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How to Create a Restaurant Business Plan: My Recipe for Success

In the past two decades, we have written hundreds of business plans for restaurants, food trucks, ghost kitchens, bars, lounges, and other food & beverage businesses. We have enjoyed seeing the positive results achieved by many of our clients when their business plans and financial forecasts were submitted to banks, investors, and landlords.

How to Create a Restaurant Business Plan: My Recipe for Success

Recently, it occurred to me that I have a formula, or recipe, that has provided excellent outcomes for our clients. I decided to share my recipe with you. I hope you’ll find that the benefits of following my recipe are that it leads to a professional, organized, and concise document that is easy for bankers and investors to follow, and that it provides a roadmap for the successful launch and operation of your business.

By the way, I am happy to share my recipe for a successful restaurant business plan, but if you think I am going to share my recipe for my famous Poppyseed Wine Cake, you will have to wait for a later post.

Let’s get started.

Cover Page

Every business plan should begin with an attractive cover page. This is your chance to make a great first impression. Your goal is to have your business plan be as professional as you are, and as professional as you intend for your restaurant business to be. This begins with your cover page.

The page must include the name of your restaurant and your logo. Your logo is not optional. If you do not have a logo, have one designed immediately. If you don’t know a graphic designer, find one online. Many are very talented and very affordable: always an excellent combination.

You will also want to include your name, contact details, and the current date.

Executive Summary

Your Executive Summary should only be one page. It needs to be brief and to the point. Include a few sentences about each of the following topics:

  • Description of the restaurant (QSR, Fast Casual, Fine Dining, Ethnic, Food Truck, etc.).
  • Why you are the best person to launch (or expand or buy) this business.
  • Funding requirement.
  • Summary operating forecast of your sales and profits for at least 3 years.

Company Overview

If you don’t want to include an executive summary, that’s ok. Just feature the executive summary information at the beginning of the company overview. In this section you want to explain:

  • Details about your concept. For example, a BBQ, brick and mortar, 2,000 square foot location open for lunch and dinner 7 days a week.
  • Your goals for the business, which might include building a base of regulars, sustainability, consistently great service, excellence in training, and other goals you may have.
  • The strategies and tactics you will employ to accomplish your goals.
  • Your 4-6 keys to your success. This might include finding, hiring, and retaining great staff, the importance of training, using technology to improve service, and finding a safe, visible, high-traffic location.

Sample Menu

Use just one page to provide a sample menu. It doesn’t have to be fancy or even all-inclusive. Just give your audience a glimpse into your cuisine. Allow your readers to understand if your menu will be large and complex, or simple with just a few items, or somewhere in between.

Restaurant Operations

The restaurant operations section is your opportunity to explain that you know how to launch and operate a restaurant. It’s not about the food or the level of service, it is really about the nuts and bolts of the business. Here are some important areas to address:

  • Purchasing and inventory controls
  • Sanitation and food handling
  • Software and systems
  • Cash management and profit management
  • Payroll management
  • Controlling costs
  • Equipment selection
  • Training and staff retention
  • HR policies and procedures
  • Customer service as a business strategy

Location & Space

I’ve seen business plans where this section was neglected or even omitted. That is a huge mistake. Even a very talented chef will not be successful if the business is located where no one can find it, or if the space is too small or too large. Don’t let your readers guess, tell them where you intend to locate, the amount of space you require, and how you intend to use it.

If you have selected a space, describe it in words, photographs, and floor plans. Provide a map that will support your location strategy. Your location strategy could, for example, include proximity to a heavily traveled roadway, to other restaurants and retailers, or perhaps near hospitals or in a downtown location.

If you haven’t selected a location, describe in as much detail as possible the type of neighborhood you would like to operate in, and why. Again, don’t leave your readers guessing.

Industry Analysis

The industry analysis can be its own stand-alone section or presented as a paragraph in the Market Opportunity section depending upon how much research you intend to do. Note that this post is being written as the United States and many other western countries are slowly coming out of the COVID-19 pandemic, while many other countries are not so fortunate. This is important as the pandemic has had a huge impact on the restaurant industry worldwide. Therefore, it is important to analyze your industry at the time you prepare your business plan. For example, if you hope to open a restaurant in the U.S., the industry trends should be in your favor as so many restaurants closed last year, never to re-open, giving you an opportunity to snap up a great location and fill unmet demand. You will also want to discuss other trends in the restaurant industry such as the popularity of ethnic foods, fast-casual dining, the move towards more ghost kitchens, or other happenings in your industry.

Market Opportunity

This is an important section that will require a great deal of research on your part. You must answer a number of important questions, and in doing so, you may discover that you have an excellent market opportunity (or, perhaps, one that is not so exciting and should be reconsidered). Specifically, you will want to answer these questions:

  • Who goes to restaurants like yours? Students, families, business people, low-income diners, high-income diners, people in a hurry, etc.
  • What are the demographics of your patrons?
  • What lifestyles, interests, or economic status do they have in common?
  • Now, using demographic data available for your target location, see if it lines it up against the demographics of your intended customer profile?

Note that, sometimes, this information is readily available and easy to find. Other times, it is not, and may have to be purchased. Either way, it is important and must be accurate and current.

Marketing Plan

The marketing plan that I develop for most restaurants and food trucks is divided into 3 sections. In the first section, I like to describe the brand. In this case, when I use the word “brand,” I mean this: “What do you want your customers to think about your restaurant?” Perhaps you want them to think about great tasting food or reasonable prices. Perhaps you want them to think about consistently high customer service or how the staff is always so friendly. To me, this is your brand.

In the second section of the marketing plan, I like to detail the strategies and tactics that you will employ to create awareness of the business. If no one knows about your restaurant, I promise that no one will visit. So, let’s list some strategies and tactics you might utilize:

  • An informative, attractive, and easily discovered website
  • A grand opening
  • Local advertising
  • Advertising on sites like Yelp
  • Takeout menu mailers
  • A concierge program with local hotels
  • Appealing exterior signage
  • Marketing partnerships
  • Social media

In the final section, you should talk about the importance of social media. I like to talk about starting a Facebook page, an Instagram account, and using Twitter to engage with potential customers. Once you have a social media following, you can use social media to distribute images of your culinary creations or to promote specials.

Competition

Like the Marketing section discussed above, I like to separate this section into three parts: the competitive landscape, your direct competitors, and your competitive advantages.

In the Competitive Landscape section, you should discuss the other restaurants or retailers your customers can decide to visit, other than yours. For example, if you are opening a sandwich shop, where else can a busy, hungry customer buy a similar sandwich at a similar price point: perhaps other sandwich shops, fast-food franchises, and supermarkets? Are there many alternatives in the area, or just a few?

In the Direct Competitors section, you should define what you believe constitutes a direct competitor and then list 4-6 of those competitors. If you define direct competitors as other sushi restaurants, then you should list 4-6 other nearby sushi bars and include their web addresses so that your audience can better understand who you are competing against.

In the Competitive Advantages section, you must explain how you will distinguish your restaurant from your competition. Perhaps you will offer better service or higher quality ingredients. Maybe your restaurant will be in a safer neighborhood with better parking options.

Company & Management

I usually include four or more parts in this section. I begin by first describing the company itself. If it has been incorporated, I include the precise legal name so that if someone wants to check to ensure that the company is properly registered, they can do so. I also like to mention how many staff members are working for the company or will work for the company. Some might be full-time; some might be part-time and some might be consultants. I like to mention that as well.

Most investors will tell you that the most important aspect of any business is the experience of the management team and its ability to execute the plan. I agree, so this is a very important part of your restaurant’s business plan. Begin by telling your audience about the team. Tell the reader that this team has many years of restaurant industry experience. Or, if it does not, then what other important benefits do the members of the team bring to the business? In the restaurant business, sometimes the team is initially just you. If that is the case, say so and explain how you intend to manage the business. Be sure to mention that you have surrounded yourself with, or intend to surround yourself with, loyal, capable staff members who share your goals for the business.

Next, provide your biography, as well as for other key members of the team. The bio should detail past successful jobs and entrepreneurial ventures, as well as relevant educational backgrounds. You should also indicate what each member of the team will do at the restaurant.

Of course, no one works alone, and no one works 7 days a week. So you must create a staffing plan. You should include how many team members work in the front of the house (the dining room) and how many work in the back of the house (kitchen). How many are full-time, and how many are part-time? Here’s a tip: the restaurant business is known for high turnover, so you need a plan for quickly recruiting and training new hires.

Financial Information

Begin this section by describing how much capital you require, how you intend to use the capital, and how you intend to source that capital, e.g. savings, investors, bank loans, etc.

The financial information section should also include at least a 3-year income statement forecast and the financial assumptions that you used to support the forecast. This way, your reader will understand how you arrived at your numbers. A simple income statement forecast (also called a P&L forecast) may suffice for some investors. However, if you intend to borrow money from a bank, you will likely also need to provide a balance sheet forecast and a cash flow forecast along with your underlying assumptions.

What Else?

You are not quite finished. There is a bit more to do:

  • Proofread the business plan at least 2 times to ensure that it is grammatically correct and well written. You should also double-check your spelling. You might also ask someone you trust to proofread it as well.
  • Include a table of contents after the cover page so that it is easy for your reader to navigate the document in the case that he or she wishes to re-read, say, the marketing section.
  • Include 8-10 photographs including pictures of food, interior and exterior space, and perhaps a picture of happy customers sitting at a table or ordering food. You can even include your headshot next to your bio.
  • You may want to include a Disclaimer that will cover two important issues. The first is to remind the reader that your business plan is confidential and that the information in the plan is proprietary. That means the information belongs to you and no one else. In your disclaimer, you will also want to remind the reader that he or she should not rely on the business plan exclusively to make an investment or underwriting decision. Rather, they should do their own research and homework to verify that the information that you have provided is reliable and truthful. Your attorney can give you some boilerplate language to include in your disclaimer.
  • Not every restaurant entrepreneur is a brilliant writer. If this is a task that you do not have the confidence to complete, or complete to your satisfaction, let us know. We can help.

As mentioned earlier, my partners and I have written hundreds of business plans in just the past two decades for restaurant entrepreneurs. If you would like to see an actual business plan that was written based on the guidelines provided above, you can see some sample business plans here. If you would like to talk to us about helping you create a winning business plan for your restaurant, please contact us.

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Jimmy Lewin

Jimmy's background includes over 40 years in international, commercial, and investment banking, and nearly a decade as the principal shareholder and CEO of a rapidly growing manufacturing and distribution business in California. Today, Jimmy spends his time advising and consulting with entrepreneurs on matters related to business planning, as well as capital markets and funding strategies. Jimmy works with clients throughout the world in industries that include financial services, real estate, manufacturing and hospitality. View details.

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