Opening a restaurant can be very lucrative but requires a well-thought-out business plan. A business plan is a document that will help you understand what steps you need to take to make your restaurant successful. This article will discuss how we design a business plan for a restaurant from scratch.
We will present some examples and restaurant business plan templates to help you understand what elements should be included in this document, from concept development through market and competition analysis to a financial plan. This article gives you a solid foundation for writing a business plan for a restaurant or improving an existing one.
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What is a restaurant business plan?
A restaurant business plan is a document that describes planned activities, goals, and strategies for a new or existing restaurant. It is an important document for anyone who wants to open or develop their own restaurant business.
How to write a restaurant business plan (Step-by-Step)?
- Step 1: Gather answers to important questions from the list below before writing your plan.
- Step 2: If you are opening a restaurant with an innovative business model, it is better to wait to start writing a business plan immediately to verify whether this model can succeed. Use the Business Model Canvas described later in the article.
- If the restaurant has a traditional business model (e.g., pizza delivery, sushi on-site, bistro) already existing in the market, you can skip this step and create a business plan immediately.
- Step 3: Create a restaurant business plan using the ready-made template (pattern) described below.
- Step 4: Review the business plan regularly, every month in the first months of running the restaurant, and at least once a year in subsequent years. A business plan is a living document that will help your restaurant grow.
- Write short and concisely. Be specific.
- Use numbers for calculations.
- Assume black scenarios. The blacker you assume, and yet the business has a chance of success, you will manage to beat the market.
- In the first months of the restaurant’s operation, work with the business plan daily and update calculations and assumptions.
- Once the restaurant is stable and has reached the so-called break-even point, return to the business plan at least once a year.
- Discuss the business plan with your team. Also, consider sharing some of the profits with your team. In this way, you will build a unique commitment.
- The business plan is for years. The document should be updated regularly.
Where to start writing a restaurant business plan? (10+ questions to start with)
Start writing a business plan by answering a few important questions. The questions help you create a good business plan for opening a restaurant and, above all, help you design a business that perfectly suits your needs:
- Why do you want to start this restaurant?
- How much would you like to earn per month?
- How many guests do you plan to serve per month?
- What kind of restaurant do you want to run? (e.g., pizzeria, or bistro. Here is a list of types of restaurants).
- What kind of delivery (handling) will you offer? (on-site, takeout, deliveries on demand).
- What area will you operate in?
- Who will be your client?
- How many direct competitors are there where you want to operate?
- How will your restaurant stand out?
- Who do you need to hire to start a restaurant?
- What metrics will you keep track of? (e.g., food cost, website traffic, customers opinions).
- What will your restaurant look like inside?
- What will the atmosphere of your restaurant be like?
- What will your restaurant menu look like?
Remember that a sample menu can attract potential investors. A well-written and attractive-looking menu will help you sell your idea, whether a small fast-food joint or an upscale restaurant. The menu is your #1 sales tool.
What is the purpose of writing a business plan?
- A business plan is an action plan. You will stop dreaming and start turning your idea into a real restaurant business plan.
- Running a business is working in a company. Creating a business plan is working “on the company,” i.e., its design and improvement.
- A restaurant business plan will allow you to verify your assumptions in a year, two, or five years (it’s super satisfying to watch how your knowledge grows every year).
- Writing a business plan allows you to translate your vision into a specific project and action plan. It also allows you to rethink to what extent your business idea is a recipe for success and what you still need to refine.
- Creating a business plan for a restaurant will help you assess the reality of your dream and the possibilities of its implementation, as well as check the chances of its success and assess the risk you have to take.
- A business plan forces you to be specific. If you don’t know the answer to a question in our guide, you may be blind in this area, which is very risky.
- If you already run a restaurant and don’t have a plan, fix this mistake. Every restaurant should have some sort of plan.
When is it worth writing a business plan?
In our opinion, always 🙂 If you plan to open a successful restaurant and do not have the basic elements of your business written down and calculated (and you do not verify them regularly), you are doomed to failure.
Only regular analysis of the restaurant’s results and planning the next moves (in the form of a business plan) allows you to have full control over the restaurant.
Of course, the external motivation is looking for an investor or support (then you are forced to create this document).
Free restaurant business plan template
A typical restaurant business plan example includes:- Executive summary for a restaurant
- Restaurant description
- Market Analysis, Location Analysis
- Market analysis
- Competition analysis
- SWOT analysis
- Investment plan (Cost Analysis, Financial Analysis)
- Investment costs (one-off to start)
- Operating costs (fixed monthly costs)
- Financial Projections
- Profit and Loss Account
- Break-even analysis
- Sensitivity analysis
- Team (Employees, Founders)
- Founders
- Employees
- Restaurant marketing plan
- Company description of the vision for further development of the restaurant
1. Executive Summary
The summary of the restaurant business plan should include:- Mission statement, vision, and values.
- Description of the restaurant concept.
- Why will this idea be a success?
- How do you want to implement this plan?
- Costs.
- Profits and return on investment.
2. Description of the restaurant
This section aims to show you the details of your restaurant. It should not lack the following elements:- Mission statement and vision
- Mission: why do we exist?
- Vision: what we want to achieve in 1, 2, and 5 years.
- Structure
- Business Type: Is your restaurant a sole proprietorship, partnership, or other business?
- Restaurant concept
- Restaurant name (get inspired by this list of restaurant names).
- Restaurant type: specify the type of restaurant, e.g., bistro, fine dining, etc.
- Specific location: write exactly where your new restaurant is (or could be) and why you chose this place.
- The style of the place: what will be the colors, atmosphere, decorations, music, etc.
- Ways to fulfill orders: only on-site, only in delivery, both ways.
- Hours of Operation: What hours will the place be open? Why in these?
- Menu
- Type of cuisine served:
- Draft menu: attach a sample menu you want to offer (design it according to the rules of menu engineering)
- 1-3 differentiators from the competition (Unique Selling Points)
3. Market research and competition analysis
Unless you are introducing real innovation to the market – and maybe especially then – you should thoroughly analyze the space to create your premises, i.e., the market and competition in the catering industry. Analyze the market and competition, focusing on the following: Market overview Customers are the key to any restaurant’s success. Knowing their demographic structure, preferences, and dining habits is critical to a business plan.- Target market for a restaurant: Think about who your customers will be. Consider their age, interests, expectations, and how to reach them.
- Needs in the market: Describe the market’s needs and how your restaurant will meet them.
- Target Audience Size: Determine the number of potential customers in the market you intend to target.
- Market trends: Use credible information to show that people will be interested in your restaurant idea. Find out current trends and how the restaurant industry is developing.
- A list of competing restaurants in your area.
- Revenue and number of orders they can achieve: Estimate how much such restaurants can earn.
- Menu and prices: Analyze what these places offer and what is their menu pricing. Try to calculate their food cost.
- Competitor marketing activities: See what makes them successful and their weaknesses.
- Competitive advantages: What will be your advantage?
| Positive | Negative | |
|---|---|---|
| Inside | Strengths – – – | Weaknesses – – – |
| Outside | Opportunities – – – | Threats – – – |
4. Investment plan (cost analysis)
In this section, you will present the costs associated with the initial investment and the spending plan for the first year of operation.
List the costs, dividing them into two groups:
- Investment costs (one-off to start).
- Operating costs (fixed monthly costs).
After opening a restaurant, verify the costs regularly, preferably once a month.
Investment costs include, among others:
- Rental or purchase of the real estate.
- Renovation and adaptation of the premises.
- Purchase of kitchen equipment:
- Oven.
- Gas stove.
- Fridge and freezer.
- Dishwasher.
- Mixer, blender, food processor.
- Dishes, cutlery, pots, pans.
- Purchase of room furniture and equipment:
- Tables.
- Chairs.
- Buffet.
- Decor.
- Lighting.
- Work clothes for the staff (if you plan uniforms for the staff).
- IT software and hardware:
- POS software.
- Payment terminals.
- Computer hardware for the POS system.
- Marketing and promotion costs:
- Logo.
- A website with online orders.
- Menu design.
- Flyers.
- A-boards.
- Insurance of the premises and equipment.
- Organizational and legal costs (e.g., regulations, documentation).
- Costs related to permits and licenses (e.g., permission to sell alcohol).
- External training costs.
- Operating costs.
- Rental of real estate (if the premises are rented).
- Utility charges:
- Electricity.
- Gas.
- Water.
- Staff wages:
- Chef.
- Cooks.
- Waiters.
- Dishwashers.
- Purchase of food and drinks.
- Equipment maintenance and servicing costs.
- Service charges:
- Cleaning.
- POS system support.
- Online ordering system.
- Commissions for external food delivery services.
- Employee insurance.
- Marketing and promotion costs:
- Online and offline advertising.
- Printed materials.
- Running social media.
- Website positioning (SEO).
- Taxes and fees.
The biggest problem for a novice restaurateur is finding financing for the first business. Various options are worth considering, such as taking out a bank loan, receiving subsidies — a business plan will even be necessary to receive them — or loans from friends or family.
Considering a restaurant loan or a subsidy, you must first think about the black scenario – what will happen if your business fails and you have to return the borrowed money, but also what to do to prevent this from happening. Assessing which costs are necessary at the beginning of the business and how high the margin you have to impose on the production of dishes is the key to assessing the chance of return on investment in the restaurant.
5. Financial forecast
The financial forecast consists of 3 elements:- Projected profit and Loss Statement: Shows what turnover and profits you will generate.
- Break-even analysis: Shows when a restaurant will become profitable.
- Sensitivity analysis: Shows what happens to turnover and profit in negative scenarios (e.g., 50% decrease in turnover for three months).
| Months of running a business | Month 1 | Month 2 | Month 3 | e.t.c… |
| Number of orders per month | ||||
| Average order value | ||||
| Monthly income (turnover) | ||||
| Variable costs per month | ||||
| Fixed costs per month | ||||
| Profit per month | ||||
| Profit margin (in percentages) |
Break-even analysis
Investors will want to know how much revenue you will need to generate each month to break even after all fixed and operating costs are considered. In the analysis, you should show how you intend to generate the necessary revenue, even in difficult months with lower sales.
Sensitivity analysis
It is worth doing it to assess the negative scenarios: when the other restaurants will be stronger, and you will have to lower prices, when you lose key employees or when there is a decrease in sales by 10 or 20% compared to what you assume.
This will allow us to be better prepared for different financial crises and reduce stress when such a situation arises.
Make a sensitivity analysis in the form of a table
| Problem | How will it affect revenue, costs and profits | How to react | Countermeasure |
|---|---|---|---|
| – – – | – – – | – – – | – – – |
6. Team
Business is people. Describe what your team will look like, dividing it into two groups:
- Founders.
- Employees.
Founders
If you are looking for investors, this area can be critical for them.
Describe the founders:
- List of founders.
- Experience.
- Successes.
Employees
Think immediately about which positions are necessary for the daily functioning of the premises, such as a waiter or cook, and which will suffice as emergency help.
Think about which people you already know with the necessary competencies and which ones you will have to look for or train your employees from the beginning. The cost of necessary training should also be included in the restaurant business plan.
Describe the team you need to build:
- List of job titles.
- Duties.
- Remuneration.
- Type of contract.
7. Marketing plan
Ideally, your marketing strategy should include the items we listed below. In our guide about restaurant marketing strategies we described how to do effective marketing.
- Brand building (Logo, colors, restaurant slogans)
- Building your own website (Here you can check how to create a restaurant website)
- Selling food online from your own website (as the main way of selling online)
- Selling food through external portals and food delivery apps (as an add-on)
- Launching table ordering
- Launching a loyalty program
- An action list on how you will attract offline customers
- Flyers.
- Radio.
- PR.
- Events.
- An action list on how you will attract online customers
- Will you run social media?
- Will you be implementing restaurant SEO (Search Engine Optimization)?
- Will you add a business listing on Google Maps?
- Will you run email and SMS campaigns, and if so, how often? How will you build your subscriber base?
- Will you be blogging?
- Will you be running a restaurant newsletter?
- Will you be doing paid Google Ads and Facebook Ads?
- Will you be offering promotions? If so, what types?
8. Description of the vision for further development of the restaurant
Determining the direction of development is very important at the beginning of your business. When setting restaurant goals you want to achieve in a certain time, you should start with the broader ones, reaching those at the everyday level. It is also worth considering how you want to achieve these goals.
Consistently assessing initial goals and adapting during project execution enables effective management and reduces losses in marketing, service, and menu. Your restaurant’s business plan should clearly outline the vision and strategies to achieve desired objectives.
Sample restaurant business plan
We created a sample restaurant business plan to help you write your plan. Click below to download an example of a business plan for a restaurant.
Fill out the form to download the business plan template. By submitting the form, you agreed to join our Newsletter list.
Business Model Canvas: A business plan for a restaurant on one sheet of paper
Who reads hundred-page documents describing a business idea? If you don’t like talking nonsense and want to simply describe your vision of a modern restaurant and test how it will work in reality, the lean canvas is the solution for you.
What is the Business Model Canvas?
Business Model Canvas simply stands for a slimmed down version of a restaurant planning document. This concept was created by Ash Maurya.
You can find more about it on the LEANSTACK website
This is not only a quantitative change, but also a qualitative one. Maurya has created a business model of thinking that helps eliminate such a restaurant or other business that raises doubts about its success from the beginning, if only because no one will want to buy the product we offer. His motto is that life is too short to build something nobody wants.
The main goal was to support communication and simplify talking about your idea. So that it can be summarized to the investor in 1 minute, and that’s enough to take in an A4 sheet of paper instead of digging through the entire document.
How is Lean Canvas different from a traditional business plan?
- Short and concise
- Quick to update and test
- Easy to maintain (because it’s short and concise)
- It allows you to eliminate an unprofitable or unnecessary idea for a restaurant already at the planning stage
- Focused on finding solutions and simplified problem analysis
When to opt for a traditional business plan versus a Business Model Canvas?
We think it is ideal to always start with a business model canvas as a sketch first. So the way to create the perfect restaurant business plan is this:
- You start by writing out a few business model canvases to catch ideas for the restaurant’s business model.
- You have fun with this model. Test XYZ.
- If from many models emerges the leading one that you want to implement, you start writing it down exactly as a restaurant business plan, where you carefully analyze the market, write down costs, profits, and a plan of marketing activities.
Business Model Canvas: pattern and example
- Problem – list the needs and problems that already exist on the market, do not invent new ones. It is best to list the 3 that are most important.
- Solution alternatives – a description of how your existing customers are currently doing and what solutions the competition offers them.
- Ideal customers – think about who has problems from point 1, and you can make a breakdown in terms of age or customer behavior.
- Open to new solutions – think about what group can become the ambassador of your restaurant.
- Solution – list what solutions you propose to solve problems and meet your customers’ needs.
- Unique value proposition – why are the solutions you propose and your business idea unique? Summarize them in a few sentences.
- Channels – what marketing channels will you use to reach your customers, be it Google Ads campaigns, a Facebook profile, or a partnership with another brand or person?
- Revenue – how your restaurant will earn a living, whether it’s just in-house orders or also catering, etc.
- Key activities – determine what will be the measures of your success, apart from financial ones, e.g., the number of customers who placed an order or left a positive opinion on your website.
- The competitive advantage of your restaurant – what the competition will neither easily buy nor easily counterfeit if, for example, you have secret recipes passed down from generation to generation or a celebrity corresponding to your ideal client decided to dine at your restaurant.
How to create a restaurant business plan using the Business Model Canvas?
- Create a lean canvas by filling in all the fields in one sitting
- Focus primarily on the present state, do not try to anticipate what will happen next.
- Fill in the fields in the following order: 1 problem and model customers 2 unique value proposition 3 solutions 4 channels 5 revenue 6 key activities 7 distinguishing feature of your restaurant.
- If you do not know how to complete a given field – leave it blank. At the initial stage, the lean canvas will change due to the tests you will conduct
- if there are several target groups to whom you want to address your restaurant’s offer – prepare separate versions for them, and then choose the most likely one.
- Run tests – check if your solutions to the problem answer the market’s needs, whether your distribution method will reach the model client, etc.
- Ash Murya, Metoda Running Lean. Iterate from plan A to the plan that will make you successful.
- Yves Pigneur, Alexander Osterwalder, Business Model Generation.
- Read more about the lean canvas: How to Create a Lean Canvas for Your Business.
Key Takeaways
- The business plan describes what your restaurant will look like.
- A business plan consists of 10 different elements.
- Create a business plan even if you already run a restaurant.
- Do not outsource writing a business plan to external companies. It is better to ask an experienced restaurateur or an external company as a consultant for your ideas.
- Go back to the business plan once a month if you are starting and once a year if you have been operating for several years.
- A business plan is not an artificial document you write once and forget. It is a living document that teaches you how to run a business.
Frequently Asked Questions (FAQ)
How to write small restaurant business plans?
Regardless of the size of the restaurant or business, the steps of restaurant business planning remain the same. Writing a business plan for a small restaurant consists of
- Executive summary,
- Restaurant description,
- Market analysis,
- Investment plan,
- Financial projections,
- Team,
- Marketing plan,
- Company description
Does every restaurant need a business plan?
In our opinion, yes. If you are serious about developing your business, you must implement a repetitive method of working “on the company”. A business plan that is updated regularly every month and year is one way to run a business.
How to open a restaurant without money?
Opening a restaurant with no money can be challenging, but it’s not impossible. Here are some ways to open a restaurant without enough funds:
- Rethink the concept of your restaurant.
- Look for restaurant investors or alternative funding sources.
- Start your online business to get customers.
- Consider working with other companies.
- Start a smaller business by offering food from a food truck or catering.
Discover more ideas on how to open a restaurant with no money.
How to promote restaurants?
Promoting a restaurant is key to attracting new guests, increasing sales and retaining regular customers. A few steps to help you promote your restaurant:
- Create a professional website with an online ordering system.
- Take care of social media by posting regularly and encouraging interaction.
- Add your restaurant to popular booking sites.
- Organize contests and promotions.
- Collaborate with influencers.
- Organize events such as tastings or concerts.
- Use paid ads such as Google Ads or Facebook Ads.
- Collect restaurant feedback from satisfied customers.
Check these restaurant promotion ideas for inspiration.
How much profit does the restaurant make?
A restaurant’s profit depends on many factors, such as location, type of cuisine, style, price, service quality, and business size. The average restaurant profit margin is between 3 and 5% per year, but it can vary significantly depending on the factors mentioned above.
For example, fast-food restaurants may have a lower profit but typically have a higher turnover and more customers. By contrast, fine dining restaurants that offer fine dining and high-quality service tend to have higher prices but fewer customers and lower turnover.
Our estimations show that restaurants generate an average monthly profit of $15,000 – $25,000.
What makes a restaurant business plan important?
A restaurant business plan is crucial for several reasons:
- It helps clarify the vision and goals of the restaurant.
- It provides a roadmap for the business.
- It includes financial projections, budgeting, and funding strategies for securing investors or loans.
- It identifies potential risks and challenges, allowing the business to address them proactively.
- It serves as a reference point for decision-making, helping the management team focus on the business’s objectives.
- It can be used to communicate the business idea effectively to stakeholders, including investors, partners, and employees.
