If you’re starting a restaurant, you already know that it’s a risky business. Restaurants are notoriously difficult to run well, and often require lots of capital to get off the ground. Plus, all the equipment and renovations to a space mean you’ll probably need to spend a good amount of cash before your doors are open and you get your first customer.
Because of the risk and the amount of money involved, writing a business plan for a new restaurant is even more important than it might be in other industries. While not everything will likely go exactly as you planned, if you have a business plan you’ll certainly minimize your risk and make it that much more likely that you’ll find financial success.
A restaurant plan shares a lot of similarities with a standard business plan. Here on Bplans, we’ve got a great guide already on how to write a traditional business plan. In this article, I’ll dig into how to write a business plan specifically for a restaurant—the changes and additions you’ll want to make so your plan is customized enough to be truly useful.
I’ve also included links to examples of restaurant business plans at the end of the article so you can see templates of how other restaurants have tackled their business plan.
If you’re not quite ready to write a plan and just want to learn how to start a restaurant, check out our guide.
Why writing a business plan for your restaurant is important
Is creating a business plan for your restaurant really that important? While most people think business plans are just for getting loans and investments, the real number one reason you need a business plan is to ensure that you are successful.
Don’t just write a plan for investors or for your bank. Write a plan to help you figure out your startup costs and the money you’ll need to get going, how long it will take to pay back lenders and to answer the hard question of why the world needs your restaurant.
Of course, you will also need a business plan for your investors and lenders. They’ll want to see that you know what you’re doing and that you have a plan in place for how you’ll be spending their money. They’ll want to know that you’ve thought through everything and have contingency plans in place if things don’t go exactly as you imagined.
What to include in your restaurant business plan
Every business plan follows a fairly standard format, but restaurant business plans need to cover specific topics that other business plans don’t touch on. Here’s an outline of what you should include:
1. Executive Summary
Every business plan needs an executive summary. Usually, you write the summary last, after you’ve fleshed out all the details of your plan. The executive summary isn’t a repeat of the full plan—it’s really just a brief outline that should be 1-2 pages at the most.
When you’re getting introductions to investors, you’ll probably just share your executive summary to start, and then share the full plan if an investor is interested.
Your executive summary should summarize your vision for your restaurant, a short description of your target market, and highlights of your management team and financials. If you did a market analysis, don’t get into tons of detail, but cover enough that a casual reader will understand what you’re trying to accomplish.
2. Opportunity: Vision and Concept
In a traditional business plan, you might discuss the “problem and solution” in this section. For a restaurant, you’ll want to talk about your vision and concept instead. It’s a different way of framing an eatery’s product or service.
This is where you’ll talk about the type of food you’ll be serving and the environment you hope to create for your diners. You’ll need to define your mission statement—are you “fast-casual” or “fine dining”? Will diners order at the counter and bus their own tables or will you offer table service? Will you focus on just one meal time or cover multiple meals?
3. Sample Menu
Nothing can explain your restaurant better than a sample menu. Your menu shows that you’ve thought through your overall concept and can translate that concept to the plate in a consistent way.
Not only will your menu help to explain your restaurant concept, it will send signals with your pricing. Are you serving premium food at premium prices, or are you a bargain restaurant that is looking to turn tables quickly? Your menu can communicate all of this.
For your business plan, consider including “cost” information with your menu, if you can gather this information. Investors will want to see that you understand how your dishes will be profitable and the potential margin that you’ve built into your menu.
4. Design and Branding
When you’re starting a restaurant, spending time to plan your overall design aesthetic and your brand is an important step. Restaurant signage and interior design help attract customers and signal what kind of restaurant you are. The right design and branding attracts the target customer that you’re hoping will walk through the front door.
In your plan, include your logo if you’ve designed it already and photos from similar restaurants to explain the mood you’re trying to create. Provide details of design elements and even your color palette if you know the direction that you plan to go in.
5. Target Market
Arguably, the target market section of your business plan is one of the most important components. Your target market describes the types of customers you hope to attract. Trying to please everyone is bound to be a failure—instead, focus on a specific group of people or type of person and build from there.
For example, maybe you’re focusing on attracting a student crowd from the local college. Or, perhaps you’re focusing on young, health-conscious families.
There are a lot of details that you can include in your target market section of your business plan and we’ve got a great article that covers everything you might want to include.
For a restaurant, location can make or break the business. Occasionally, a restaurant concept is so good that people go out of their way to find it. But, more realistically, your location needs to be convenient for your target market. If it’s hard for your customers to get to you, hard for them to park, and not something they notice as they drive by, they’re unlikely to check your restaurant out.
In your business plan, make sure to discuss the potential locations that you hope to occupy, assuming you haven’t already secured the location. Explain why the location is ideal for your target market and how the location will help attract customers.
Be sure to explain the complete costs of your location and what kinds of renovations will be necessary to open your restaurant.
7. Marketing and PR
Getting the word out about your new restaurant can be challenging. Your PR and marketing plan section will discuss how you plan to let your target market know that you’re open for business. Will you use mailers? Targeted social media posts? On-street advertising? Any other advertising?
As important to marketing is Public Relations (PR). This is the press coverage you hope to get in the local media and on food blogs. But, you probably don’t want to get tons of press before you’re ready. Too much press too early and you may not have all the kinks worked out creating bad experiences for early diners.
Your marketing strategy and PR plan should explain the kind of marketing and advertising you plan on investing in and how you’re going to manage your PR. If you’re going to hire a PR consultant, describe that person or company and their experience in the restaurant industry. If you’re going to do it yourself, explain your plans and how you’ll have time to manage PR while also getting a restaurant up and running.
8. Company & Management
Most restaurants are partnerships and your plan will need to explain how your business is structured and who owns what portions of the business.
You’ll also want to include a company description that includes details on the management team and the highlights from their resumes. Potential investors will be looking for experienced owners and managers to get a restaurant up and running, so this section of the plan should explain why your team is qualified to build the business into a success.
9. Financial Plan
Finally, your restaurant will need a financial plan. Investors will want to see a sales forecast, income statement, (also called profit and loss statement) cash flow statement, and a balance sheet. If you use a tool like LivePlan, you’ll be able to build out your financial forecasts relatively quickly, even if you don’t have experience with business numbers.
If you need additional help, we’ve created a guide to creating the financial statements you need to include in your business plan.
Restaurant business plan templates and examples
If you want to see how other restaurants have planned their businesses, check out our free library of restaurant business plans. You can download all of them in Word format so you can jump-start your own business plan.
A tool for writing a restaurant business plan
Here at Bplans, we recommend LivePlan for writing your business plan. It walks you through the process step-by-step with instructions and examples for all aspects of your plan. It includes all of the financial forecasts you need—no experience necessary. Learn more about how LivePlan can help you write your business plan for your restaurant.