How to Write a Restaurant Business Plan

One of the most important steps in starting a new restaurant is to put your business plan together. Here's how and why.

Why is a business plan important when starting a restaurant?

Your business plan is your first step in starting your restaurant.

  1. It will be the first time you really think through every last detail involved in starting your restaurant. You will encounter things you would have otherwise overlooked
  2. It will help you estimate how much capital you really need
  3. Investors or creditors require it. It displays savviness and credibility on your part.

Outline for your business plan

  1. Table of contents
  2. Management team. Describe all the partners involved and backgrounds.
  3. Business concept. Describe the theme and approach for your restaurant. Are you starting a casual yogurt shop, or a fancy sushi restaurant?
  4. Menu. Include your menu in full detail, including pricing. This is a large component of your business strategy, and you should it through carefully early on.
  5. Market analysis. How do you compare with competing restaurants in your area? What's your marketing pitch or positioning statement? How will your product and service be differentiated?
  6. Client demographics. You need to confirm that you'll have enough of the type of customers you're targeting. Determine your target clientele, and make sure it makes sense against your positioning and pricing.
  7. Financials. Include a projected income statement, balance sheet, and cash flow statement. You'll need to forecast your sales in detail, project how much cash you'll need each month, and determine what you're going to be spending on expenses and investments like equipment and remodeling.

Determine your restaurant concept

First off, what type of restaurant are you looking to start?

  1. Quick service - Fast food
  2. Midscale - Full meals, but with prices perceived as providing a good value
  3. Upscale - Ffull table service focusing on the quality of cuisine, service, and decor

Then, what type of food will you serve? Ethnic? Chinese, Italian, Mexican, Caribbean, English, French, German, Indian, Japanese, Korean, Mediterranean,  Thai?

Good restaurant concepts are in-line with current trends, are priced within the market, are differentiated from the competition, and fits the location. Another important fact is that good concepts will be easy to remember, something catchy. And above all, you must be passionate about your concept. You will be living this concept day in and day out, so it's critical that you are passionate about it.

Create your menu

Go in full detail and determine what you will be serving. Some basic questions to ask yourself:

  1. Are you targeting a lunch crowd?
  2. Will you do takeout? Will that be a focus?
  3. Is your food familiar or new to your guests? Will the menu need to explain things a bit?

Things to consider when determining menu price points:

  1. What type of clientele are you trying to attract? Don't overprice for a casual crowd or vice versa.
  2. What is the competition charging?
  3. Do your prices match the atmosphere you're targeting?
  4. How much will your food costs be?

Do a demographic survey to assess demand

You will need to know whether you'll have enough customers in your target demographic to meet your forecasted plan - and will need data to back it up. Here are some resources to use.

Forecast your sales

Fire up your Excel spreadsheet and get ready to crunch some numbers! Sales forecasting is more of an art than a science, but it is a necessary step to thinking through your business and its potential to succeed. A few steps to follow:

  1. Determine the number of seats you'll be serving
  2. Estimate turnover to determine how many guests will be in those seats during each meal period
  3. Estimate how much each guest will spend, based on your menu

Forecast your costs and expenses

Some areas you'll need to consider when putting together your budget of costs:

  1. Your equipment needs.
  2. Your type of table top items, such as flatware, plate ware, napkins and linens
  3. Storage, cooler and freezer size
  4. Employee Uniforms - How to choose employee uniforms
  5. How large of a building you will need.
  6. How many employees you will need to hire.
  7. Your parking lot size.
  8. What type of signs and type of advertising needed.

These are some steps to get your started writing your restaurant business plan. It is by no means exhaustive, but should get you well on your way.

Some additional resources


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Posted on Apr 29, 2010
Simplyoj (Joy L. Carnay) Simplyoj (Joy L. Carnay)
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Pete Williams
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