Whether you're seeking investment, planning for growth, or simply looking to establish a clear operational blueprint, a comprehensive restaurant business plan is indispensable. A meticulously prepared restaurant business plan serves multiple functions: attracting investors, forecasting profits, and strategizing for sustainable growth.
In today's food service sector, a detailed plan will help you navigate the complexities of the market confidently. This guide will walk you through creating a robust restaurant business plan and help define your path to success.
How to develop a restaurant business plan
When creating a restaurant business plan, the goal is to outline profit generation strategies. In addition to the financial aspects, a well-structured business plan should encompass factors like branding, staffing, and marketing, so before you start drafting, take a moment to take these initial preparatory steps.
Define your restaurant concept and priorities
During the startup phase, establish your priorities. If you're launching a fast food eatery, you might focus on quick service, a wide menu selection, and competitive prices — but if it's a food truck, you might prioritize mobility and affordability. If you're establishing a high-end restaurant, your priorities likely are exceptional customer care, a sophisticated ambiance, and top-quality ingredients. Here's the bottom line: Can you explain your restaurant idea quickly and concisely? What about your restaurant idea is unique and gets you excited? Develop a clear vision of your restaurant and list what's most important to you — your business strategy will reflect your concept.
Review sample restaurant business plans
Learning from others is key, so get networking or researching any connections in the industry so you can review established restaurant business plans. Look at how other plans showcase unique selling points, and undertake market analysis to identify areas for cost optimization and margin improvement. Ultimately, your plan should reflect your distinct vision, but understanding how others built out their vision and the structure they adhered to is valuable in helping you develop your restaurant business plan.
Calculate startup and ongoing costs
Assess your financial needs as you plan your restaurant budget and consider the range of startup costs. Are you taking over an existing space or are you renovating and building from scratch? Calculate all associated expenses such as operations, leasing, renovations, equipment, initial inventory, and licensing fees — you'll want to consider every variable cost line by line, which varies widely based on your business model.
Estimate your daily operational costs, such as rent and utilities. How much will ingredients cost to make your menu and what does your payroll look like? What roles do you need to hire to get your operation running? Then think about your marketing budget — how much will it cost to design the website, the take-out menu, and additional promotional materials? These questions should help inform your financial plan, budget, and overall cost of launching and running your restaurant effectively.
Key sections of a restaurant business plan
For a successful restaurant concept, aim for a culinary experience that fills a gap for your target customers, even if they still need to be made aware of it. While drawing inspiration from various sources, remember that a well-crafted restaurant business plan typically includes elements like an executive summary, company overview, industry analysis, operations plan, marketing plan, financial analysis, and restaurant menu.
1. Executive summary
An executive summary describes the big picture for your restaurant. Offer a compelling overview of your restaurant concept. Introduce yourself, your vision, and the market you're addressing. Include items like your mission statement, core values, and key differentiators. Remember, this is the first thing potential investors will read. It needs to grab their attention, convince them that there is a strong potential for success, and get them excited about what you bring to the table.
2. Company overview
You've already provided an overview of your restaurant concept, so now dive into the details of your restaurant, including its legal structure. Here, you can describe your restaurant concept in more detail, including cuisine, service style, operating hours, and ambiance. What makes your restaurant different? Include the contacts, owner details, location, and other relevant information about the restaurant you're opening.
3. Industry analysis
A thorough analysis demonstrates your understanding of the broader restaurant market, so identify current trends affecting the sector and analyze your local competitors and nearby businesses. Are you close enough to office buildings to expect daily lunch rushes? Are you in a shopping center where there's great foot traffic? Is there a movie theater nearby with more opportunities for dinner service?
Describe the neighborhood's economy, demographic makeup, and projected growth. Are there other opportunities and challenges you anticipate and is there any additional information potential partners or investors find helpful? This section allows you to be specific while showcasing your initiative to prove what gaps your restaurant fills.
4. Operations plan
An operations plan details the day-to-day running of your restaurant, from the organizational structure and kitchen workflow to customer service protocols and employee play. Outline your restaurant's processes, plans, and procedures that will ensure efficiency and quality, making sure to include information on suppliers and equipment needs. Will you be bringing in a notable chef, mixologist, or sommelier? What restaurant technology will you invest in and will you pursue an exclusive partnership with a third-party delivery service?
A majority of merchants say that without DoorDash, their overall revenue (58%), new customer growth (52%) and revenue growth (51%) would have been lower.
5. Marketing plan
Your marketing plan should articulate how to attract and retain customers through customer awareness and acquisition initiatives, advertising, public relations, community engagement, and events. Discuss branding, promotional tactics, and community engagement strategies. Detail your plans for digital marketing, traditional advertising, and any unique campaigns or events designed to build buzz and loyalty and keep your patrons active.
Will your team take on your marketing initiative, or will you hire a social media consultant or PR agency to help you with launch and post-launch activity? If you're using an external vendor, it's important to include their client list, successful case studies, and a brief write-up of the services they'll provide for you. How you communicate with your patrons outside the walls of your restaurant will inform your marketing strategy.
6. Financial analysis
Arguably the most scrutinized section, the financial analysis provides a detailed forecast of your revenue, costs, and profitability. When do you think your restaurant will break even? Calculate and project when you feel your restaurant's monthly expenses become less than the income it'll generate — remember, these timelines can take anywhere from six months to years.
When you're pre-launch, your forecasts are essentially educated guesses, so anchor these guesses in thorough market research, actual expenses, and expected earnings. Use realistic assumptions to build credibility with potential investors to include a five-year outlook covering estimated revenue and capital expenditure budgets.
Once your business is operational, provide concrete financial data like cash flow and profit and loss statement, especially spanning the past five years. Utilize visually engaging charts and graphs to showcase financial achievements, enabling investors to quickly assess your company's financial well-being.
7. Restaurant menu
Include a sample menu or a detailed description of your offerings, as this section will help readers visualize the dining experience and understand how your menu aligns with your restaurant concept. Highlight signature dishes or unique ingredients that make your menu stand out from your competitors. Consider this section an extension of your restaurant branding, so work closely with your chef to create an eye-catching menu with evocative menu descriptions that follow strong design principles.
Get professional feedback on your restaurant business plan, review, and refine
Once your draft is complete, seek feedback from experienced restaurateurs, mentors, or business advisors — their insights can help refine your plan, making it more compelling and effective. Be open to constructive criticism and use it to polish your plan before presenting it to potential investors. Remember that incorporating diverse perspectives can lead to a more robust and successful business strategy in the long run.
Download a free sample restaurant business plan
Breaking down the process of creating a restaurant business plan into segments can make the task more manageable, as you can develop a comprehensive and robust plan by addressing each part individually. Crafting a business plan may appear challenging, but it demonstrates to potential investors that you have a well-thought-out strategy for success.
Ready to create your own winning restaurant business plan? Download the free Restaurant Business Plan template to get started.
