restaurants business development plan

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How to Write a Restaurant Business Plan

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When starting a business—no matter what type of business that may be—a business plan is essential to map out your intentions and direction. That’s the same for a restaurant business plan, which will help you figure out where you fit in the landscape, how you’re going to differ from other establishments around you, how you’ll market your business, and even what you’re going to serve. A business plan for your restaurant can also help you later if you choose to apply for a business loan .

While opening a restaurant isn’t as risky as you’ve likely heard, you still want to ensure that you’re putting thought and research into your business venture to set it up for success. And that’s where a restaurant business plan comes in.

We’ll go through how to create a business plan for a restaurant and a few reasons why it’s so important. After you review the categories and the restaurant business plan examples, you can use the categories to make a restaurant business plan template and start your journey.

Why you shouldn’t skip a restaurant business plan

First-time restaurateurs and industry veterans alike all need to create a business plan when opening a new restaurant . That’s because, even if you deeply understand your business and its nuances (say, seasonal menu planning or how to order correct quantities), a restaurant is more than its operations. There’s marketing, financing, the competitive landscape, and more—and each of these things is unique to each door you open.

That’s why it’s so crucial to understand how to create a business plan for a restaurant. All of these things and more will be addressed in the document—which should run about 20 or 30 pages—so you’ll not only have a go-to-market strategy, but you’ll also likely figure out some things about your business that you haven’t even thought of yet.

Additionally, if you’re planning to apply for business funding down the line, some loans—including the highly desirable SBA loan —actually require you to submit your business plan to gain approval. In other words: Don’t skip this step!

How to write a restaurant business plan: Step by step

There’s no absolute format for a restaurant business plan that you can’t stray from—some of these sections might be more important than others, for example, or you might find that there’s a logical order that makes more sense than the one in the restaurant business plan example below. However, this business plan outline will serve as a good foundation, and you can use it as a restaurant business plan template for when you write your own.

Executive summary

Your executive summary is one to two pages that kick off your business plan and explain your vision. Even though this might seem like an introduction that no one will read, that isn’t the case. In fact, some investors only ask for the executive summary. So, you’ll want to spend a lot of time perfecting it.

Your restaurant business plan executive summary should include information on:

Mission statement: Your goals and objectives

General company information: Include your founding date, team roles (i.e. executive chef, sous chefs, sommeliers), and locations

Category and offerings: What category your restaurant fits into, what you’re planning to serve (i.e. farm-to-table or Korean), and why

Context for success: Any past success you’ve had, or any current financial data that’ll support that you are on the path to success

Financial requests: If you’re searching for investment or financing, include your plans and goals here and any financing you’ve raised or borrowed thus far

Future plans: Your vision for where you’re going in the next year, three years, and five years

When you’re done with your executive summary, you should feel like you’ve provided a bird’s eye view of your entire business plan. In fact, even though this section is first, you will likely write it last so you can take the highlights from each of the subsequent sections.

And once you’re done, read it on its own: Does it give a comprehensive, high-level overview of your restaurant, its current state, and your vision for the future? Remember, this may be the only part of your business plan potential investors or partners will read, so it should be able to stand on its own and be interesting enough to make them want to read the rest of your plan.

Company overview

This is where you’ll dive into the specifics of your company, detailing the kind of restaurant you’re looking to create, who’s helping you do it, and how you’re prepared to accomplish it.

Your restaurant business plan company overview should include:

Purpose: The type of restaurant you’re opening (fine dining, fast-casual, pop-up, etc.), type of food you’re serving, goals you have, and the niche you hope to fill in the market

Area: Information on the area in which you’re opening

Customers: Whom you’re hoping to target, their demographic information

Legal structure: Your business entity (i.e. LLC, LLP, etc.) and how many owners you have

Similar to your executive summary, you won’t be going into major detail here as the sections below will get into the nitty-gritty. You’ll want to look at this as an extended tear sheet that gives someone a good grip on your restaurant or concept, where it fits into the market, and why you’re starting it.

Team and management

Barely anything is as important for a restaurant as the team that runs it. You’ll want to create a section dedicated to the members of your staff—even the ones that aren’t yet hired. This will provide a sense of who is taking care of what, and how you need to structure and build out the team to get your restaurant operating at full steam.

Your restaurant business plan team and management section should have:

Management overview: Who is running the restaurant, what their experience and qualifications are, and what duties they’ll be responsible for

Staff: Other employees you’ve brought on and their bios, as well as other spots you anticipate needing to hire for

Ownership percentage: Which individuals own what percentage of the restaurant, or if you are an employee-owned establishment

Be sure to update this section with more information as your business changes and you continue to share this business plan—especially because who is on your team will change both your business and the way people look at it.

Sample menu

You’ll also want to include a sample menu in your restaurant business plan so readers have a sense of what they can expect from your operations, as well as what your diners can expect from you when they sit down. This will also force you to consider exactly what you want to serve your diners and how your menu will stand out from similar restaurants in the area. Although a sample menu is in some ways self-explanatory, consider the following:

Service : If your brunch is as important as your dinner, provide both menus; you also might want to consider including both a-la-carte and prix fixe menus if you plan to offer them.

Beverage/wine service: If you’ll have an emphasis on specialty beverages or wine, a separate drinks list could be important.

Seasonality: If you’re a highly seasonal restaurant, you might want to consider providing menus for multiple seasons to demonstrate how your dishes (and subsequent purchasing) will change.

Market analysis

This is where you’ll begin to dive deeper. Although you’ve likely mentioned your market and the whitespace you hope to address, the market analysis section will enable you to prove your hypotheses.

Your restaurant business plan market analysis should include:

Industry information: Include a description of the restaurant industry, its size, growth trends, and other trends regarding things such as tastes, trends, demographics, structures, etc.

Target market: Zoom in on the area and neighborhood in which you’re opening your restaurant as well as the type of cuisine you’re serving.

Target market characteristics: Describe your customers and their needs, how/if their needs are currently being served, other important pieces about your specific location and customers.

Target market size and growth: Include a data-driven section on the size of your market, trends in its growth, how your target market fits into the industry as a whole, projected growth of your market, etc.

Market share potential: Share how much potential there is in the market, how much your presence will change the market, and how much your specific restaurant or restaurant locations can own of the open market; also touch on any barriers to growth or entry you might see.

Market pricing: Explain how you’ll be pricing your menu and where you’ll fall relative to your competitors or other restaurants in the market.

Competitive research: Include research on your closest competitors, how they are both succeeding and failing, how customers view them, etc.

If this section seems like it might be long, it should—it’s going to outline one of the most important parts of your strategy, and should feel comprehensive. Lack of demand is the number one reason why new businesses fail, so the goal of this section should be to prove that there is demand for your restaurant and show how you’ll capitalize on it.

Additionally, if market research isn’t your forte, don’t be shy to reach out to market research experts to help you compile the data, or at least read deeply on how to conduct effective research.

Marketing and sales

Your marketing and sales section should feel like a logical extension of your market analysis section, since all of the decisions you’ll make in this section should follow the data of the prior section.

The marketing and sales sections of your restaurant business plan should include:

Positioning: How you’ll describe your restaurant to potential customers, the brand identity and visuals you’ll use to do it, and how you’ll stand out in the market based on the brand you’re building

Promotion: The tools, tactics, and platforms you’ll use to market your business

Sales: How you’ll convert on certain items, and who/how you will facilitate any additional revenue streams (i.e. catering)

It’s likely that you’ll only have concepts for some of these elements, especially if you’re not yet open. Still, get to paper all of the ideas you have, and you can (and should) always update them later as your restaurant business becomes more fully formed.

Business operations

The business operations section should get to the heart of how you plan to run your business. It will highlight both internal factors as well as external forces that will dictate how you run the ship.

The business operations section should include:

Management team: Your management structure and hierarchy, and who is responsible for what

Hours: Your hours and days of operation

Location: What’s special about your location that will get people through the door

Relationships: Any advantageous relationships you have with fellow restaurateurs, places for sourcing and buying, business organizations, or consultants on your team

Add here anything you think could be helpful for illustrating how you’re going to do business and what will affect it.

Here, you’ll detail the current state of your business finances and project where you hope to be in a year, three years, and five years. You’ll want to detail what you’ve spent, what you will spend, where you’ll get the money, costs you might incur, and returns you’ll hope to see—including when you can expect to break even and turn a profit.

Financial statements: If you’ve been in business for any amount of time, include existing financial statements (i.e. profit and loss, balance sheet, cash flow, etc.)

Budget: Your current budget or a general startup budget

Projections: Include revenue, cash flow, projected profit and loss, and other costs

Debt: Include liabilities if the business has any outstanding debt or loans

Funding request: If you’re requesting a loan or an investment, lay out how much capital you’re looking for, your company’s valuation (if applicable), and the purpose of the funding

Above all, as you’re putting your financials together, be realistic—even conservative. You want to give any potential investors a realistic picture of your business.

Feel like there are other important components but they don't quite fit in any of the other categories (or make them run too long)? That’s what the restaurant business plan appendix section is for. And although in, say, a book, an appendix can feel like an afterthought, don’t ignore it—this is another opportunity for you to include crucial information that can give anyone reading your plan some context. You may include additional data, graphs, marketing collateral (like logo mockups), and more.

The bottom line

Whether you’re writing a restaurant business plan for investors, lenders, or simply for yourself and your team, the most important thing to do is make sure your document is comprehensive. A good business plan for a restaurant will take time—and maybe a little sweat—to complete fully and correctly.

One other crucial thing to remember: a business plan is not a document set in stone. You should often look to it to make sure you’re keeping your vision and mission on track, but you should also feel prepared to update its components as you learn more about your business and individual restaurant.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How to Write a Restaurant Business Plan in 2023 (Step by Step Guide with Templates)

Jan 31, 2023 6:30:00 AM

Have you decided to open a restaurant? Has it been something you've thought of doing for years and are finally in a position to make it happen?

Regardless of how much time you've spent conceptualizing your idea and researching the industry, without proper planning, your restaurant is doomed for failure.

That's where a restaurant business plan comes in. A restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations; from menu design, location, financials, employee training, and a lot more, and helps develop your restaurant ideas into a reality.

Read on for everything you need to know about writing a restaurant business plan along with samples and tips.

Why is a Restaurant Business Plan Important?

Many new restauranteurs fail to put together a well-thought-out restaurant business plan because the process can be a bit difficult and time-consuming. But without a proper restaurant business plan, you're shooting in the dark without an aim. It's unlikely that you would be able to secure an investor to help fund your restaurant dream without a proper plan. And even if you do, the lack of proper planning, regulations, and forecasts will set your restaurant up for failure. 

Your restaurant business plan is what is going to map out how you plan on turning a profit from your business as well as where your restaurant fits into the saturated market and how you plan on standing out.

A little time and pain early on are worth the reward of a successful restaurant in the long run.

11 key steps a restaurant business plan should include

A good business plan varies from restaurant to restaurant and takes into account factors like style of restaurant, target market, location, etc. If you're new to the restaurant game, the idea of creating a business plan can be daunting. To help you get started, we have highlighted the key elements you need to include when writing a restaurant business plan. 

Depending on who you are presenting your business plan to, you can change the order of the sections to reflect priority.

Here are the main components of a restaurant business plan

• Executive Summary
• Company Description
• Market Analysis
• Restaurant Design
• Market Overview
• External help
• Financial Analysis

1. Executive Summary

A restaurant business plan should always begin with an executive summary. An executive summary not only acts as the introduction to your business plan but also a summary of the entire idea.

The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.

Common elements of an executive summary include:

• Mission statement (learn more about how to write a good mission statement here )
• Proposed concept
• A brief look at potential costs
• Expected return on investments

An executive summary is imperative for those looking to get investors to fund their projects. Instead of having to comb through the entire restaurant business plan to get all the information, they can instead just look through the executive summary.

2. Company Description

This is the part of the restaurant business plan where you fully introduce the company. Start this section with the name of the restaurant you are opening along with the location, contacts, and other relevant information. Also include the owner’s details and a brief description of their experience.

The second part of the company description should highlight the legal standing of the restaurant and outline the restaurant’s short and long-term goals. Provide a brief market study showing that you understand the trends in the regional food industry and why the restaurant will succeed in this market.

3. Market Analysis

The market analysis portion of the restaurant business plan is typically divided into three parts.

3.1 Industry Analysis

What is your target market? What demographics will your restaurant cater to? This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.

3.2 Competition Analysis

It's easy to assume that everyone will visit your restaurant, so it is important to research your competition to make this a reality. What restaurants have already established a customer base in the area? Take note of everything from their prices, hours, and menu design to the restaurant interior.  Then explain to your investors how your restaurant will be different.

3.3 Marketing Analysis

Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others? How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.

The most important element to launching your restaurant is the menu . Without it, your restaurant has nothing to serve. At this point, you probably don’t have a final version, but for a restaurant business plan, you should at least try to have a mock-up.

Add your logo to the mock-up and choose a design that you can see yourself actually using. If you are having trouble coming up with a menu design or don’t want to pay a designer, there are plenty of resources online to help.

The key element of your sample menu though should be pricing. Your prices should reflect the cost analysis you’ve done for investors. This will give them a better understanding of your restaurant’s target price point. You'll quickly see how important menu engineering can be, even early on.

5. Employees

The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant management team.

The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.

6. Restaurant Design

The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine. Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.

The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment. 

7. Location

The location you end up choosing for your restaurant should definitely be in line with your target market. At this point, you might not have a precise location set aside, but you should have a few to choose from.

When describing potential locations to your investors, you want to include as much information as possible about each one and why it would be perfect for your restaurant. Mention everything from square footage to typical demographics.

8. Market Overview

The market overview section is heavily related to the market analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.

Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the restaurants that could prove to be competition and what your strategy is to set yourself apart.

9. Marketing

With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world. The marketing and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.

Read more: How to write a restaurant marketing plan from scratch

10. External Help

To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running. This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems . Explain to your investors the importance of each and what they will be doing for your restaurant.

11. Financial Analysis

The most important part of your restaurant business plan is the financial section . We would recommend hiring professional help for this given its importance. Hiring a trained accountant will not only help you get your financial estimates in order but also give you a realistic insight into owning a restaurant.

You should have some information prepared to make this step easier on the accountant.  He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.

In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator. 

Restaurant Business Plan Template

Ready to get started? Download our free restaurant business plan template to guide you through the process.

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