How To Write Restaurant Business Plan Correctly

Alex

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11 minutes

How To Write Restaurant Business Plan Correctly

When you decide to open a restaurant, the first step of yours should be to write everything down. This will help in the progression and development of your idea from just being a concept to a multi-year strategy. It provides you with a clear roadmap without any twists and turns. You can use it to pitch your money-making idea to potential partners and investors. If you are wondering that, that is a lot of work. Do not skip or wing it just because it seems like a difficult task. Just picture your bustling hotel that is always having people in the waiting area due to its popularity.

Without a solid business plan, you will be walking on thin ice. No one will be interested in investing in your idea. These plans will vary in terms of idea, depending on the person planning to open this business. Certain key steps will be articulated later that you should follow to absolutely nail it. If you are still confused about "how to write a business plan", check out some samples on the internet. Go through them carefully and keep a checklist to check the points or parts you have completed. In this way, you will not leave out any detail.

Importance of Writing the Restaurant Business Plan

As discussed before, you must take out time to formulate a detailed restaurant business plan. Try to set out on the journey of becoming a restaurateur only when you accomplish the task of having a blueprint laid out for you. This is the only difference between the amateur and the professionals. The former does not follow any documentation and dive into the business without any elementary knowledge. Whereas the latter carefully reflect and pens it down on a paper. Look at it like this; whenever you think of something, it feels like you have figured out everything. However, when you write it down, you find many gaps and loopholes.

These should be answered right away to wiggle your way in the saturated market. It is better to suffer a little pain in the early stages to get huge returns at the end of the year. This pain includes a detailed business plan outline that you can fill out as you continue studying the market. If you are still unsure, then check out examples of a failed business. There is one trait that is common among all of them. It is known as "lack of planning and documentation". The entrepreneurs kept on injecting cash after bootstrapping it, and still, they had to shut their business down because they were cash-flow negative.

Purposes of a Restaurant Business Plan

It is not smart to stick your neck out when faced with challenges in your business journey. It would be best if you were prepared for each strike that you see approaching you. This level of proactiveness can only be achieved if you make a restaurant business plan. This must include all of the components that are mentioned in the next parts of this article. Try to read many plans to get a holistic idea of how your content should be designed. It is all about clarity and details. Just like cleaning your house and cleaning that dust from every nook and cranny, try not to leave any point when making this plan. Think of different possibilities, and then decide on how you will tackle it. These can be related to finances, location, or any other points.

The goal is to give yourself and the partners a clear sense of direction. This business plan will communicate your vision to the partners, investors, and other stakeholders. This business plan will act as a blueprint that will be consulted for any roadblock. Considering that the restaurant industry is fiercely competitive, in the future making your space will be tricky, risky, and will require you to strategize quickly. These strategies should be in line with the plan that you wrote, as that is the ultimate guide that must be followed.

Key Elements of Successful Restaurant Business Plan

Now that you have been convinced that you should not cut corners, let's get familiarized with what should be included in the business plan. Do not worry if your document is different from your friend's, opening a sushi bar. Yes, if you miss out on any heading, then that is the thing to worry about. So, please take out a piece of paper and start noting down the headings and what goes inside them.

Executive Summary

An executive summary of a business plan is the first section. You will have to introduce your restaurant idea and summarize it professionally. Try to include all key elements that you will be discussing throughout. This will capture the attention of the potential investors and will compel them to read further. The goal is to entice the investors so that there is an ignition of entrepreneurial spark in them. This will get you that investment that will kick start your business. This part contains the following:

  • Mission statement;
  • Concept;
  • Your execution ideas;
  • Overview of financials such as costs, profit, and the return of investment (ROI);
  • Core values of the business.

Description of Company

You must start this part with the high-level elements of your plan. You will state information related to the ownership, location, the business concept, and the hierarchy or structure. As for the concept, do not bite off more than you can chew. Try to be realistic and set goals accordingly. You must also outline the vision that you have for your business in the long term. Vision in terms of customer experience can prove to be very powerful. After all, you are providing a service! So, describe the brand in detail. Try to identify the design, layout, and other unique aspects that set you apart from your competitors. This is the very doorway to your plan. After reading this section, your investor will either thank you for the coffee or turn the page to read the next section. So, keep a focus on customer satisfaction, and most importantly, on the financial forecast highlights.

Analysis of Market

As the name indicates, the analysis revolves around "who". Who are the people that will eat in your restaurant? To answer this question, you need to answer a few more subparts of this main question. You will have to define your target segment's age, income levels, and other demographics.

Now that you have a gist of what market analysis is let us dive in deeper. This portion is divided into three parts:

  • Industry Analysis: You will be asking questions related to your target segment. Do state all of the demographics that your restaurant will cater to.
  • Competition Analysis: Try to scan your environment and look for competitors that will be your direct rivals. Once you figure out the restaurants that are currently occupying your targeted customer base, the next step is to strategize about how to capture them. You will be using this part to say to your investors how your restaurant will be different from others in the competition. Try to conduct SWOT and Pest analysis. It would be best if you also made a business model environment (BME), to get a better understanding of what is going on in the industry.
  • Marketing Analysis: You will use this section to show your investors how you will market the restaurant and secure the target market.

Menu

Try to make a mock-up menu. A restaurant is nothing with this element. Try to design this menu after going through multiple designs. Do get your chefs to cook the menu once at least. It would be best if you decided the prices well before getting it printed. Remember, you will have to justify these prices to the investors. They must neither be set too low nor very high. Menu engineering should be a task that should be at the top of your business plan to-do list.

Staff

A business plan must include information regarding the business structure. It would help if you defined the span of control. If you intend to have one manager at your restaurant, you must state the number of chefs and other staff that will work under that manager.

You will also have to explain the hierarchy of the chefs that you are going to hire.

You can name this part as the restaurant management team. If you have a well-known head chef on your team, then do not shy away from bragging as this will attract investment. Look at some salon business plan examples. Note how they market their team. You must do it for your restaurant business in a similar manner.

Design

This is the part where you can show your creative capabilities. Most of the entrepreneurs completely ignore this part. However, in today's world of TikTok, Facebook, and Snapchat, you must design your restaurant in such a way that is "instagramable". The way your restaurant looks is called "servicescape" in the services marketing language. A fast-food restaurant must have bright colors, wooden chairs, bright lights, and fast music. Simultaneously, a fine dining restaurant should have comfortable furniture, dim lights, and light music. Try to use a mood board when planning this part. Do not forget to write down about the restaurant software or the kitchen equipment as it is not just about the ambiance. It would help if you also used the technique of service blueprinting. All of the activities will be mapped and timed. In this way, you can design the best layout for your business.

Place

You will have to state the location that you will choose for your business. Try to shortlist two to three locations and then select one. When describing it to investors, try to include as many positive points as you can. These can be the proximity to the target segment or the availability of resources or raw materials in that location. From square footage to the target segment, mention everything to your potential partners.

Market Overview

You will be addressing the micro and macro market information and their conditions in the chosen location. Focus more on the economic conditions as that is what the investors will be most interested in. Try to explain how your business will compete in this heated, competitive climate. Also, focus on the factors that distinguish your business from that of the competitor's.

Marketing

A word of advice is to prepare a pre-and post-opening marketing plan. The investors will see your motivation and capability to attract customers. You can also refer to it when you feel like the business isn't gaining the momentum like it was supposed to. If you have hired any marketing agency or have outsourced any of the tasks, you must also state that. Try to design a detailed social media marketing plan. It is because you want the news of your restaurant to break like a wildfire. You can plan all of the social media posts well ahead of time. Design all of the pictures that are going to go on different social media accounts.

Financial Details

Though all of the above elements are important from your perspective, this section will be necessary from the investor's perspective. You have to be very accurate. Refrain from stating golden numbers that are hard to achieve. The ROI should be kept at a satisfactory level since you aren't operating yet. Use all of the tools, most importantly, the projections of financial statements and the financial ratios. State the particulars of the break-even point. You must also list the channels through which you can obtain enough money to make your business fluid. Try to use as many visuals as possible. If you keep on showing tables and plain text, it might not make an impression. By having a simple colored graph, the investor will get a clear idea about the expected sales and profits. Do not hide your expenses to get a partner on board. Be transparent and list down all of the costs. Some businesses started from a negative cash flow and ended up opening chains nationally. Be prepared to answer any question that your potential partner asks.

Restaurant Business Plan Template

Let's move towards some templates that can be very helpful. Take these as a business plan example. This is because every plan is different.

Bakery Business Plan

If you are confused about "how to open a bakery", try to conduct some research before following this template.

Let me unfold a few essential elements:

  • Executive summary
  • Opportunity
  • Problem: "Shortage of spots that sell fresh baked goods."
  • Solution: "Your business."
  • Market: State the demographics
  • Competition
  • Why us? Explain your value proposition
  • Marketing plan
  • Location
  • Design
  • Menu/Items
  • Employees
  • Expectations (ROI)
  • Forecasts
  • Financial Highlights by Year

Cafe Business Plan

Before starting a café business, you must aim at creating a business plan template. This will help you in eliminating any forks that you have in your path. A café takes a lot of planning. It is why you must include these elements in great detail:

  • Executive summary
  • Opportunity
  • Problem: "Absence of a café in the (Location) where people can hang out and have business meetings."
  • Solution: "Your business."
  • Market: State the demographics
  • Competition
  • Why us?Explain your value proposition
  • Marketing plan
  • Location
  • Design
  • Menu/Items
  • Employees
  • Expectations (ROI)
  • Forecasts
  • Financial Highlights by Year

Fast Food Business Plan

The Fast-food market is very competitive. To penetrate it and hold firm ground, you must do your homework. Try to formulate a detailed plan by including all of the elements stated below:

  • Executive summary
  • Opportunity
  • Problem: "Increasing demand for a fast-food restaurant in (Location)"
  • Solution: "Your business."
  • Market: State the demographics
  • Competition
  • Why us? Explain your value proposition
  • Marketing plan
  • Location
  • Design
  • Menu/Items
  • Employees
  • Expectations (ROI)
  • Forecasts
  • Financial Highlights by Year
Originally published Feb 10, 2021, updated Feb 17, 2021

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