There you stand right now — at the cusp of realizing your dream of launching your own restaurant. You have a great business idea in mind, and your core team is just as enthusiastic about making this F&B venture a success as you are. But do you have a restaurant business plan ready? If not, your restaurant dream may remain just that — a dream. 

A restaurant business plan gives you the framework to help you piece together each and every thing — from the menu design and sitting arrangements to restaurant management. It also serves as a roadmap, telling you whether you are moving in the right direction or not.  

In short, a thorough business plan is crucial to the success of your restaurant.

Before we get started, you might be interested to check out our Ready-made Restaurant Business Plan Template with pre-written text and automatic financials which you can easily customize and adapt to your own project, no financial expertise required.

So what does a restaurant business plan entails? How does one write it? Why do you need a plan at all in the first place? Do you need a business degree to pen one?

The answer to the last question is a definite “NO.” And to find out the answers to the first three, continue reading…

The Sections to Include in a Restaurant Business Plan

You should include the following sections in your restaurant plan:

1) Executive Summary

2) Description of your Business

3) Market Analysis

4) Your Restaurant’s Menu

5) Employees

6) Design of Your Restaurant

7) Its Location

8) Overview of the Market

9) Marketing

10) External Help

11) Financial Forecast

Why Do You Need A Restaurant Business Plan?

Writing a well-thought-out business plan takes time and effort, and while the process may be a little complex and time-consuming, without a well-written restaurant business plan, you are reducing your chances to succeed and investors won’t give you the time of day, much less their money. And even if you do manage to get the funds, without a proper plan, you are likely to be off to a rough start.

Your restaurant business plan shows:

– How you will turn your venture into a profitable, sustainable business

– Where exactly your restaurant concept fits in the F&B market

– How you plan to stand out from the rest

Spending a little time early on creating a sound business plan is every bit worth the reward of a successful and sustainable restaurant business in the long run.

Writing A Restaurant Business Plan Made Easy

Here are some main steps you must take care of while creating a restaurant business plan.

Executive Summary

Your business plan should always — we repeat always — start with a powerful executive summary.

Why? Glad you asked.

A good executive summary does two things:

Introduces the reader to your restaurant business plan

Provides a summary of your entire F&B business idea

And both of them are important things. Remember, investors are not going to read a 30-page long business plan unless you convince them upfront that it will be worth their while.

An executive summary gives you the opportunity to do just that. In short, it helps you draw in the reader.

So what are the common components of a good executive summary?

If you want to write a compelling executive summary, make sure you have all these sections.

– Mission Statement

– Proposed F&B Concept

– Execution

– Startup Costs

– Expected Return on Investments (ROI)

If you’re looking for funding, it’s absolutely imperative your restaurant business plan includes and starts with a powerful executive summary. Investors aren’t going to comb through your entire plan to get information; if you don’t provide them key information upfront, they are more likely to simply toss away the plan than read it. 

Here are some tips to help you create a compelling executive summary:

Keep it short and simple

Remember, an executive summary is not referred as summary for nothing. It is not the place where readers expect in-depth analysis. Instead, the reader wants you to tell him what your business does in just a couple of pages, even a single page if possible.

Lead with a problem and its solution

What needs is your restaurant fulfilling? Who has these needs? And how exactly you plan to address them?

If you want the investor to read your entire summary, ensure you list the unique value proposition of your F&B concept. Investors are not interested in nice to-have solutions and consumers with little money, even less in history lessons and your vision to make the world a better place.

So share the most important part in the beginning itself, but be concise and to-the-point.

Focus on what makes you different

What is about your restaurant that makes it stand out? It could be the type of cuisine you offer, or the quality of the ingredients you source, or maybe the edgy décor of your venue. Focus on answering this question here. And remember to back your claims with hard facts.

Show why your team is the best one for this F&B project

Investors back the right team before anything else. So make sure you mention your most important players here, as well as their previous experience in the F&B business.

Show the market opportunity is large and growing

Investors want to see dependable third-party evidence that your market opportunity is not only large but also has an impressive growth rate. When it comes to the type of cuisines or restaurant concepts, this implies choosing the right niche that promises a significant growth in demand. A thorough market research can prove very useful to identify and understand the F&B opportunity.

Define your business model

Quantify each and every important element of the equation. This includes price, volume, and margin, among others. Remember that a fast-food outlet has a totally different business model compared to a fine dining restaurant. Make sure you truly understand the financial dynamics that lie behind your operations.

Project revenues, your costs, and your investment expectations

What targets have you set for yourself? It is paramount to understand your cost and revenue forecasts. Only mention a summary of your key financials at this stage. This could be done with a chart and a summary table for example. You will later develop in detail your pro-forma financial statements including P&L, Cash Flows and Balance Sheets in a dedicated section of the business plan.

Additionally, mention the amount of investment you need to launch and grow your F&B venture.

Highlight the potential return

This is where you outline the payback process and the potential return on investment. This is usually developed as part of your financial plan section. Investors are keen to know when and how much return they get for the investment they will inject in your F&B venture.

Restaurant Description

This section is typically divided into two parts. The first part should include the following information in this section:

– Name of your restaurant

– Its location

– Owner’s details

– And a small description of their relevant experience

In the second part of your restaurant description section, include the following information:

– Outline short-term goals and long-term goals

– Outline the legal standing of your restaurant

– Give a short market study to highlight your understanding of the regional food industry trends. Also include the reasons that make you believe that your restaurant will be a success

Market Analysis

You should talk in detail about the micro conditions in the locality where you plan to open a restaurant, as well as the macro conditions.  

If any current economic conditions may make opening a restaurant difficult, mention them as well, along with how you plan to tackle them. List the restaurants with which your business will compete and your strategy for combating them.

Generally speaking, the market analysis section comprises two parts.

Industry Analysis

Start with global trends in the F&B sector then drill down to your particular niche in the local market.

Define your target market in this section. Also, tell the investors what demographics your restaurant will be catering to.

The aim of this section is to explain the target market to the reader and underline the reasons why customers would want to visit your restaurant.

Competition Analysis

More than anything else, investors want to know what makes your restaurant different and how does it stack up against the competition. Show investors you’ve researched the market and competition thoroughly. Then explain why your F&B venture will be different. Highlight the local gaps and demonstrate how your unique offering will make you stand out from the rest.

Menu

It’s no secret that the key element to starting your restaurant is the menu. That said, you don’t need the final version of your menu for your business plan; a mock-up would do just fine. However, walking into a meeting with an investor without a sample menu is a strict no-no.

Also, ensure your sample menu is designed professionally and has your logo on it. In case you don’t want to yet shell out money on menu design, use one of the online resources. There are many resources available online, most of which are pretty easy to use. This means you wouldn’t have to put in a lot of effort or time to create the menu’s design.

Pricing is the most important element of your mock-up menu. Your rates should be in line with your cost analysis, as this will allow investors to get a clear understanding of your target price point.

Employees

In the company description section, you introduced the owners to the investors. Now is the time to flesh out your restaurant management team. While investors certainly don’t expect you to have filled every position just yet, they would prefer to see at least a few members of the core team on board.

A good idea is to have a table showing the various positions you plan to hire with average salaries and expected start dates.

Restaurant Design (optional but highly recommended)

This is the section where you can impress investors with your creativity. Ideally, you should showcase an attractive mock-up rendering of your restaurant, but if you don’t have one, that’s fine too. You can use a mood board to convey your vision and ideas.

However, remember that there’s more to restaurant design than aesthetics alone. In your sample design, cover everything, from décor to kitchen equipment.

Location

Have you already chosen the location for your restaurant? Is it appropriate for your target market? These are two important questions you should answer in this section.

But what if you haven’t picked the precise location yet?

Well, this is a common scenario especially in the case where you’re still looking for funding. That said, by now you should have at least a few location options in your mind. So talk about them, but don’t just rattle off the names of every shortlisted location one by one. Instead, include as much information about each location as possible to show investors just exactly why it would be great for your restaurant idea. Mention every important detail, from typical demographics to square footage or seating capacity.

Marketing

This is where you tell the investors in detail how you plan to market your restaurant to your target audience.

Will you be relying on traditional marketing strategies or do you plan to embrace digital media and mobile technology to spread the word about your restaurant? Give a detailed overview of each of your marketing strategy and why you’ve chosen it.

Some of the marketing strategies worth considering in the current landscape of restaurant business include leveraging social media platforms, creating a smart and user-friendly website, offering contests, utilizing email marketing, reaching out to food bloggers and influencers, and getting listed on popular F&B portals and review sites.

External Help

You are likely to need help to turn your dream of owning a successful restaurant into reality. List all the help you are planning to hire in this section. This includes everything from F&B consultants, designers and accountants to suppliers and software that will help you run the restaurant more efficiently, such as restaurant reservation software and POS systems.

Financial Plan, a Key Section in your Restaurant Business Plan

The financial section is one of the most important components of your restaurant business plan, and you should give it the attention it deserves.

To be able to properly forecast your restaurant financials, aim to answer the below questions:

– The number of seats your restaurant is likely to have

– The average check per table based on the average prices of your key menu items (starters, main dishes, desserts and beverages)

– The average number of guests per day

You should also do rough food cost calculations for each menu item, as this will allow you to estimate the profit margin on every dish. You can do these calculations easily with the help of a free online food cost calculator.

The purpose here is to build a pro-forma income statement, cash flow statement and balance sheet.

These financial statements will allow you and potential investors to understand the cost and revenue projections of your restaurant over the next three years. It will also help you estimate the profitability of your F&B venture.

Your Restaurant Business Plan: Final Words

If you want your restaurant to be a success, you must plan properly. In other words, you need a well-thought-out restaurant business plan. Don’t worry, you don’t need a business degree to write one. Just follow the tips shared above, and you will do fine.