How to Write a Restaurant Business Plan

As a restaurant owner, you need to create a solid business plan before you even think about opening up your doors. For one thing, in most cases, an investor or bank won't even consider loaning you money or buying equity without seeing one first.

Even if you already have an established restaurant, it still doesn't hurt to sit down and map out a plan. Doing so allows you to better estimate your profits and expenses, and it’ll help you figure out how and where to allocate any extra cash. Regardless of where you are in the process, whether you’re just starting out or thinking of expanding your business, crafting a restaurant-specific business plan doesn't have to be an impossible task, especially if you follow these six steps.

1. Craft an Executive Summary

For the best possible executive summary, write it after you have completed the rest of your plan, but place it at the very top of your report. In a few sentences or paragraphs, it summarizes the rest of your business plan so that you can offer a snapshot of your restaurant. This is an essential step when seeking investments or loans.

Use this section to briefly describe the type of restaurant you want to open and why you are qualified to run it. If you have a partner or founding team, also discuss their qualifications, and include any advisors or board members that may be helping you out.

2. Describe Your Restaurant

In this section, you will go into great detail about your plans for the restaurant. You'll cover the type of food you plan to serve, the atmosphere you'll create, the location, your expected typical clientele and more. Provide a mockup of your menu complete with dish descriptions and pricing, and talk about the area you'll serve and why you project being successful there.

Research your local competitors, and describe ways in which your restaurant is unique in comparison to others, and highlight how this uniqueness will translate to success. This section should offer plenty of statistics, reasonably drawn conclusions and background research. Your gut feeling or the opinions of a few people you've spoken to won't suffice.

3. Complete a Market Analysis

A good market analysis will highlight details about your competition and explain what sets you apart from others. Convincing customers to leave their favorite restaurants won't be easy, so document ways that you will draw customers into yours. Can you beat the competition’s prices, value or atmosphere? How will you be different enough to bring them in and good enough to keep them coming back?

In addition, go into detail about your clientele. Will you be catering to a younger, hipper crowd at night, while marketing to business professionals at lunch? Will you offer senior discounts to encourage older folks to eat in your restaurant?

Finally, discuss your planned marketing efforts. Perhaps you'll put together a street team to announce the launch, or print menus to share with all the local office buildings. Or maybe you can afford to run ads in the paper or produce a local commercial.

If you've been able to do any market research on your restaurant’s location and demographics, include that information in this section. Go into detail about the advantages your restaurant will have, including its location or proximity to other hot spots.

4. Discuss Business Operations

Outline your hours of operation, how many employees you plan to hire and any partners you will have. Remember to describe each person's role, focusing specifically on managing, bookkeeping and other administrative duties. Consider creating an organizational chartthat shows who will report to whom, and list the anticipated salary, benefits and training costs for each employee.

In addition, detail whether you will offer delivery and how you will manage it. Provide a list of equipment, furniture and other supplies you will need to purchase or lease. Furthermore, list all of the vendors or suppliers you plan to use, and highlight any relationships you have with firms that can help you launch the business. For example, you may know a printing company who will print menus at a discount.

5. Estimate Your Financial Growth

In this section, you should provide sales projections for the future. For at least the next three years, provide a:

•           Profit-and-loss statement. This statement is a monthly or annually generated report that details the earnings of a company by stating the restaurant's profits or losses during an allotted timeframe.

•           Cash-flow statement. This statement details cash you have coming in from sales, investments, selling of assets and loan proceeds, as well as outgoing cash to cover operating expenses, pay debts and purchase assets during a specific timeframe.

•           Break-even analysis.Your break-even point tells you and your investors how long it will take before the business stops losing money. It will show how much customers and revenue you will need to cover the costs of running your restaurant.

•           Balance sheet. This statement details your businesses assets, liabilities, capital and other sources of income, and balances these figures against your expenses during a specific period of time. In a sense, it provides a picture of your restaurant's financial position.

•           A list of possible risks. This shows that you are aware of the fact that you will face challenges, which shows investors and banks that you are realistic. In addition, detail a plan for dealing with these risks.

6. List Your Funding Needs

If you are requesting capital, list the minimum amount of funding you will need, and then list what would be ideal in order to expand and grow your business. Then, specifically map out how the investment will be spent, and outline how you plan to repay investors, whether through an exit plan or via specified payments. Doing all these tips certainly will not guarantee investment, but it’ll surely increase the chances of your restaurant’s success.