If you are planning to open a restaurant, there are many things you need to do first. One of the top things on the list is writing a restaurant business plan. While it might not be one of the most fun or glamorous parts of opening a new restaurant, it is essential if you hope to succeed. In this article, we dig into some basic restaurant business plan essentials to help set you up for success.
What is a business plan for a restaurant?
A restaurant business plan is the roadmap that you will use to help you guide your day to day decisions for your business. It also serves as a guide to train the people who work for you. Many new business owners will share their business plan with banks to secure funding to open their restaurant. This essential document helps you ensure that your business idea is potentially profitable and successful.
Why do restaurants need a business plan?
All businesses need a business plan, but for a restaurant, this document is truly essential. While writing a business plan, the future restaurant owner spends a lot of time and effort doing the research that ensures the business succeeds. Without it, you risk failing before you even get started.
Additionally, if you need funding for your business, most banks require a business plan before they talk to you. Opening a new restaurant is expensive and many new owners need help to get them started.
What should a restaurant business plan include?
There are many different things to cover in your restaurant business plan. We put together a list of some of the things you may want to include. This list isn’t comprehensive and not all the items work for every restaurant. However most restaurant owners will include the following items in their business plan.
Write the summary last, after completing the rest of your plan. It consists of a few sentences that give the reader an overview of what the rest of the plan entails.
The Overview contains descriptions of the layout of the restaurant and the concept behind it. It also includes a sample menu. We advise creating a visual as well as descriptions of potential menu items. Finally, include information about the management team and their qualifications.
This section includes information about the location of your restaurant, the target audience, and the competition. This helps ensure your restaurant is in a place where business is booming. You don’t want to open a Taco Bell across the street from another one. Determine what your restaurant will serve and whether customers want to buy that food and experience in your chosen location.
Additionally, if the other restaurants in the area are doing well, you need to establish how your restaurant competes. If they are not doing well, how is your restaurant going to improve on that?
A SWOT Analysis looks at the strengths, weaknesses, opportunities, and threats for your restaurant. Look within the restaurant itself, as well as in comparison to competitors. Strengths could be that you have a really well known head chef, or a concept that is growing in popularity but unique to the area. Weaknesses could be that finding staff in your area is difficult, or that the location you choose is small and will make it difficult to grow. An opportunity could be that there is ample real estate in your area if you succeed and want to open a second location. A threat could be a restaurant across town that offers a similar concept.
The Operations Plan looks at the day to day operation of your restaurant. In this section, cover plans for staff management and customer service. This is also a good place to list out the specialists and consultants you plan to have on board.
There are many financial elements involved in running a restaurant. A good business plan covers all aspects of the financial side of the business to ensure you have enough cash on hand to cover business expenses. Additionally, you need to have a plan for profitability. As many restaurants operate with a small margin of profitability, we highly recommend working with an accountant who specializes in restaurants if you want your business to succeed.
Without a solid marketing plan, even the best restaurants struggle with sales and profitability. Knowing what you are going to do to bring in new customers and keep old ones returning sets you up for success. A successful business owner plans their budget and identifies where they can inform their target market of the new business to ensure that the customers keep coming when the doors open.
Business Structure (LLC, Sole Proprietorship, Corporation)
Deciding on what sort of business structure you want for your restaurant business is another essential decision to make. If you want to learn more about choosing a business structure for your restaurant, we share in more detail about restaurant owner registration.
How do I write a restaurant business plan?
Writing a restaurant business plan is a lot of work, and seeking help is advisable. If you haven’t written one before, there are lots of advisors who are available to help. The SBDC offers free advice to new business owners and you can connect with an advisor to help you. Find your nearest SBDC to learn more.
Additionally, the team at Accounovation works with restaurants to help with their accounting and financial needs. If you are seeking an accountant to help you prepare your restaurant business plan you can book a free discovery call to see if we are a good fit.