The o.p. appears to have a substantial amount of experience in the food service industry so I apologize in advance if any of the observations are trivial or not applicable to this specific opportunity. I’m writing this from the viewpoint of a hypothetical investor (in reality I would never invest in a restaurant, for reasons explained below) and what I would expect to see to sway me to invest significant capital.
The o.p. mentions needing to write a business proposal, which is correct in this case. The business or operating plan, which describes the basic product of the business, the anticipated expenses and revenues, opeating margins, depriciation and amortization, return on investment, et cetera, are one part of a proposal. Given the current business in failing, you are also going to address the failings of the current business and how your proposed enterprise will improve upon those issues. You also need to detail out how you plan to initially attract new or lost clinetele and how you will retain them after initial enthusiasm, as well as personnel recruitment, training, and retention. This needs to go down to a fairly detailed level; how much, how many, and when to every question above. It may be a series of educated guesses but you at least need to be able to answer those questions.
I’m sure you are already aware of the slim margins a restaurant can see, and the necessity of controlling costs. You need to factor waste, theft, and fraud into that, and also minimize those as much as possible both by selecting comptent, honest people and keeping careful tabs on money, food, and equipment losses. I once worked at a restaurant where certain employees were known to be carrying off hundreds if not thousands of dollars a week in food and booze. They were also the top cooks so the owners probably felt like they couldn’t have called them out without compromising their ability to conduct business, but that is exactly the kind of stranglehold you don’t want to be in. You need every cook on the line to be able to work any position so if your top grill man is sick at home (having shot a little too much whiskey or heroin, probably) or your sous chef turns out to be walking out with boxes of steaks you can take the appropriate steps and keep going without a beat. This may mean that you work the job until you find a replacement on top of doing every other damned thing in the joint.
You say “diner” so I assume no beer & wine or liquor license; if not, reconsider and figure out what it would take. Liquor is a double-edged sword–it can bring a lot of trouble–but will also be by far the highest margin product you will sell. Food costs have been increasing but the prices that people will pay have been kept artificially depressed by chain restaurants like Denny’s and Waffle House which make money by selling a crap product at bargin basement price and hiring the people who can’t get hired anywhere else. You can only charge a few dollars more a plate for the nominally same food, regardless of how good it is, unless you are branding yourself as gourmet (more on this in a second). That means your margins are going to be tiny unless you can sell a beer along side the meal.
On the topic of gourmet “comfort” food: people seem to think they can offer basic staples with a little flair for twice the price. And, surprisingly, it works…for a while. But if you can’t actually offer a plate of chicken and waffles that is actually better than what can be had at Roscoe’s (and they make some damn fine chicken and waffles) you’re not going to fool many people for very long. Offering “fine” food is more than just food quality; it is presentation, service, and a certain quirky charm that nobody else in the area has that makes you special. If you don’t think you can do this, don’t try. There is a taco place down the road from me that thinks they can charge $8 for a taco because it is run by hipsters with cool hats, but I can get better food from the non-gourmet food truck down at the campus construction sites, so guess what; I don’t eat there and nor does anyone else.
All that being said, don’t try to do everything yourself unless you are literally prepared to live in the restaurant. Either find a partner, or a manager that you trust who is skilled at the things that you are not. Someone needs to manage the kitchen and all the bullshit that goes on in there, and someone else needs to ride herd over the waitstaff and the fucked up, kinky shit they get into on a daily basis. And don’t just train but drill your waitstaff on how to handle every conceivable problem, and then be there to back them up (or have a senior server who can) when they have the inevitable conflict with a difficult customer. You don’t want to alienate customers unduly, but don’t be afraid to tell a customer they are being unreasonable if they are actually making unreasonable demands. You cannot be tied up with one customer that is just looking to make drama or drive off a good server over a conflict that is actually meaningless to your busines.
Back to the business proposal (which I fear I’ve strayed far afield from) you need to be able to tell a story to an investor why you are going to be successful when three quarters of independent food establishments go out of business within a few years and without ever showing a profit. “You used to date my mom,” or “This town needs a diner,” aren’t enough; as an investor, I need to know that you are going to look after, protect, and grow my investment. Tell the story, with facts, figures, and a little panache, and include a healthy dose of how your particular experience is going to beat the odds.
Stranger