Have you decided to open a restaurant? No matter how many friends assure you it will do well or how many countless hours you've spent coming up with the concept in your head, you are going to need a restaurant business plan. A restaurant business plan is the framework from which you can start to develop your restaurant ideas into a reality.
What should you include in your restaurant business plan?
A restaurant business plan varies from person to person, but below you will find the key points you need to highlight in yours to increase your chances of sucess. Depending on who you are presenting the restaurant business plan to you can change the order of the sections below to reflect priority.
A restaurant business plan should always begin with an executive summary. An executive summary not only acts as the introduction to your business plan, but also a summary of the entire idea.
The main aim of an executive summary is to draw the reader (often times an investor) into the rest of your business plan.
Common elements of an executive summary include:
- Mission statement
- Proposed concept
- Brief look at potential costs
- Expected return on investments
An executive summary is imperative for those looking to get investors to fund their project. Instead of having to comb through the entire restaurant business plan to get all the information, they can instead just look through the executive summary.
This is the part of the restaurant business plan where you fully introduce the company. Start this section with the name of the restaurant you are opening along with the location, contacts, and other relevant information. Also include the owner’s details and a brief description of their experience.
The second part of the company description should highlight the legal standing of the restaurant and outline the restaurant’s short and long term goals. Provide a brief market study showing that you understand the trends in the regional food industry and why the restaurant will succeed in this market.
The market analysis portion of the restaurant business plan is typically divided into three parts.
What is your target market? What demographics will your restaurant cater to? This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.
It's easy to assume that everyone will visit your restaurant, so it is important to research your competition to make this a reality. What restaurants have already established a customer base in the area? Take note of everything from their prices, hours, and menu design to the restaurant interior. Then explain to your investors how your restaurant will be different.
Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others? How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.
The most important element to launching your restaurant is by far the menu. Without it your restaurant has nothing to serve. At this point you probably don’t have a final version, but for a restaurant business plan you should at least try to have a mock-up.
Add your logo to the mock-up and choose a design that you can see yourself actually using. If you are having trouble coming up with a menu design or don’t want to pay a designer, there are plenty of resources online to help.
The key element of your sample menu though should be pricing. Your prices should reflect the cost analysis you’ve done to investors. This will give them a better understanding of your restaurant’s target price point.
Further Reading: 'Top 5 Free Restaurant Menu Makers'
The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant management team.
The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.
The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine. Instead put together a mood board to get your vision across. Find pictures of similar aesthetic to what you are looking for in your restaurant.
The location you end up choosing for your restaurant should definitely be in line with your target market. At this point you might not have a precise location set aside, but you should have a few to choose from.
When describing potential locations to your investors, you want to include as much information as possible about each one and why it would be perfect for your restaurant. Mention everything from square footage, to typical demographics.
The market overview section is heavily related to the market analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.
Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the restaurants that could prove to be competition and what your strategy is to set yourself apart.
With restaurants opening left and ride nowadays, the investors are going to want to know how you will get word of your restaurant to the world. The marketing and publicity section should go in detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.
Further Reading:'14 Most Effective Restaurant Marketing Ideas'
To make your restaurant a reality, you are going to need a lot of help. List any external company you plan on hiring to get your restaurant up and running. This includes everything from accountants and designers to suppliers. Explain to your investors the importance of each and what they will be doing for your restaurant.
The most important part of your restaurant business plan is the financials section, and as a result, you should make sure to hire professional help. Hiring a trained accountant will not only help you get your financial estimates in order, but also give you a realistic look into owning a restaurant.
You should have some information prepared to make this step easier on the accountant. He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.
Further Reading: '8 Tips for Effective Restaurant Accounting'