A restaurant business plan is a blueprint for starting and operating your restaurant. You can use it to explain what type of restaurant you’re opening, why you’re in business, what food you serve, and how you will be profitable. Additionally, a business plan can help you to obtain funding from a bank or investor.
The steps and sections below can help you create a business plan. However, if you feel that you need more assistance, particularly with the financial projections, consider using a business plan software. LivePlan is the most popular business plan software available. It prompts you to provide information and organizes it into a business plan. Additionally, LivePlan’s tools organize your income and expense forecasts into charts and graphs. Sign up to start using LivePlan today.
Downloadable Free Restaurant Business Plan Template
The restaurant business plan template is designed for you to fill out as you follow along with the guide below. We recommend opening the template in another browser and filling it out as you read through each section. For the financial projections portion of the plan, we recommend using the Service Corp Of Retired Executives (SCORE) free excel template. To download, click the link, download the financial projections template, and save it to your computer.
We recommend to download the Word business plan template because that is the most functional template. With the Word version, you can make changes to document, and the table of contents can be updated as well. With the PDF and Google Doc versions, the page numbers for the table of contents will remain static, meaning they may not match if the amount of information you add pushes a section to the next page.
To start using any of the templates below, click the desired link to download the template. Save the template to your computer so your changes will be saved.
First Pages of the Restaurant Business Plan
The first page of your restaurant business plan should be the cover page. On it, you should include your restaurant’s name, the company’s name―one that’s registered with the state―address, and creation date.
The second page should be your table of contents. The table of contents should include the name of the sections, subsections, and corresponding page number. Although it isn’t a requirement, you may want to add a nondisclosure agreement (NDA) at the beginning of the plan and have the reader sign it. An NDA is needed if you believe the person reading the business plan may use or disclose any of the information, such as a business idea.
Here are the seven sections to include in your restaurant business plan.
1. Executive Summary
The executive summary is an overview of the entire business plan. Keep it to one or two pages in length. Review the most important sections and write a quick summary. Even though it’s the first section after the table of contents, it’s often easier to write the executive summary last, after finishing the other sections. Some investors will only ask for your executive summary, so make it informative and persuasive. They should understand how your business will operate and make money after reading it.
In the executive summary’s opening paragraphs, include the following information:
- Your restaurant description: This is similar to a 30-second pitch describing your restaurant and what makes it unique.
- Products and services: Mention the type of food the restaurant will provide and describe the service that will be provided.
- Local competitors: Briefly describe your biggest competitors and why your restaurant will succeed despite them.
- Management and organization: Discuss the owners’ backgrounds and emphasize how it will help the restaurant succeed. Additionally, briefly discuss management structure within the restaurant, such as who is running day-to-day operations and who will be high-level.
- Restaurant location: State where the restaurant will be located and why that location is a benefit.
- Target market and ideal customer: Outline who your ideal customers will be and why they are going to dine with your restaurant.
- Financial data and projections: Provide brief financial data and projections, like how many customers per week you expect, sales data, startup costs, and at what month the restaurant will be profitable.
- Financing needed: Wrap up the opening paragraphs with an explanation of the startup funding sources and the amount of financing being requested.
The information mentioned above can be combined into several paragraphs. You don’t have to include formal headers for each topic. If you’re seeking investors for funding, you may find that they only ask for the executive summary. Make sure it’s less than two pages but has enough detailed information so that the reader knows the problem potential customers have, the proposed solution, target market, your team, and the financial projections.
Restaurant Business Objectives
Business objectives are specific and attainable goals for your restaurant. You can include business financial objectives as well. To illustrate, you could set goals like, “Be the No. 1 Google rated Mexican-style restaurant in South Tampa by our third year in business” and “Achieve $500,000 in revenue by our second year in business.” Include at least five business objectives.
Restaurant Mission Statement
A mission statement is a brief statement about the restaurant’s purpose and what it stands for. You may find that some restaurants use its mission statement as a marketing slogan. However, that is not a requirement. For example, Chipotle’s mission statement is, “To provide food with integrity.”
Whereas Jimmy John’s mission statement is “Everything about Jimmy Johns―from the menu to the marketing to franchise management―is about keeping it simple. No games, no gimmicks. Bottom line―we make gourmet sandwiches, and we avoid anything that complicates the process or our image.”
Restaurant Keys to Success
The keys to success are a few statements about what you believe will make the restaurant a success. It’s essentially your competitive advantage. For example, your key to success could be your location, the quality of your chefs, or a unique loyalty program that encourages repeat business. Include at least four keys to success.
2. Restaurant Company Summary
The company summary provides a general background and a description of your restaurant. In the opening paragraph, include specifics about your current or potential address, who will own the business, and what makes it unique. Also, include the restaurant’s hours of operation. Consider creating a chart if the hours are complicated.
Restaurant Startup Summary
Give a brief overview of how much it will cost to open up the restaurant and source of the costs. Discuss the location you’re seeking and how the build-out will get completed. Mention where the funds for opening the restaurant will come. Additionally, list the startup costs, which are the expenses incurred before opening the restaurant, in a chart. For example, include startup expenses like legal, payroll, equipment, inventory, grand opening advertising, licenses, and insurance.
Restaurant Location & Facility
Describe the location of the restaurant in depth. Explain the area in which it will be located and mention any location-specific benefits. Discuss local complementary businesses that would be a benefit to your business. State the demographics of the population, median household income, age, type of housing, and any major companies near the facility. Additionally, spend several paragraphs describing the restaurant you’re opening and what will make it unique. Include visual artist renderings in the appendix below.
Restaurant Ownership & Management
In this section, describe the owners of the restaurant and their backgrounds. Discuss their experience in the restaurant industry and emphasize management experience. If you are seeking funding to open a restaurant and none of the owners have management experience in a restaurant, consider finding an owner who does. Banks typically won’t make a commercial loan to owners who don’t have management experience within the industry in which they’re lending.
In addition, the owners need to discuss the organizational structure. Include information about a general manager, chef, assistant chef, line cooks, part-time personnel, and freelance professionals like marketing and accounting. State their roles and to who they report. Include a paragraph on any management team gaps. Be honest about shortcomings and the type of consultants you may need to hire to assist in the early stages of running your restaurant.
3. Food, Products & Services for Your Restaurant
In the Food, Products, and Services section, provide an overview of the food you plan to serve and how the business operates. Open the section with a couple of paragraphs giving a high-level overview that describes the products and services the restaurant provides, like a limited breakfast, buffet-style lunch, and full-service dinner.
Product Description
Give a detailed explanation of the type of food you will be serving. For example, consider explaining the type of cuisine and specific foods you’ll serve and how they will change throughout the day. Be creative with the food description to make it appealing to an investor. Additionally, discuss other nonfood products your business provides. For instance, if you’re opening a sports bar, discuss the televisions, sports packages, special events, music, in-restaurant games, and Wi-Fi.
Daily Operations and Production
Write several paragraphs describing the systems and administrative tasks within the restaurant. You need to show that you’ve thought through business operations. Mention tasks that aren’t customer-related like keeping track of inventory, ordering inventory, and cleanliness checks. Also, customer-related tasks like how customers will be seated, how food will be served to customers, and closing and opening shift responsibilities are important to elaborate on so that readers understand how your restaurant operates.
Food & Product Sourcing
Investors and bank lenders want to know where you’re getting the food and products from that you prepare in the restaurant. Write a couple of paragraphs detailing where food will be purchased. Mention if you already have relationships with these suppliers. Also, mention if you have a backup supplier in the event of a shortage or natural disaster. Products like silverware, plates, cups, and interior design can be discussed as well.
Pricing and Profitability for Items on Menu
We recommend that you review each item on the menu and describe its profitability. This can be organized in a chart. For example, if you’re opening a steakhouse, list each type of steak, its wholesale cost, and the menu (selling) price. The difference between the menu price and wholesale price is the profit. Creating a chart with profitability by menu item shows a banker and lender that you’ve thought through your pricing and menu selections.
4. Market & Industry Analysis for Your Restaurant
In the market analysis section of your business plan, you’re tasked with making the case as to why your restaurant type will succeed based on data from market research. Obtain this data from free sources like the United States Census and U.S. Bureau of Labor Statistics. Regarding a paid tool, Hoovers Industry Research provides professionally curated reports for more than 1,000 industries. In the opening paragraphs of your restaurant’s market analysis, give an industry overview, and discuss any trends.
Market Segmentation for Your Restaurant
Market segmentation is the process of dividing potential customers into different groups. Don’t fall into the trap of defining your market as “everyone.” This will be an instant turn off to investors and bankers because every restaurant appeals to certain groups of people. Make your segments broad categories, like millennials, business people, travelers, and parents. Once you’ve identified at least three market segments, use data to explain they’re living near your restaurant and ideally, show they’re a growing segment.
Target Market Segment Strategy
After showing data that proves your market segments are located near your business, briefly outline how you will market to them. Give every segment a different paragraph. Discuss what your restaurant will attract that segment of people. Additionally, you can briefly discuss the type of marketing and advertising you will do to attract them. For example, if you have a family restaurant that appeals to local athletes, you could have a sports channel TV package and be a sponsor for the local football team.
Main Competitors for Your Restaurant
The competitive comparison section is where you should list at least five competitors within a five-mile radius of your restaurant. In this section, you want to be honest about your competitors. However, you want to persuade the reader why customers will choose your restaurant over competitors. You may find that you don’t have direct competition, but indirect competition. For example, you may be the first ramen restaurant in your city. However, you need to know who the closest competitors are, such as other noodle or Asian-based cuisines.
Consider creating a matrix comparison chart for the competitor section. This will make it easy for an investor or banker to compare your local competitors. In this chart, include the distance from your restaurant, overall pricing, atmosphere, advantages, and disadvantages.
5. Marketing Strategy & Implementation Summary
The marketing strategy and implementation summary section covers how you will market and position the restaurant to potential customers. A position is your customers’ perception of your brand and products. You try to control your image to customers through your restaurant’s interior presentation, type of food, staff personality, and marketing. In this section’s opening paragraphs, discuss your overall marketing and branding strategy, and how it will be implemented.
Your Restaurant’s Competitive Advantage
Also called a competitive edge, the competitive advantage is what you will rely on to outperform your competitors. Competitive advantages could be superior food, customer service, cost, experience, chef creativity, location, or owner experience. Your competitive advantage may be evident to customers, like the products, or it could be hidden to the public like relationships with superior suppliers.
Restaurant Marketing Strategy and Positioning
If you have an in-depth marketing strategy, discuss it in this section. For example, include all targeted marketing campaigns, loyalty programs, email marketing initiatives, birthday programs, pricing strategies, and event, online, and social media marketing plans. Also include your positioning statement, which is a short paragraph stating what your restaurant will provide. The positioning statement is similar to a 30-second pitch explaining your restaurant to a new customer.
Traditional Marketing and Advertising for Your Restaurant
Traditional marketing is considered the paper-based and in-person marketing strategies of your business. Outline those in detail here and indicate where and when they will be completed. For example, state where the business cards, flyers, to-go menus, and direct mailings will be created along with their associated costs. Also, include any advertising-like local magazines or grand opening costs.
Online Marketing and Advertising for Your Restaurant
Online marketing for your restaurant includes topics like the website, online directories, online reviews, email marketing, and social media marketing. Outline who will have the responsibility of maintaining these channels, what the cost will be, and a strategy for each. Additionally, if you’re focusing on specific online marketing strategies like social media marketing with video, go into detail about what that will look like on your Facebook or Instagram page.
Restaurant Sales Strategy & Forecast
Create an overview of your annual sales forecast for the first three years. Organize total sales by broad categories, like food, beverages, and others, which may include merchandise, music tickets, or event rentals. Additionally, include broad costs like for food and payroll. Subtract expenses from sales to obtain your profit. This information will be broken down further in the profit and loss financial projection chart below. Provide a year-by-year chart summary in this section.
In this annual sales forecast for a fictional restaurant, profit increases every year
Restaurant Milestones
Include a chart of restaurant milestones during the startup phase. In the chart, list the name of the milestone, start date, end date, budget, person overseeing the milestone, and the entity responsible. For example, the marketing plan may have a four-month completion date and a budget of $5,000. Come up with at least eight milestones for your restaurant.
6. Financial Plan & Projections
The financial plan and projections are the most difficult section of a business plan. This is where you outline how much money it will take to open the business and predict your restaurant’s performance during the next three years. Additionally, you should use the projections below to track the success of your business over the next three years. Use this financial projections example with a fictional coffeehouse and bistro as guidance to help you complete the subsections below.
In the opening paragraphs of this section, state the assumptions made about your financial projections. Use as many specific numbers as you can. Examples of assumptions include a growing economy without a recession, no disruptive changes in technology, like artificial intelligence, tax rate trends, average sales prices for meals―breakfast, lunch, and dinner―and the total number of tables and seating capacity available.
Restaurant Startup Costs
Create a chart listing the specific costs incurred with starting a restaurant. This chart shows a potential investor or banker that you have done the research to determine how much money is necessary to open your restaurant. Include all costs and be as detailed as possible. After the chart, include a paragraph stating from where the funds to pay the startup costs will come. It’s helpful to use an existing Excel worksheet to document the financial projections, including startup costs.
Break-even Analysis
The break-even analysis shows how many sales are required for the business to be profitable. Before completing the break-even chart, write a paragraph stating the point at which sales will hit a break-even point, which is when revenue equals total costs―both fixed and variable. Also, state the average sale amount per patron that the sales analysis is based upon. Regarding costs, state the fixed monthly expenses used in the break-even analysis and how much you intend to incur per patron.
Projected Profit & Loss
The projected profit and loss chart is a month-by-month breakdown of income and expenses, including startup expenses. The profit and loss chart shows the month during which the business will earn a profit. Typically, business owners want their restaurant to show a profit within the first year of operating with an increased amount in years two and three. Be sure to show income and expenses month-by-month for the first two years in operation and create a separate chart that shows them year-by-year for the first three years.
Projected Cash Flow
The cash flow section shows the business’ incoming and outgoing cash. This is broken down in a month-by-month table and should cover the first two years in business. Projected cash flow is different than the profit and loss projections because it focuses specifically on cash within the business. In the paragraph before the month-by-month projected cash flow table, mention the expenses that revenue would go towards after costs are covered, for example, long-term debt.
Projected Balance Sheet
The balance sheet shows the net worth of the business and the financial position of the company on a specific date. The balance sheet is different than the profit and loss statement because it focuses on the assets and liabilities of the restaurant, whereas the profit and loss focuses on income and expenses. Prepare a projected year-by-year balance sheet for the first three years.
Business Ratios
Business ratios are a way to evaluate the performance of your restaurant. You need to compare your restaurant’s business ratios to the industry standard. Project business ratios by year for the first three years.
For example, you should know your restaurant’s current ratio, which is the total existing assets―cash and other assets that can be liquidated easily―to total current liabilities―short-term debts due in less than a year. If you have $2,000 in current asset and $2,000 in current liabilities, your current ratio would be 1:1.
A 1:1 current ratio means that, for every $1 of current assets on the books, your business has $1 of current liabilities. Anything below a 1:1 could indicate your business will not be able to pay its debts, which would be a red flag to lenders and investors.
7. Appendix & Menu Samples
The appendix is where you include supporting documentation for the information you state in your business plan. For example, in addition to describing the interior of your restaurant, include artist renderings in the appendix. You can also include a menu sample for bankers and investors to review.
Consider including the following items in your restaurant’s business plan appendix:
- Building permits
- Artist mock-up of the interior
- Floor plan
- Leases and agreements
- Equipment documentation
- Supplier agreements
- Incorporation documents
- Licenses and permits
- Trademarks
- Media coverage
- Marketing materials
- Letters of recommendation
An appendix is not required in a business plan, but it is highly recommended for a restaurant. There are several visual aspects to a restaurant that are hard to picture with only words. If your appendix becomes too long, more than 10 pages, consider creating a second table of contents placed before the appendix.
Frequently Asked Questions (FAQs) for a Restaurant Business Plan
This section includes the most frequently asked questions about a restaurant business plan. If you don’t see your question, head over to our forum, and post your question there. We have an entire team of industry experts who answer questions from small business owners every day.
How much money do you need to open your own restaurant?
How much money you need to open a restaurant depends on location, size, interior build-out, marketing materials, exterior design, and equipment. For the typical restaurant, you need at least $300,000. However, if you open a small 200-square-foot, pizza-by-the-slice restaurant with low overhead and payroll, you may be able to get your startup costs to less than $80,000.
Where can I find a business plan example?
One of the best resources to find a restaurant business plan is LivePlan. They have more than 40 fictional business plans specifically for restaurants, like for a sports bar, steakhouse, fine dining, ethnic food, coffee shop, and deli. Included in all the business plan examples are detailed financial projections, which you can use as a guide when creating your own projections.
What is needed to start a restaurant business?
What you need to start a restaurant business is determined by the type of restaurant you’re opening. Regardless, some costs are universal, such as a lease or building cost, payroll, interior buildout, marketing, licenses, employees, insurance, inventory, point-of-sale (POS) system to accept payments, bank account, and accounting system.
How can I start a restaurant with no money?
You can start a restaurant with no money, but it will be difficult. Most likely, it will be a combination of financial sources, like a crowdfunding campaign, an angel investor, and a cosigner on a business loan. In this situation, you will likely be a minority owner or a general manager in the business. It’s unlikely that the investor will give you majority ownership in the business if they are assuming a majority of the financial risk.
How much does it cost to start a small restaurant?
You can start a small restaurant for less than $100,000. This type of restaurant will offer primarily takeout orders because of the small interior size. Typically, it costs $350 per square foot to open a restaurant. If you open a simple restaurant like a pizzeria with low overhead and low payroll, you can keep the costs down.
Bottom Line
Opening a restaurant is a challenging but rewarding business to open. A well-thought-out business plan helps you prepare for the uncertainties of opening a restaurant. It also helps you plan out the restaurant’s startup costs and gives you an idea of when it profitable. If you need funding from a bank or investor to get started, a business plan is a requirement.
If you’re struggling to create the business plan after downloading our template and following the guide above, consider using a business plan software. LivePlan is a low-cost business plan software that stores your information in the cloud. A benefit of LivePlan is that after you open your restaurant, you can continue to use it to track your financial progress and make financial goals for your restaurant. Sign up to start using LivePlan today.
Read More
0 تعليقات