Do you want to start bbq restaurant business?
Do you want to start a BBQ business? Well, this business can be immensely profitable provided that you make delicious BBQs and market your business successfully.
BBQs are loved by millions of people in the United States so the market for this business has undoubtedly a lot of potential. Secondly, this business can be started with any extent of investment. You can even start a small setup and expand it later or if you have sufficient savings you can start a high-class restaurant. In both cases, you have to make a comprehensive plan covering all aspects of your business. You have to plan everything including the tiniest details to make this business successful.
So, before you move on to start this venture, develop a detailed business plan for it. The business plan will not only help you in startup but it will also help you in taking important decisions for your business over the next years. In case you don’t know how to write a good business plan, we are providing a detailed business plan of a startup ‘Jim’s BBQ’ to help you avoid the trouble of making a plan yourself.
2.1 The Business
Jim’s Stop will be a licensed and ensured BBQ restaurant located in Tribeca, a neighborhood in the Manhattan borough of the New York City. We will be strategically located in the most suitable place to start a BBQ business. The business will be solely owned and operated by Jim Pert who is a famous American Chef and has been working at executive positions in various fast food restaurants for the last 20 years.
Jim’s BBQ will be managed by Jim himself and he will be assisted by his younger brother Nick who holds a degree in finance from Harvard University. Initially, Jim will hire a small team comprising of chefs, waiters, assistants, cleaners and drivers for the startup. To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.
Our customers will primarily be the residents living in the Tribeca neighborhood and people working in the commercial and businesses center of the city. We will offer BBQ meat by pound, sandwiches, desserts, sides and drinks to our customers. We will provide dine in, takeaway as well as free home delivery services to our esteemed customers. The community living nearby is very diverse and comprises of teens and adults, single as well as married people, most of which love fast foods. There are also a number of commercial and business centers in the vicinity of our restaurant so we can easily attract the employees working in them.
2.4 Target of the Company
Our main goal is to provide healthy, delicious as well as economical BBQs to our customers. Our primary target is to become the best BBQ restaurant in the New York City within next 5 years of our launch and to recover the initial investment within next 2 years of launch. Our secondary target is to achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year.
3.1 Company Owner
Jim is a famous American Chef and has been working at executive positions in various fast food restaurants for the last 20 years. He is famous for creating unique and juicy BBQs which are loved by all and sundry.
3.2 Why the Business is being started
The main motive behind Jim starting a barbecue business is his intense passion about BBQs. Jim is known for making unique BBQs by combining recipes from various localities and his unique mixed recipes are the reason behind his fame. By starting this venture, he aims to give everyone a taste of his unique BBQs.
3.3 How the Business will be started
Jims’s BBQ will be launched in the Tribeca neighborhood of Manhattan. A 250-square-feet building which was previously being used as a breakfast restaurant has been acquired on lease. Since the building was previously a restaurant, adequate seating arrangements are already present. The company will only acquire 4 grills, 4 smokers, 2 stoves and 2 full-size commercial refrigerators in addition to usual inventory for a restaurant. The company’s financial experts have forecasted following costs for expenses, assets, investment, and loans for the Start-up.
The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by company’s analysts, is given below:
|Research and Development||$32,750|
|TOTAL START-UP EXPENSES||$187,300|
|Other Current Assets||$232,500|
|Start-up Expenses to Fund||$11,875|
|Start-up Assets to Fund||$15,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$18,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$18,750|
|Cash Balance on Starting Date||$21,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$251,875|
Services for customers
It is wiser to plan your services or menu before you think about how to start a BBQ business. You can only plan subsequent things after you know what you will be providing to your customers. Jim’s BBQ will offer following delicious meals to its esteemed customers:
- Meat by pound: Chopped beef brisket, pork spare ribs, turkey breast, giant beef rib, sausages
- Sandwiches: Chopped beef brisket, pork spare ribs, turkey breast, giant beef rib
- Sides: Potato salad, slaw, pinto beans
- Deserts: Pecan, lemon chess, bourbon banana, key lime
- Drinks: Bottled water, sodas, juices, iced tea
- Beers & Wines: Mimosa, blue owl, hops & grain
Our customers can dine in, takeaway or even get free delivery on their doorstep.
Marketing Analysis of bbq restaurant business
The most important component of an effective BBQ business plan is its accurate marketing analysis that’s why Jim acquired the services of marketing experts to help him through this phase. It is only after this stage that a good BBQ restaurant business plan could have been developed. After identifying the local market trends in Manhattan, the marketing experts and analysts also helped him to select the best site to start a barbecue business.
The success or failure of a startup totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. There are four main steps to carry out an accurate marketing analysis of a BBQ business which are to identify the current market trends of BBQ restaurants in Manhattan, identify your target audience and potential customers, set out the business targets to achieve, and finally set the prices of the menu. Marketing analysis is a must-do thing before you even think how to open a BBQ restaurant. It must be considered before developing the BBQ restaurant business plan template.
5.1 Marketing Segmentation
As for a general trend, the market demand for BBQ businesses is on the rise. BBQ is one of the most popular American fast foods that’s why the number of BBQ restaurants has been increasing during the last few years. According to a recent report, there has been a staggering 21% increase in the restaurants offering BBQs in the Manhattan just in the last 4 years. As of now, there are thousands of established restaurants which provide high quality and delicious BBQ meals. This increase is credited to the fact that American citizens love BBQs and the second reason is that starting a BBQ restaurant has become very easy. In fact, the small BBQ setups and BBQ stands are selling more BBQs as compared to the established high-class residents. It is due to their greater accessibility and comparatively lower rates. Nevertheless, this industry has a lot of potential and a BBQ business, regardless of its magnitude, can yield immense profit provided that you successfully plan it and target your customers.
5.2 Marketing Segmentation
Our target market is the community living nearby at the 10 minutes’ drive from our restaurant. The community consists of all types of people from varying backgrounds. As per the financial position, nearly half of the community has a monthly income ranging from $40k to $50k while nearly 10% people have incomes even around $100,000. There are also a lot of working-class people who are extremely tight up with their busy routines and prefer to grab a bite of delicious BBQs while on their way home. Our marketing experts have identified following type of target audience which can become the potential customers of our restaurant.
The detailed marketing segmentation comprising of the company’s target audience is as follows:
5.2.1 Working Community:
The first category includes the workers and employees who work in the businesses or offices located in the vicinity of our restaurant. Most of these workers live singly and depends on restaurants like us for their daily food needs. Secondly, many working-class people have a tight routine and they prefer to eat something as fast as they can without compromising on their busy schedule. That’s why this group will become the biggest consumer of our services. This customer group will drive the most number of sales so our marketing strategy will be specifically built to attract this group towards us.
5.2.2 Residential Community:
The second group of our target customers will be the community residing in the vicinity of our restaurant. BBQ is one of the favorite foods of American teens so we hope to have a lot of sales due to them. Not only teens, adults and middle-aged people also love BBQ. To attract this target group towards us, we will also offer various promotional packages.
The third category includes those people who do not live or work near our restaurant but have come to the area for any business purpose or commercial activity. We also hope to attract these passers-by with our economical and delicious BBQ.
The detailed market analysis of our potential customers is given in the following table:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
5.3 Business Target
Our business targets are as follows:
- To become the best BBQ restaurant in Manhattan within next 5 years of our launch
- To recover the initial investment in the form of earned profits within next 2 years of launch
- To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
5.4 Product Pricing
Product pricing is one of the most important factors in deciding the sales and marketing strategy. Selecting the price for products is a difficult task because startups have to attract customers while yield profit at the same time. These two things cannot be achieved at the same time and the only way out is to select a compromised trade-off or balance between the two. After considering the market demands, we have priced all our products in the similar ranges as of our competitors. Our menu is priced as follows:
- Meat by pound: $16.99 per pound
- Sandwiches: $6.99 per single meat and $9.99 per double meat sandwich
- Sides: $1.99 per single serving, $4.99 per medium serving and $8.99 per large serving
- Deserts: $2.99 per single serving, $5.99 per medium serving and $9.99 per large serving
- Drinks: $1.99 per serving
- Beers & Wines: $3.99 per serving
Sales strategy is also an important component of a BBQ restaurant business plan and hence it must be developed with great care and attention must be paid to every detail.
6.1 Competitive Analysis:
We have a really tough competition because BBQs restaurants are nearly everywhere in Manhattan but none of our competitors is offering as much high quality and delicious BBQs as ours. This is our main competitive advantage over other established businesses. Jim is known for making unique BBQs by combining recipes from various localities and his unique mixed recipes will give us an unparalleled edge over other BBQ restaurants.
6.2 Sales Strategy
After carrying out a detailed analysis, our experts came up with the following brilliant ideas to advertise and sell ourselves.
- We will ensure at least a 20% increase in website traffic each month and will ensure at least an 80% conversion rate, i.e. to turn 80% of our website visitors into our customers.
- We will get featured in the local news or on a certain website by a popular blogger to increase our brand awareness in people.
- We will advertise our restaurant in food magazines, newspapers, TV stations, and social media.
- We will offer a 20% discount on all meals for the first three months of our launch.
6.3 Sales Monthly:
Our monthly sales, as forecasted by the company’s financial experts, are as follows:
6.4 Sales Yearly:
Our yearly sales, as forecasted by the company’s financial experts, are as follows:
6.5 Sales Forecast
Considering the quality of our food and our exceptional marketing strategy, our sales pattern is expected to increase with years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on a yearly basis which are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following table:
|Unit Sales||Year 1||Year 2||Year 3|
|Meat by pound||1,887,030||2,680,320||2,588,240|
|Bears & Wines||134,240||394,340||842,230|
|TOTAL UNIT SALES||3,771,940||5,107,740||5,825,880|
|Unit Prices||Year 1||Year 2||Year 3|
|Meat by pound||$140.00||$150.00||$160.00|
|Bears & Wines||$150.00||$1,300.00||$1,450.00|
|Meat by pound||$2,149,800||$2,784,000||$3,383,200|
|Bears & Wines||$229,500||$365,500||$501,500|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Meat by pound||$0.70||$0.80||$0.90|
|Bears & Wines||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|Meat by pound||$989,300||$1,839,000||$2,679,700|
|Bears & Wines||$64,200||$224,700||$385,200|
|Subtotal Direct Cost of Sales||$1,294,100||$1,699,400||$2,104,700|
The success of a company heavily depends on its staff, the number and type of which should be determined in the initial stages. That’s why a detailed personnel plan is needed before starting a BBQ business. The personnel plan of Jim’s BBQ is as follows:
7.1 Company Staff
Jim will act as the Head Chef of the restaurant. The company will initially hire following people:
- 1 Manager to manage the overall operations of the restaurant
- 1 Cashier to receive cash from the people
- 2 Accountants to maintain financial records
- 4 Sales Executives responsible for marketing and advertising the restaurant
- 15 Chefs for preparing meals
- 10 Waiters to serve the customers
- 8 Cleaners to clean dishes and other facilities at the restaurant
- 7 Delivery Drivers to deliver BBQs to the local residents
7.2 Average Salary of Employees
The following table shows the forecasted data about employees and their salaries for next three years.
|Year 1||Year 2||Year 3|
The final thing to do before you think about how to start a barbecue business is to develop a comprehensive financial plan which will cover the detailed costs of startup.
8.1 Important Assumptions
The company’s financial projections are forecasted on the basis of following assumptions.
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
The following graph shows the company’s Brake-even Analysis.
The following table shows the company’s Brake-even Analysis.
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|Average Per-Unit Revenue||$260.87|
|Average Per-Unit Variable Cost||$0.89|
|Estimated Monthly Fixed Cost||$196,410|
8.3 Projected Profit and Loss
The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
The following table shows detailed information about profit and loss, and total cost of sales.
8.4 Projected Cash Flow
The following column diagram shows the projected cash flow.
The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$7,023||$8,610||$9,297|
|SUBTOTAL CASH FROM OPERATIONS||$47,143||$53,651||$59,359|
|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||$47,143||$53,651||$55,359|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$35,296||$39,549||$43,582|
|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||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.5 Projected Balance Sheet
The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
The following table shows data about business ratios, ratio analysis, total assets, net worth.
|Year 1||Year 2||Year 3||Industry Profile|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|Total Debt to Total Assets||2.68%||1.04%||0.76%||67.10%|
|Pre-tax Return on Net Worth||66.83%||71.26%||75.69%||4.40%|
|Pre-tax Return on Assets||64.88%||69.75%||74.62%||9.00%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||19.20%||21.16%||23.12%||N.A.|
|Return on Equity||47.79%||50.53%||53.27%||N.A.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|