Steak House Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Steak House Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Steak House business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Steakhouses are one of the most popular types of restaurants within the United States. More so than any other country, American citizens consume more beef per capita than any other place in the world. As such, these businesses have become very popular as both mid-end and high-end restaurants. Generally, the per ticket revenues for a steakhouse can easily reach $50 per person even if alcohol is not included in this overall tab. These businesses typically generate high gross margins with that range anywhere from 65% to 85% depending on the type of quality of cuisine sold. Usually, higher end steakhouses typically produce higher gross margins given that they age their beef and are able to charge a higher per ticket profit for each customer.
The startup costs associated with the new steakhouse are considered to be moderate and typically range anywhere from $250,000 to $1.5 million depending on whether or not real estate is being acquired in conjunction with the steakhouse operation. These businesses do tend to do okay during times of economic recession. However, higher end steakhouses typically do see a decline in the revenues during times of economic recession is more people will go to different lower-cost restaurants or forgo eating out altogether. However, these businesses do remain popular among corporations that are entertaining clients that are conducting business deals – and as such, by maintaining an expansive corporate clientele these businesses generally are able to survive even severe economic recessions.
Given the that this is a food and beverage business, most financial institutions are willing to extend a loan equal to 80% of the total capital needed in order to launch the operations of the business. The owner, restaurateur, or group of investors developing this business are usually required to put up about 20% of the needed capital which is usually allocated towards working capital as well as inventory acquisitions. Of course, a steakhouse business plan is going to be required. This business plan should include a three year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page that features industry information that is on par with that of the economy as a whole. As it relates to the steakhouse industry research, restaurants produce in excess of $715 billion of revenue and provide jobs for more than 15 million Americans. Gross payrolls in each of the last five years has exceeded $200 billion. The continued demand for restaurants is expected to remain strong as the economy moves forward. It can be estimated that restaurant revenues will increase by about 2% to 4% per year depending on the overall economic productivity. During times of economic recession, industry revenues pertaining to restaurants typically stay flat during these times.
Given that this is a business that will have a local and regional draw, the demographic analysis for the business plan needs to be expansive. Information in this section should include a discussion regarding population size, population density, median household income, median family income, number of large corporations within the market, percentage of people that maintain a large client base that needs to be entertained, and other relevant statistics to the local and regional market. Typically, the target market radius for a steakhouse is approximately 25 miles provided that they have developed a very strong brand name. Additional information regarding competitor should be included as well and this analysis should include a discussion regarding chain competitors. It should be noted that many people do prefer to eat and it independently owned and operated steakhouse as opposed to going to a large-scale chain. The discussion regarding all other restaurants within the market should be included as well especially as it relates to businesses that provide American-based cuisine.
A steakhouse marketing plan needs to be developed and it needs to be developed so that the brand can easily reach several thousand to several hundreds of thousands of people on a regular basis. Foremost, many new restaurants will seek to have articles placed in lifestyle magazines, food magazines, and related publications so that they can have individual reviewers provide a strong review for the new steakhouse. However, this does take time and some steakhouse owners will hire a publicist in order to properly have dislocation found by individuals within the market. Usually, a new review for a steakhouse in a lifestyle or food magazine typically takes about six months to acquire. Additionally, many steakhouses will engage in a very broad based marketing campaign including print advertisements, radio advertisements, commercials on cable television networks, and via online channels.
It is of special importance at the business maintain an expansive profile online via a proprietary website as well as social media platforms. As many people find specialized businesses and restaurants is through the Internet – it is imperative that the company’s website showcase the menu, steakhouse location, hours of operation, pricing information, biographies of key chefs, and other relevant information to the restaurant. There should be online related functionality that allows people to immediately place a reservation at the facility without having to call. This is becoming commonplace among many larger scale restaurants, and as such – it would be beneficial to the business to have this type of information available on the online platform.
The company’s website should all should be listed among major search engines including Yahoo, Bing, and most importantly Google. There are a number of ways that a web developer can ensure that the business appears in search results very quickly once the restaurant commences operations. It is also very important that the steakhouse maintain an expansive presence on social media platforms including FaceBook, Twitter, Instagram for pictures, TripAdvisor.com and Yelp.com. These online platforms will allow individuals to place reviews about the steakhouse once they have had a meal at the facility. Over time, these reviews will substantially boost the brand-name visibility of the restaurant while providing a significant amount of credibility.
New functionality has been frequently introduced to major social media platforms that allow individuals to request recommendations from their friends and colleagues. As such, these online recommendations can be distributed very quickly among the very large number of people. It is in the best interest of the steakhouse to have this type of online marketing apparatus which can be managed in-house or through third-party social media consultant. It should be noted that while a social media consultant is an expensive investment for any new business, the results can be phenomenal if the individual is able to properly position the marketing messages of the steakhouse through online channels that may go viral. Finally, social media platforms allow restaurants like steakhouses to immediately connect with a large fan base. Specialized deals, discounts on drinks, happy hours, and other events that are frequent at the steakhouse can be disseminated through online channels.
One of the other ways that many steakhouses well developed their business is by maintaining relationships with local event planners and wedding planners that will use the steakhouse facility for rehearsal dinners and corporate events. This can be one of the quickest ways for a new steakhouse to book large-scale parties that will produce substantial streams of revenue on an ongoing basis. The cost of developing these relationships is minimal given that it is mostly the owner reaching out to these companies in order to develop a referral relationship. Of course, the ability to host large-scale offense depends on the size of the steakhouse.
A steakhouse SWOT analysis should be produced as well. As it relates to strengths, steakhouses typically generate substantial gross margins from their sales of American focused cuisine. If the business has a liquor license than the gross profits and net profits of the business can be substantially boosted over a over the life of the business. These businesses are moderately immune to negative changes in the economy once established and once they have an existing base of corporations that will frequently entertain clients and business partners at these locations. The operating costs are considered high, but the gross margins to ameliorate these risks.
For weaknesses, the operating costs are high and as such the entrepreneur is going to need to keep a very close eye on inventory acquisitions, payroll expenses, and related expenses to the operations of the steakhouse facility. Additionally, there usually another handful of companies that offer the same type of steak and American cuisine of that of this type of business.
Relating to opportunities, one of the ways that steakhouses can rapidly expand the revenues is through offering catering services to the general public. In some cases, these businesses can provide commercial kitchen services so that large-scale caterers, event planners, and venues can place large orders for the delivery of prepared meals. This can be one of the amazing ways to increase the business during its first five years of operation. Also, many steakhouses that have become very popular will seek to develop a second location usually after the third year of profitable operation.
For threats, steakhouses have been around for several hundreds of years and people will continue to go to restaurants – there are very few ongoing risks and threats as it relates to a steakhouse. Of course, the owner needs to keep a very close eye on the economy as well as underlying inventory input costs, namely beef, in order to ensure that pricing is accurate that will allow for the business to remain profitable. Additionally, safe food handling techniques are always a threat for any business given that if someone becomes ill this can create a liability for restaurant. However, by implementing a number of procedures and protocols as it relates to the safe handling of food these risks are brought down to a minimal level.
A steakhouse can be a fun and exciting type of restaurant to own and operate. These are very popular among American citizens and will continue to be so over the next 10 to 20 years. The only real risk in running these operations outside of competition from other local restaurants is a major economic recession that would change the way that a steakhouse conducts business as it relates to their pricing.