When you’re working through the process of opening up a new restaurant, a business plan is a must. Simply put, a restaurant is a business like any other kind of enterprise, and restaurant owners benefit from coming up with a detailed and professional restaurant business plan.
Writing a restaurant business plan helps to improve your chances of success. It gives you a road map to follow as you set out to offer table service day in and day out.
A good restaurant business plan has several key components including how the restaurant is supposed to compete and how it should be managed financially.
Let's look at some of these key components of a restaurant’s business plan.
Think of the executive summary as the top-level component of the restaurant business plan – a “read me first” consolidated resource to start off with, when crafting a more detailed plan.
You'll want to include things like your restaurant’s mission statement, location, and timeline. In terms of market analysis, a little summary will be helpful, but you'll get into more details later on in your plan document.
Additionally, you should gather a list of expected costs, predicted financial outcomes, stated goals, and objectives for the executive summary.
Most people will read the executive summary of your business plan first, so it's pertinent to have concise and clear information.
In writing your company description, think about your restaurant as its own commercial enterprise. Include elements like:
- Restaurant theme and market
- Overview of menu items
- Customer base
- Staffing details
- Notes on how day-to-day operations will work
Some people describe the company as an “executive summary 2.0” – in other words, you're taking some of the brief information in the executive summary, and expanding on that a bit.
Concept and Menu Section
This is an opportunity for your food and drinks to shine.
The concept and menu section of the business plan will address style and décor, but menu planning is front and center. The menu embodies your restaurant and what type of food visitors can expect.
Decide if your restaurant should be fine dining or casual. With new delivery services taking over, it’s important to consider whether take-out and delivery will be included in your business.
Management and Ownership Structure
In the management and ownership structure segment of your business plan, you talk to the “bean counters” about legal setup and how this enterprise is going to look on annual tax filings.
Some restaurants register as a sole proprietorship, where one person is formally in charge. Others use things like an LLC to allow investors to co-own and co-manage a food service business.
Employee and Staffing Planning
In any business plan, employee and staffing strategy is key because good staff will drive the commercial kitchen’s success.
Think about the personnel that the business is going to need in the kitchen, out front, and behind the bar. Be sure to address both front and back of the house models separately and in detail.
Employee and staffing planning also addresses models of compensation and talent recruitment strategy. You can call this section “restaurant human resources.”
Remember that restaurants (like other businesses) are driven by people!
Market and Competitor Analysis
Ask yourself this question: how will my restaurant compete in the marketplace?
It starts with a detailed customer profile – age, income level, and family status may be important to know about your desired target audience. Use this profile to come up with market research that works.
Now that you have your customer profile, create one for your competition too! What already exists in a given neighborhood? What will the restaurant do to make its offerings unique? This is also known as “competitive analysis.”
Going back to the idea of take-out and delivery, the ability to order online will position your restaurant to compete well with its competitors.
Marketing and Advertising
A marketing and advertising plan included in your restaurant business plan will detail marketing campaigns and how branding is used to position your restaurant for success.
Once again, pay attention to the newest trends and technologies in the restaurant market. In many cases, modern restaurants use some form of social media to act as part of advertising for their overall brand. The more awareness your restaurant has on social media, the less it has to do with advertising costs.
Although a lot of the business financial planning has already been addressed in the above modules, be sure to include information on startup capital costs – what you'll need to get started, including all kitchen gear and equipment. It can also include a break-even analysis or spell out different kinds of financial scenarios that might require a quick pivot or adjustment as the restaurant business offers its services to the community.
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