Business Plan for Resturant

Topics: Restaurant, Demographics, Foodservice Pages: 21 (2994 words) Published: September 11, 2009
Restaurant Market Analysis

University of Wisconsin-Extension

Goodpasture, John; Ryan, Wm.; Boger, Carl;
Buergermeister, James; Way, Wm.; Kempen, Alice; Weyer,

Market conditions in your area have a significant impact
on the profitability of your restaurant. The strength of
the local market affects how many customers you will
serve and the menu prices that you can charge. This
guidebook will help you analyze your market so that you
can gauge the potential of your existing or proposed
operation and make more informed operating and investment

On the pages that follow are a series of checklists to
help you collect and analyze information as part of a
restaurant market analysis. The checklists, tailored to
the restaurant industry, will serve as a learning tool to
help you understand the many market factors that impact
your profitability.

Types of Questions Answered

By conducting a market analysis, you will be able to
answer questions such as:
* What trends are emerging in the food service industry?
* What are the strengths and weaknesses of my
* Is my location suitable?
* Does my concept fill a niche in the market?
* What is the potential number of customers I can serve
per year?

This guidebook is designed to provide you with an
industry-specific market analysis format that can be used
in a feasibility study, business plan or marketing plan.
It can be used to analyze the market potential of an
existing operation, an expansion or a new development.

Existing operators can use a market analysis to identify
opportunities to improve sales. The analysis can provide
valuable information on market conditions to help in
forecasting and budgeting. It also provides a foundation
for an effective marketing plan.

Prospective operators can use a market analysis to
project sales volume for a new restaurant venture. The
analysis can provide essential information required
in a business plan or feasibility study. The risks of a
business investment are lessened by careful analysis of
the market.

Using your market analysis findings, you can estimate the
financial potential of your venture by creating financial
projections. If you are a prospective restaurateur, these
projections will help you determine if your venture
is feasible. Guidebooks and software for developing
restaurant financial projections are available through
University of Wisconsin-Cooperative Extension.

Conducting Your Analysis

The sections that follow include data collection
checklists and work sheets. While the section on
projecting sales should be the final step, the other
sections can be completed in any order. Remember that
your efforts in studying the market will provide you with
information to make better, more informed decisions. Good

I.Industry Trends

Studying industry trends is one of the first steps in
conducting a market analysis. It will help you identify
opportunities and threats in the industry that may affect
your profitability. Consider the following Food Service
Industry 2000 Trends, reported by the National Restaurant

* Consumers will spend a greater portion of their food
dollars away from home;

* Competition in the food service industry will be more
intense as growth continues;

* Major food service chains will increase their shares of
both sales and units;

* Independent operators will be the main source of new
restaurant concepts;

* Nutritional concerns will be critical at all types of
food service operations; and

* Service will become a more important point of

Studies on consumer eating and drinking patterns are
available from various sources. Such studies report
trends in consumer attitudes and behaviors regarding food
away from home.

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