Restaurant Business Plan: Top 9 Things to Include
Creating a proper business plan is very important when starting a new restaurant business and also established entities as well. This business plan will not only help you get bank and mutual funds but also help you to forecast your restaurant business and prepare accordingly. It is no exaggeration to say that without a proper business plan, the business is not viable. Also, a business plan should be updated regularly so that business owners can develop their businesses in line with it and grow more firmly.
Restaurant Business Plan: Top 9 Things to Include
1. Executive Summary
The executive summary is the first section of your restaurant business plan and provides a snapshot of your business. It should include:
Business Concept:
A brief description of your restaurant concept, including the type of cuisine, dining style, and target market. For example, you might be opening a modern Australian bistro, a traditional Italian trattoria, or a trendy vegan café.
Mission Statement:
A concise statement that defines the purpose and values of your restaurant. For example, "Our goal is to create a warm and inviting space where visitors can savor fresh, locally-sourced cuisine paired with outstanding service."
Business Objectives:
Clear, measurable goals you aim to achieve within specific timeframes, such as "Achieve a 20% profit margin within the first year of operation" or "Become the go-to dining destination in our local area within six months."
Ownership and Management Structure:
Information about the owners, management team, and their roles. This might include a brief bio of each key team member and their relevant experience in the hospitality industry.
2. Company Description
In this section of the business plan, provide a detailed description of your restaurant. Include:
Name and Location:
The name of your restaurant and its location. For instance, "Coastal Eats" located in Bondi Beach, Sydney.
Legal Structure:
The legal structure of your business (e.g., sole trader, partnership, company). If you're setting up a company, you might include details about your ABN (Australian Business Number) and ACN (Australian Company Number).
History and Background:
Any relevant background information or history that led to the creation of your restaurant. This might include your personal journey, inspiration, or market research findings.
Concept and Theme:
Detailed description of your restaurant's concept, theme, and atmosphere. For example, "A beach-inspired restaurant with a laid-back coastal atmosphere, serving fresh seafood and a selection of premium Australian wines."
3. Market Analysis
Conducting a thorough market analysis is crucial for understanding your target audience and competition. Include:
Industry Overview:
An overview of the Australian restaurant industry, including trends, challenges, and opportunities. This might cover the rise of sustainable dining, the impact of the any pandemic, or the popularity of takeaway and delivery services.
Target Market:
Detailed information about your target market, including demographics, psychographics, and spending habits. For instance, "Our focus is on young professionals and families in Bondi Beach who enjoy fresh, local food and a relaxed dining atmosphere."
Competitive Analysis:
An analysis of your competitors, including their strengths and weaknesses, and how your restaurant will differentiate itself. This might involve a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) of nearby restaurants.
Market Needs:
Understand the needs and preferences of your target audience that your restaurant will address. For instance, 'There's a growing desire for fresh, affordable seafood in Bondi Beach that appeals to both residents and visitors.'
4. Menu and Services
Your menu is the centerpiece of your restaurant's identity. In this section of your business plan, be sure to include:
Sample Menu:
A sample menu with descriptions of your dishes, including pricing. Make sure to highlight any signature dishes or unique offerings. For example, "Grilled Barramundi with Lemon Myrtle Butter - $28."
Signature Dishes:
Highlight any signature dishes or unique offerings that will set your restaurant apart. For instance, "Our signature dish, the 'Bondi Bowl,' features fresh prawns, avocado, quinoa, and a zesty lime dressing."
Service Style:
Description of your service style (e.g., full-service, fast-casual, takeaway, delivery). If you plan to offer delivery, consider mentioning your partnership with platforms like UberEats or Deliveroo.
Special Services:
Any special services you plan to offer, such as catering, private events, or cooking classes. For example, "We offer private dining experiences and catering services for local events and celebrations."
5. Marketing and Sales Strategy
An impactful marketing and sales strategy is crucial for enticing diners and ensuring they return for more. Your business plan for the restaurant must include the following:
Branding:
Your restaurant's branding strategy, including logo, colour scheme, and overall brand identity. This might involve working with a graphic designer to create a cohesive look for your menus, signage, and online presence.
Marketing Plan:
Detailed marketing plan outlining your strategies for online and offline marketing, social media, local SEO, and public relations. This might include plans for an Instagram account showcasing your dishes, a Facebook page for updates and promotions, and collaborations with local influencers.
Promotions and Advertising:
Specific promotions and advertising campaigns you plan to run, including timelines and budgets. For example, "Launch a 'Happy Hour' promotion with discounted drinks from 4-6 PM on weekdays."
Sales Strategy:
Strategies for increasing sales, such as loyalty programs, special events, and partnerships. For instance, "Introduce a loyalty program where customers earn points for every dollar spent, redeemable for discounts on future visits."
6. Operations Plan
Your operations plan for restaurant business plan outlines how your restaurant will function on a day-to-day basis. Include:
Location and Facilities:
Detailed description of your restaurant's location, layout, and facilities. For example, "Our 100-seat restaurant includes an outdoor patio, a bar area, and a main dining room with an open kitchen."
Equipment and Supplies:
List the restaurant equipment and supplies you will need, including costs. This might cover everything from kitchen appliances and furniture to tableware and cleaning supplies. Additionally, this will include restaurant POS software, EFTPOS, Cash Drawers, etc. if you are planning to automate your restaurant.
Staffing Plan:
Staffing requirements, including job descriptions, hiring plans, and training programs. For example, "We will hire a head chef, two sous chefs, five kitchen staff, and ten front-of-house staff."
Operating Procedures:
Standard operating procedures (SOPs) for all aspects of your restaurant, from food preparation to customer service. This might include hygiene protocols, order-taking processes, and customer complaint resolution procedures.
7. Management and Organisation
A strong management team is critical to the success of your restaurant. This section should include:
Organisational Structure:
An organisational chart showing the hierarchy of your management team and staff. This might involve detailing the roles and responsibilities of each team member.
Management Team:
Detailed biographies of the key members of your management team, highlighting their experience and qualifications. For instance, 'Our executive chef, Jane Cook, brings over 15 years of culinary expertise, having honed her skills at multiple award-winning restaurants."
Advisors and Consultants:
Information about any advisors or consultants you plan to work with, such as accountants, lawyers, or marketing experts. This might include details about their expertise and how they will contribute to your business.
Related Article: How to Manage Restaurant Staff: A Complete Guide
8. Financial Plan
Your financial plan is one of the most important sections of your business plan. It Includes:
Startup Costs:
Detailed list of your startup costs, including expenses for equipment, supplies, permits, and licences. For example, "Initial costs include $50,000 for kitchen equipment, $10,000 for furniture, and $5,000 for marketing."
Funding Requirements:
Your funding requirements and how you plan to secure the necessary financing (e.g., loans, investors, personal savings). For instance, "We are seeking $150,000 in funding to cover initial startup costs and operating expenses for the first six months."
Financial Projections:
Detailed financial projections for the next three to five years, including income statements, cash flow reports, and balance sheets. This should outline anticipated monthly sales, operating expenses, and profit margins.
Break-Even Analysis:
Analysis of when your restaurant will break even and start generating profit. For example, "We anticipate breaking even within 12 months, with an average monthly revenue of $40,000 and expenses of $35,000."
Exit Strategy:
Your plan for exiting the business, whether through sale, franchising, or other means. This might include details about potential buyers or succession plans.
Related Article: How to Finance a Restaurant
9. Appendices
The appendices section should include any additional information that supports your business plan. This might include:
Resumes of Key Personnel:
Detailed resumes of the key members of your management team.
Market Research Data:
Any additional market research data or reports that support your market analysis. This might include surveys, focus group results, or industry reports.
Menus and Marketing Materials:
Copies of your sample menu, branding materials, and marketing collateral.
Legal Documents:
Copies of legal documents, such as lease agreements, contracts, and licences. For example, "Lease agreement for our Bondi Beach location, health and safety certificates, and liquor licence."
Why a Restaurant Business Plan is Important for a Restaurant
Securing Funding
A comprehensive business plan for restaurants is essential for securing funding from banks, investors, or other financial institutions. It demonstrates that you have a clear vision and a detailed strategy for success, giving lenders confidence in your ability to repay loans and achieve profitability. Without a solid business plan template, securing financial support can be nearly impossible.
Providing Direction
A business plan acts as a roadmap for your restaurant, outlining your goals and the steps needed to achieve them. It helps you stay focused and on track, ensuring that every decision you make aligns with your overall strategy. This direction is crucial for maintaining consistency and working towards long-term success.
Clarifying Objectives
Having a business plan helps you clearly define your objectives and how you plan to reach them. It breaks down your goals into manageable tasks and sets milestones to measure your progress. This clarity keeps you and your team motivated and ensures everyone is working towards the same targets.
Understanding the Market
A detailed business plan includes thorough market research, helping you understand your target audience, competitors, and industry trends. This information is invaluable for making informed decisions about marketing, menu development, and pricing strategies. It also helps you identify potential challenges and opportunities within the market.
Managing Finances
Financial projections and budgeting are key components of a restaurant business plan. By forecasting your revenue, expenses, and profitability, you can manage your finances more effectively and avoid potential pitfalls. A business plan also helps you monitor cash flow, ensuring you have enough resources to cover operational costs and invest in restaurant growth.
Guiding Operational Planning
A business plan outlines the operational aspects of your restaurant, from staffing and training to equipment and supply chain management. This detailed planning ensures that your operations run smoothly and efficiently, minimising disruptions and maximising productivity.
Attracting Talent
A well-structured business plan can help attract top talent to your restaurant. Potential employees are more likely to join a business that has a clear vision and a plan for growth. Sharing parts of your business plan with your team can also foster a sense of purpose and commitment, encouraging them to contribute to the restaurant's success.
Mitigating Risks
A good restaurant business plan helps you identify potential risks and develop strategies to mitigate them. By anticipating challenges and preparing solutions in advance, you can navigate uncertainties more effectively and maintain stability in your operations.
Measuring Success
Regularly updating your business plan allows you to measure your progress against your goals and make necessary adjustments. This ongoing evaluation helps you stay agile and responsive to changes in the market, ensuring your restaurant continues to grow and thrive.
Enhancing Communication
A business plan serves as a communication tool for stakeholders, including partners, investors, and employees. It ensures everyone involved understands the business's goals, strategies, and expectations, fostering collaboration and alignment. Clear communication is essential for building a strong, cohesive team and achieving long-term success.
Who Needs a Restaurant Business Plan?
Aspiring Restaurant Owners
If you're dreaming of opening a restaurant, a business plan is your roadmap to success. It helps you turn your vision into a structured, actionable strategy. Without it, you might find yourself navigating the complexities of the restaurant industry without a clear direction.
Existing Restaurant Owners
Even if you've been in the business for a while, a good restaurant business plan is still vital. It can help you identify new opportunities for growth, streamline operations, and improve profitability. Regularly updating your business plan keeps your goals aligned with the current market conditions and business environment.
Investors and Lenders
Investors and banks won’t even consider funding your restaurant without a detailed restaurant business plan. They need to see a clear picture of your business concept, market potential, financial projections, and how you plan to achieve success. A well-crafted business plan demonstrates your commitment and increases your chances of securing the necessary funding.
Restaurant Managers
Managers can use the business plan as a guide to ensure that day-to-day operations align with the overall business strategy. It provides a framework for making informed decisions and helps in setting performance benchmarks.
Bonus Content: Restaurant Manager Job Description
Franchisees
If you’re buying into a restaurant franchise, you still need a business plan to secure financing and map out your strategy. It will detail how you intend to adhere to the franchise’s guidelines while also personalising your approach to suit your market.
Consultants and Advisors
Business consultants and advisors often need to refer to your business plan to offer relevant advice and strategies. It provides them with a comprehensive understanding of your business, enabling them to provide targeted recommendations.
Partners and Stakeholders
Anyone involved in your restaurant—whether they’re business partners or key stakeholders—needs to understand the business plan. It ensures everyone is on the same page and working towards the same objectives, fostering collaboration and unified efforts.
Employees
While they might not need the entire document, sharing relevant parts of the business plan with your employees can be beneficial. It helps them understand the bigger picture, their role in achieving the business goals, and the importance of their contributions to the restaurant's success.
A Comprehensive Business Plan is Crucial
Putting together a solid business plan is key when you're kicking off a new restaurant. Not only does it help you snag funding from banks and investors, but it also lets you forecast and prepare for your business's future. Your plan should cover your business goals, strategies to hit those goals, market analysis, financial projections, and how you’ll run the place day-to-day. Don’t forget to include how you'll use a good POS system to streamline operations, boost customer service, and keep your finances in check.
Without a proper business plan, your venture might not get off the ground as it lacks direction and structure. Regularly updating your business plan ensures you can develop and grow your restaurant smoothly, aligning your operations with your goals for ongoing success.
More Resources:
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FAQs
What is the primary purpose of a restaurant business plan?
The primary purpose of a restaurant business plan is to provide a detailed roadmap for starting and running a successful restaurant. It helps clarify your business goals, outline strategies for achieving them, and attract potential investors or lenders by demonstrating the viability and profitability of your venture.
How long should a business plan be?
A business plan should be comprehensive yet concise. Typically, it can range from 20 to 40 pages, depending on the complexity of your restaurant concept and the amount of detail required in each section. The key is to ensure all critical aspects of your business are thoroughly covered.
What financial projections should be included in a restaurant business plan?
Your financial projections should include detailed income statements, cash flow statements, and balance sheets for the next three to five years. Additionally, you should perform a break-even analysis to determine when your restaurant will start generating profit. These projections help assess the financial viability of your business and are crucial for securing funding.
How often should I update my restaurant business plan?
You should review and update your restaurant business plan regularly, especially during the initial stages of your business. It’s advisable to revisit your plan at least once a year to reflect changes in the market, business performance, and financial goals. Regular updates ensure your plan remains relevant and aligned with your long-term objectives.
What are some common mistakes to avoid when writing a business plan for your restaurant?
Some common mistakes to avoid include:
- Lack of Market Research: Failing to conduct thorough market research can result in an unrealistic business plan that doesn’t align with market demands.
- Overly Optimistic Financial Projections: Being overly optimistic about your revenue and underestimating costs can lead to financial shortfalls.
- Ignoring Competition: Not adequately addressing your competition and differentiating your restaurant can hinder your success.
- Inadequate Marketing Strategy: A weak or vague marketing strategy can make it challenging to attract and retain customers.
- Unclear Business Objectives: Vague or unrealistic business objectives can make it difficult to measure progress and achieve goals.
How can I make my restaurant business plan stand out to investors?
To make your business plan stand out to investors, focus on:
- Detailed Market Analysis: Provide in-depth market research and demonstrate a strong understanding of your target audience and competition.
- Unique Selling Proposition: Highlight what sets your restaurant apart from competitors and why it will succeed in the market.
- Realistic Financial Projections: Offer realistic and well-supported financial projections to show the potential for profitability.
- Comprehensive Marketing Strategy: Outline a clear and effective marketing strategy to attract and retain customers.
- Strong Management Team: Showcase the expertise and experience of your management team, emphasising their ability to execute the business plan successfully.
What should I include in the operational plan of my restaurant business plan?
The operational plan should detail the day-to-day operations of your restaurant. This includes information on your restaurant’s location and facilities, equipment and supplies needed, staffing requirements, and standard operating procedures (SOPs) for all aspects of the business, from food preparation to customer service. This section ensures that every aspect of the restaurant's operations is well-planned and efficient.