How to Write a Restaurant Business Plan

It’s time to bring your restaurant knowledge, experience, and passion to life. But how do you find the funds to open your doors to future diners? A restaurant business plan can help attract investors by providing a tangible blueprint for turning your vision into a financially viable reality.  

What is a restaurant business plan?

A restaurant business plan is a clear, comprehensive strategy that outlines your restaurant’s concept, menu, operational organization, marketing and sales strategies, and financials. It can serve as your personal guide, an external fundraising document, or both. A thorough restaurant business plan takes time to create, but when done correctly, it could be the first step in getting your operation off the ground.

What are the 7 parts of a standard restaurant business plan?

Business plan structures can vary, but you can organize yours into seven parts that cover the broad but crucial areas of your restaurant.

1. Executive summary: Contextualizes your concept, mission, and unique value for investors, lenders, partners, and staff.
2. Business description: Details your location, menu, target diners, ingredient sourcing, primary partners, competitive edge, and growth opportunities.
3. Market research and analysis: Defines your competitors and how you fit into the market, notes industry trends and areas for innovation, and outlines ideal customer profiles. This is where you can clearly show what you bring to the table that your competitors don’t.
4. Management and organization: Highlights your team members and their day-to-day roles, experience, and education—and describes your overall management style and kitchen structure.
5. Marketing and sales: Shows investors how you’ll reach your goals with product pricing, the reasoning behind it, and any strategic marketing that you plan to execute.
6. Funding plan: States how much funding you’ll need and how you plan to use the capital over specific periods for building, real estate, licensing and permits, insurance, inventory, hiring, training, and any other area that needs to be nourished before, while, and after the doors open.
7. Financial outlook: Illustrates your cash flow development over time and estimates when investors can expect to see their return on investment (ROI).

How detailed does each business plan section need to be?

Every aspect of your business plan is crucial for serious lenders and investors, so the more data-informed detail you can supply, the better. And, while it may seem counterintuitive, investors may not fixate solely on the numbers. They may home in on the feasibility of your proposal (the real operational costs versus realistic profits) and on your plans to hire talent to scale the business.

How to write a restaurant business plan

1. Define: Distill your vision—from the floor plan and service style to the kitchen’s hierarchy, flavors, and everything in between.
2. Research: Analyze competitors, trends, guest profiles, location, and gaps in the market where you can carve out space for yourself.
3. Do the math: Document all your estimated startup and operational costs, plus your profitability timeline.
4. Draft: Write the first version of your restaurant business plan with clear, concise language, stripping every idea down to its simplest form.
5. Review: Have your partners or other trusted professionals review your draft and make any necessary tweaks.

Optional Supplemental Sections

You may want to create a plan that also functions as an internal operating roadmap, and you can incorporate a few elements to help your partners and staff hit the ground running:

• Org chart: An organizational chart is a visual diagram that maps the internal structure of management and the kitchen, including roles, responsibilities, and hierarchies (you can include it in the management and organizational section).
• Recipe Guide: A detailed guide beyond the menu that lists all dishes, beverages, and other goods, plus their ingredients, and how they’re made (you could include this in the business description section).
• Training Manual: A concise document that defines the service style, dress code, point of sale (POS) instructions, and safety measures that all employees need to know (this can appear in the management and organizational section).
• Editorial Calendar: A timeline for publishing promotional content and marketing campaigns on social media or other platforms (this would fit best in the marketing and sales section).
  Once you’ve drafted a plan that answers all potential questions about how your business runs, when and how it will become profitable, and why investors should fund you, it’s ready to be shared with lenders.

Frequently asked questions

What financial projections should a restaurant business plan include?

A well-developed plan includes forecasted revenue, projected cash flow, and estimated costs for goods, operations, food, occupancy, labor, and the cost of potential setbacks.
It’s important to be realistic about revenue and cost assumptions when creating your restaurant business plan. To help do this, draw on your current economic and market conditions and prepare a projected profit and loss (P&L) statement that details your expected monthly or annual profitability.

What are common mistakes operators make in a restaurant business plan?

• Common mistakes to avoid include:
• Skipping any of the seven parts of your plan
• Failing to conduct thorough research into all financial and market elements of your proposal
• Writing a vague business description
• Underestimating your projected costs

Any of these mistakes may cause investors or lenders to lose confidence in your plan.

How much startup capital does a restaurant realistically need?

A RestaurantOwner.com survey of over 350 operators found that startup costs ranged from $175,500-$750,000. But your costs will depend heavily on your location and the size of your space.

How should a restaurant business plan address funding gaps and contingency planning?

Your plan may address potential funding gaps or economic hardship scenarios by including a contingency sub-plan in the operations and management section.

The contingency sub-plan can explore potential scenarios (pandemics, supply chain disruptions, natural disasters, cyberattacks, fires, and other accidents), how they could financially impact the business, and how you, your staff, and your partners plan to respond in these situations.

The takeaway

A restaurant business plan is your chance to create a document that guides your business’s daily operations and convinces investors and lenders to take a chance on you. It includes thorough market research, realistic financial projections, management structure, operational planning, and a clear picture of your restaurant’s mission, unique brand, and products. When writing your plan, avoid underestimating costs and provide a clear ROI timeline for your investors.