Opening a restaurant can be lucrative, but it requires a well-thought-out business plan to ensure success.
This article outlines how to create a restaurant business plan from scratch, covering everything from concept development to market analysis and financial planning.
Additionally, it provides examples and restaurant business plan templates to help you understand the essential elements to include.
Key Takeaways
- Restaurant Concept: The business plan outlines the vision, concept and service style of your restaurant.
- Elements of a Plan: A comprehensive business plan consists of 8 essential elements.
- Importance for Existing Restaurants: As a restaurant owner, create a business plan even if you already operate a restaurant.
- Consultation Over Outsourcing: Avoid outsourcing your business plan; consult experienced restaurateurs for insights.
- Regular Review: Revisit your business plan monthly if starting out, or annually if established.
- Living Document: A business plan is a dynamic document that guides your restaurant operations and growth.
What is the business plan of a restaurant?
A restaurant business plan is a document that describes planned activities, goals, and strategies for a new or existing restaurant.
It is an important document for anyone who wants to open or develop their own restaurant business.
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How to write a restaurant business plan (Step-by-Step)?
- Step 1: Gather answers to important questions from the list below before writing your plan.
- Step 2: If you are opening a restaurant with an innovative restaurant business model, it is better to wait to start writing a business plan immediately to verify whether this model can succeed. For that purpose, use the Business Model Canvas.
- If the restaurant has a traditional business model (e.g., pizza delivery, sushi on-site, bistro) already existing in the market, you can skip this step and create a business plan immediately.
- Step 3: Create a restaurant business plan using the ready-made template (pattern) described below.
- Step 4: Review the business plan regularly, every month in the first months of running the restaurant, and at least once a year in subsequent years. A business plan is a living document that will help you grow your restaurant.
- Write short and concisely. Be specific.
- Use numbers for calculations.
- Assume black scenarios. The blacker you assume, and yet the business has a chance of success, you will manage to beat the market.
- In the first months of the restaurant’s operation, work with the business plan daily and update calculations and assumptions.
- Once the restaurant is stable and has reached the so-called break-even point, return to the business plan at least once a year.
- Discuss the business plan with your team. Also, consider sharing some of the profits with your team. In this way, you will build a unique commitment.
- The business plan is for years. The document should be updated regularly.
10+ Questions to start writing a restaurant business plan
Start writing a business plan by answering a few important questions, including:
- Why do you want to start this restaurant?
- How much would you like to earn per month?
- How many guests do you plan to serve per month?
- What kind of restaurant do you want to run? (e.g., pizzeria, or bistro. Here is a list of types of restaurants).
- What kind of delivery (handling) will you offer? (on-site, takeout, deliveries on demand).
- What area will you operate in?
- Who will be your client?
- How many direct competitors are there where you want to operate?
- How will your restaurant stand out?
- Who do you need to hire to start a restaurant?
- What restaurant metrics will you keep track of? (e.g., food cost, website traffic, customers opinions).
- What will your restaurant look like inside?
- What will the atmosphere of your restaurant be like?
- What will your restaurant menu look like? (Here you can check restaurant menu examples).
Remember that a sample menu can attract potential investors. A well-written and attractive-looking menu will help you sell your idea, whether a small fast-food joint or an upscale restaurant. The menu is your #1 sales tool.
Why write a business plan?
- A business plan is an action plan. You will stop dreaming and start turning your idea into a real restaurant business plan.
- Running a business is working in a company. Creating a business plan is working “on the company,” i.e., its design and improvement.
- A restaurant business plan will allow you to verify your assumptions in a year, two, or five years (it’s super satisfying to watch how your knowledge grows every year).
- Writing a business plan allows you to translate your vision into a specific project and action plan. It also allows you to rethink to what extent your business idea is a recipe for success and what you still need to refine.
- Creating a business plan for a restaurant will help you assess the reality of your dream and the possibilities of its implementation, as well as check the chances of its success and assess the risk you have to take.
- A business plan forces you to be specific. If you don’t know the answer to a question in our guide, you may be blind in this area, which is very risky.
- If you already run a restaurant and don’t have a plan, fix this mistake. Every restaurant should have some sort of plan.
When is it worth writing a business plan?
In our opinion, always 🙂 If you plan to open a successful restaurant and do not have the basic elements of your business written down and calculated (and you do not verify them regularly), you are doomed to failure.
Only regular analysis of the restaurant’s results and planning the next moves allows you to have full control over the restaurant.
Free restaurant business plan template
A typical restaurant business plan example includes:
- Executive summary for a restaurant
- Restaurant description
- Market Analysis, Location Analysis
- Market analysis
- Competition analysis
- Restaurant SWOT analysis
- Investment plan (Cost Analysis, Financial Analysis)
- Investment costs (one-off to start)
- Operating costs (fixed monthly costs)
- Financial Projections
- Profit and Loss Account
- Break-even analysis
- Sensitivity analysis
- Team (Employees, Founders)
- Founders
- Employees
- Restaurant marketing plan
- Company description of the vision for further development of the restaurant
1. Executive Summary
The summary of the restaurant business plan should include:
- Mission statement, vision, and values.
- Description of the restaurant concept.
- Why will this idea be a success?
- How do you want to implement this plan?
- Costs.
- Profits and return on investment.
The executive summary should be written at the end after you have written your entire restaurant business plan.
The executive summary summarizes the business plan and provides the reader with the most important information in a very concise form (max. 600 words, i.e., about 1-2 pages) to encourage him to read the entire document.
Discuss only the key aspects of your business idea. Use points!
2. Description of the restaurant
This section aims to show you the details of your restaurant. It should not lack the following elements:
- Mission statement and vision
- Mission: why do we exist?
- Vision: what we want to achieve in 1, 2, and 5 years.
- Structure
- Business Type: Is your restaurant a sole proprietorship, partnership, or other business?
- Restaurant concept
- Restaurant name (get inspired by this list of restaurant names).
- Restaurant type: specify the type of restaurant, e.g., bistro, fine dining, etc.
- Specific restaurant location strategy: write exactly where your new restaurant is (or could be) and why you chose this place.
- The style of the place: what will be the colors, atmosphere, decorations, music, etc.
- Ways to fulfill orders: only on-site, only in delivery, both ways.
- Hours of Operation: What hours will the place be open? Why in these?
- Menu
- Type of cuisine served
- Draft menu: attach a sample menu you want to offer (design it according to the rules of menu engineering)
- 1-3 differentiators from the competition (Unique Selling Points)
3. Market research and competition analysis
Unless you are introducing real innovation to the market – and maybe especially then – you should thoroughly analyze the space to create your premises, i.e., the market and competition in the catering industry.
Analyze the market and competition, focusing on the following:
Market overview
Customers are the key to any restaurant’s success. Knowing their demographic structure, preferences, and dining habits is critical to a business plan.
- Target market for a restaurant: Think about who your customers will be. Consider their age, interests, expectations, and how to reach them.
- Needs in the market: Describe the market’s needs and how your restaurant will meet them.
- Target Audience Size: Determine the number of potential customers in the market you intend to target.
- Market trends: Use credible information to show that people will be interested in your restaurant idea. Find out current food trends and how the restaurant industry is developing.
Competition analysis
Check out other restaurants that are or could be your competition.
- A list of competing restaurants in your area.
- Revenue and number of orders they can achieve: Estimate how much such restaurants can earn.
- Menu and prices: Analyze what these places offer and what is their menu pricing. Try to calculate their food cost.
- Competitor marketing activities: See what makes them successful and their weaknesses.
- Competitive advantages: What will be your advantage?
SWOT analysis
The abbreviation comes from the words: S for Strengths, W for Weaknesses, O for Opportunities, and T for Threats.
Fields S and W are related to the restaurant’s launch situation. While the O and T fields are related to the success of your project in the future.
It is worth conducting such an analysis in the form of a table:
| Positive | Negative | |
|---|---|---|
| Inside | Strengths – – – | Weaknesses – – – |
| Outside | Opportunities – – – | Threats – – – |
4. Investment plan (cost analysis)
In this section, you will present the costs associated with the initial investment and the spending plan for the first year of operation.
List the costs, dividing them into two groups:
- Investment costs (one-off to start).
- Operating costs (fixed monthly costs).
After opening a restaurant, verify the costs regularly, preferably once a month.
Investment costs include, among others:
- Rental or purchase of the real estate.
- Renovation and adaptation of the premises.
- Purchase of kitchen equipment:
- Oven.
- Gas stove.
- Fridge and freezer.
- Dishwasher.
- Mixer, blender, food processor.
- Dishes, cutlery, pots, pans.
- Purchase of room furniture and equipment:
- Tables.
- Chairs.
- Buffet.
- Decor.
- Lighting.
- Work clothes for the staff (if you plan uniforms for the staff).
- IT software and hardware:
- POS software.
- Payment terminals.
- Computer hardware for the POS system.
- Marketing and promotion costs:
- Logo.
- A website with online orders.
- Menu design.
- Flyers.
- A-boards.
- Insurance of the premises and equipment.
- Organizational and legal costs (e.g., regulations, documentation).
- Costs related to permits and licenses (e.g., permission to sell alcohol).
- External restaurant training costs.
- Operating costs.
- Rental of real estate (if the premises are rented).
- Utility charges:
- Electricity.
- Gas.
- Water.
- Staff wages:
- Chef.
- Cooks.
- Waiters.
- Dishwashers.
- Purchase of food and drinks.
- Equipment maintenance and servicing costs.
- Service charges:
- Cleaning.
- POS system support.
- Online ordering system.
- Commissions for third-party delivery services.
- Employee insurance.
- Marketing and promotion costs:
- Online and offline advertising.
- Printed materials.
- Running social media.
- Website positioning (SEO).
- Taxes and fees.
The biggest challenge for novice restaurateurs is securing financing for their first venture. Options include bank loans, subsidies (which require a business plan), or loans from friends and family.
When considering a restaurant loan or subsidy, evaluate potential failures and strategies to mitigate risks. Understanding initial costs and the necessary profit margin on dishes is crucial for assessing the likelihood of a return on investment.
5. Financial forecast
The financial forecast consists of 3 elements:
- Projected profit and Loss Statement: Shows what turnover and profits you will generate.
- Break-even analysis: Shows when a restaurant will become profitable.
- Sensitivity analysis: Shows what happens to turnover and profit in negative scenarios (e.g., 50% decrease in turnover for three months).
Profit and Loss Account
You will need to estimate the value of the sale considering the size of your restaurant, target market, sales volume, and food cost. You will get a profit and loss forecast, comparing this with the costs.
The easiest way to prepare a profit and loss account is in the form of a table:
| Months of running a business | Month 1 | Month 2 | Month 3 | e.t.c… |
| Number of orders per month | ||||
| Average order value | ||||
| Monthly income (turnover) | ||||
| Variable costs per month | ||||
| Fixed costs per month | ||||
| Profit per month | ||||
| Profit margin (in percentages) |
Break-even analysis
Investors will want to know how much revenue you will need to generate each month to break even after all fixed and operating costs are considered. In the analysis, you should show how you intend to generate the necessary revenue, even in difficult months with lower sales.
Sensitivity analysis
It is worth doing it to assess the negative scenarios: when the other restaurants will be stronger, and you will have to lower prices, when you lose key employees or when there is a decrease in sales by 10 or 20% compared to what you assume.
This will allow us to be better prepared for different financial crises and reduce stress when such a situation arises.
Make a sensitivity analysis in the form of a table
| Problem | How will it affect revenue, costs and profits | How to react | Countermeasure |
|---|---|---|---|
| – – – | – – – | – – – | – – – |
6. Team
Business is people. Describe what your team will look like, dividing it into two groups:
- Founders.
- Employees.
Founders
If you are looking for investors, this area can be critical for them.
Describe the founders:
- List of founders.
- Experience.
- Successes.
Employees
Think immediately about which restaurant positions are necessary for the daily functioning of the premises, such as a waiter or cook, and which will suffice as emergency help.
Think about which people you already know with the necessary competencies and which ones you will have to look for or train your employees from the beginning.
The cost of necessary training should also be included in the restaurant business plan.
Describe the team you need to build:
- List of job titles.
- Duties.
- Remuneration.
- Type of contract.
7. Marketing plan
Ideally, your marketing strategy should include the items we listed below. In our guide about restaurant marketing strategies we described how to do effective marketing.
- Brand building (Logo, colors, restaurant slogans)
- Building your own website (Here you can check how to create a restaurant website)
- Selling food online from your own website (as the main way of selling online)
- Selling food through external portals and food delivery apps (as an add-on)
- Launching table ordering
- Launching a loyalty program
- An action list on how you will attract offline customers
- Flyers.
- Radio.
- PR.
- Events.
- An action list on how you will attract online customers
- Will you run social media?
- Will you be implementing restaurant SEO (Search Engine Optimization)?
- Will you add a business listing on Google Maps?
- Will you run email and SMS campaigns, and if so, how often? How will you build your subscriber base?
- Will you be blogging?
- Will you be running a restaurant newsletter?
- Will you be doing paid Google Ads and Facebook Ads?
- Will you be offering promotions? If so, what types?
8. Description of the vision for further development of the restaurant
Determining your restaurant’s development direction is crucial at the start. Set broader goals first and then break them down into everyday objectives, considering how to achieve them.
Regularly assess and adapt your initial restaurant goals during execution to enhance management and minimize marketing, service, and menu losses.
Your restaurant’s business plan should clearly outline the vision and strategies needed to reach these objectives.
Sample restaurant business plan
We created a sample restaurant business plan to help you write your plan. Click below to download an example of a business plan for a restaurant.
Fill out the form to download the business plan template. By submitting the form, you agreed to join our Newsletter list.
Frequently Asked Questions (FAQ)
How do I write a small food business plan?
Regardless of the size of the restaurant or other food-related business, the steps of restaurant business planning remain the same and are the following:
- Executive summary,
- Restaurant description,
- Market analysis,
- Investment plan,
- Financial projections,
- Team (including funders, management team, and employees),
- Marketing plan,
- Company description
Does every restaurant need a business plan?
In our opinion, yes. If you are serious about developing your business, you must implement a repetitive method of working “on the company”. Restaurant business plans that are updated regularly every month and year are one way to run a business.
How profitable is owning a restaurant?
The average restaurant profit margin is between 3 and 5% annually. Fast-food restaurants often have lower profits but higher turnover, while fine dining establishments command higher prices with fewer customers. On average, restaurants generate a monthly profit of $15,000 to $25,000.
What is the most profitable restaurant business?
The most profitable types of restaurant business are:
- Quick Service Restaurants (QSR)
- Fast Casual Restaurants
- Fine Dining
- Casual Dining Restaurants
- Pizza Restaurants
- Delivery-Only Ghost Kitchens
Read more about most profitable restaurant types here.
