The Key Ingredients of a Restaurant Business Plan
Need a hand turning your restaurant dream into a viable business? Here are the key ingredients to writing a restaurant business plan — plus a free template.
Every successful restaurateur knows that, first and foremost, a restaurant is a business. But compared to other businesses, restaurants present unique challenges, with 75% of restaurants shutting their doors within the first 18 months. Restaurateurs battle slim profit margins, high employee turnover, and a competitive market on a daily basis. Taking the time to develop a comprehensive restaurant business plan before you open is the difference between a flash in the pan and a neighborhood staple.
So where to begin? Before you start thinking about how to increase sales and grow your restaurant, you need to nail the essentials. That means thinking beyond the food that inspired it all in the first place and ensuring your concept can function profitably. A well-crafted business plan helps attract investors and allows you to forecast how you will generate profits while solidifying a long-term roadmap for growth and viability. Tear yourself away from tasting menu items for a minute, and let's talk through creating a restaurant business plan step by step.
Benefits of a restaurant business plan
The main goal of a restaurant business plan is to outline how you intend to earn profits. But it goes well beyond finances, often incorporating the positioning, branding, and market research that need to be ironed out before opening up shop. Comprehensive, clearly articulated, and powerfully substantiated, this is the key strategy document you'll need to engage investors — and the blueprint that will keep you on track even in the heat of day-to-day operations. But before putting your plan on paper, there are a few preliminary measures to take.
Spend some time reading through business plans from other restaurants: both similar and different. Where do their numbers fall? What expenses strike you as high or low — and why? Where do you think you can streamline your costs — or increase your food margins? Once you have a sense of how other restaurant owners model their businesses, make a list of your estimated startup costs and begin drafting an estimated budget plan for your restaurant.
Determine whether you're taking over an existing space as is, doing a renovation to an available location, or building from the ground up — and compile the associated costs. Will you need to start a dining room from scratch? If you're seeking a liquor license, what will that cost? What pre-launch marketing materials will you need? Think about your website, your take-out menus, and other collateral: what will these cost to design, write, and produce?
As the owner, the priorities are up to you to decide — and the startup period is the best time to clearly delineate what those are. But keep in mind, that you have a lot of flexibility. Whether you're developing a small restaurant business plan or something more large-scale, startup costs can range from a few thousand to several million dollars, depending on what you're working with and where you choose to cut costs or splurge.
Determine whether you're taking over an existing space as is, doing a renovation to an available location, or building from the ground up — and compile the associated costs. If you're seeking a liquor license, what will that cost? What pre-launch marketing materials will you need? Think about your website, your dining room and take-out menus, and other collateral: what will these cost to design, write, and produce?
As the owner, your priorities are up to you to decide — and startup is the best time to delineate what those are clearly. But keep in mind, you've got a whole lot of flexibility here. Whether you're developing a small restaurant business plan or something more large-scale, startup costs can range from a few thousand to several million dollars, depending on what you're working with and where you choose to cut costs or splurge.
Crafting your business plan
While your restaurant concept should be unique and offer a culinary experience your target customers are currently missing — or don't know that they're missing — your restaurant business plan can follow a well-established template. There's no need to reinvent the wheel.
While every restaurant business plan template is slightly different in the naming and structure of its categories, they all contain similar core components: an executive summary, business overview, industry analysis, operations plan, marketing plan, and financial analysis.
- Establishing the core elements
Executive summary. Articulate the big picture for your restaurant. Introduce who you are, what your vision is, and which market you're addressing. Include items like your mission statement, core values, and key differentiators.
- Business overview. Whereas the executive summary is all about the big idea, the business overview (or company description) provides high-level insight into the details: the concept, brand, structure, location, design, and so forth.
- Industry analysis. Go in-depth about where your restaurant fits in the marketplace. Talk about the local competition near your chosen location, synergistic businesses that surround you (like a spa, office building, or shopping center), the area's economy and projected growth, your target demographics, and everything else a potential partner or investor would want to know.
- Operations plan. This is an overview of the day-to-day operations of your restaurant, including the organizational structure, employee pay, customer service policies, and plans for the general restaurant processes and procedures. What restaurant technology will you invest in? Will you partner with delivery service? Essentially, here you have the opportunity to lay out the action steps for how your restaurant will function.
- Marketing plan. All things related to customer awareness, advertising, public relations, and community engagement live here. How are you going to let customers know you're here? How will you keep them coming back to the restaurant — and placing delivery orders from home? How will you engage and communicate with your fans, once you get a bit more established? Detail your marketing strategy here.
Preparing for a winning restaurant opening
To make writing your business plan more manageable, break it down into sections you can tackle one by one. This makes it less daunting and will likely result in a stronger, more compelling, and more instructive plan.
While it may seem impossible to represent your restaurant vision in a single document, a business plan assures all potential stakeholders that you're cooking with a successful recipe from the start. Prepare to break into the marketplace — and come out thriving. Ready to put your restaurant ideas to paper? Contact any Dropp Business Development Agent to assist you design your free Restaurant Business Plan today and move one step closer to opening your restaurant.
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