Investment

A blue dumpster covered in graffiti placed against a concrete wall, resting on asphalt
by David Klemt David Klemt No Comments

Your One-Page Business Plan is Trash

Your One-Page Business Plan is Trash

by Doug Radkey

A blue dumpster covered in graffiti placed against a concrete wall, resting on asphalt

Subtle, no?

If you’re planning to open a bar, restaurant, or hotel using a one-page business plan or an AI-generated template, you’re setting yourself up for failure.

Let me be clear: using an AI-generated template is the absolute worst option.

I’ve seen it too many times. A passionate operator walks in with a dream and a slick one-pager (or even a 20-page document) in hand.

There are a few bullet points. A vision statement. Some rough numbers. A bit of basic demographics. Maybe a “mission.”

They think they’re ready right then and there to pitch to investors, lease a location, and operate a successful business.

Here’s the truth: a one-page plan isn’t a plan.

What it is, is a wishlist. And wishlists don’t build profitable, scalable, legacy-driven hospitality businesses.

It might feel good in the moment to have something down on paper. But when the real work starts—the budget controls, construction delays, staffing issues, supplier negotiations, licensing hiccups, margin pressures—that one-page business plan doesn’t do one damn thing to help you.

So, let’s call it what it is: lazy, outdated, and dangerous.

The Seduction of Simplicity

One-page business plans are everywhere. They’re easy. They’re free.

Maybe they’ve become trendy because some business guru got lucky and built a unicorn business with one.

One-pagers are sold as “quick-start” tools for entrepreneurs who want clarity and speed.

Well, clarity without depth is misleading. Speed without structure is reckless.

If you’re building a side hustle e-commerce business to run out of your basement or garage, fine. Maybe a one-pager can help you validate an idea.

But if you’re investing $250,000 to $2,500,000 or more into a physical property? If you want to build a business that hires teams, serves guests, signs leases, and burns through cash every day? You need more. Way more.

This is particularly true of an industry where the margin for error is razor thin. Where failure rates still hover around 60 to 80 percent. And where the smallest mistake can cost tens of thousands of dollars in a matter of weeks.

Let’s Talk About What’s Actually Missing

A one-pager or basic template from the bank or an AI program might give you a north star, but it doesn’t show you the terrain, the weather conditions, or the pitfalls along the way.

Here’s what it doesn’t give you:

1. Financial Reality Checks

You won’t see line-by-line startup budgets. You won’t understand contribution margins. And you won’t forecast labor productivity or revenue per available guest during different dayparts or seasons.

Most one-page plans have a single line called “Projected Revenue,” and maybe a “Cost of Goods Sold” and “Profit” box, if you’re lucky.

That’s not a financial strategy. That’s napkin math.

2. Market Nuance

“Target Market: Millennials.” Oh really? Which Millennials? Urban 30-somethings with disposable income? Foodies influenced by TikTok? Business travelers who value speed and convenience?

One-pagers flatten your market. What is the projected TAM/SAM/SOM?

These one-pagers don’t unpack demographics, psychographics, or behavioral segments. They definitely don’t account for neighborhood trends, transit flow, or tourism cycles.

3. Operational Strategy

Where’s your tech stack? Your vendor procurement plan? Your SOPs?

What about your training systems, performance metrics, shift structure, and flow-of-service blueprints?

A one-pager won’t even mention these, let alone show you how they connect to your financial model.

4. Brand Experience

“Cool vibes” is not a brand strategy. “Elevated, yet accessible” is not brand positioning.

Real brand work takes introspection, data, story, and soul.

A one-pager gives you slogans. A proper strategy playbook gives you meaning, and that in-depth meaning is what drives guest loyalty and differentiation.

5. Risk Mitigation

Let me ask you something: How do you know the size of property you need? How do you know what space is available to you?

If you don’t know either of those details, how do you plan to maximize your available budget, and the opportunity?

What happens if your chef walks out before you open? If your liquor license gets delayed?

Your one-pager doesn’t know. Because one-page business plans assume success.

Real strategic playbooks prepare you for failure and build contingency into every strategy.

So, Why Do So Many People Still Use Them?

Because they’re fast. Because they’re cheap. They look nice.

Because someone on YouTube said you could launch your restaurant in 60 days with ChatGPT.

And, let’s be honest, because they’re easy to hide behind.

You don’t have to face your gaps. You don’t have to confront what you don’t know. Your free to keep pretending your dream is “almost ready,” when really, you’re coasting on delusion.

One-pagers, templates, and auto-generated AI business plans might feel efficient. Most of the time, they’re simply a distraction from doing the real work.

You Need Playbooks, Not Just a Plan

At KRG Hospitality, we don’t do templated PDFs. We don’t sell cookie-cutter plans.

What we build with our clients are playbooks. These are dynamic, connected, tactical documents that actually help you start, stabilize, and scale your business.

Here’s what that looks like with our KRG Method program:

Feasibility Study

Validate your market. Understand your guests. Assess the viability of your business. Build confidence for your investors, and for yourself.

Concept Development

Design the business experience: programming, service, space, and an introduction to design. Create the DNA of your operation with clarity and cohesion.

Prototype Playbook

Layout. Flow. Fixtures. Furniture. Equipment. Zones. Build the engine that powers your day-to-day without friction.

Brand Strategy

Voice. Story. Purpose. Positioning. No more “vibe” businesses. Instead, you’ll build a brand that matters.

Tech-Stack Playbook

POS. PMS. CRM. Ordering. Inventory. We plug you into the right systems from day one.

Marketing Playbook

We map the entire journey from awareness to loyalty. Not just what platforms to use, but how to use them effectively for ROI.

Financial Playbook

Revenue models. Labor strategies. Cost controls. Funding schedules. Pre-opening cash flow. Profitability targets. Real math. Real insight.

Business Plan

This is the final product, the operation-facing doc. It’s not the starting point, it’s the summary of all your previous thinking tied into one strategic playbook.

And guess what? It works.

We’ve maintained a 98% startup success rate since 2009. And our clients average 18-plus-percet profit margins (over 24 percent for hotels). That doesn’t happen with a one-pager.

Real Story, Real Risk

We recently had a potential client come to us after trying to launch their venue with a one-page plan, hence the inspiration for this article.

They claimed they were 60 days from opening. Lease signed. Equipment was ordered.

Well, here’s the thing: There was no brand. There was no menu strategy, no staffing plan, no leadership. The financial model? Non-existent. The only semblance of a tech stack was a basic POS built for retail.

Their one-page plan had a paragraph about “innovative food,” and how they “will use social media and build great local partnerships.”

What it didn’t have was reality.

They were behind in their schedule, already $100K over budget, and couldn’t secure any investor confidence to help with their needed cash injection.

Had we been involved earlier, they could have saved thousands of dollars and months of stress.

The Bottom Line

I bet you’ve heard this one before: If it’s worth doing, it’s worth doing right.

If your business is worth doing, it’s worth doing right from the very start.

You don’t need a shortcut, you need a system. You don’t need a one-pager, you need a proven method.

And you don’t need a “pretty” template, you need to think deeply about your business, because that’s what leads to results.

At KRG Hospitality, we don’t sell plans. We build brands, systems, strategy, and profit.

What we sell is strategic clarity.

So, if you’re serious about this business, ditch the one-pager. Because success isn’t something you manifest, it’s something you plan for. And planning requires both depth and critical thinking.

Image: Kevin Butz on Unsplash

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AI-generated image of a closeup of a loan application and pen
by David Klemt David Klemt No Comments

The Banks Have it Wrong

The Banks Have it Wrong

by Doug Radkey

AI-generated image of a closeup of a loan application and pen

It’s widely assumed that a well-written business plan will impress banks and SBA-type programs, and secure the funding required to launch a hospitality concept.

When starting a bar, restaurant, or hotel, most people are told exactly that: “You just need a business plan.”

The problem, however, lies in how these business plans are created. Too often, aspiring entrepreneurs turn to fill-in-the-blank templates provided by banks or online resources. They believe that simply completing the form will open the doors to financing, and start them on the path to building a successful business.

Unfortunately, this approach can do more harm than good. Let’s explore why the traditional reliance on business plan templates, including AI-generated business plans, can set both businesses and lenders up for failure.

In this article I dive into real-world examples, examine the success and failure rates of loans in the hospitality industry, and outline why banks and other programs need to rethink their loan approval processes to reduce risks for not only themselves but the entrepreneurs they serve.

The Problem with Business Plan Templates

Imagine this scenario: You’re excited to open a hospitality business, but you don’t know where to begin. You do some research, and learn quickly that you need a business plan to secure a loan. The bank or Small Business Administration (SBA) offers you a convenient template to complete, or you find one online that seems like it will do the job. You fill in the blanks, submit the plan, and, to your delight, the bank approves all or a portion of your loan.

However, the approval doesn’t mean your business plan is actually sound. Read that again.

It only means it meets the basic requirements of the bank’s loan approval checklist. A template provides a false sense of security, making entrepreneurs think they’ve covered all their bases when, in reality, crucial aspects of the business are left unaddressed.

For example, I recently reviewed a business plan for a client who had used a bank-provided template prior to our engagement. The plan was approved by the bank, but upon closer inspection, I found numerous errors: the start-up financial projections were unrealistic, the cash-flow analysis was incomplete, and crucial aspects of market analysis were missing.

The result? The project is on track to run out of money before it even opens its doors.

This example highlights a troubling issue: Templates don’t provide clarity, and they certainly don’t prompt critical thinking about the true costs to start, and the real challenges that the business will face once it’s operating.

The Risks of Using Templates

Business plan templates may seem like an easy solution, but they come with significant risks.

  1. False Sense of Security: A completed template may look professional, but it doesn’t guarantee that the plan is sound or comprehensive. Key elements can be glossed over, copy and pasted, or simply misunderstood.
  2. Lack of Critical Thinking: A template doesn’t ask tough or industry-specific questions. It doesn’t force you to analyze the competitive landscape, identify potential risks, or develop a clear financial strategy around a unique concept.
  3. Inadequate Financial Analysis: Templates often provide a basic structure for financial projections but fail to help you understand the true costs of starting and running a business. A template won’t be specific to your concept, your revenue and cost channels, or industry benchmarks. The template won’t catch errors in your financials, leaving you and the bank exposed to significant risk.
  4. Inability to Stand Out: In a crowded market such as the US, Canada, or Europe, differentiation is key. A cookie-cutter business plan won’t help you stand out from the competition. Despite handing them out, banks see thousands of these plans, and if you don’t demonstrate why your concept is unique and viable, you’re setting yourself up for denial.

The Dangers of AI-Generated Business Plans

As technology advances, AI-powered business plan generators are becoming more popular. I’ve seen a few ads for them over the past few months.

These tools claim to be able to create a business plan in minutes, promising efficiency and ease. However, relying on AI to write your business plan is just as dangerous as using a template. The same issues apply: lack of clarity, shallow financial analysis, and the absence of critical thinking.

AI-generated business plans may provide a surface-level solution, but they cannot replace the deep analysis required to make a business successful. Business plans need to be customized and thought out thoroughly, with insights drawn from real-world strategic planning.

Hospitality Industry Loans: Success and Failure Rates

The hospitality industry—particularly the accommodation and food service sectors—has one of the highest loan approval rates, but it also has some of the highest operator failure rates.

According to the U.S. Small Business Administration, in 2022 alone, 6,297 loans were approved for the accommodation and foodservice industry. These accounted for 13.2 percent of all small business loans, and 19.2 percent of total loan dollars. The average loan amount was US $784,768.

Despite these impressive loan numbers, the success rate of a business in this industry tells a different story. Only about 20 percent of hospitality businesses make it to their fifth year, and the average time to pay off a business loan ranges from five to ten years. The failure rates are driven by various factors, including cash-flow problems, a lack of market understanding, and poor financial planning.

So, why do banks continue to approve business loans based on inadequate business plans?

The Need for More than a Business Plan

Each reason for a business failing points to one underlying cause: lack of strategic clarity. In many cases, these businesses began with a standard business plan but skipped the other non-negotiable playbooks truly needed to be successful.

A well-rounded approach to strategic planning includes much more than a business plan.

Aspiring or seasoned bar, restaurant, and hotel operators need to develop feasibility studies to determine whether their business models can succeed in their target market. They also need concept development plans, prototype drawings, brand strategy plans, tech-stack plans, marketing plans, and financial playbooks.

Only after these steps are completed should the final business plan be written.

How Banks Can Improve Loan Success Rates

Banks have an opportunity to reduce their risks significantly—and increase the success rates of the businesses they fund—by requiring more than the completion of a business plan template during the loan approval process.

Instead, they should request detailed feasibility studies, along with the other playbooks, that go beyond the basics.

By working with entrepreneurs to ensure they have true clarity about their business model, market conditions, and financial outlook, banks can reduce default rates, and build stronger partnerships with their clients.

In addition, by encouraging the use of customized plans over templates or AI-generated plans, banks can ensure that they are investing in businesses with a clear path to success.

My Final Thoughts

Yes, a business plan is a vital tool for any entrepreneur, but it must be more than just a template, and lenders need to stop relying on these fill-in-the-blank approaches.

To build a successful business, you need more than a plan on paper; you need clarity, strategy, and a deep understanding of your market and financials. It’s time for banks, financing programs, and even angel investors to get it right and demand more than a standard business plan template. Only then will both the business and the lender see the long-term success they’re striving for.

Perhaps they, too, can then achieve success rates in the 90th percentile.

Image: Canva

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Front of house staff member using SevenRooms
by David Klemt David Klemt No Comments

EHI and Danny Meyer Invest in SevenRooms

EHI and Danny Meyer Invest in SevenRooms

by David Klemt

Front of house staff member using SevenRooms

SevenRooms is showing no signs of resting on their laurels, announcing a major new investor: Enlightened Hospitality Investments.

EHI, a private-equity fund, traces its launch back to 2016. The fund, launched by and affiliated with Union Square Hospitality Group, typically makes investments in the $10-25 million range. Generally speaking, EHI makes non-control investments.

As you’re likely well aware, USHG’s founder and executive chairman is none other than restaurateur Danny Meyer. The Shake Shack chairman is also the managing partner of EHI.

Investment in SevenRooms by EHI—and by extension Danny Meyer—is huge news. Meyer now joins other high-profile chef and restaurateur investors in SevenRooms:

“At EHI, we always pay close attention to transformative tech that advances high touch,” says Meyer. “Far more than a reservations platform, SevenRooms provides abundant tools to create highly customized guest experiences and equips both restaurant and hotel teams to do what they do best—deliver truly memorable hospitality.”

Continual Growth

Since 2011, SevenRooms has pursued growth while serving the hospitality industry.

Whether in terms of innovation, partnerships, appointing the right people to key roles, or attracting investors, the platform is constantly strategizing to ensure its longevity.

Just look at what the company has achieved over 24 months:

  • March 2021: SevenRooms appoints Pamela Martinez as the company’s chief financial officer.
  • September 2021: SevenRooms announces a multi-year partnership with TheFork. The partnership is big news for operators throughout Europe and Australia. Further, the partnership illustrates how the company is pursuing global growth.
  • October of 2021: The company forms a partnership with Olo. This ensures clients who also use Olo are able to capture data from a key group: off-premise customers. That data creates profiles for such customers automatically. That means operators can learn more about—and effectively market to—customers who engage with them via online orders.
  • December 2021: SevenRooms and ThinkFoodGroup—the hospitality company behind Chef José Andrés’ portfolio of restaurants—make their partnership public. Interestingly, this partnership also includes ThinkFoodGroup joining SevenRooms in an advisory role.
  • January 2022: The platform announces the hiring of a chief revenue officer, Brent-Stig Kraus.
  • December 2022: SevenRooms enters into a partnership with Competitive Social Ventures.
  • January 2023: The company announces the appointment of their first-ever chief marketing officer.

As our industry rapidly attracts tech platforms and innovations, it can be difficult to know which companies are here to stay.

The growth of SevenRooms shows stability and longevity. Those are two key factors that should inform operator decisions when considering the tech stack.

Image: SevenRooms

Try the free KRG Hospitality Bar & Restaurant Start-up Calculator, rectangle
by David Klemt David Klemt No Comments

Introducing the KRG Start-up Calculator

Introducing the KRG Bar & Restaurant Start-up Calculator

by David Klemt

The KRG Hospitality Bar & Restaurant Start-up Calculator banner

We are incredibly excited to announce the launch of a helpful new tool for new and veteran operators alike: the KRG Hospitality Bar & Restaurant Start-up Calculator.

It couldn’t be simpler to use, and it will give users an idea of how much funding their project will require.

Just enter the square footage you desire or that you know you’ll need. Then, our brand-new calculator generates more than 40 key costs for your review.

Know Your Numbers

New or veteran, single unit or multi, success in this business requires an obsessive knowledge of numbers.

Costs, in particular, are operators’ eternal opponents. People incur the greatest costs before they ever open their doors for business.

Now, that’s just common sense on one hand. Securing a location, kitting out a kitchen, building out the front of house—these are five-, six- and sometimes even seven-figure endeavors.

However, on the other hand, the massive costs that come with opening a new restaurant or bar are often the result of surprises or insufficient planning.

That’s where our calculator comes in.

Here to Help

There’s a reason that the KRG Bar & Restaurant Start-up Calculator populates more than 40 fields.

That reason is simple: preparation is key.

For instance, does your current plan budget for utility deposits, business insurances, opening F&B inventory, soft opening and launch month strategies, the complete array of construction or renovation costs?

Here’s a real-world example of our calculator at work:

Let’s say you want to open a 2,200-square-foot pub. At the minimum, you should budget at least $2,547 for business insurances and nearly $8,200 for opening F&B inventory. And you’ll likely want to set aside at least $14,806 for emergencies.

Try it out for yourself today!

Disclaimer

As with any online calculator, this free calculator is to be used as an initial reference point. Every project is unique in its own way. Property and leasing costs, equipment, and renovation costs will heavily fluctuate based on market, concept, and the status/condition of a chosen property.

Image: KRG Hospitality

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