July 6, 2023
Adam Hoeksema
There are many reasons why you might want to write a business plan for your restaurant startup, but I always say that the “real” reason that most founders write a business plan is because their potential lenders and investors ask for a business plan.
You probably didn’t wake up this morning just dying to spend the next couple of days writing a detailed plan for your business. If you are like me, the business plan is in your head, and you just want to get to starting your business, not writing out a detailed plan.
But the people with the money, your potential investors and lenders, have asked you for your business plan and projections perhaps? If you are looking for an SBA microloan specifically, and you are a startup, they will require a business plan and projections with your application.
So if you have to do it, this article is going to help you walk through the following:
With that in mind as the path forward, let’s dive in.
What Should be Included in a Restaurant Business Plan?
A restaurant business plan should tell investors and lenders why customers will want to come to your restaurant, why you are the right person or team to operate the restaurant and how the financials will work to help ensure that they get their money back. Here is a detailed outline of our free restaurant business plan template.
Restaurant Business Plan Outline
Executive Summary
Business Description
Market Analysis
- SWOT Analysis
Marketing and Sales Strategy
- Branding and Identity
- Website, menu, and social media platforms
- Marketing materials and promotional items
- Marketing mix
- Product
- Pricing
- Place
- Promotion
Operations Plan
- Organizational Structure
- Location and Facility
- SOP (Standard Operating Procedures)
- Health and safety protocols
Financial Projections
- Startup Costs and Use of Funds
- Annual Sales, Gross Profit and Net Profit
- Key Financial Ratios
- Income Statement at a Glance
- Income Statement Annual Summary
- Cash Flow Statement Annual Summary
- Balance Sheet Annual Summary
Conclusion
How to do Market Research for a Restaurant Business Plan
At the heart of any restaurant business plan is market research. You need to understand your place in the market and try to prove that there is sufficient demand for your specific restaurant concept, location and price point. You can learn more about our restaurant market research approach here, but ultimately you are looking to understand your competition, get an idea of potential customer traffic, select a good location, and prepare for any seasonal trends that might impact your business. Here are some tools and techniques to do market research for your proposed restaurant.
How Much Will it Cost to Advertise for my Restaurant?
We like to use Google Keyword Planner to help you determine what keywords to advertise for to attract customers to your restaurant website. The tool will also allow you to see an estimate of how much it will cost per click to advertise for different keywords as seen below:
What Keywords are Customers Searching for?
We use both Google Keyword Planner and Ahrefs to see which keywords are driving traffic to your competitors websites. For example, you can run a report on your competitors website and see which keywords they are ranking for and how much organic traffic they are getting from each keyword. This can help you focus your SEO efforts.
How Seasonal are Restaurants?
We like to use Google Trends to determine how seasonal your restaurant concept might be. You can see below that “Steakhouses” might not be all that seasonal, but an ice cream shop would most certainly be seasonal in nature.
How Many Customers Visit my Competitors Each Month?
Finally, we like to pull foot traffic reports on your competitors to be able to see how many customers they typically receive at their restaurants. You can see an example below that shows number of visits per month for a specific address:
Ultimately, the number of potential customers for your restaurant will be a critical assumption that will form the basis of your financial projections. So understanding how many customers visit your competitors will help you estimate potential traffic to your restaurant.
How to Create Financial Projections for a Restaurant Business Plan
With solid market research in hand, it is time to create financial projections for your restaurant. Our restaurant financial projection templates rely on estimating customer traffic to form a basis of your revenue projections. Some restaurants are capacity constrained by the number of seats in the restaurant while some will be constrained by how fast the kitchen can cook and deliver orders. In order to create financial projections to prove your ability to repay a loan or provide a return on investment to potential investors you will need to do the following:
- Estimate startup costs for your restaurant
- Forecast revenue
- Project food and labor cost
- Estimate your operating expenses like rent and utilities
- Calculate how much investor or loan capital you will need to open
Our restaurant projection templates will help walk you through this process and format your projections in a standard format that will meet investor or lender requirements. Typically startup restaurant projections should include an integrated income statement, balance sheet and cash flow forecast.
Example Restaurant Business Plan
Below you will find the text of our example restaurant business plan. You can also download a Google Doc version of this restaurant business plan template here so that you can edit it and make it your own. You can also follow along in this video walkthrough that will help you make the business plan work for your restaurant concept.
Table of Contents
Executive Summary:
- Business Description:
- Market Analysis:
- SWOT Analysis:
Marketing and Sales Strategy:
- Branding and Identity:
- Website, menu, and social media platforms:
- Marketing materials and promotional items:
- Marketing mix:
- Product:
- Pricing:
- Place:
- Promotion:
Operations Plan:
- Organizational Structure:
- Location and Facility:
- SOP (Standard Operating Procedures):
- Health and safety protocols:
Financial Projections:
- Startup Costs and Use of Funds
- Annual Sales, Gross Profit and Net Profit
- Key Financial Ratios
- Income Statement at a Glance
- Income Statement Annual Summary
- Cash Flow Statement Annual Summary
- Balance Sheet Annual Summary
Conclusion:
Executive Summary:
[Name of restaurant] is a new fine dining restaurant that will offer a unique and upscale dining experience to customers in [City, State]. The restaurant will feature a menu of contemporary dishes made with locally sourced ingredients, as well as an extensive wine list and cocktail menu. The restaurant will be located in [desired location], and will have a seating capacity of [number of seats]. The restaurant will be open for dinner service seven days a week, and will also offer brunch service on weekends. The restaurant will be owned and operated by [name(s) of owner(s)].
Business Description:
[Name of restaurant] will be a high-end dining destination for customers looking for a unique and upscale dining experience. The restaurant will feature a menu of contemporary dishes made with locally sourced ingredients, and will have an extensive wine list and cocktail menu. The restaurant will be located in [desired location], and will have a seating capacity of [number of seats]. The restaurant will be open for dinner service seven days a week, and will also offer brunch service on weekends.
Market Analysis:
- Fine dining market in [City, State] overview: A thriving fine dining market in [City, State], with a growing demand for upscale dining experiences and a strong reputation for quality food and service.
- Target market demographics: The target market includes affluent individuals and couples, aged 25-65, with a high income and a passion for fine dining and unique culinary experiences.
- Market size and growth potential: A growing market, with an estimated size of $100 million and an expected growth rate of 5% per year.
- Competitive landscape analysis: A competitive landscape with several established fine dining restaurants, but with room for new entrants offering a unique and differentiated experience.
SWOT Analysis:
- Strengths: Unique selling points, such as a farm-to-table menu, a highly experienced management team, and a reputation for exceptional food and service.
- Weaknesses: Limited experience in the fine dining sector, limited market share, and lack of brand recognition compared to established competitors.
- Opportunities: Growing market demand, potential for partnerships and collaborations with local farmers and suppliers, and potential for online ordering and delivery services.
- Threats: Economic downturns, competition from established restaurants, and changing consumer preferences, including increased demand for healthy and sustainable menu options.
Marketing and Sales Strategy:
Branding and Identity:
- Restaurant name: The Fine Dine
- Logo: A sophisticated and elegant design that captures the essence of high-end dining, incorporating the restaurant's name in an aesthetically pleasing manner.
- Tagline: "Indulge in a culinary experience like no other."
Website, menu, and social media platforms:
- Website: A user-friendly, visually appealing website that showcases the restaurant's menu, specials, promotions, and events.
- Menu: A menu that showcases the restaurant's culinary offerings, including its appetizers, entrees, sides, and desserts. The menu should be updated regularly to reflect seasonal and market changes.
- Social media platforms: An active presence on social media platforms such as Facebook, Instagram, and Twitter. This presence should be used to promote the restaurant, interact with customers, and share updates and special events.
Marketing materials and promotional items:
- Marketing materials: A range of materials such as flyers, posters, and brochures to promote the restaurant to the local community.
- Promotional items: Items such as t-shirts, hats, and tote bags that feature the restaurant's logo and tagline.
Marketing mix:
Product:
- Menus: A comprehensive menu that includes a wide range of dishes, catering to different tastes and dietary requirements.
- Wine and cocktail lists: A comprehensive wine and cocktail list that features both classic and signature drinks.
- Specials and promotions: Regularly updated specials and promotions that offer customers an incentive to visit the restaurant.
Pricing:
- Competitive pricing: A menu with entrée prices ranging from $20 to $40, comparable to other fine dining restaurants in the area.
- Discounts: A 10% discount for repeat customers and a 15% discount for members of the restaurant's loyalty program.
- Loyalty program: The restaurant's loyalty program rewards customers with a $50 gift certificate for every 10 visits to the restaurant.
- Specials and promotions: A "Three-Course Dinner for Two" special priced at $50, and a "Wine and Dine" promotion that offers a free bottle of wine for every four diners.
- Happy Hour: A daily happy hour with discounted drinks and appetizers, attracting customers during off-peak hours.
- Early Bird Special: A special early bird menu with discounted prices for customers who dine between 5:00 pm and 6:00 pm.
- Seasonal promotions: Seasonal promotions such as a "Summer Barbecue" or a "Fall Harvest" themed menu, featuring special dishes and prices.
Place:
- Physical location: A prime location that is easily accessible and attractive to customers.
- Atmosphere: A warm and welcoming atmosphere that creates a comfortable and inviting environment for customers.
- Ambiance: A refined and sophisticated ambiance that elevates the dining experience.
Promotion:
- Advertising: A targeted advertising campaign that promotes the restaurant to its target market.
- Public relations: A proactive public relations strategy that leverages media opportunities to promote the restaurant and its offerings.
- Promotions and events: Regular promotions and special events that engage customers and create a buzz about the restaurant.
Operations Plan:
Organizational Structure:
- Ownership structure: A sole proprietorship owned and operated by a seasoned restaurateur with extensive experience in fine dining.
- Management team and staff: A team of experienced professionals, including a head chef, sous chef, and front-of-house manager, as well as a well-trained staff of servers, bartenders, and support staff.
- Responsibilities and roles: Clear and well-defined responsibilities and roles for each member of the management team and staff, ensuring efficient and effective operations.
Location and Facility:
- Description of physical location: A historic building located in the heart of the city's downtown area, with a stunning outdoor patio and ample street-side seating.
- Facility layout and design: A beautifully renovated interior, featuring a spacious bar area, comfortable dining room with elegant chandeliers, and a private dining room for special events.
- Equipment and supply needs: A state-of-the-art kitchen equipped with top-of-the-line appliances, including a wood-fired oven, sous vide machines, and a cold kitchen for preparation of desserts and appetizers. In addition, a wine cellar, bar area with multiple taps and a comprehensive list of spirits, and a well-stocked pantry for ingredients.
SOP (Standard Operating Procedures):
- Kitchen and front-of-house operations: Detailed standard operating procedures for all kitchen and front-of-house operations, including food preparation, service, and clean up.
- Staff training and management: A comprehensive training program for all staff, including ongoing training and development opportunities to ensure that staff remain knowledgeable and skilled.
Health and safety protocols:
- Health and safety protocols: A range of health and safety protocols to ensure the well-being of customers and staff, including hand washing protocols, regular sanitizing of surfaces, and proper food handling procedures.
- Emergency procedures: Detailed emergency procedures in the event of a fire, power outage, or other emergency, ensuring the safety of customers and staff.
Financial Projections:
All of the unique restaurant financial projections you see here were generated using ProjectionHub’s fine & casual dining financial projection template.
Startup Costs and Use of Funds
Annual Sales, Gross Profit and Net Profit
Key Financial Ratios
Income Statement at a Glance
Watch how to create financial projections for your very own restaurant:
Income Statement Annual Summary
Cash Flow Statement Annual Summary
Balance Sheet Annual Summary
Conclusion:
[Name of restaurant] is a new fine dining restaurant that will offer a unique and upscale dining experience to customers in [City, State]. With a menu of contemporary dishes made with locally sourced ingredients, an extensive wine list and cocktail menu, and a focus on customer service, the restaurant is poised for success in a competitive market. The restaurant will be owned and operated by [name(s) of owner(s)], and has a clear plan for achieving financial success.
Restaurant Business Plan FAQs
How long should my business plan be?
Our business plan example is roughly 13 pages with the table of contents, and screenshots of the financials included. From a text perspective I would try to keep the business plan to less than 10 pages maximum, and 5 pages is probably better than 10. Investors and lenders have a short attention span, so get straight to the point.
Will lenders and investors actually read my business plan?
Yes. I spent 10 years as an SBA lender and although I didn’t read every word of client business plans, I did skim them, and often one of our underwriting staff members would actually read through each business plan pretty carefully. I think you should expect that they will read it, but don’t feel too frustrated if they only skim through it.
What is the most important part of my business plan?
For a restaurant business plan, the most important sections of your plan are going to be your team, location and financials. You have to demonstrate that you have the team to provide great food and a great service to your customers. You have to demonstrate that your location is the right place for your particular concept. Will your target market customers come to and enjoy that location? Finally, do your numbers work. Restaurants are a low profit margin business, there isn’t much room for error and many restaurants fail, so a clear financial plan will be quite important.
Can I use AI or ChatGPT to write my business plan?
Yes! We actually used ChatGPT to help us write our example business plan. One great way to utilize ChatGPT would be to write your business plan yourself, but then use ChatGPT to write your executive summary. You could simply feed your business plan to ChatGPT and ask it to write a short executive summary. You can also ask ChatGPT for things like examples of startup costs, or operating expenses for a restaurant so that you can avoid missing key aspects of your financial plan.
