Simulated Business Plan

The following hypothetical business plan illustrates the various elements required in this type of document.

Courtesy ACC Business

Pierre's Berkshire Bistro

Executive Summary

We propose to open a French restaurant at the edge of Pittsfield, Massachusetts, in Berkshire County in early 1999. This restaurant, which would be the only French restaurant within approximately 20 miles in any direction, would capitalize on the region's growing population of affluent professionals interested in gourmet dining.

The Potential Market

Pittsfield, Massachusetts is at the center of Berkshire County in western Massachusetts, a region that is undergoing a dramatic transition. Pittsfield was once a blue-collar town, the site of substantial production facilities for General Electric, a giant company that was founded in nearby Schenectady, New York. In recent years, manufacturing has declined sharply in western Massachusetts, causing substantial unemployment in such cities as Pittsfield and North Adams and a decline in population. The population of Pittsfield, the largest city in the county, has fallen from 58,562 in 1964 to 42,825 in 1994, according to the city's annual report.

But the decline in population within Pittsfield's city limit has been paralleled by a growth in population elsewhere in the county. And while blue-collar employment has declined, the total number of white-collar professionals has risen substantially.

Much of this growth has been associated with the region's attractions for tourists. Because of the cool weather and scenic vistas, during the gilded age families such as the Vanderbilts and the Westinghouses built estates in the Berkshires. More recently, the base of visitors has been widened extensively because of the area's cultural attractions. Since Tanglewood, approximately 10 miles south of Pittsfield, was selected as the summer home of the Boston Symphony Orchestra 60 years ago, the region has become a mecca for music lovers from New York and Boston.

In addition, the Williamstown Playhouse is nationally recognized for its summer productions, as is the Stockbridge Theater Festival. Moreover, Jacobs Pillow in Lee, Massachusetts, is the nation's leading summer festival for dance. These major cultural institutions have, in turn, spawned a variety of other cultural events.

While tourism started with summer visitors, it has become a year-round industry. The region is served by a number of ski areas, including Brody Mountain, Jiminy Peak, and Butternut Basin. Moreover, it is an important destination during the fall because of the changing foliage. Thus, tourism has become the largest industry in Berkshire County, generating total revenues of $600,000 in 1994, according to the Berkshire County Chamber of Commerce.

The year-round tourism, in turn, has led to substantial migration of affluent individuals from the New York and Boston metropolitan areas. These migrants fall into two categories: Upon reaching retirement, a number of those individuals who have owned second homes in the region have sold their homes in the New York or Boston area and have moved to the Berkshires on a full time basis. In addition, a number of working professionals have also migrated to the area. Such technological advances as the ubiquitous faxmachine as well as modems and overnight courier service have permitted these professionals to live full time in the Berkshires while maintaining their professions.

In addition to the growing upper middle class professional population within Berkshire County, there are substantial enclaves of middle class professionals in every direction from Pittsfield. Thirty miles to the west is Albany, the capital of New York with a sizable population of educated government employees. To the north lies Williamstown, Massachusetts, and Bennington, Vermont, the homes of Williams and Bennington Colleges. To the east, there is Northhampton, Holyoke, and Amherst, Massachusetts, the sites of Smith, Mount Holyoke, and Amherst Colleges as well as the Amherst campus of the University of Massachusetts. To the south there is not only Great Barrington, home of the Simon's Rock campus of Bard College, but also the Hotchkiss School in Lakeville, Connecticut. Thus, within a 40-mile radius of Pittsfield, there are a number of communities that have a substantial population of college professors and other professionals with cultivated palates. This sizable affluent demographic group is interested in fine dining. They represent a market for what the restaurant industry calls a "white tablecloth" restaurant.

According to the Berkshire County Chamber of Commerce, the aggregate revenues of restaurants in the county totaled $50,000 million in 1994, a 25 percent increase over 1990. Approximately 30 percent of this revenue was generated by what the restaurant industry calls "white table cloth" establishments, as opposed to coffee shops or fast food restaurants. Restaurateurs have responded to the Berkshire's changing population mix by opening several fine restaurants.

However, they tend to be concentrated in southern Berkshire County. The competition for the proposed restaurant would be comprised of those restaurants offering "gourmet" or "continental" cuisine, and averaging dinner prices in excess of $20 per person, excluding tax, tip, and liquor.

The competitors include four French restaurants: Le Jardin in Williamstown, La Tomate in Great Barrington, Les Hotels Brasserie in Hillsdale, New York, and Les Pyrenees in Canaan, New York. All are operated by owner-chefs with experience in major New York City restaurants. All have been featured in national gourmet publications. All are year-round restaurants operated as businesses, they are neither seasonal nor hobbyist enterprises. And all of them are at least 20 miles from Pittsfield. continued...

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