You have an idea for a restaurant, but you don't know how to write a restaurant business plan.
We've all heard the saying, ‘fail to prepare and prepare to fail.’ This is especially true when it comes to writing a business plan. If you want your restaurant idea to succeed, you need a solid restaurant business plan before the launch date.
Let's face it – many startups fail within the first few weeks of opening. One reason is that they don't take the time to develop a comprehensive business plan. And another reason is that their plan isn't any good!
Let's see why a restaurant business plan is essential.
A business plan provides restaurant owners with an organized guide to outline how they will make their vision come true.
When you're in the weeds and need guidance, your business plan will act as your roadmap to success. It's like having an extra person around helping you stay focused on what needs to be done when.
Every business plan is different, but there are specific components that every restaurant owner should address. I will list them in order of importance below:
Typically, a restaurant business plan begins with an executive summary. This summary serves as the introduction to your business but also as a brief overview of your idea and how you intend on executing it. This section aims to draw in investors who are interested in investing their money into what you have to offer them.
Common elements found within executive summaries include:
Mission Statement: This part defines what do you wish to do with this project or idea.
Proposed Concept: How exactly will these ideas work? What will they entail and look like after execution?
Execution: Who will execute these plans created from the proposed concepts if everything goes right?
Potential Market: Who will be the consumers or target audience for this?
Competition: What are your competitors doing, and how do you plan on competing with them?
Financials: How much will you need to spend to execute this idea? And how will these funds be obtained?
Expected Return on Investments: Is the idea worth investing in? What are the rewards?
Projected Timeline: This section entails everything that will happen within the upcoming months and why these events will occur. The timeline gives investors a visual idea of what will be taking place in the future.
In the company description, you introduce your restaurant and its location. You provide all relevant contact information such as email or phone number.
The owner's experience is also discussed so that investors can assess their industry knowledge based on previous success stories in related fields like management consulting for restaurants (e.g., testing menus).
This part is critical because it shows how committed you are to your restaurant project. It also highlights what sets your business idea apart from other entrepreneurs who have similar ideas but less expertise.
The second part of a business plan should highlight legal standing when opening an establishment. That also includes outlining short-term and long-term objectives, including market research to show why this will succeed.
Typically, the market analysis portion of the restaurant business plan comprises three parts. The first is a brief overview that describes the target market and the services provided to the consumers.
The second part evaluates known or potential competitors, emphasizing their strengths and weaknesses, as well as how your restaurant will be different from them. The last part of this segment includes recommendations for marketing strategies that you will use to attract and retain customers.
It is very important because it shows that you can communicate your services to connect with people. So, for example, you know how to advertise your restaurant to attract the correct type of customers and make them want to come back for more.
After you have established your restaurant concept and target market, crafted a marketing plan, secured funding and legal support, it is time to create an operations plan.
That should include how food will be prepared (e.g., recipes), how much food should be purchased each week based on projected demand, tasks such as purchasing or payroll, and forecasting sales and profits.
Depending on the size of your restaurant, you may want to specialize in a specific type of cuisine like Italian or Asian.
Having an all-encompassing menu is fine, but it would make it difficult for customers to find exactly what they're looking for right away. That will be a turnoff and discourage customers from revisiting your restaurant in the future.
That means you won't have much flexibility as far as decor and other aesthetics are concerned. However, it will generate more business by giving people what they want when they want it.
Here are the questions that your plan must address.
If you're looking for a loan or an investment from an investor, they will want to know how long it will take before you can repay the full and final amount.
This also applies to profit-sharing. There are numerous methods of calculating profitability and determining what kind of payout you want.
This section of a business plan also outlines how you will be measuring your success, along with what criteria you'll use to judge whether this project is worth pursuing.
It's important to know that if you don’t cover these factors in your restaurant business plan, your project could come crashing down. You need to keep in mind that there is no place for ulterior motives or business-related dishonesty because it can backfire in the worst way possible.
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