Every business needs a business plan. It may not be the first thing you think of when branching out on your own, but it’s an essential step towards success. If you haven't created a restaurant business plan yet, it's something you should already be considering today.
By the way, if you’ve already opened your business, or are simply in the middle of an upgrade, it’s not too late either. In fact, it’s rarely too late to start planning ahead.
In this post we’ll look at:
- The importance of creating a restaurant business plan
- The plans’ structure and what you should include
- How detailed you should be
The importance of creating a restaurant business plan
A business plan has two main purposes.
The first is that it helps you spell out your goals, as well as the steps you need to take in order to achieve them. This includes short-term aims and actions, as well as long-term objectives. Maybe you want to have the best sandwich shop in town, or maybe you’re aiming to launch a brand with restaurants across the country.
You could think of a restaurant business plan as a blueprint or roadmap to running your restaurant business successfully. And like any other business plan, it should be as detailed as possible, covering all aspects of your business operations.
The other purpose of creating a restaurant business plan is to serve as your company’s resume. That is, it’s a useful document for attracting investors, partners and even bank loans.
Similarly, others use their business plan as a “guide” for employees and vendors. It helps them better understand the business, and encourages them to stay on-track in terms of your overall/mutual goals.
(By the way, if you’re not comfortable writing a business plan on your own, you can always hire a professional to help.)
The basic structure of a restaurant business plan
First of all, you should start with an outline. This will help you stay organized and keep track of what you want to cover. Then, you need to fill in each section.
Areas you definitely want to cover include:
1. Executive summary
This is a brief summary of your business. It should highlight things like what problem you are solving, how you will solve it, your target market, a bit about the founding team, and highlights of your financial forecast.
For instance, maybe your town doesn’t have a cafe that sells coffee drinks made with oat milk, despite the growing interest with local teens and lactose intolerant adults. You (a diehard oat milk enthusiast) want to open a drink shop and fill that void.
The executive summary should be short and engaging. Much like a movie trailer it’s meant to generate interest.
2. The opportunity: why there is a market for your restaurant
Now it’s time to get into the details of the problem you’ll be solving and how. This is primarily about filling a customer need, and the benefits customers will gain from your business.
For example, as a restaurant owner, you may have noticed there is no Mexican food in a 100-mile radius.
This is the place to show off your research. Write about this lack of eatery. Talk about what local tastes and culture are like. Bring your numbers on the popularity of Mexican food and its growing market. Finally, talk about the void you will fill for a hungry audience.
3. The execution: how you’ll turn these ideas into action
This section highlights how you'll execute your restaurant business plan. Use it to discuss your marketing plan, sales plan as well as other logistical questions.
For example, you’ll want to include things like:
- Where your business will be located.
- A list of the equipment you’ll need to get started.
- A list of equipment you hope to acquire in the long-term.
- The technology and services you’ll need, like special software for running your back office.
These are all part of the physical side of execution, or perhaps more accurately the tools.
Beyond that, however, this section should spell out your roadmap to success, including where you want your business to go, and how you envision getting there.
For example, maybe you’ll start with a limited menu and build as you become more popular. Or maybe you’ll focus on developing a few signature recipes that get your customer’s attention and spread via word of mouth.
Don’t forget to include metrics for success, so you know when you've achieved (or missed) your goals.
4. The financial details
While you don’t need to get into details like how much your business insurance will cost you here, you do need to get fairly specific if you want to attract investors and secure loans.
You will want to include your:
- Revenue/sales forecast
- Projected profit and loss
- Projected cash flow
Make sure to back up your projections with an explanation about the assumptions you’re making in the text. This adds to your legitimacy and helps you stay realistic. Using visualizations like tables and charts helps illustrate your points.
Also, if this section is seems really overwhelming, you can seek the help of an accountant to help you. You'll still need to fill in some information about how many customers you're expecting to serve and how much you're charging for your food and beverages, but they can guide you, ensuring your numbers are sound.
You may or may not want to include other sections if they provide important context for your business. For instance, you can include a market analysis summary, a management summary and appendix if you have anything extra to add.
Also, you might want to include a section on what sets you apart from your competitors or what factors you see are key to your success. These details are valuable, especially if you’re looking to attract investors.
For example, since the menu is critical to your success, you may want to outline your food type and your proposed menu. Similarly, restaurant design can draw in clientele, so you may want to include your details.
And if you’re not the chef, make sure to include his or her name in your management team. More so, you may want to include a bit about who you’re going to hire and how.
How much detail to include in your restaurant's business plan?
How detailed you want to be in each section of your restaurant business plan depends on how you’ll be using your plan and who will be looking at it.
For example, if it’s just for internal guidance, it can be fairly lean. However, if you’re using it to recruit investors, you may need to go into more details to demonstrate that you know your stuff.
Either way, it’s not a novel, so try to be concise, and clear. Also, you certainly don’t need to write each section in order.
For example, many people actually prefer to write the executive summary last, as it’s essentially a summation of all that’s been written. Others, prefer to write it first to give them direction. In other words, write it in a way that works for you.
What else to consider when running a restaurant
Writing a business plan is only one ingredient that will help determine your success. This is a competitive space, and the recipe for longevity is a complicated mix. So what else will you need?
We certainly recommend restaurant insurance to help you out and protect the investment you’ve poured your time and energy into. We know there are hundreds of things to keep track of when you run a food service business, so NEXT Insurance has designed policies to take some of those worries off your plate.
Insurance like general liability, workers' compensation insurance and other coverage allow you to focus on managing your business, knowing that you don’t have to pay out of pocket if an accident happens. It only takes about 10 minutes to get covered and then you’re back to following the solid business plan you’ve created.