For many new entrepreneurs, nothing is quite as nerve wracking as writing their restaurant business plan. After all, it’s an important part of getting investors to back your business. If you’ve ever seen “Shark Tank,” you’ll know entrepreneurs that fail on the show tend to be the ones without a clear business plan. And if you don’t come from a business background, writing a business plan can seem like an insurmountable task to overcome.
The good news is that a lot of what goes into a restaurant business plan is information you’ve already accumulated in developing your plans for the new restaurant. The whole point of the restaurant business plan is to show investors you’ve actually done your homework when it comes to your restaurant. The information needs to be in a succinct package with numbers that make sense.
When it comes time to meet with those investors, your restaurant business plan becomes a powerful tool you can use to show how confident you are in this project. It’s a benefit to you, not a hindrance.
While the structure of a restaurant business plan is relatively fluid depending on the business sector, these are the main items you should definitely include:
This is the first impression investors will see, so make it looks good. You should include your logo and professional branding, the date, the names of the owners, and your contact information. Don’t use Comic Sans as your font, crazy colors, Word Art or clip art. Keep it professional.
The executive summary is essentially a concise introduction to your restaurant business plan with an overview of the business. Here you’ll want to go over the official business name and location, the general restaurant concept, an outline of what is in your business plan and your mission statement.
The executive summary is also the time you can bring up your own experiences within the restaurant industry and why you’re the perfect person to start and run this business. It’s about really selling your skillset as a strength in this business, whatever your skills might be.
Use the executive summary to sell your investor on the big ideas of the restaurant and why this is a good investment. Think about it from their point of view — how can you make this business idea the most appealing to them? If you were in their shoes, what would convince you that this is a venture worth investing in? Have the executive summary include a preview of the projected profitability that will be fully detailed in the financials section of the plan.
The executive summary should transition easily into the company description, which further details the larger brand identity of your business. Make a point to outline what an average customer experience will be. What will your front of house and back of house layouts look like? Who will be involved within your management? What will these management roles do for your business? What about the menu and service style? What are the unique aspects of your restaurant that differentiates it from the competition?
This section should cover any and all research you’ve done about businesses in the area you’re planning to have your business. It needs to feature how the area’s economy has grown, as well as overall traffic. This part of the restaurant business plan should show investors that there’s potential in the location you’ve picked for your establishment.
This goes further into your area research, this time focusing on your soon-to-be competition — other restaurants. You should be able to show not only that similar restaurant concepts have done well in your area, but also translate that into how your business will bring a competitive advantage. You should be able to compare your average pricing, seating, and basic menu ideas to those of your competitors.
After breaking down your industry and competitive analysis, the next step is to discuss your target market in terms of location, price, dining occasion, and cuisine. Who is your ideal customer? What are they looking for in a restaurant and how do you plan to provide it to them? Most importantly, how are you going to server that target market better than your competition?
The business operation portion of your business plan should outline the day-to-day processes of the restaurant. This includes your hiring process, your suppliers, your sales tracking, and your full training plan for both the kitchen and your serving staff. Don’t forget to include your managers’ shift checklist.
How will you use social media? Will you be incorporating a loyalty program for your customers? What kind of paid advertising will you be investing in? What about a website? Investors want to know your marketing plans. Getting the word out about your grand opening is crucial for a brand new restaurant. And then once you get new customers, how are you going to get them to generate word of mouth? It’s a good idea to include specific marketing outlines for the first 30 days, the first quarter, and for the general future beyond that.
Financing will be the last part of the plan, and will probably also be the longest. In many ways, this is the most important part of your restaurant business plan because it features your projected revenue and costs with an estimated profit and loss, and how you plan to get there. Your investors want to see exactly how their money will be spent, after all. You’ll need to be thorough in this last part of the plan.
The financial projections segment should include:
- Projected profit and loss summaries for at least the first three years in business.
- A break even analysis
- Projected cash flow
- Projected balance sheet
- Capital requirements budget
Keep in mind that there’s no one strict format for these plans, and you should customize the business plan to fit your branding, the type of restaurant, and your investor audience. However, the sections highlighted above are valuable pieces of information that your investors will probably be looking for during your presentation.
And while the above information should be part of your restaurant business plan, feel free to build your plan in a way that makes sense for you. It might also be helpful to start with a template and go from there.
Need a quick checklist to show potential investors that you have a plan in place? Download our free “Essential Checklist for Opening a Restaurant” today!
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