How to write a business plan for a restaurant

 Would you like to open a restaurant?

Opening a restaurant without a proper business plan is like sailing a ship without a compass.

I know you've thought everything about opening a restaurant. But it's not enough. You need to create a detailed business plan for your restaurant.

A restaurant business plan is a framework to help you open and operate your restaurant organized and systematic. It includes everything like your restaurant's menu design, staff details, market details, etc.

More importantly, the business plan will also help you make investments for your restaurant business.

This article will show you exactly how to create a great business plan for your restaurant.

Let us begin!

Why do you need a business plan for your restaurant?

Some new restaurant entrepreneurs skip writing a business plan. This is because it can be a challenging and time-consuming task. But it's worth your time and effort. Here's why:

1. Serves as a guide

The business plan is like a map that guides you to the success of your restaurant. For example, it helps you determine how you will stand out from the rest of your competitors. The business plan consists of important information such as financial analysis, market analysis, design, etc.

Writing the business plan can also uncover problems before starting your restaurant. 

1. Crucial for investors

If you are looking for an investment in your restaurant business, a proper business plan is essential. No investor will invest without a detailed business plan.

How to write a restaurant business plan

There are many ways to create a business plan. But I've listed the ten main elements that every restaurant plan should have.

The following are the main elements of a restaurant business plan:

1. Summary
2. Description of the restaurant
3. market analysis
4. your restaurant menu
5. restaurant staff
6. Location of your restaurant
7. design of your restaurant
8. marketing plan
9. Restaurant operation plan
10. financial analysis

Now I will discuss them in detail:

Summary

The first section of the report should be an executive summary. Any business plan. Note that this is not just the introductory section. It's a brief summary of your overall strategy.

The main goal of the summary is to grab your reader's attention. Generally, your readers are your investors or other business partners.

Here are some elements of the summary: (Briefly describe them)

1. The restaurant name, cuisine, and theme
2. The mission statement of your restaurant
3. How you differ from your competitors
4. A brief forecast of costs
5. How you will carry out your plans
6. Expected return on investment

Description of your restaurant business

In this part, you describe your restaurant business in detail. First, write the name of your restaurant and then other important details like location, contacts, etc. Here are some aspects that you need to detail:

1. Type of restaurant

(Restaurant concept) What kind of restaurant are you planning to start?

• Restaurant Service Types: Fast Casual, Fast Food, Gourmet Restaurants, etc.
• Types of cuisine: Chinese, Thai, pizza, etc.

1. Details of the restaurant owner

You must discuss this in this section yourself. Mention your work experience and other achievements. You can also mention the accomplishments of your best team members.

1. Market Analysis

This section describes your marketing strategy and your competitors. Here are some things that this section needs to contain:

1. Analyze your customers

Answer these questions:

1. The demographics of the location?
2. Who will your usual customers be? (demographics)

• age
• income
• gender

1. What do you like?
2. Analyze your competitors

Here are some questions you need to answer:

1. Mention any popular restaurants in your area.
2. Which restaurants are your direct competitors?
3. (Let's say you run a sushi restaurant. If there is another sushi restaurant in your area, this bar is your direct competitor.)
4. Are your competitors successful?
5. Why should your customers choose your restaurant over other competitors?

Please pay attention to other details such as food prices, opening hours, interior design, etc. Then think about how you can differentiate yourself from your competitors. This section is also significant for your investors.

1. Analyze the market

Answer these questions:

1. What's your specialty? E.g., Thai food, sushi, etc.
2. Are people interested in this kitchen yet? How strong is the demand for your kitchen in the market?
3. What special offers do you have for your customers?

This section is not only crucial for your investors. It also helps you create a plan for your restaurant's success.

1. Your restaurant's menu

The menu is another essential part of your restaurant. You have to design it carefully. A well-designed menu can dramatically increase a restaurant's sales. It also helps promote good dishes and grow your restaurant's profitability.

You may not have the best version of your menu at this point. But it's good to have an uncomplicated menu.

You should also have yours at this point restaurant's logo ready. You can design the logos yourself using a free tool like Canva. Your best bet is to order a logo from freelancers like Fiverr. Use this logo on your restaurant's menu.

The main element of your menu is the pricing of your dishes. However, it is currently not generally possible to determine the exact prices for your words. You need to run your restaurant for some time to get the data and set your prices accurately.

(For more information on creating a website, see this article's excellent restaurant menu.)

1. Restaurant staff

In the previous section, we suggested that you write down the restaurant owner's qualifications and achievements. In this section, you need to write in detail about the restaurant's management team. This gains the trust of your investors.

At this point, the entire staff team does not have to be ready. However, you should have some key employees. Write about their work experience and achievements.

1. Location of your restaurant

One of the most important aspects of a restaurant's success. You should already have decided on a place for your restaurant. If not, make a list of 3-5 suitable locations for your business.

You need to think very carefully when choosing your restaurant location. First, conduct a market analysis and know the demographic of your customers. Then make sure your site is suitable for your target customers.

Suppose you are planning to open an expensive restaurant. It is best to choose a place where residents or visitors are financially wealthy. However, it should also suit their tastes and preferences.

This will help you answer the following question as you write this section:

"Why is this place perfect for the restaurant?"

Mention every detail like costs, demographics, etc.

There are two main points for analyzing the site:

1. accessibility of the location
2. Complimentary Businesses

This article will instruct you on choosing a location for your restaurant.

1. Design of your restaurant

The aesthetic design of your restaurant is crucial for your business partners and investors and crucial to providing an excellent experience for your customers.

The interior design depends on the population of your customers and the type of your restaurant. For example, the theme of a fast food restaurant must be very different from the design of a premium gourmet restaurant.

Answer this question:

"What kind of design suits my restaurant? Will this design appeal to my customers? '

You need to explain to your investors why you chose this design and why it's the best fit for your restaurant.

Note: The aesthetics of the design are essential, but the invention's functionality is even more critical.

1. Marketing Plan

Marketing is critical to the growth of a restaurant. You need to educate people about your business to make it successful. Here are some questions you need to answer:

1. How will you market your restaurant?
2. What advertising methods will you use?
3. Do your advertising methods differ from those of your competitors? How?

This section is crucial for your investors. You must also have a marketing plan before and after your restaurant opens. For example:

1. How will you let people know about your restaurant before you open it?
2. How will you attract customers after opening your restaurant?

Important Tip: Digital marketing methods like Facebook Ads, Google Business, and Google Ads are great for marketing your restaurant. You don't have to hire an agency for any of this. You can do it yourself!

1. Restaurant operation plan

How you run your restaurant is definitely another essential part of your business. The operation of the restaurant is quite complex and consists of many components.

It is impossible to predict and document your entire restaurant operation process before starting your business. However, you can establish an operational strategy before opening your restaurant. For example, you can write about hiring your employees and what technology you will use.

Here are some things you can elaborate on in this section:

Find and recruit employees.

Finding the right staff for your restaurant can be a challenge. So you need a systematic way to recruit your restaurant staff.

List any online job portals you plan to use. To find good employees, you can also employ other techniques, such as newspaper ads or personal recommendations.

How do you select the best employees?

Make a list of requirements for each job role like chef, cashier, manager, etc. Then, write some interview questions to help you find your ideal employees.

Technology for restaurants

A significant benefit of starting a restaurant these days is that many modern software programs make it easy to manage and run a restaurant. A typical example is restaurant POS software (also known as restaurant management software ). This type of software can perform many restaurant functions like:

• manage orders
• Track your restaurant sales
• Taking online grocery orders

In fact, most restaurants these days use the software. It's crucial.

1. Financial Analysis

The most important part of your business plans is the financial analysis section. Most of the time, the first thing your investors see when they see your business plan document is finance.

It's an excellent decision to hire a professional accountant to help you with this section and provide a realistic estimate. First, you need to provide your accountant with some information like the following:

1. How many seats does your restaurant have?
2. What is the expected bill for each customer? (Average)
3. How many guests do you wish per day for your restaurant?
4. Your food costs - cost of ingredients, other expenses.

Here are some valuable things your accountant needs to include in the financial analysis section:

sales forecast

This should be a realistic estimate of your weekly, monthly, and yearly sales. You can estimate this forecast based on various factors such as the restaurant's seating capacity, delivery options, advertising budget, expected growth, location, and prices of your dishes.

The estimated total cost of starting the restaurant

Every investor wants to know where their money is being spent. Creating an estimate will keep your restaurant on a budget. You should identify:

1. The most significant expenses for your restaurant
2. Other small expenses
3. The capital required to operate the restaurant ("working capital")

Profit and Loss Forecast

This section is pretty straightforward. But, first, you must write an estimate of the expected profit or loss in the first year.

Break-Even Analysis

Break-even is when your restaurant business is just beginning to become profitable. Then the restaurant pays back all loans, investments, and start-up costs. Again, this is a valuable metric for your investors and business partners.