Plenty of people have restaurant ideas. However, you know how the phrase goes — “Failing to plan is planning to fail.” Successful restaurant owners collect their creative ideas and develop a detailed and thorough business plan — a guide to manage their business at different stages, such as planning, financial analysis, marketing strategy, launch, and operational management.
Business plans give you credibility as well. It demonstrates your investment and commitment to not only develop, but also grow your restaurant. For example, investors and lenders are going to want to see that you have a strong plan, financial analysis, and operational management strategy before they consider funding your restaurant. In addition, a thorough business plan provides a road map for how to set up and manage your new business. Without such a plan, it’s too easy to run from one “crisis” to another and miss the greater goals of your business.
How do you write your restaurant business plan? It’s not as difficult as it may sound. As you’ve thought about your restaurant ideas, most likely, you’ve considered most, if not all, of the essential components to a business plan.Now, it’s time to put your ideas on paper.
What is a Restaurant Business Plan?
A restaurant business plan is a comprehensive document that outlines the strategic direction and operational framework for a restaurant’s launch and growth. It serves as a blueprint that details every aspect of the business, from the concept, market analysis, and menu design to the staffing, customer service, and financial projections. This plan is not just a static document but a living guide that evolves with your restaurant, helping you navigate through the industry’s competitive landscape.
Why is a Restaurant Business Plan Important?
The importance of a restaurant business plan cannot be overstated. It’s the foundation upon which successful restaurants are built. This plan is crucial for:
- Securing Funding: Investors and lenders seek confidence in your vision and execution strategy. A well-crafted business plan demonstrates your potential for success and your commitment to the business.
- Guiding Operations: It provides a clear roadmap for your team, ensuring that everyone understands the business objectives and their role in achieving them.
- Adapting to Change: The restaurant industry is dynamic. A business plan allows you to anticipate changes and adapt your strategy accordingly, ensuring long-term sustainability and growth.
By articulating your vision and strategy in a business plan, you set the stage for a restaurant that’s not just a fleeting passion but a lasting enterprise.
11 Important Elements to Include in Your Restaurant Business Plan
While a business plan may vary based on size, type, and style of the restaurant, there are several key components you’ll want to include. We’ve provided a basic outline below with the elements your business partners, investors, and management team will want to see in your business plan.
1. Executive Summary
Your restaurant business plan should begin with an executive summary. This summary provides a snapshot of your restaurant vision, mission statement, management team, restaurant concept, target audience/customers, a brief financial statement, and 5-year projections. Think of the executive summary as your “elevator pitch,” the story you tell in the limited time you have to arrive at your destination. Limit this section to one or two pages.
Your executive summary should be able to stand alone, not just be an introduction to the rest of the business plan. Ask yourself: Will this portion of the plan be enough to pique an investor’s interest and provide funding for my restaurant?
2. Company Overview
In your company overview, also known as company description, you’ll outline additional details about your restaurant — including the restaurant name, location, management team and relevant experience, menu, aesthetic, and target market. You should also explain how you intend to legally structure your company. You may choose a sole proprietorship, a partnership, or a Limited Liability Company (LLC). Finally, you’ll briefly summarize your restaurant’s short and long-term goals.
Like the executive summary, you don’t want to elaborate too much here — detailed explanations will follow in the coming sections. Think of this as an extended “tear-sheet” — an abridged explanation of your restaurant to capture attention quickly and inspire curiosity to learn more.
3. Restaurant Description
Here’s where you’ll want to elaborate and outline your restaurant concept in detail. You’ll want to describe the type of cuisine you’ll provide, the aesthetic and decor, the types of events you plan to host, and more. You’ll also need to provide the number, size, and shape of tables, type of seating (booths, high-tops, traditional tables), bar design, and whether you’ll feature any other attraction, such as a gift shop or winery. As you elaborate on your restaurant concept, you’ll want to connect your choices to your mission statement.
4. Sample Menu
This section is pretty easy and something you’ve likely thought about in detail as you decided to open a restaurant. The sample menu will list your proposed menu items, just like your guests will see when the restaurant opens. If you plan on having separate menus for breakfast, lunch, brunch and dinner, make sure to include a menu for each seating. If your restaurant will promote an extensive wine or cocktail list, you might consider including this menu with your business plan, as well.
5. Market Analysis
When you write your market analysis for your restaurant business plan, you’ll explain the demand for your type of restaurant in your chosen location, along with an overview of the competition. It’s important that you include statistics about market size, growth potential from industry sources, and target customer demographics in order to make your case for your restaurant. If your restaurant targets young professionals, is there a market in your chosen location? If your restaurant targets families with small children, are you offering menu items that appeal to this demographic?
Do you belong to any organizations, such as the local Better Business Bureau or restaurant associations that could help your business? You can include that information here.
Your market analysis should prove that there is an opportunity for your restaurant concept to be successful in a chosen area. This is also a good place to talk about your menu pricing compared to your competitors.
Your market analysis section may be lengthy, but that’s good. You want it to be comprehensive. Lack of demand is the number one reason that new restaurants fail, so it’s important for you to explain why guests are going to flock to your new restaurant.
6. Operations Plan
Your operations plan will document how you intend to structure your business. Here, you’ll introduce your management team (your chef, general manager, front-of-the-house manager, etc.). You’ll want to design an organizational chart, establish business hours, and explain the employee count needed to run the business efficiently — how many servers, cooks, bartenders, hosts, etc. do you need?
7. Marketing Plan
Your marketing plan describes how you intend to bring awareness around your restaurant — it’s a critical component of your restaurant business plan. You’ll elaborate on your marketing and communications strategy, branding (your logo, signage, motto, colors, etc.), and your advertising plans (social media, direct mail, email marketing, print advertising and more).
You’ll also want to share your promotion ideas, such as daily specials, drink and food specials, and special events (such as live entertainment and holiday parties).
In addition to bringing value to potential investors about how you intend to attract customers to your new restaurant, your marketing plan also serves as a guide for you and your team when you plan to launch your restaurant.
Consider different marketing strategies, including:
- Social Media: From tantalizing food photos on Instagram to engaging posts on Facebook, each platform offers a unique way to connect with your audience. Consider regular updates, behind-the-scenes looks, and interactive content to keep potential customers engaged and informed.
- Advertising Through Public Relations: Establishing a strong presence in local newspapers can significantly boost your restaurant’s profile. Feature articles, interviews, and even regular advertorials can tell your story and draw in a local audience. Moreover, effective public relations can help you manage your restaurant’s reputation and build relationships with the community.
- Email Marketing: Email campaigns allow you to keep your subscribers in the loop with the latest news, events, and promotions. A well-crafted email can remind your customers of the delightful experiences awaiting them at your restaurant and encourage repeat visits.
- Mail Advertising: Personalized postcards, menus, and special offer coupons can make a tangible impression that digital ads simply can’t match. It’s a classic approach that can yield a high return on investment when done creatively and thoughtfully.
8. Restaurant Design
Here, you’ll describe the signage, decor, ambiance, music, colors and layout of your restaurant. Through your explanation, a reader should be able to visualize the exterior and interior of your eatery. If you have artist’s drawings and fabric swatches from your designer or architect, include them here.
9. Location
Not only should you identify the proposed establishment you wish to launch your restaurant in, but you should also describe the neighborhood. You should identify similar competitors in your targeted location and the type of establishment you hope to occupy — will your restaurant operate within a shopping center or a stand-alone building? Will you purchase the space or lease it? The more detail the better.
10. Financial Projections
Lastly, you need to discuss the finances. You should explain your one-year, three-year, and five-year plans, along with how much money you need from investors, where you intend to obtain funding, cost projections, and profits. You’ll want to disclose any debt the company may have as well as the terms of that debt. Financial projections are a significant component of your business plan — you should consult a professional to review your plan, as well. Remember — most restaurants are in business for three years before restaurant owners start turning a profit.
Your restaurant business plan serves as a guide to investors, potential business partners, and yourself to launch your vision. A comprehensive document is essential — the more detail, the better.
However, your business plan may change — marketing strategies and tactics evolve, locations change, and food trends evolve. You can refer to and revise this plan to reconnect to your mission and align your team.
11. Choose Contractors
Choosing the right contractors is key to your restaurant’s construction and design. They are experts in various roles, from electricians and plumbers to interior designers and carpenters, each playing a specific part in bringing your vision to life. Typically, contractors are hired for the duration of a specific project, ensuring all aspects of the build-out meet your standards and timeline. It’s essential to select a team that not only delivers quality work but also shares your commitment to creating a unique dining experience.
How to Present Your Restaurant Business Plan
When it’s time to present your restaurant business plan, the way you convey your vision can be just as important as the details within the document. Here are key points to keep in mind:
- Clarity and Conciseness: Be clear and concise. Your audience may not have the same level of expertise as you, so explain your concepts in a way that is easy to understand.
- Passion and Professionalism: Show your passion for the restaurant industry, but also maintain professionalism. Balance enthusiasm with data-driven insights to build credibility.
- Know Your Audience: Tailor your presentation to the interests of your audience. Investors may be more interested in financials, while potential partners might focus on operational strategies.
- Practice Makes Perfect: Rehearse your presentation multiple times. Familiarity with the material will allow you to present with confidence and handle questions effectively.
- Feedback Loop: Encourage questions and feedback. This not only engages your audience but also provides valuable insights into areas that may need clarification or improvement.
By keeping these points in mind, you’ll be able to present a compelling and persuasive business plan that captures the attention and interest of your audience, paving the way for fruitful discussions and potential partnerships.
Learn More About Food Entrepreneurship Today With JWU Online
Get the knowledge you need to open your own restaurant, café, bar, or food truck business by continuing your education online with the JWU College of Professional Studies. Build upon your associate’s degree in culinary or baking arts by earning your bachelor’s degree in Food & Beverage Entrepreneurship with Johnson & Wales Online. For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].