Decided to join the restaurant industry?
It’s an exciting decision, but it’s also quite overwhelming at the same time. The restaurant industry is very competitive. Fox Business reports that even despite the pandemic, around 6,700 new restaurants were opening each month from July to September 2020.
Such fierce competition often causes many new businesses in this industry to close almost immediately after opening. The only way to avoid that is to have a thorough restaurant business plan, which you and your potential investors will use as a roadmap to bring your new restaurant to life.
Today, we’re going to take a look at how to write an efficient restaurant business plan that will help you withstand competition.
1. Start with an Executive Summary
First, you need to provide a general overview of your business plan. An executive summary highlights the critical parts and explains why your business plan is viable.
Typically, an executive summary includes:
- Restaurant concept – for example, an Italian restaurant with a menu emphasis on pasta or any other characteristic feature that will make the restaurant stand out.
- The goal of the business plan – opening a completely new restaurant, purchasing the franchise, or buying a restaurant from the previous owner, etc.
- Justification of the restaurant’s survivability – for instance, the restaurant’s location is usually busy with tourists or any other reason why potential investors might be interested in investing in the restaurant.
- Mission statement – explains the value of the restaurant for its customer base.
- Main objectives – goals a restaurant is aiming to achieve within a given timeframe.
- Resources to achieve the goals – a brief outline of the main marketing strategies that will promote the restaurant.
Larissa Lima, a writer and researcher at SupremeDissertations, recommends not to go into detail with financial analytics in the executive summary but also not to make baseless claims. If necessary, include hyperlinks to the part that provides further explanation.
2. Provide a Detailed Company Description
Now, it’s time to go into detail and give an in-depth overview of your restaurant as a company.
The company summary puts together the most important aspects of a restaurant and includes the following points:
- restaurant name and the type of the restaurant (fine dining, fast food, and so on)
- business structure
- primary demographics of the target customers
- management team and staffing (with the information on payroll)
- legal structure
This section should also touch upon the company ownership and provide the contacts of the restaurant owner, general manager, lenders, and investors.
On top of that, if you’re opening an entirely new restaurant, you should also include the startup summary. It should cover the information on the starting bank capital and the list of startup costs needed to launch the restaurant, such as kitchen equipment, as well as costs to maintain restaurant hygiene and all additional expenses
3. Outline Your Services and Include Menu Design
This is the part where you talk about your menu and how it will help your restaurant stand out. In this section, you should include the following:
- the description of all menu items
- sample menu mockup
- the list of regular drinks to be served at a bar
- children’s menu
- exclusive and seasonal menu items
Since you’re going to show the menu mockup to your potential investors, your business plan should contain a final menu sample that you’ll give to your customers.
So, you should proofread your menu. You can double-check your menu entries with tools like Grammarly and TrustMyPaper that have great readability checkers. Also, make sure you hire a professional designer and food photographer to create great and appetizing visuals of the food you will serve.
4. Proceed with Market Analysis
We already mentioned that the restaurant industry is very competitive. So, unless you prove the viability of your restaurant, it will be very hard for you to find investors.
That’s why you should provide a detailed market overview with competitive information, including:
- industry and niche analysis
- market research
- the number of similar restaurants in the area
- summary of the competitors’ restaurant experience and pricing
- service business analysis
- overview of buying patterns
- target market segment strategy
First-year restaurants should also include a growth strategy from scratch, which would explain how a new restaurant will be able to function under certain market conditions.
5. Summarize the Implementation Strategy
The implementation strategy section is one of the most important parts of your restaurant business plan. This section provides an in-depth look into:
- Marketing strategy. You should explain your marketing plan step-by-step, including how you will promote your restaurant on social media, advertise your food service, and attract customers.
- Sales strategy and forecast. Provide compelling evidence of how you are going to consistently increase sales – through loyalty programs, partnerships with local businesses, pop ups marketing strategy, etc.
- Business operations. This section should also include a detailed operation plan to give an insider look at how your restaurant will function.
The implementation strategy part should also cover data on financial projections that, apart from bank statements, should comprise:
- cash flow predictions
- return on investment
- projected profit
- loss statement
- projected balance sheet
- business ratios
You can also make financial projections into a separate section of your restaurant business plan to make this data easier to find and browse.
A successful restaurant is never born by a lucky accident. Usually, there’s a lot of work going on behind the scenes, and a lot of the restaurant’s success depends on the business plan.
So, if you’re an aspiring restaurateur and have a unique restaurant idea, get to planning first. This way, you will have a consistent blueprint that will guide you through all the steps of opening a restaurant. Hopefully, our short guide to writing a restaurant business plan will help you with that.