gross Margin $60,213 $60,213 $61,921 $79,181 $76,668 $76,668
Gross Margin % 67.00% 67.00% 67.00% 67.00% 67.00% 67.00%
Expenses
Payroll $19,716 $19,716 $19,716 $19,716 $19,716 $19,716
Sales and Marketing and Other Expenses $5,013 $5,540 $5,540 $5,540 $5,013 $3,845
Depreciation $0 $0 $0 $0 $0 $0
Leased equipment $167 $167 $167 $167 $167 $167
Proffesional fees accounting $167 $167 $167 $167 $167 $167
Proffesional fees legal $167 $167 $167 $167 $167 $167
Licences and permits $83 $83 $83 $83 $83 $83
Office Supplies $167 $167 $167 $167 $167 $167
Postage $83 $83 $83 $83 $83 $83
Utilities $1,667 $1,667 $1,667 $1,667 $1,667 $1,667
Insurance $1,250 $1,250 $1,250 $1,250 $1,250 $1,250
Rent $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Payroll Taxes 15% $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0
Total Operating Expenses $31,480 $32,007 $32,007 $32,007 $31,480 $30,312
Profit Before Interest and Taxes $28,733 $28,206 $29,914 $47,174 $45,188 $46,356
EBITDA $28,733 $28,206 $29,914 $47,174 $45,188 $46,356
Interest Expense $1,156 $1,145 $1,134 $1,123 $1,112 $1,101
Taxes Incurred $8,273 $9,471 $10,073 $16,118 $15,427 $15,839
Net Profit $19,304 $17,590 $18,707 $29,933 $28,649 $29,416
Net Profit/Sales 21.48% 19.57% 20.24% 25.33% 25.04% 25.71%

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$53,613 $36,363 $43,800 $118,180 $36,363 $36,363
$17,692 $12,000 $14,454 $38,999 $12,000 $12,000
$0 $0 $0 $0 $0 $0
$17,692 $12,000 $14,454 $38,999 $12,000 $12,000
$35,921 $24,363 $29,346 $79,181 $24,363 $24,363
67.00% 67.00% 67.00% 67.00% 67.00% 67.00%
$19,716 $19,716 $19,716 $19,716 $19,716 $19,716
$3,845 $5,013 $3,845 $3,845 $3,845 $5,013
$0 $0 $0 $0 $0 $0
$167 $167 $167 $167 $167 $167
$167 $167 $167 $167 $167 $167
$167 $167 $167 $167 $167 $167
$83 $83 $83 $83 $83 $83
$167 $167 $167 $167 $167 $167
$83 $83 $83 $83 $83 $83
$1,667 $1,667 $1,667 $1,667 $1,667 $1,667
$1,250 $1,250 $1,250 $1,250 $1,250 $1,250
$3,000 $3,000 $3,000 $3,000 $3,000 $3,000
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$30,312 $31,480 $30,312 $30,312 $30,312 $31,480
$5,609 ($7,117) ($966) $48,869 ($5,949) ($7,117)
$5,609 ($7,117) ($966) $48,869 ($5,949) ($7,117)
$1,090 $1,078 $1,067 $1,056 $1,044 $1,033
$1,582 ($2,868) ($712) $16,734 ($2,448) ($2,852)
$2,937 ($5,327) ($1,322) $31,078 ($4,546) ($5,297)
5.48% -14.65% -3.02% 26.30% -12.50% -14.57%

 

Table: Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Cash Received
Cash from Operations
Cash Sales $89,870 $89,870 $92,420 $118,180 $114,430 $114,430
Subtotal Cash from Operations $89,870 $89,870 $92,420 $118,180 $114,430 $114,430
Additional Cash Received
Sales Tax, VAT, HST/GST Received ### $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0
Subtotal Cash Received $89,870 $89,870 $92,420 $118,180 $114,430 $114,430
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Expenditures from Operations
Cash Spending $19,716 $19,716 $19,716 $19,716 $19,716 $19,716
Bill Payments $1,695 $50,907 $52,612 $54,481 $68,449 $66,039
Subtotal Spent on Operations $21,411 $70,623 $72,328 $74,197 $88,165 $85,755
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,852 $1,863 $1,874 $1,884 $1,895 $1,907
Purchase Other Current Assets $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0
Dividends $1,850 $1,850 $1,850 $1,850 $1,850 $1,850
Subtotal Cash Spent $25,113 $74,336 $76,052 $77,931 $91,910 $89,512
Net Cash Flow $64,757 $15,534 $16,368 $40,249 $22,520 $24,918
Cash Balance $149,757 $165,291 $181,659 $221,907 $244,427 $269,345

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$53,613 $36,363 $43,800 $118,180 $36,363 $36,363
$53,613 $36,363 $43,800 $118,180 $36,363 $36,363
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$53,613 $36,363 $43,800 $118,180 $36,363 $36,363
Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$19,716 $19,716 $19,716 $19,716 $19,716 $19,716
$64,154 $30,660 $22,088 $26,805 $65,846 $21,218
$83,870 $50,376 $41,804 $46,521 $85,562 $40,934
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$1,918 $1,929 $1,940 $1,951 $1,963 $1,974
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$1,850 $1,850 $1,850 $1,850 $1,850 $1,850
$87,638 $54,155 $45,594 $50,322 $89,375 $44,758
($34,025) ($17,792) ($1,794) $67,858 ($53,012) ($8,395)
$235,321 $217,529 $215,734 $283,593 $230,581 $222,186

 

 

 

Table: Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Assets Starting Balances
Current Assets
Cash $85,000 $149,757 $165,291 $181,659 $221,907 $244,427 $269,345
Other Current Assets $0 $0 $0 $0 $0 $0 $0
Total Current Assets $85,000 $149,757 $165,291 $181,659 $221,907 $244,427 $269,345
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0
Total Assets $85,000 $149,757 $165,291 $181,659 $221,907 $244,427 $269,345
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Current Liabilities
Accounts Payable $0 $49,155 $50,812 $52,197 $66,247 $63,862 $63,122
Current Borrowing $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $49,155 $50,812 $52,197 $66,247 $63,862 $63,122
Long-term Liabilities $200,000 $198,148 $196,285 $194,411 $192,527 $190,632 $188,725
Total Liabilities $200,000 $247,303 $247,097 $246,608 $258,774 $254,494 $251,847
Paid-in Capital $185,000 $185,000 $185,000 $185,000 $185,000 $185,000 $185,000
Retained Earnings ($300,000) ($301,850) ($303,700) ($305,550) ($307,400) ($309,250) ($311,100)
Earnings $0 $19,304 $36,894 $55,601 $85,534 $114,183 $143,599
Total Capital ($115,000) ($97,546) ($81,806) ($64,949) ($36,866) ($10,067) $17,499
Total Liabilities and Capital $85,000 $149,757 $165,291 $181,659 $221,907 $244,427 $269,345
Net Worth ($115,000) ($97,546) ($81,806) ($64,949) ($36,866) ($10,067) $17,499

 

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$235,321 $217,529 $215,734 $283,593 $230,581 $222,186
$0 $0 $0 $0 $0 $0
$235,321 $217,529 $215,734 $283,593 $230,581 $222,186
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$235,321 $217,529 $215,734 $283,593 $230,581 $222,186
Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$29,928 $21,241 $24,559 $65,139 $20,486 $21,213
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$29,928 $21,241 $24,559 $65,139 $20,486 $21,213
$186,807 $184,878 $182,938 $180,987 $179,024 $177,050
$216,735 $206,119 $207,497 $246,126 $199,510 $198,263
$185,000 $185,000 $185,000 $185,000 $185,000 $185,000
($312,950) ($314,800) ($316,650) ($318,500) ($320,350) ($322,200)
$146,536 $141,209 $139,888 $170,966 $166,421 $161,123
$18,586 $11,409 $8,238 $37,466 $31,071 $23,923
$235,321 $217,529 $215,734 $283,593 $230,581 $222,186
$18,586 $11,409 $8,238 $37,466 $31,071 $23,923

 

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