How to Write a Restaurant Business Plan in 2023

So you’ve decided to open a restaurant. Congratulations! But before you can open a successful restaurant, you need to write a restaurant business plan. 

According to CNBC, approximately 60% of restaurants fail within the first year of operation, and 80% fail within the first five years. 

Without a proper plan, your restaurant might be doomed for failure before it even opens. However, a well-researched and detailed business plan can help solve half your problems and help you launch your restaurant successfully.

The restaurant industry constantly changes, so you need a detailed roadmap with a framework to start and run your business.

If you’re unsure where to start, we’ve compiled this guide on how to write an awesome restaurant business plan.

Read Also: Restaurant Tax Guide

Business Plan for Restaurants Template

A detailed restaurant business plan requires a lot of research and analysis, especially if you’re just starting. It’s an essential tool for new business owners and the one thing you can’t do without. 

If you’re looking for a quick and easy way to start writing your restaurant business plan, here’s an accessible restaurant business plan template.

This template will provide the information and direction you need to create your restaurant business plan. 

The Importance of a Restaurant Business Plan

A restaurant business plan is an essential tool for new restaurants looking to open and existing operations seeking capital funding.

If it’s fast casual or fine dining, no matter which restaurant type, you need a thorough and thoughtful business plan.

A well-written plan helps you secure funding from lenders, investors, and other sources because it demonstrates how you plan to profit from your business, where your restaurant fits into the saturated market, and how you plan on standing out.

Whether you are a first-time restauranter or a group of seasoned restauranteurs. This roadmap will ensure your investors, management team, and employees are aligned on your mission.

In addition to helping you obtain financing, a restaurant business plan also ensures you have a clear vision for your restaurant before opening its doors to customers. 

By providing financial goals for the next year or two and detailed information about your location and target market, you can develop strategies to help you reach those goals.

A good restaurant business plan should include the following:

• A description of your business and how it will operate
• An analysis of your target markets
• Information about competition within those markets
• A marketing strategy for reaching those markets
• Financial projections for the coming years

If you are considering opening a restaurant, creating a business plan can help determine if it’s worth it in the long run. And if you already have a restaurant, creating a plan will help you improve operations and increase profits.

P.S. We Offer Restaurant Financial Models to make completing your restaurant business plan a breeze!

Whos’ it for, Anyways?

A restaurant business plan is for anyone wanting to start a food service establishment.

This could be you if you plan to open a small neighborhood restaurant or a chain of pizza spots. It can also help existing restaurants looking to expand their operations.

A restaurant business plan helps you stay focused on your goals and achieve them by laying out the steps needed. A good plan will help you get the right people on board, set realistic targets and timelines, and keep track of your progress toward these goals over time.

A restaurant business plan can also help you improve your chances of success when you’re looking for funding from investors or applying for loans. 

You’ll also find that developing a detailed outline for your restaurant helps you avoid making mistakes or overlooking essential details regarding location selection, marketing plans, and more.

How to Write a Restaurant Business Plan (Description, Examples, Proposals)

A restaurant business plan is a document that describes your proposed restaurant, the market you’re targeting, your marketing strategy, and other details about how the business will operate. 

It also outlines the financial plan for starting and running your business.

The following sections describe what goes into a restaurant business plan, how to develop one for your business, and examples and proposals you can use.

The Key Elements of a Restaurant Business Plan

To create a successful restaurant business plan, you should incorporate the following key elements:

A Branded Cover Page

You should incorporate your branding on the cover page. Your brand is your identity, the way your customers want to be seen.  

Branding allows you to create a positive perception of your company by combining elements like logos and a consistent theme throughout all your marketing communications.

It makes you unique, memorable, and different from your competitors.

A good brand strategy can help you build trust with potential investors and make your business more valuable in the long term.

An Executive Summary

The executive summary is the first thing people see when they look at your business plan. It’s a short description of your restaurant business that should be easy to understand and memorable.

You can use this section to highlight any unique aspects of your business, such as your restaurant’s mission statement, proposed concept, how you’ll execute the plan, an overview of potential costs, the anticipated return on investment, and your core business values.

The purpose of this section is to present an overview of your company and its key goals, objectives, and strategies. 

A Company Overview

Your company overview introduces the basic structure of your business, the market it serves, and its competitive advantage. You should also include details about the following:

• Ownership structure
• Location
• Type of restaurant
• Style of service
• Price positioning
• Sample Menu
• Restaurant Concept (Fast Food, QSR, casual dining, fine dining, etc.)

Finally, you can also discuss your plans for the restaurant’s space, including the layout and hours of operation. 

This section is essential because it helps potential investors understand what your company does and how it differs from other businesses in the same industry. Your target market should also be clearly defined in this section, so investors know who they are investing in.

1. Legal Structure

The legal structure of your business is critical to how it will operate and should be included in the company overview. 

Smart restaurant owners think about their corporate structure before they raise money. Three basic options are available: partnership, limited liability company, and corporation. Your legal structure significantly impacts what tax liability you might have. And each has its benefits and drawbacks, so make sure to do enough research on this before choosing a business structure. 

Consider consulting a lawyer or certified accountant for advice on which type of entity is best for your business. Once you’ve determined your business’s legal structure, ensure this information is included in your company overview.

2. Capitalization

This section of your business plan includes the money you will need to start and run your business. 

This is important because if you need more cash on hand, you may need to borrow money or get investors for your business, and they need to see your funding needs.

You can break it down into three categories: 

Cash: How much money do you need for your build-out? What are your expected pre-opening expenses? How much are you putting into the business? What is your cash burn during ramp-up?

If you don’t have enough money, you may need to look for other ways to raise your business’s capital, such as equity or debt financing.

Equity: Selling equity of your business is another way of raising funding for your business and involves raising capital through the sales of shares. 

If this is something that your business will need, you should figure out how much equity you are willing to give up in your restaurant. 

You’ll want to consider making this decision carefully, as you must relinquish some of your ownership and dilute your control over the business.

Debt: Debt financing differs from equity financing and involves borrowing money and paying it back with interest. The most common form of debt financing is a loan, so you may want to figure out if taking out a loan for your business makes sense.

3. Business Concept

To launch a successful restaurant, you must have a strong concept that resonates with customers with a unique selling point that sets it apart from other restaurants in the area. The concept defines the purpose of your restaurant, what your menu will look like, and who your target market will be. 

4. Market Analysis

Lots of entrepreneurs overlook this important step in the process. The naive think that they have a great idea that everyone will love. This isn’t the case; ensure you research your market to make sure it supports your restaurant concept, price point, aesthetic, and so on.

Include an Industry Analysis (Identifying Your Target Market)

Industry analysis is one of the essential parts of your business plan. Here you can discuss the market sector in which your restaurant will exist and the specific location or area where you plan to open the restaurant. 

This section also covers the growth of the local economy and industry, your major competitors, ongoing or upcoming infrastructure projects, and so forth. 

1. Target Market

The target market for your restaurant business plan is those who will frequent and purchase from your restaurant. Smart entrepreneurs think through their target market in the early stages of idea development.

And because the restaurant industry is so competitive, finding your niche (perfect restaurant concept) is crucial. 

You should know who your restaurant will attract and who you hope will become repeat customers. You can start by finding out who will eat at your restaurant. What age range are they in? Where do they live? 

The more specific you are in identifying your target market, the better off you’ll be when developing strategies for attracting the right customers to your restaurant. 

2. Location Analysis

The location analysis section of your restaurant business plan should include information on the area where you plan to open your restaurant. This includes data on population, employment, and other statistics of that area.

You can include information about how many people live in the area, the growth of the local economy, infrastructure projects nearby, and so forth.  

Also, include any other relevant information, such as activities in the area and significant events during certain times of the year.

The goal here is to help you find a location that will be successful for your restaurant. If there’s a lot of competition nearby or the area is not a prime spot to start a restaurant, this could be a warning sign that you should look elsewhere for your new business venture.

It’s also important to understand that your price point can be supported by the local community.

3. Competitive analysis

Competitive analysis helps you understand your competing restaurants and their strengths and weaknesses. It also allows you to determine what differentiates your restaurant, i.e., why customers should choose it over others. 

A great tool for this is a SWOT analysis, which I have covered here.

You’ll also want to discuss what will make your food service stand out, and doing this will give you a competitive business edge.

Investors will also want to know what will set your restaurant apart from the competitors so they can decide whether to invest in your business or not. 

Detail Your Restaurant Marketing Plan

Your restaurant’s marketing plan should detail how the business will attract new customers and encourage repeat visits. It should describe all the ways you plan to promote your restaurant. 

There are many ways to promote your restaurant, but you’ll want to focus on the most effective ones that work in today’s marketing landscape.

In your marketing strategy, be sure to include the following:

Your target audience: Who exactly do you want to visit your restaurant? What are their demographics (age, income level, etc.)? What kind of messages appeal to them? 

Your marketing strategy: How will you reach your target audience? Will it be through TV commercials, billboards, or social media? How much will this cost? What results should you expect? Will your foot traffic be enough to minimize marketing costs?

Your budget: How much money do you have for marketing? What other expenses might be included in the overall marketing strategy?

Put Together an Operations Plan

An operations plan that outlines how you intend to operate your restaurant once it opens for business, including how many employees you’ll need and what their roles will be within the organization. 

You’ll also need to include information about how you will manage day-to-day operations once your restaurant opens for business, such as inventory control and financial management, and what systems or software you’ll use for these tasks.

Include in this section:

Staffing (Organizational Structure)

Your organizational structure should include how many positions you will need to fill in the different parts.

You should also include how much you expect to pay employees in each position and benefits packages. 

This is a great opportunity to call out your management team. What are their background and experience? What are your background and experience? What makes you the best restaurant owner for this project?

Your staffing plan should also include information about employee training programs and explain how you plan to motivate your staff to perform at their best.

Customer service policies and procedures

Your customers are your most important asset, so you want to ensure they’re always happy. A good operations plan should detail how you expect to provide an excellent guest experience. 

You should also outline the specific service values, policies, and procedures you will implement and how they will be enforced.

Restaurant point of sale and payroll systems (plus other essential systems)

An exemplary operation plan should include a detailed description of how you will track your inventory and sales. 

It should include details on how you plan on:

• Providing takeout and delivery
• Managing labor
• Cash Controls
• Payroll processing
• Accept various payment types

You may also include a detailed description of your point-of-sale system and a list of employees responsible for inputting data.

Main Suppliers

Your operations plan should describe how you will source your ingredients. You’ll want to outline where you will buy equipment and products, both one-time purchases and what will need to be bought regularly to keep your operations running.

Here are some more questions to consider in this evaluation:

• Are you focusing on local suppliers? If so, have you explored those relationships to ensure they can support your restaurant needs?
• Have you priced products from multiple suppliers?
• If the goods aren’t available locally, have you figured out your logistics and the cost to ship?
• Have you priced your menu with the market rate for products?

Complete A Detailed Financial Analysis with Five-Year Projections

The financial analysis is the backbone of your business and often one of the last parts of a business plan. It’s essential as investors expect to see a breakdown of how you plan to spend their money and compare the anticipated costs and projected revenue.

If you want to start a restaurant business, and need a detailed projection of your company’s financial performance over the next five years,  look no further!

Get your restaurant’s financial model here!

If you are writing a business plan or preparing to raise capital, you may also want our 5-year financial forecast. 

We provide 5-year financial models that will give you a comprehensive understanding of the financial aspects of your restaurant business, allowing you to make informed decisions that will drive your success.

We’ll dive into the details of your company’s start-up costs, operating expenses, existing assets, and industry trends for realistic projections. This will give you a clear picture of what it will take to make your restaurant profitable.

Here’s what a fundamental financial analysis looks like:

Investment Plan (Use of Initial Funds)

The investment plan is the first step in your financial analysis and is used to determine how much money you need to raise and how you plan on using the initial funds. 

Initial startup costs may include kitchen equipment, payroll, and marketing costs.

It’s essential to be detailed about how much money you will need from the start to avoid cashflow shortages before you open your doors.

Projected Profit and Loss (P&L) Statement 

The projected profit and loss statement is a detailed financial analysis that breaks down your business’s revenue and expenses by month.

It includes all your costs, such as payroll, rent, utilities, and other fixed costs. You can also have anticipated cost fluctuations for items like food or supplies.

Estimate revenue is projected especially if you’re just starting.

Break-Even Analysis

In this section, you want to provide a detailed analysis of your break-even point. This is the point at which your business will generate enough revenue to cover your expenses and sustain itself.

Investors will also want to know how much revenue you expect to bring in each month to break even.

To calculate your break-even point, divide the total fixed costs by the unit contribution margin. 

For example, let’s assume that your fixed costs are $20,000. With a contribution margin of $40, your break-even point would be 500 units ($20,000 divided by $40). 

So if you can sell 500 units, your business will report a net profit or loss of $0. 

Once you’ve reached this point (and hopefully exceeded it), your business should be able to sustain itself on its sales alone.

Expected Cash Flow

Cash flow is the lifeblood of a business. It’s what you use to pay your vendors and employees and how you pay yourself.

You need enough cash flow to keep the doors open. And cash flow forecasting is one of the essential parts of developing a restaurant business plan to help determine how much money your restaurant will need to get up and running.

The Best Ways to Present a Restaurant Business Plan

Now that you have a business plan, it’s time to learn it inside and out. In addition to a written plan, you should be ready to present your business plan to potential investors or other interested parties.

You’ll want to show that you’re knowledgeable about every area of your business and confident that you can pull it off. 

Once you’re confident about your business plan, Send the business plan to anyone you believe would be interested in investing in your company.

Some investors might like to receive the information from it in the form of a pitch presentation. You can use a professional template from Google Sheets or PowerPoint to create one and then practice, practice, and practice until you can deliver the entire presentation.

You may also want to prepare for any questions they might throw at you. Make sure you have a fact sheet or other document with your company’s critical metrics to reference it quickly if necessary.