How to Write a Business Plan for a Restaurant Business
If you have not written a business plan before, or have the seen the templates, it is a dauting task. A business plan could easily become 50-70 pages long. In our startup and small business consulting firm, we start with a business model canvas (BMC) first. Once our entrepreneurs graduate the BMC framework, then we kick off the Business Plan (BP) route. By this time, our clients understand the fundamentals and also appreciate the depth the of BP.
Read: Primer - What is Business Plan and How to Write it
Read: Primer - What is a Business Model Canvas (BMC) and its Purpose
Key Strategic Question to Ask before Writing a BP for a restaurant:
There are a few things to consider when creating your business plan for a restaurant. First, you'll need to decide on the concept for your restaurant. Will it be a casual eatery or a fine dining establishment? Once you've decided on the concept, you'll need to choose a location. Keep in mind that the location of your restaurant will play a big role in its success.
After you've chosen a location, you'll need to start thinking about the menu. What type of food will you serve? Will you offer breakfast, lunch, and dinner? Or will you focus on just one or two meals? Once you've decided on the menu, you'll need to start developing recipes. If you're not a experienced chef, you may want to hire someone to help you with this task.
Once you've got the concept, location, and menu figured out, it's time to start working on the financial model. This is where you'll need to estimate your start-up costs, operating expenses, and projected revenues. Start-up costs can include things like the cost of leasing a space, outfitting the kitchen, and purchasing supplies. Operating expenses include things like food costs, labor costs, and marketing. And finally, projected revenues will depend on things like the number of customers you expect to serve and the average check size.
Read: Business Model and Business Strategy: Telling a story using VARS framework
Scenario: A Business Plan with a high level financial model for a restaurant in Austin, TX
Executive Summary:
The restaurant will be located in Austin, Texas. The cuisine will be a mix of modern American and Tex-Mex. The target market is college students, young professionals, and families. The restaurant will be open for lunch and dinner. The mission of the restaurant is to provide a casual dining experience with fresh and innovative dishes at a reasonable price.
Description of the Business:
The restaurant will be a casual, full-service eatery serving lunch and dinner. The menu will feature a mix of modern American and Tex-Mex cuisine. The restaurant will have a full bar with a focus on locally-sourced beers and wine.
Market Analysis:
The target market for the restaurant is college students, young professionals, and families. Austin is home to a large number of colleges and universities, making it a prime location for a restaurant targeting this demographic. In addition, Austin is a rapidly-growing city with a young population, making it an ideal location for a restaurant targeting young professionals. Families are also a significant part of the Austin population and are an important target market for the restaurant.
Competitive Analysis:
The competitive landscape in Austin is extremely competitive, with a large number of restaurants competing for market share. However, the restaurant will have a number of competitive advantages, including its location, menu, and price point. The restaurant will be located in downtown Austin, near a number of colleges and universities. The menu will offer a unique mix of modern American and Tex-Mex cuisine. The restaurant will also have a competitive price point, offering reasonably-priced meals.
Read: Primer - Competitive Intelligence (CI) - Why its Critical for a Firm Success
Management and Organization:
The restaurant will be managed by a general manager (GM). The GM will be responsible for the day-to-day operations of the restaurant, including overseeing the staff, ordering supplies, and managing the budget. The GM will report to the owner. The staff will consist of a head chef, sous chef, line cooks, servers, bartenders, and busboys/bussers.
Products and Services:
The restaurant will serve a mix of modern American and Tex-Mex cuisine. The menu will feature a variety of appetizers, entrees, and desserts. The restaurant will have a full bar, with a focus on locally-sourced beers and wine.
Marketing and Sales:
The restaurant will use a mix of marketing techniques to attract customers, including print and online advertising, direct marketing, and public relations. The restaurant will also offer promotions and discounts to generate interest and drive traffic.
Once you've got the concept, location, and menu figured out, it's time to start working on the financial model. This is where you'll need to estimate your start-up costs, operating expenses, and projected revenues. Start-up costs can include things like the cost of leasing a space, outfitting the kitchen, and purchasing supplies. Operating expenses include things like food costs, labor costs, and marketing. And finally, projected revenues will depend on things like the number of customers you expect to serve and the average check size.
Financial Plan:
Funding Sources:
- Owner investment: $100,000
- Small business loan: $50,000
Start-up costs:
- Equipment: $50,000
- Supplies: $10,000
- Marketing: $5,000
Expenses:
- Rent: $5,000 / month (mon)
- Utilities: $500 / mon
- Payroll: $12,000 / mon
- Supplies: $1,500 / mon
- Marketing: $500 / mon
Revenue:
- Lunch sales: $6,000/day or $180,000 / mon
- Dinner sales: $8,000/day or $240,000 / mon
- Other sales: $2,000/day or $60,000 / mon
Assumptions:
- Lunch customers: 200/day or 6000 / mon
- Dinner customers: 300/day or 9000 / mon
- Other sales: 20% of total sales
- Food cost: 30% of total sales
- Labor cost: 20% of total sales
Summary:
Creating a business plan with a financial model can seem like a daunting task, but it's important to put the time and effort into it. A well-thought-out business plan will help you secure the funding you need to get your restaurant up and running.
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