How to Write a Restaurant Business Plan
Having a business plan is essential for any restaurant to be successful. It helps you perform an objective evaluation of your restaurant. You need to be able to identify its competitive advantage—what makes it different—and how you plan to make it successful. A restaurant business plan covers all of that and more.
Here’s how to write a restaurant business plan:
1. Start with the executive summary
The executive summary is a concise explanation of the roadmap you’ve created for your restaurant. Although it’s the first part of the business plan, it’s not a bad idea to wait until the remainder of the plan is done before finalizing. You’ll consider what makes your restaurant different, how it’ll make money, and how you plan to keep it.
2. Perform a market analysis
The next step you should take is performing a market analysis. Find out how restaurants are performing overall in addition to the type of restaurant you want to open, for example, 5-star or drive-in. For example, you may discover there is an abundance of hamburger joints in your area, which could lead you to avoid that saturated market.
As you perform your market analysis, one acronym that would be good for you to remember is SWOT (strengths, weaknesses, opportunities, and threats). Any aspiring entrepreneur who truly wants to be successful learns how to conduct a SWOT analysis. Identify all of the strengths and weaknesses that your business has compared to similar businesses in the market. And try to identify any opportunities and threats based on market research. Knowing what your restaurant is good at and what it’s not will help you perfect your business plan, so it is able to weather any storm.
3. Who is your competition?
Do a deep dive into information about the competition. Find out about their prices, the products and services they sell, who’s managing the company, and any upcoming changes that have been reported. Your direct competition can have a significant effect on your business, so it’s important to familiarize yourself before any obstacles arise.
4. Develop a marketing strategy
As you get to know your business idea through and through, you’ll learn what makes it unique and appealing. And this is what you’ll build on to develop an effective marketing strategy. Depending on your ideal client base, social media might be a huge part of your marketing plan. Traditional advertisements and commercials are also options. This is the phase in which you’ll brainstorm the best strategies for you, perform cost estimates, and so on.
5. Know your restaurant’s operations
By now, you should know how your business will earn money. From the chef to the waitstaff and bartenders, it’s important to know exactly where every dollar that enters your restaurant is coming from and going. Do your processes flow well? Are there any bottlenecks to clear?
6. Decide who will manage the restaurant
As the owner, your job shouldn’t be managing the restaurant (with the exception of a really small establishment). In your restaurant’s business plan, you’ll need to discuss who’s managing the business and what authority they have. Will you have a kitchen manager and a different one for the waitstaff? Decide what decisions they can make, train them well, and leave them to do their jobs.
7. Document financial projections
Last but certainly not least, you’ll need to project financials for at minimum the first couple of years. Start with how much money you think the restaurant will earn versus how much it will spend. When do you project a profit? For how much? Do your best to think of as many possible financial scenarios that you can, so you’re able to develop financial projections on how you would handle each if they were to occur. Being financially prepared is one of the biggest challenges of starting a restaurant.
As you wrap up the financial documents, don’t forget to revisit the executive summary. It’s not until most people finish the business plan that they truly understand the company they intend to create.