It is not enough to work hard, prepare delicious cuisine, and want to be successful. It is important to have the appropriate technique, a strong operational plan, and an excellent marketing strategy to open up a restaurant business. Table and chair choices and the style of the food will surely not be as influential in starting a new restaurant as a strong business plan.
No matter how much time you put into your business concept and research, your restaurant will fail without a strong business plan.
“A restaurant business plan is a blueprint that guides you through the process of planning and forecasting every aspect of restaurant operation and management, including menu design, financials, location, and personnel training, and it assists you in transforming your restaurant ideas into reality.”
Business plans aren't just pieces of paper. It's a guide that assists you in defining and achieving your objectives. Additionally, it is a tool that helps you track and display your business growth. In brief, developing a business plan can boost your chances of success if you're thinking about starting a restaurant or planning to pitch your idea to investors.
Why is a Restaurant Business Plan Important?
Many new restaurant owners end up failing since the process of planning a business can be complicated and lengthy. However, if you expect to run a restaurant without planning, you're firing blindly. Without a clear plan, it's unlikely that you'll be able to attract an investor to assist in financing your restaurant dream. And even if you do, your restaurant will fail due to a lack of adequate planning, regulations, and forecasts.
A little time and effort upfront is well worth the long-term payoff of a successful restaurant.
The restaurant business plan will outline how you want to make a profit from your venture, as well as how your restaurant will fit into a crowded market and how you intend to stand out. Having a strong business plan enables you to accomplish the following goals:
Expedite your business's growth
Pitch your idea and get funding
Make effective strategic decisions
How to Write a Restaurant Business Plan?
Every restaurant has its own specific needs; therefore, a business plan must be carefully customized for each situation. A business plan must also account for issues like the restaurant's general style, the intended customer base, and the location. If you're an inexperienced restaurateur, preparing a business plan might be nerve-wracking. To assist you in getting started, we've identified some key aspects you should include in your restaurant business plan.
The Important Components of a Restaurant Business Plan
In the next few moments, you will learn about the key elements of the restaurant business plan. Then, depending on who is reviewing your business plan, you can rearrange the sections to match the order of importance.
Branded Cover Page
Make a cover page with your logo, brand fonts, and other important contact information to incorporate your branding.
The executive summary section gives a 1-2 page overview of the restaurant's operations and business plan. While the details of how the restaurant will flourish will be described throughout the business plan, this section will demonstrate the concept's legitimacy while also persuading investors to read the remainder of the plan excitedly.
An executive summary contains information on your restaurant's mission statement, proposed idea, how you intend to execute the plan, an outline of future costs, and the expected return on investment. Additionally, this is an excellent spot to highlight your business's core principles.
This section of your restaurant business plan is dedicated to introducing your company in detail. Begin this section by stating the name of your restaurant and the location, contact information, and any other pertinent information. Include the owner's contact information as well as a brief summary of their experience.
Additionally, you might discuss how you intend to attract and keep excellent employees through sound regulations and a supportive work environment.
The restaurant's legal standing and short and long-term aims should be highlighted in the second section of the company description. Finally, provide a brief market analysis demonstrating your understanding of regional food industry trends and how the restaurant will prosper in this market.
The three primary areas that generally get covered in the market study segment of a restaurant business plan are:
Which market segment are you targeting? Who will your restaurant's target demographics be? This section is intended to inform investors about your target market and why you feel visitors would choose your restaurant above others.
Knowing what your competitor is doing, which helps you gauge how popular your business will be, is something you can't afford to overlook. Which restaurants have already acquired a following in the neighborhood? Take notice of the restaurant's prices, timings, and menu design, as well as the restaurant's décor. Then, inform your investors about how your restaurant would be different.
Your investors will be interested in learning about your restaurant's marketing strategy. What new strategies will you implement to differentiate your marketing? How do you intend to secure your target market? What types of special deals will you make to your guests? Ensure that you include everything.
The menu is the primary point of contact for any restaurant's brand, and as such, this must be more than just a mere list of items. Include your logo and create a mockup of a structured menu design (hire a professional for help if required).
Additionally, your model menu should include prices based on a thorough cost analysis. This provides investors with a good explanation of your target price point, serves as the first step toward determining the average check estimations necessary to generate financial projections, and demonstrates to investors that you've conducted the required due diligence to be confident in your ability to sell these items at these prices while remaining within your budget.
Present a brief overview of yourself and the team you have developed so far. You want to show that your job history has equipped you with the skills to manage a successful restaurant. Ideally, once you've detailed each member of your team's strong suit, you'll be able to offer a complete deck. Giving potential investors some insight into your passions outside of work might be important as well, as most restaurant owners are only in it for more than money.
You can display your ideas to investors in the design component of your business plan. This is fine if you don't have professional mockups. To communicate your vision, create a mood board. Find images that reflect your restaurant's aesthetic. The restaurant design includes everything from software to equipment.
The location of your restaurant should unquestionably correspond to your target market. While you may not have a specific site in mind at this time, you should at least have a few options.
When you speak to investors about potential locations for your restaurant, you want to be as specific as possible about the important features. Include details such as square footage and usual demographics.
Describe the micro-and macroeconomic conditions in your area, as well as the impact of COVID-related local restrictions. What are the macroeconomic conditions in your area and region? If restaurants are struggling, explain why yours will not; if restaurants are thriving, explain how you will survive in an already growing restaurant environment. Discuss your direct competitors on a micro-level. Discuss which restaurants compete for the same customer base as yours and how you intend to differentiate yourself.
The day-to-day operational aspects of the restaurant must be described in the operations portion of the business plan. Several critical points to consider while discussing your operations include the following:
This part should include a list of different staff positions, including the number of individuals required for each position and the typical salary for each position. Next, include any recruiting strategies or services you intend to employ to attract new hires. Finally, describe the hiring process and criteria that will be used.
Describe plans for service attitude and policy establishment. Try to explain how you will address complaints and include information on how you will collect consumer feedback, like mystery shoppers or surveys.
Point-of-sale systems in restaurants and other systems such as payroll
How will you record sales and inventory, process deliveries, manage employees, deal with cash, and do payroll and other payments types?
What sources will you use to get your ingredients? Where will you purchase equipment, including one-time purchases and those that will require frequent replenishment? Demonstrate contingency strategies for relocating key suppliers.
Restaurant Marketing Plan
With restaurants opening at a breakneck pace these days, investors will want to know how you intend to spread the word about your business. Before and after opening, the marketing and PR strategy must be thoroughly explained in this area. Also, include any proposals you have for hiring a PR company to assist with marketing. If not, explain that you have an excellent plan to garner recognition on your own using social media, website, and media relationships.
Just like creating your sample menu, you'll likely want to get the assistance of a proficient accountant when it comes to your financials. Establishing a budget can assist you in anticipating all of the expenses associated with opening a restaurant — there are always more!
If you ask people for money, they'll want to know where, how, and why it's being spent. An accountant with restaurant sector experience can provide everything you need to showcase investors, including break-even analysis, Expected Cash Flow, and a projected profit and loss (P&L) statement.
Restaurant Business Plan Template
Are you ready to begin? To help you organize your business, you may get a free business plan template for your restaurant.