Your business plan will act as a road map for starting your restaurant. It can also help you get a loan from a bank or attract a business partner or an investor who wants to put some capital into your idea. Therefore, every self-respecting restaurant must draw up a Restaurant business plan.
A. What elements to include in a business plan?
Your business plan will guide the process of starting your new business, which you can refer to during the opening. Still, you can also share it with potentially interested investors who clearly understand where you will go.
So let’s first look at its basic skeleton and the pieces that will make it up:
Rationale
The big idea of your restaurant is the theme that will tie all the elements together, such as the menu, the decor, the atmosphere, the staff, the costumes, equipment, and much more. Having a central idea, a complete rationale, that is, is essential to opening a successful restaurant.
Menu
From the beginning of starting a restaurant, you should consider what kind of food you want to make and sell after deciding on the rationale that will define the store’s identity. The menu you will present in the Business Plan does not need to be extensive, but give its readers a few examples of the types of food you plan to serve.
Market analysis
Where are you heading to open it? What are the demographics in this area? Will your business be able to succeed in the local market? These are all topics you need to cover in your restaurant business plan.
Financials
At the heart of any business plan is finance. So make sure you have answers to questions like the following:
▢ How much money do you plan to spend?
▢ Where do you plan to get funding from?
These are some of the topics that you should cover within the sections of your business plan. Of course, you must have ready answers for all of the above so that those interested in “throwing” money into your idea, whether a bank or partners, will treat you seriously.
B. What sections to include in a business plan?
Business plans are usually divided into too many sections to appear organized and clear. However, since we are talking about a restaurant and not a company with a complex structure and activities, I believe that the following are necessary:
Breakdown of Restaurant Business Plan Sections
1. Company Description
The company description section, also called the company overview, contains a lot of information, but as a summary, of each part of your business plan.
This summary will get the readers interested and is your chance to explain, in more specific terms, how and why you want to open this restaurant.
When writing a company description, be sure to answer the following questions:
◎ What is the big idea and rationale for your restaurant?
◎ What makes your restaurant different from what we have seen so far?
◎ What kind of food will be on your menu?
◎ Who is your target audience?
◎ What composition will your team have?
◎ How will your restaurant operate daily?
◎ What kind of company do you plan to build?
◎ Have you prepared logos, a website, and marketing materials?
2. Summary of the main points
After the company synopsis, the executive summary is a brief overview of all the information contained in your business plan. A solid and structured summary is necessary not only for starting a business but also for its potential financing, as it is the first section that potential investors or a risk assessor from the bank will read.
A business plan summary should be between 1 and 4 pages long and contain the most important information about your new restaurant. The goal of such a summary is to show investors and banks that you are thinking of everything so that you can convince and get seed capital.
Here are some of the information that should be included in the summary:
◎ Analysis of your restaurant concept.
◎ Analysis of the restaurant’s mission.
◎ A realistic schedule of tasks until the opening of your restaurant.
◎ Your target location and your required indoor and outdoor square footage.
◎ A brief analysis of the region and the market.
◎ Analysis of the concept that makes your restaurant hit the market.
◎ The main advantages of the restaurant, e.g., your experience, talented chef, etc.
◎ Expected costs, business goals, and financial projections for starting your restaurant
You should clearly emphasize within these lines why your restaurant is worth investing in.
Here are some tips for writing a persuasive restaurant summary: Be concise and to the point. The ideal executive summary is short and to the point and doesn’t hide the important information behind catchy words and slick language. Know to who you are presenting your business plan, and write your summary accordingly.
Think about who you’re pitching your restaurant business plan to and what they’re most interested in, and put that information front and center. Avoid clichés and exaggerations. Avoid claims like “we make the best T-bone steaks in the world!” or “our sea urchin risotto is the best in town.” Be authentic. Let your passion and belief show on paper, but do it with sincerity. If you have to present it later in a meeting, you should have corresponding enthusiasm, showing that you believe everything you say.
3. Rationale and menu
You can divide this section into three main parts: menu, Service, and decoration. We will break down each section below.
Menu Ideas and Design
You can include your sample menu in this section. If you don’t have a complete picture of your restaurant’s menu, then mention some of the items it will include or some of the recipes you plan to use.
Restaurant Service
Are you planning to open a Fine Dining restaurant or a Fast Food? Will you have waiters or just employees behind the counter where customers can order and pick up their food to sit there or take out? Will you also distribute in the area?
Design and decoration
This is the section where logos can be displayed, communication material, website, brochures, promotional material, and advertising mockups in print or online. Additionally, you can include any design and decorating choices you’ve made, such as your color palette, furniture choices, or tableware aesthetic.
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4. Operating Structure and Company Type
Explain to the readers of the business plan what type of company you want to start:
Will you be a sole proprietor, or will you choose a type of company that allows partnerships from third parties?
In addition to informing the nature of your new business, you must consider how the restaurant will operate. For example, will you, the restaurant owner, also act as its manager, or do you plan to hire a manager who controls everything? Maybe not, and you decided to have separate managers for Service and the kitchen?
It’s best to clarify these protocols when creating your business plan to demonstrate that you’re not leaving anything to chance.
5. Employment and staffing needs
Once your restaurant’s ownership and management structures are clear, you can detail your staffing needs. In this section, you can define your staffing needs, such as how many waiters you will need, kitchen staff requirements, and any other employees, such as hostesses, cashiers, lancers, distributors, etc.
You can also list, without including them, any staff operation manuals you have written, Standard Operating Procedures, job descriptions, etc.
6. Local market analysis and competitor
Your business plan’s market analysis section will explain to potential investors how your new business will fit into the existing local market. This section can also be further divided into two main types of analysis:
Demographic analysis and Competitive analysis
Demographic Analysis
Understanding your target demographic is essential to success when opening a new restaurant. Must you know which target group your restaurant addresses? You can analyze information about your goal in this section. Here is some important information to include
◎ What is the age group of your target group?
◎ What is their average income level?
◎ What is the average income of the residents of the specific Municipality?
This information will help you understand your prospects, what they are interested in, and their eating habits so that you can adapt to their needs.
When writing this section, you need to present facts that penetrate deeply and use that data to draw conclusions that will convince potential investors.
Competitive Analysis
The other half of the market analysis concerns the competition in your chosen restaurant location. Established restaurants have a loyal customer base, so you must ensure that your business targets a different demographic or has a super competitive advantage that can capture market share by taking people away from competitors.
When writing a competitive analysis, here are some things to consider: ◎ How many restaurants are in your target area? ◎ Do competitors offer similar menus or services to your new restaurant? ◎ How do your menu prices compare to them? ◎ Are there secondary competitors in the area, such as convenience stores? Also, consider how close the other restaurants have to be considered competition. If you are in the city, the sphere of competition
yours may only be a few blocks, but that sphere of competition could be much larger if it is a specialty restaurant or a country town where the customer will travel a few miles to eat.
7. Advertising and Marketing Strategies
After you have identified your demographics and competitors in the previous section, you can begin to outline how you will reach these customers and compete with other businesses in your area.
Your business can use many marketing and advertising tactics to get the name of your new restaurant out in the market. Among the most popular alternatives are grand openings, launching a social media marketing campaign, advertising through Google Ads, offering coupons to nearby companies for their executives, local radio stations, or creating customer loyalty programs.
In this section, you’ll want to list all the marketing and advertising strategies you plan to implement and how you expect them to benefit your business. Also, what exact process is involved in each tactic, and what will be its approximate cost?
8. Financial data
Financial data is one of the most important sections of the Restaurant Business Plan.
Financial Documents
You need to organize the information in your financial section based on the people you are presenting your business plan to. For example, suppose you are preparing a presentation for the bank to receive a loan. In that case, it should be drafted by an accountant and include information about how long your business will take to become profitable. If it is to be viewed by someone who is not an expert in financial data analysis, it should again have some financial data but with enough explanations of how these numbers are interpreted.
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