Before putting up a restaurant business, it is important to write a feasibility studies to analyze the current situation if it is possible to have a successful restaurant business. Feasibility study is an effective tool to evaluate a business if it is feasible.
Some factors to consider are location, competition, price value strategies and population. Also, feasibility study evaluates terms of lease, rental rents, tax projections, cost, sales, and special assessments.
Restaurant feasibility study includes the financial analysis of the restaurant’s projected income and operating expenses. It should provide a market analysis with ROI to be used as a basis
for business plan. It also included the capital budget expense, sales projections, labor costs, detailed profit and loss statements as well as the break even analysis. Other items to be included are the working capital requirements, equipment and fixture costs, payback forecasts and analysis, pre-opening budget and all general costs estimates cost.
Restaurant feasibility study is written to evaluate the potential of having a restaurant in a certain place based on extensive research and investigations. It is usually used for the reason of having potential investors of the restaurant to make an investment decision.
To sum up, restaurant feasibility study will definitely study the following elements such as the potential location, marketing figures, existing competition, industry, cost and expenses, and organizational structure.