Preparing a Restaurant Business Plan

The preparation of a strong and detailed restaurant business plan is essential for several reasons. Firstly, you will need it to be able to convince others, such as bank managers or investors of the viability of your plans. Secondly, it will be useful to you as the business owner as a place to compile your research findings, set goals and to run some hypothetical scenarios about how the business could run if things go better or worse than expected.

There are many companies offering restaurant consultancy services so you may find that it is worthwhile having an industry expert look over you final plan before you proceed to put it into action. You can also find free restaurant business plan samples and templates online that can guide you.

Below we have outlined some titles for the various sections of a business plan for a restaurant and provided details on what should be included within each section.

Executive Summary

This part of the business plan should only be about one page in length and should introduce the reader to your proposal. It should basically summarize the other sections of the plan.

Background

Set out your personal background, relevant work experience and qualifications. Let readers know how you came to decide that you want to open a restaurant and what attracted you to the industry.

A background on the restaurant industry both nationally and locally will also likely be helpful to the reader. Also provide a history that relates specifically to your concept, theme or style of restaurant.

Let readers know about the current status of your plan if you have already taken action prior to preparing it. You may have already done certain tasks such as finding a location or talking to potential chefs.

Business Description

Include basic details of your proposal such as the location that you have or are looking for, the concept or theme of the restaurant and the kind of food that you will serve. Make a note of other important details such as whether of not you will be licensed to serve alcohol, proposed opening hours, seating capacity and the type of clientele that you wish to target.

Mission Statement

Take some time to describe the kind of restaurant that you want to be in terms of your business philosophy and values. Think about what you really want to achieve, financially and otherwise. There are other goals to have in business aside from profits such as being environmentally friendly, caring about the health of your customers or striving to treat your employees fairly.

Goals and Objectives

Set out a timeline that highlights the goals that you have for your restaurant business in the short and medium term. Gauge your progress and success by setting a variety of targets such as daily and monthly gross sales or the percentage of full restaurant capacity reached on a consistent basis. Targets could also include such things as how long it takes to get the first course on the table from the point that the order was taken.

In this section you can also mention your plans for future growth. Do you want to expand into other locations or further develop your existing location? Will you be reinvesting your restaurant profits?

Ownership Structure and Management

List any people that have an ownership stake in the restaurant and their respective interests. Also set out a management plan so that there are no arguments when it comes to making decisions if there is more than one owner.

Startup Requirements and Operating Costs

Your business plan should set out a comprehensive list of everything that will be needed for the restaurant to start as planned. Try to think of every little detail as you compile a list of equipment, other supplies, building renovations and compliance costs.

You also need to estimate the amount that is needed for monthly operating costs. Some entrepreneurs will allow for several months of operating costs when they calculate total startup costs as revenue may be slow in the first few months of operation.

This is also a good part of the report to include details of how the restaurant startup will be funded and the sources of finance that you, as the owner have available.

Location and Competition

Set out your reasons for wanting to locate your restaurant in a specific location. Describe the location in terms of size and the existing facilities that are onsite. If you are leasing your restaurant premises then outline the terms and duration of the lease.

Describe the location's immediate surroundings as well as the wider area. Give some background information on the area and the kind of people that live there.

Include details of all local competitors and how you propose to differentiate your restaurant in a way that allows you to stand out and compete with them. You should be able to show that there is a local market that is not being met by your competitor’s offerings and suggest ways of meeting this demand. It is helpful here to back up your reasoning with some demographic data or market research.

A Marketing Plan

Marketing is one of the most important factors contributing to the success of a new restaurant. Discuss your target market in detail and how you plan on packaging an experience that suits their tastes in the way of food, service, music, theme and atmosphere. Put together some profiles of typical customers that you would expect your restaurant to appeal to. Take note of any demographic trends that may support your case for future growth.

Give details as to how the dining experience that you create will be branded with a name and a logo and how you will live up to your brands promise and reputation in a way that strengthens your brand over time.

Talk about your restaurant pricing and include a list of proposed menu items with proposed prices. Consider how your prices will compare with other restaurants in the area and how the value that you offer would be comparable or better than what they have to offer. Estimate what the average customer will spend at your restaurant.

Lastly, set out some methods that you feel could work well for advertising and promoting the restaurant. This will start out with an opening launch and then be followed up with ongoing methods of promotion. Promotional activities can be divided into those that get customers in to the restaurant and those that take place once customers are inside the restaurant.

Operations and Employees

Provide details on the day to day operations of the restaurant. Give details on where food production will take place, how meals will be delivered to diners and how payment will be collected. Also include details on the standard of service that you will offer to customers.

List out details on the systems that you will incorporate into your business to make things run smoothly. These could include kitchen management systems, ordering systems, security systems, payment processing systems and more.

Estimate the number of employees that will be needed initially and set out a schedule to hire more as the restaurant grows in popularity. Make a note of the policies that you will put in place regarding staff behaviour, performance and training.

Financial Analysis

Set out some financial projections for your first three years in business. Estimate monthly cash flows coming in and out of the business and set these out in a spreadsheet. Change your figures to allow for a variety of different scenarios in the case that things go better or worse than expected. You will then have a fair idea of how profitable your restaurant will be if it runs according to your plans.

Appendix

Lastly, you should attach any supporting documents to the business plan such as your references from previous employment in the food and beverage industry or a photocopy of your qualifications from a culinary school.

Entrepreneurs would be crazy to start a restaurant in America in the 21st century without a well thought through and researched business plan. A restaurant business plan will help you to get started off right and to avoid unnecessary mistakes. The business plan for your restaurant should guide you in the direction that you need to go to ensure that your long term goals are met.