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How to write a business plan for a restaurant that will bring you success

Running a successful restaurant is very much like an orchestra performance. Every element in the restaurant from the staff to the tables and even the smallest element such as the positioning of the cutlery needs to be in perfect place before the Friday night crowd arrives.

As an aspiring entrepreneur, perhaps with some time to your name cooking up a storm in a couple of kitchens professionally, you may be ready to start your own restaurant. But the idea is just the starting point. There is a lot of preparation that goes into launching a restaurant concept and one of the very first things you need to do is prepare a business plan for a restaurant.

What is a restaurant business plan? It can be referred to using many names: a framework, a road map, a document, a compilation of research, etc. However, one thing is for sure. Whatever name you call it, a business plan of a restaurant is one of the most essential documents you will ever create for your restaurant business.

Contrary to popular belief, a business plan isn’t fixed in stone and it can be adapted and amended as your business develops and scales. However, it is one of the very first things you will need to put together to ensure that your business idea is accurately conceptualised so that you can enjoy greater success.

Yes, restaurants can be highly profitable ventures but the amount of planning and preparation that goes into planning a restaurant business can be astounding. This is where the business plan comes in: it helps refine your ideas, consolidate all the important research you’ve made and ensure that you can use this data to help you get the necessary funding for your venture.

So, without further ado, in this article, we present why business plans for restaurants are important in the first place and what are the essential elements that go into creating a good business plan. Let’s take a closer look.

Why do you need a restaurant business plan?

There are several reasons why you need to prepare a business plan for your restaurant. However, these can be broken down into external and internal reasons.

On the external side, you want to show potential investors or lenders that your restaurant business concept is worth supporting and investing in. Investors and lenders are particularly interested in the amount of research you have done to warrant their trust and investment in your restaurant. They will want to see that you have covered all your bases to lend to you and to ensure that they get a return on their investment, instead of putting their money in a venture that has little chance of success.

On the internal side, this is a framework that you will continue developing long after your restaurant’s operations have reached a solid point with a good customer base. In fact, it’s essential for helping to scale your restaurant and expand to new geographic locations.

Essential components of a good restaurant business plan

Every good restaurant’s business plan entails several essential components or elements that show you have done your homework. The compilation of all the data and research will help give investors more confidence in your business idea and they are more likely to support you. As such, every good restaurant business plan will contain the following subsections:

1. Executive summary

Although the executive summary is the first item in your documentation or business plan for your restaurant, you can and should probably write it last. The reason for this is the following: writing the executive summary is essentially a summary of the entire business concept from start to finish. You should write it last as you compile and collate all the data and information you have collected in your preparation process.

However, once you’re ready to write your executive summary, you need to include what the business concept is, how it will be run and managed, what team you have behind you to make the concept a success and a brief summary of your projected financials including a break-even analysis that contains projections of financial performance over the next three to five years.

When an investor reads your executive summary, they should have a bird’s eye view of everything that will go into your business that will make it successful. They should also be convinced to keep reading as you’re offering them a lucrative opportunity instead of something that screams “don’t invest” right from the very first page.

2. Company description & overview

As an entrepreneur, you already know that there are several different types of business “vehicles” that you can use to structure your restaurant business under. For example, you can operate solo as a sole proprietor. You can work as part of a partnership with one or more individual partners to support you although profit sharing will be required under this model.

You can also work as a corporation where you don’t face any of the negative ramifications in the event that your restaurant business fails or if liquidators and debtors start chasing you for payment. This is because the latter business “vehicle” is structured in such a way as to separate the owner’s assets from those of the business.

With this in mind, it’s clear that you need to choose a restaurant business structure. This will heavily depend on your circumstances in life and the amount of risk you are willing to take on. For example, it is riskier if you go the sole proprietor route if your restaurant doesn’t take off. However, it can be highly rewarding as all the profits you’ll make will be yours and yours alone.

Setting out what type of company you will be operating under and providing a brief overview by mentioning the name of the restaurant concept, what inspired it and why you chose it will help investors get a better understanding of the rationale behind your decision to open a restaurant and this will help ensure that you convince them to keep reading.

How to write a successful restaurant business plan

3. Market analysis

So, you have your business structure and business name ready to go. But what kind of research have you done regarding the potential success of your restaurant? This is where the hard work comes into play and it will take days and weeks to gather all the necessary research together to present the market analysis part of your restaurant business plan. For example, you will not only need to conduct an industry, competitive, and geographic analysis but a SWOT analysis, too. Below is a brief outline of what each of these entails.

Industry analysis

An industry analysis means much what the name implies: studying the industry that you are operating in. In this case, it is the restaurant industry in a particular city or location. Studying the industry means studying how many other restaurants, bars, pubs, coffee shops and tea house concepts are operating in the same area. It also means discovering if your restaurant concept is new and unique or whether it has been done before.

It’s also about what sets you apart from others. In this part of your research process, you should also ensure that you study the competition and try to determine what kind of market share they have and how much you can tease away from them. Carrying out an industry analysis is not an easy process but it is essential to convince those investors to back you as opposed to someone else.

Competitive analysis

A competitive analysis looks at the industry in a much narrower light. For example, if you are going to be a fine dining restaurant that caters to upper-middle income families, you will need to know who you are competing with. Are there similar restaurant concepts to yours? Where are they located? How far or how close are they to you? What will you do to set your restaurant business apart from theirs? Studying them and their practices will once again show those investors that you’ve done your research.

Geographic analysis

The geographic analysis comes next. This is another important part of your research process. Say that you’ve found an old building that you want to renovate and turn into a restaurant. The idea may be absolutely excellent from your point of view but investors may look at it otherwise. Why? Because the building may not be close to a residential or high-traffic area. If you are going to require your restaurant patrons to drive far and out of their way to get to you, you really need to make the experience worth their while.

On the other hand, if you choose a high-traffic area such as a busy retail street, you may be up against more competition from coffee shops, pubs and other restaurants. This means that location, location, location is absolutely everything in this business and you need to think very carefully about whether there will be ease of access, convenient parking, easy access to public transportation links and a whole lot more to make it as easy for your patrons to frequent your restaurant as opposed to choosing your competitors.

SWOT analysis

You may have already heard of a SWOT analysis as something that addresses strengths, weaknesses, opportunities and threats. But have you really deeply thought about these aspects in an honest and self-reflective kind of way and have you put your thoughts down on paper? Now is the time.

Yes, the SWOT analysis begins with identifying your strengths. This means being clear about what your unique selling point (USP) is. It’s also about what you offer that makes you stand out from the crowd.

Since no business is perfect or operates in perfect conditions, you will also have to identify your weaknesses. It’s important to be honest about these and not to try to sugarcoat it for your investors. Perhaps you lack managerial experience or business experience. Perhaps it’s another aspect that can set you back. Being open and honest about this can help investors see you in a better light.

Then there are the opportunities and threats. You have given a great deal of thought to your restaurant concepts because you have identified a market opportunity. Perhaps no one fries bananas or roasts a steak as well as you do. You need to make these aspects clear to your audience. As for threats, these need to be identified as well. What if a new competitor enters the market? How will you deal with their presence and their potentially stealing some of your patrons away from you?

Each of these points and sub-analyses needs to be factored in to ensure that you demonstrate to lenders your thorough and thoughtful analysis and evaluation of the circumstances and environment in which you’ll be operating to ensure greater confidence in your restaurant concept.

4. Sample menu and restaurant design

The investors who you will approach will also want to know more about what your sample menu will be and what the restaurant design will look like. After all, these are the two most important deciding factors for a patron visiting one restaurant over the other. If the menu serves a wide variety of high-quality foods with ingredients that are organic or sourced locally, you will appeal to one demographic as opposed to another.

If the restaurant design creates an appealing atmosphere, the chances are that your patrons will keep coming back to you for more. Either way, you need to be able to demonstrate what you will be serving on the menu by also identifying the different ingredients you will be serving in each meal and using this opportunity to emphasise to lenders why your menu will make you stand out.

5. Technology, inventory and supplies

Running a restaurant is not an easy venture. It requires technology, inventory and a constant stream of fresh food supplies that are used optimally using the first-in-last-out principle. However, this is just the tip of the iceberg. You need to ensure that you have tables and comfortable chairs. All the crockery and cutlery need to be put in place. Your flooring, curtains and decor should be carefully thought out.

Not to mention all the equipment that goes into a kitchen. Stoves, burners, hobs, ovens, fridges, freezers and more. These are just a small list of the equipment you’ll need on hand to prepare your tasty dishes. In addition to this, there is also technology that needs to be thought of, too. For example, you may need an online restaurant reservation or booking system.

There are point-of-sale (POS) systems to consider as an ever-growing number of restaurant patrons prefer to pay the cashless way using a card. Each of these elements must be carefully presented to the lenders and you need to show that you’ve put in a lot of thought into your planning and preparation process.

Successful restaurant with great atmosphere

6. Marketing strategy

Your marketing strategy is another critical element of your restaurant business plan. This is what will draw attention to your restaurant in the first place and then sustain that awareness and momentum over the long term. As such, you will need to give careful thought to the following elements that are part of a marketing strategy:

Positioning statement

Your positioning statement, tagline or whatever you wish to call it will be what sets you apart from your competitors. It can be on your menu, in your signage or simply a part of your restaurant business’ vision and mission. Ultimately, you want to say what your concept is and what makes your restaurant stand out.

Target market definition

You also need to consider creating an ideal buyer persona for your restaurant. This is a fictional person (or more) which represents your ideal restaurant patron. What is their level of education? What levels of income do they earn? Where do they live? What problems will you be solving for them and how? Answering these questions can help you better understand the patrons walking through your door and when you know who you’re targeting with your marketing efforts, your lenders will look at your business concept more favourably.


Branding is a huge aspect of your restaurant business and it all starts with a logo and choosing a certain set of colours that you will stick to for years to come. This logo and your brand colours are what your customers will know you for and whether they see these elements on a social media ad or on a takeaway menu, they should be able to recognise your restaurant right away. But it’s not just about a logo and some pretty colours. It’s also about having a website that offers easy bookings, displays your menu and even indicates when (and if) any special events will be taking place at your restaurant venue.

Test your brand

You will also need to test your brand. But the trick here is not to test it on friends and family. They are likely to support what you have in mind. You need impartial strangers who can give you their honest opinion before you start printing your new logo on every menu possible.

Marketing to drive traffic

Another important aspect of marketing is driving traffic to your website or to certain promotional landing pages. This can be done through blog articles, social media posts (organic or paid), paid ads, and more. Leveraging social media to drive traffic through promotions, discounts, special offers or a charity event can help ensure that lenders are confident in your ability to promote your restaurant business as it takes off.

7. Management team, employees and service providers

In your business plan, the next section should consist of the management team, the front- and back-house staff as well as any external service providers you plan on using to ensure the success of your restaurant. For the management team, you can emphasise what skills and experience each member brings and what their role will be as well as why they are well suited for it.

The employees of your restaurant are essential to ensuring that you run a smooth ship and outlining how many employees and what their roles will be will also show careful foresight and planning. As for the service providers you will be working with, you may consider including outside contractors that you will rely on for assistance including: accountants, attorneys, architects, designers, PR and marketing specialists and others.

8. Financials

The financial section is by far the most important one of the entire business plan and you should consider working with an accountant or a financial specialist to help you create a strong subsection that outlines your financial projections over the short, medium and long-term as well as what realistic data these projections are based on. Furthermore, you will need to present a break-even analysis, a capital requirements budget as well as a pro forma profit and loss statement.

Presenting your restaurant business plan

And voila! After all the hard work that you’ve put into your restaurant business planning, it’s time to present it to investors and/or lenders. Remember that the more thorough and detailed your restaurant business plan is, the better outcome you are likely to have. Also, be prepared to know every single detail of your business plan like the back of your hand in the event that you are asked any questions to clarify any aspect of the document.

In conclusion…

As you can see, creating business plans for a restaurant can seem like quite an overwhelming task, especially with all the different sections and subsections, data, information and research that you have to do to compile this important document. However, once you’ve prepared it, you will always be able to adapt and amend it as necessary and as your business needs change. The most important thing to remember is that your restaurant business plan is not just to help you visualise and better predict what type of success your business may experience. It’s also about convincing others that you’ve done your due diligence to help support you in your restaurant journey ahead.

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