The very first step to starting a successful restaurant is coming up with a strong restaurant business plan. This is your roadmap, which you will need to steer your company in the right direction. With so many moving parts involved in opening up your venue, it’s vital that you have all of the details figured out.
A solid business plan will help you secure funding, understand your projected profit, plan out your day-to-day operations, get to grips with the steps required for opening your venue, and more. So, it’s important to include every little detail when writing your plan. Follow this template to ensure nothing is amiss.
How to Draw Up a Killer Restaurant Business Plan in 11 Steps
1. Restaurant Overview
The first step to creating your restaurant business plan is establishing the kind of restaurant you want to open in a detailed company overview. You need a strong restaurant concept and vision to start with.
To do this, you need to think of precisely what your ideal restaurant will cover, who you will start it with, and how you will build it. This is your company description or executive summary.
Here are a few steps and strategies that go into planning an executive summary for a new business:
Any proper restaurant plan begins by describing exactly what the restaurant does and what purpose it follows. This includes choosing a cuisine. Successful restaurants specialize in a particular type of food and are generally very clear about what they serve. A winning restaurant business plan should be as specific as possible here.
Then choose a concept, or service style, for your restaurant. Will it be fine-dining, fast-casual, delivery-focused? This helps you understand the basic operational needs of the restaurant.
You will also need to set your restaurant's mission statement and goals. This helps you establish unique selling points, which is essential for differentiating your restaurant from other businesses in your competitive landscape. For example, you might focus on organic produce, offer seasonal menus, or focus your restaurant around sustainability.
When it comes to opening a restaurant, location is everything. Your specific location needs to match your concept, and it needs to align with where your potential customers are. Finding the right location is often the most challenging part of opening a business.
When looking for a physical space for your restaurant, it will need to tick many boxes. Consider locations with a high level of foot traffic, such as tourist attractions, shopping centers, and stores.
A parking lot is another big plus, so try to choose an area that offers sufficient parking.
Ideally, the location should also have low cuisine competition. For example, if you open a Japanese restaurant, you want to be the only Japanese restaurant in the area - the less local competition, the better.
Finally, try to look for a beautiful view or unique ambiance.
2. Customer Overview
To get feet through the door when your eatery opens, you need to know who your ideal diners are. As a result, researching your target customers is essential to any restaurant business plan.
Your target market should be linked to your location, the type of cuisine your restaurant offers, and your restaurant concept. The more specific you are about your diners, the better. This will make it easier to target them later on.
Try to create a detailed target customer persona. This should include their demographics and details such as their age, income, interests, and more. You should develop a successful business around what your customer wants.
3. Management Overview
The next step in your restaurant business plan is to build a structure for the restaurant team. No matter how good your restaurant idea is, it requires talented people to execute it properly.
Establish what your management team will look like. This should include the backgrounds of managers, including their qualifications and experiences. Outline the specific duties and responsibilities of the management team.
Restaurants rely heavily on their staff. A proper restaurant business plan should outline all of the positions in the restaurant, including the qualifications and experience of the people who will fill them.
When you write a restaurant business plan, you won’t have all positions filled already. So, just outline what the job involves and what positions are available for hire.
4. Menu Plan
Your menu is your restaurant’s product. Any successful eatery requires an excellent menu, so it’s essential to get it right.
While your menu will change over time, you should include a sample menu in your restaurant business plan. This gives potential investors a sense of what to expect.
Create a sample menu for the food you will offer. When doing this, you could consider options such as whether you’d like to offer a brunch menu, an a la carte menu, or a prix fixe tasting menu. Make sure that your sample menu is realistic and that you have a plan for how you can execute it.
You might also want to create seasonal menus. This is a great idea, but it can also be tricky because your ingredients and inventory will change throughout the year. Be sure to have a kitchen operations plan that matches your menu changes.
Don’t overcomplicate things here. Just remember that your goal is to produce the most delicious food possible.
Create a separate menu if your restaurant will have an emphasis on its wine or beverage service. Maybe you will have a sommelier or an expert cocktail bartender? These can be big drawcards and differentiators for many venues.
Many people may think they need to jump straight into opening a restaurant. However, there is a considerable cost to doing this. If you aren’t yet sure that your menu is a hit, blindly opening an eatery is a major risk.
To help boost your chances of success, there are many steps that you can take while putting together your restaurant business plan. You can iterate on your menu and start to build a following and email list. Then, when it is time to open your venue, you’ll hit the ground running with a menu you’ve tested. You will also have some existing and interested customers.
Experimenting with your menu and putting in the research can significantly impact your overall success. Here are some ideas to help you test out your menu idea. We’ve ranked them in order of least time and capital intensive to the most time and capital intensive:
- Test out your food with friends and family
- Farmers markets
- Private chef
- In-home catering business
- Food cart
- Food truck
- Partnering with a beverage-based concept that doesn’t serve food (like a brewery)
- Joining a food hall/market
- Opening a restaurant
5. Market Research
A key part of any restaurant business plan is performing thorough market research. A proper market analysis will help you understand exactly how your eatery can find an opportunity and capitalize on it with minimal risk.
Here are some of the crucial steps to doing a market and location analysis:
Before opening your venue, you need to perform a thorough market analysis of the industry. Understand the size of the existing local restaurant industry, do competitive research, and look into any growing trends in the market. One of the best ways to do this is to visit and eat out at as many local eateries as possible.
Establish who your target audience is through your neighborhood and your cuisine type. What are your customer needs? How are they being fulfilled?
One good strategy is using census data to determine how many ideal customers live within a two-mile radius. This gives you a better idea of how many feet might be walking through your restaurant door and who you need to target in your marketing plan.
Market Share and Pricing
This is where you will determine how you will change the market. What unique factors will help you cut through the competition and make your restaurant stand out?
An essential strategy here is to run a detailed competitive analysis. Understand how nearby restaurants operate, what they offer, and how much they charge. This will help you determine your price point.
Paying attention to other eateries' successes and failures should also help guide your restaurant business plan in the right direction.
6. Restaurant Marketing
When you write a business plan, you will need to plan how to attract diners. This requires marketing and branding strategies.
Start by creating a brand identity to help your restaurant stand out. This should include your logo, colors your restaurant will use, your restaurant’s ‘personality’ and tone of voice, what the interior of your restaurant will feel like, and so on.
Then it’s time to establish a marketing strategy for your restaurant. This should include what promotional tools you will use to attract more customers, for example, social media, working with influencers and food bloggers, gaining restaurant reviews, and more. Check out our detailed guide to creating a restaurant marketing plan for more information on this.
7. Other Revenue Avenues
Beyond your main offering, restaurants have many options for increasing revenue through different sales channels and tactics. Consider these in your business plan, as they can play a significant role in creating a more profitable business:
Private Events and Catering
Do you plan to have a private dining room at your venue? You might want to rent it or your entire venue out for private events and functions. Or you could provide additional catering services from your restaurant. These can be great ways to increase revenue and offer a higher-profit service.
If it’s something you’re interested in, think about how you plan for people to learn about these offerings and factor this into your marketing plan.
Delivery is an excellent way to extend your restaurant service beyond the limitations of your dining room. Do DoorDash or UberEats have a strong presence in your area? Does your concept work well with delivery?
Any comprehensive business plan needs to include a detailed financial breakdown. This is an area that potential investors will spend a lot of time on.
Unfortunately, restaurants require a lot of money to start, have high operating costs, and often only realize relatively thin profit margins. This is why your financial plan needs to be absolutely watertight if your business is going to be profitable. Many eateries fail because they do not put enough attention to their financial projections.
Here are some financial areas you will need to cover in your restaurant business plan. It can be a good idea to work with an experienced accountant when putting this together:
Current Financial State
What capital do you have available, and what do your current financials look like? Establish what your financial needs will be from day one so that you can plan out what your break-even analysis will look like.
Take a long-term approach when putting together your restaurant business plan. Establish a financial plan of where you want to be in 3 years and again in 5 years. This should include revenue projections based on your sample menu, the size of your restaurant, and your market analysis. Consider inflation when planning for the years ahead.
Identify what startup costs are required for your restaurant. To do this, you will need to create a detailed list of every piece of equipment your restaurant needs.
You will also need to consider costs like inventory, rental deposit, wages, marketing and advertising, fittings, and more. Know that most restaurants don’t turn a profit straight away, so you will need some cash reserves to start with.
Understand what financing options your restaurant has available. This can include traditional small business financings, like banks and SBA.
You could also consider creative customer-based financing options. A growing trend is to use customer-based financing options to build an initial base of loyal regulars. For example, breweries starting a “mug club” is common where members pay an initiation fee and/or an ongoing subscription to have a mug at the bar that comes with other perks.
Restaurants could start a “Test Kitchen” club for regulars who get access to special upcoming menu tastings and other events. Tools like Patreon make it easier than ever to start and manage subscription programs with your regulars.
There are also tools like Mainvest, where investors can invest upfront in exchange for a percentage of future sales up to a certain cap.
Understand all your operating costs. This needs to be accurate to help you establish realistic cash flow projections. A good strategy when planning restaurant budgeting is to follow the rule of thirds and add 10%.
Your rent will be a major monthly expense, and so will your monthly labor costs. Try to organize these in as cost-efficient a way as possible.
You will also need to find a trusted supplier in your area for ingredients. Understand your debt and factor in any loan payments and liabilities to your monthly budget.
9. Build Out Your Restaurant
This is one of the most exciting parts of writing a restaurant business plan. It’s where you establish how your restaurant will be put together.
Find a contractor to help with this. You will need to know who will be fitting out your restaurant and what requirements this involves. If you are taking over an existing restaurant space, this might be relatively simple. But, if you are starting a restaurant in a general retail space, it could be an intensive project. You might need to add extraction systems, customer bathrooms, a bar counter, and more.
In general, your business plan should have a clear vision of what the venue will look like and how the floor plan will be laid out. It’s essential to stick to a timeline when planning this.
10. Prepare for the Grand Opening
The last stage of your restaurant business plan is planning for the big opening day. During the build-out and opening process, continuously post on social media and send out newsletters to share your progress and generate excitement. A strong marketing and public relations strategy creates buzz around your restaurant.
Another great approach is hosting a soft opening with your fans, friends, and family. This way, you can test your systems and get people excited while ironing out any potential issues before opening to the public. Consider donating the revenue proceeds from this to a local charity as a show of community support - it may well come back to you once the doors are open.
When you’ve tested your restaurant operations, it’s opening time. Host your grand opening, and let the party begin!
11. Additional Resources
Running a restaurant is hard work, so it’s crucial to have access to the right resource, information, and connections. Consider joining the National Restaurant Association to help you out. It’s also a good idea to join your local restaurant association when opening your business.
No business can start without a firm action plan - especially not a restaurant. Loads of restaurants fail because they don’t have a well-researched business plan to begin with. You don’t want to be one of them!
This restaurant business plan template should cover every major step you should consider before opening your venue. It might take some time and effort to figure out every detail, but it will certainly be worth it when you open your new eatery to the public.
If you’d like to know more about Perfect Venue’s event management software, book a demo or try it free. With team tasks, one-click email templates, automatic proposals, and more, it’s the perfect solution to streamline events at your new and upcoming venue.