Write your restaurant bar business plan as if you will fail!

Traditional wisdom suggests that when you write a restaurant bar business plan, it should be with the assumption you will be successful. However, according to many industry statistics, the likelihood of failure is more evident among restaurants than many other businesses. For example and according to the IRS, 1 out of 2 restaurants fail in the first year. Added to this stat is that only 2 in 5 restaurants last a full five years. If one survives beyond five years, the success rate is 70% according to a Michigan State University study! Restaurant Menu ItemTherefore from our viewpoint, one should include in your initial planning certain specific activities and steps one will take if the it does not meet expectations or encounters unexpected circumstances such as an economic recession. Some of the critical areas to address would include: a) How will you deal with vendors, suppliers and outside contract services in terms of a payment plan for goods and services owed when the operation experiences ebbs and flows in its cash flow for long periods of time; b) What changes you will make to your hours of operation, staffing and menus to accommodate less business during certain months and days of the year without affecting the concept and because of a major shift in customers demand generators and are these specifically stated in your restaurant bar business plan; c) Which alternative ways will you pay back lenders and investors if it only meets 50% to 75% of the original projections. Are you in the process of planning or starting up a food service business? If so, please share with our readers what contingency restaurant bar plan you anticipate if your original projections do not pan out or there is a major shift in the economy and so on…