How To Write A Restaurant Business Plan
As you begin your journey of opening a new restaurant, one of the first things you need to do is create a restaurant business plan. A restaurant business plan serves multiple purposes, including helping you distinguish what separates you from competitors, identifying where you fall in the industry, creating a marketing strategy, and planning your menu. You can also use restaurant business plans in the future if you decide to apply for a business loan. Creating a thoughtful and comprehensive restaurant business plan will ensure that you've completed the necessary research to get your restaurant operating successfully.
As industry-leading restaurant consultants, DMD Restaurant Consultants will walk you through a restaurant business plan template so that you understand what type of information you need to include. It's crucial to write a restaurant business plan, whether you're brainstorming a food truck concept or opening your tenth restaurant. Restaurant business plans can be anywhere from dozens to hundreds of pages, and it's easy for the process of writing one to become overwhelming quickly. Using the restaurant business plan template outlined below will help keep you on track and ensure that you've included all of the elements investors will want to see. In addition, completing your business plan will guide you to think about operations, marketing, financial projections, competitors, strategy, and more!
Why Is A Restaurant Business Plan Important?
A restaurant business plan explains your restaurant concept to business owners, stakeholders, potential investors, and industry leaders. When you open a restaurant, it's easy for things to become chaotic quickly. With a restaurant business plan guiding your decisions, you'll have something to reference to stay on track. Imagine being knee-deep in construction; you'll be thankful you took the time to write a restaurant business plan because it'll help you make financial decisions.
One of the most crucial reasons for writing a restaurant business plan is that it will help you land funding. The cost of opening a restaurant is extremely expensive, and most restaurants require outside financing before they can open their doors. Without a thorough restaurant business plan, people will be hesitant to invest because they won't have an explanation of how you're going to be successful and, therefore, make money. A restaurant business plan is the key to securing investors because it shows that you've already thought about possible expenses and how you'll overcome potential obstacles.
Who Will Read My Restaurant Business Plan?
When you write your restaurant business plan, you need to consider who may read it. Potential investors, banks, prospective employees, and others may want to read your business plan to gain a better overview of your restaurant goals. The list of potential readers you should write for includes, but is not limited to:
Investors
Banks
Prospective Managers
Potential Employees
Restaurant Business Plan Step By Step
Every restaurant is unique, so you may find that some of the sections listed below are more important than others. Remember, this is a restaurant business plan template, and it's okay to stray from it a bit while writing as long as you're following the overall strategy.
Step 1: Branded Cover Page
Incorporate your branding into your restaurant business plan by creating a cover page with your logo, restaurant name, brand fonts, and contact information.
Step 2: Executive Summary
An executive summary is a statement explaining your vision for your restaurant. In one to two pages, explain what makes your restaurant unique and what you hope for your restaurant's future. Make sure to take the time to perfect your executive summary because, for some investors, it's all they'll read before making their decision. An executive summary should cover the following topics:
Mission Statement: Your goals and objectives.
General Company Information: Include team roles, your founding date, restaurant name, service type, menu overview, and restaurant locations.
Restaurant Category And Offerings: Explain your restaurant's category, the type of food you plan on serving, and your reasoning.
Proof Of Success: If you've had past success or have financial data that proves you're on a successful path, include it here.
Financial Requests: Explain what type of financing you're interested in, your plans with the money, and financial statements of any funding you've earned or raised so far.
Future Plans: Talk about where you want the restaurant to be in a year, three years, and five years.
Core Values: Discuss the core values of your restaurant and the pillars of your operations.
An excellent way to test if your executive summary is thorough enough is to read it on its own to check if it provides a comprehensive overview of your restaurant, where it currently stands, and where you see it in the future. If you feel your executive summary does all of these things, you've most likely written an excellent executive summary!
Step 3: Company Overview
This section of your restaurant business plan will dive into the specifics of your restaurant and help you develop a thorough strategy. A company overview should cover the following topics:
Purpose: Discuss what type of restaurant you're opening, the kind of food you will serve your customers, any restaurant goals you have, and the niche you want your restaurant to fill.
Area: Include information about the area where you're opening, the restaurant location's layout, and capacity.
Customers: Discuss the type of customer your restaurant is going to target and include the demographic information of your target audience.
Service Style: Explain if your restaurant will be full-service fine dining, fast-casual, drive-thru only, fast food, or a combination of these.
Legal Structure: State your business entity (i.e., LLC, LLP) and how many owners you have.
Your company overview will still be more generalized information, as the more detailed data will be included in future sections of your restaurant business plan.
Step 4: Team And Management
One of the key pillars of a restaurant is its management team. In your restaurant business plan, dedicate a section to your staff, including positions you have yet to hire. Taking time to create a staff outline will identify people's responsibilities and help you figure out all of the jobs you need to fill to operate a successful business. This section of your restaurant business plan should include:
Management Overview: Identify the management team of your restaurant, their qualifications and experience, and their responsibilities.
Staff: Include any other staff members and a blurb about who they are and the positions you believe you'll need to fill.
Ownership Percentage: State which individuals are part owners of the restaurant and how much they own. Also, state if you are an employee-owned establishment.
As your restaurant evolves and your staff changes, update this section of your restaurant business plan.
Step 5: Sample Menu
The next step in completing your restaurant business plan is to create a sample menu. A sample menu will provide context for others and allow people to get a sense of what they can expect from your restaurant. Taking the time to create a menu also gives you the opportunity to decide what you want to serve your customers and how your menu will differentiate from other restaurants in the area. Make sure to include the following:
Service: Consider the different types of menu you want to include. Will you have a separate brunch menu or an a la carte menu? Make sure to create a menu design for each type of menu you want to have.
Beverages/Wine Service: If your restaurant is going to emphasize specialty drinks or wine, consider including a separate drink menu.
Seasonality: If you envision being a seasonal restaurant, you want to include menus for multiple seasons to show an overview of your dishes and purchasing trends.
Step 6: Market Analysis
You're beginning to be more specific at this point in your restaurant business plan. The market analysis section is an opportunity for you to dive into your hypotheses. Follow this restaurant business plan template and make sure you cover the following areas in your market analysis:
Industry Information: Describe the restaurant industry, size, trends, demographics, structures, and evolving tastes. This section will also explain why you believe now is the time to open a new restaurant.
Target Market: Go into detail about where you're opening your restaurant. Describe the surrounding neighborhood of the restaurant's location and the type of food you will serve.
Target Market Characteristics: Take a moment to describe your ideal customers and their needs. Discuss if their needs are being met and include critical information about your specific restaurant location and customers. The target market characteristics section is also a great place to mention your potential customers' characteristics, needs, and behaviors.
Target Market Size And Growth: This will be a section that uses data to describe the current market conditions, including market size, growth trends, how your target market fits into the restaurant industry, and the projected growth of your target market.
Location Analysis: If you don't have a specific location picked out for your restaurant quite yet, include information about the growth of the local economy, major citywide events, and any infrastructure projects taking place at a nearby location. If you're purchasing an existing restaurant location, disclose that here and whether or not you're going to rebrand or operate under the current restaurant name.
Market Share Potential: Detail the market's potential, how the presence of your restaurant will change or influence the industry, how much your restaurant or restaurants can own of the open market, and potential barriers to market growth or market entry.
Market Pricing: Explain how the prices on your menu will relate to the menu prices of other restaurants in the area.
Competitive Research: Complete an analysis of your competitors and describe your findings explain their successes and failures, and how customers view them. Include the number of other restaurants in the area, and how many of those restaurants have a similar concept to yours.
Did you know that one of the top reasons restaurants fail is lack of demand? Your market analysis section will help you ensure that there's enough demand in the industry for you to be successful.
Step 7: Marketing And Sales
The data found in the market analysis section will determine the decisions you include in this section. Your restaurant marketing plan will detail your strategy for promoting your restaurant before and after the grand opening. Make sure to cover the following topics in the marketing section:
Positioning: In this section, detail how you'll describe your restaurant to a potential customer, your brand identity, possible visuals, and how your brand will stand out among competitors. If you have a social media following or plan on launching a social media account for your restaurant, include that here.
Promotion: These are the tools, techniques, and platforms you'll use to market your restaurant. Include any channels you'll be using for marketing, including email, social media, ads, and charity partnerships.
Sales: If you have additional revenue streams, include them here.
If you haven't opened your restaurant yet, parts of this section will likely be possible concepts. Even if you only have ideas so far for your marketing strategy, include them here and update this section as you develop your restaurant.
Step 8: Business Operations
The business operations section of your restaurant business plan will describe how you want to run the day-to-day operations of your restaurant. It'll touch on internal factors and external forces and how these two areas will influence your business operations. Include the following sections:
Management Team: Include the structure and hierarchy of your restaurant's management and the responsibilities of each individual.
Customer Service Policies: Detail how you will provide unparalleled customer service. Make sure to include customer service policies and customer service values and your plans for enforcing these.
Hours: Include your hours of operations and days that you're open.
Location: Describe how your restaurant's location will drive people to dine with you.
Restaurant Point Of Sale: Explain how you're going to track sales and inventory, process payroll, provide takeout and delivery services, accept different modes of payment, and manage labor to maintain a successful restaurant.
Restaurant Technology: In this section, you're going to describe any industry technology that you will integrate to streamline restaurant operations and any software you will use to make your restaurant discoverable online.
Suppliers: Include the cost of where you're going to get your ingredients and equipment and whether or not things will be a one-time purchase or will be re-purchased.
Relationships: Explain any beneficial relationships with fellow restaurateurs, business organizations, consultants, and places for sourcing and buying.
Step 9: Financials
This section will detail the current state of your restaurant's finances and your financial projections for one year, three years, and five years. You're going to include information about the cost of everything so far, what you plan on spending, where you're going to get financing, potential costs, projected returns, and when you hope to break even. Make sure to include the following data:
Financial Statements: No matter how long your restaurant has been open, include balance sheets, profit and loss statements, cash flow sheets, and any other financial statements.
Budget: Explain your current budget or a general start-up budget.
Projections: Include revenue, cash flow, and projected profit and loss information.
Break-Even Analysis: Describe how much revenue is required each month for your restaurant to break even. Make sure to consider overhead and operational costs.
Debt: List any outstanding debts or loans your restaurant has.
Funding Request: If you're requesting a loan or an investment, including the amount of capital you need, your company's valuation, and plans for the funding.
Make sure you give potential investors a realistic look at your restaurant's finances.
Step 10: Appendix And Supporting Documentation
Make sure to include any documents that you referenced in your restaurant business plan. Documents may include:
Financial statements, graphs, charts, and projections.
Photos are renderings of the restaurant location.
Sample food menu.
Photos of the restaurant's website and/or online ordering platform.
Restaurant floor plan.
References from colleagues in the restaurant industry.
Presenting A Restaurant Business Plan
Writing a restaurant business plan is one thing; presenting it is another. Potential investors will want to see that you know your restaurant inside and out and have spent ample time conducting the necessary research.
Once you've completed your business plan, email it to anyone in the industry who you think might be interested in becoming an investor. The more people you send it to, the more chances you have to set up potential meetings and share your marketing strategy. Be prepared that some investors will want to see your restaurant business plan in the form of a pitch presentation, in addition to having a hard copy. If you're going to present a pitch of your business plan, make sure to practice constantly until you don't need to reference your notes and can complete the entire presentation confidently.
Write a list of potential questions you might get asked and practice the answers to those questions. If you get asked a question and don't have an answer, it's better to say you'll find the answer and get back to them rather than making up something on the spot.
Create A Comprehensive Restaurant Business Plan With The Help Of DMD Restaurant Consultants
As industry leaders, DMD Restaurant Consultants can help you construct a restaurant business plan that will help get restaurant capital from investors. One of the key tasks restaurant owners have to complete before opening a restaurant is composing a business plan. If you follow the guideline above on how to write a restaurant business plan, you'll be set up for success. In addition, your unique business plan will give others an overview of your restaurant and detail the strategies you will implement. If you want to know more about the strategy behind how to write a restaurant business plan, contact our team to schedule a free consultation!
