If you're thinking of opening a restaurant, you need to understand that having a plan in place is the number one priority. A business plan is just one of the many moving pieces involved in opening a restaurant. It can all look a bit complicated and you may be unsure where to start but thankfully we're here to lend you a helping hand.
Here is what you need to know about writing a restaurant business plan.
A high-level restaurant business plan should include these 13 things
- Branding, Name & Vision
- Design Concept
- Menu Concept
- Operational Structure
- Restaurant Technology
- Service Style
- Market Research
- Demographic Research
- Location Details
- Marketing Plan
- Launch Plan & Timeline
- Consultants & Specialists
- Financials & Funding
Let's break each section down to take a closer look and bring you one step closer to the restaurant opening of your dreams.
1 - Branding, name & vision.
It’s important to lock in on a concept for your restaurant as soon as possible. The starting point will be to establish your branding, name, and vision. Having a strong brand is crucial to the success of your business plan, and ultimately your restaurant once it opens. Rather than getting swallowed up in the sea of competitive space that is the restaurant industry, a strong restaurant brand will ensure you stand out amongst the others.
Your unique restaurant brand will be one of the most valuable elements of your business, which is why it's essential to hone in on this concept early on. Not sure where to start? Here's a step-by-step look at how to build your restaurant brand.
Starting with a mission statement.
There should always be a story behind your restaurant that explains why you decided to enter the industry in the form you did. The process of telling your story comes through the development of additional crucial elements like your values and your mission. To break it down even further, you can begin your story by asking yourself the following questions:
- What is your restaurant?
- What is your restaurant going to do?
- Why is your restaurant going to do this?
- What goals would you like to accomplish?
- How do you plan on achieving these goals?
Position yourself in the market.
Your mission statement is essentially the "why" behind your business. Once you've defined your purpose, you can move on to the "what" and "where”. This process is known as brand positioning and helps to differentiate you from your competition. To begin, you'll need to narrow down your options regarding these four elements:
- Place
- Product
- Price
- Promotion
Developing your voice.
Developing your brand voice will involve establishing the "how" for your business. This section describes how you plan to communicate with your prospective audience. Think of your brand as an individual—what type of voice would it have in the world? Here's an excellent way to gain perspective:
- Describe your brand using three descriptive words.
- Expand on each word.
- Begin to understand the personality of your brand
Developing the design.
In the age of the internet, appearances are everything, so you want to make sure you take particular time and care in developing the overall look and feel of your brand. The face of your brand goes well beyond the signage on the exterior or a printed logo on your menu. You want to make sure your guests can feel the experience as much as they can see it. Mood boards are a great way to spark your creativity and begin planning this out.
Creating a brand book.
Consistency is vital, and especially so when it comes to branding. You want to make sure that all of your business's branding is consistent, including all online and offline content. In your brand book, you'll want to make sure you cover:
- Do's and don'ts of speaking with media
- Acceptable photos or designs for promotions
- Fonts and typefaces for logos, menus, and other designs
Remember that developing your restaurant brand will be challenging at first but will help to ease the rest of the process along the way. Your brand will be your compass, your guiding light, ensuring you stay on course and remain authentic to your vision, values, mission, and purpose.
2 - Design concept.
Restaurants provide diners with so much more than a simple meal on a plate. The ideal dining experience should provide an entire vibe, including your interior and menu design concepts. Your design should help your restaurant to stand out from the competition and also draw your customers back time and time again. Check out our menu concept article here for more details.
Even before your target market has an opportunity to hear or read anything you have to say about your restaurant, it's the appearance of your brand that will capture their attention. Understanding the impact of your design concept will help you in the long run, which is why creating vision boards can be incredibly helpful throughout the process.
Using a combination of vision boards and the general personality guidelines of your restaurant, the pieces will begin coming together on their own. Even better, you'll be able to take your concept to your graphic designer to help convey the story of your restaurant to them.
3 - Menu concept.
Another crucial element to your restaurant business plan will be your menu concept.
Check out more on how to create a menu concept in our article here.
While you don't have to have all of the details ironed out at this point, it's essential to understand that your concept includes much more than the food you plan on serving. When it comes to designing a restaurant menu, don't forget these crucial steps in the process:
- Deciding on a menu concept.
- Choosing your ingredients.
- Checking out your supply chain.
- Costing out your dishes.
- Visualizing all the details.
- Deciding on a menu design style.
- Running a test kitchen.
4 - Operational structure.
Determining your operational structure is another aspect of your restaurant business plan that should be well thought out. The operations structure of your restaurant will not only anticipate your business demands but should help you to begin costing out each position. Some of the positions you might need to include would be:
- Restaurant General Manager
- Executive Chef
- Sous Chef(s)
- Manager(s)
- Front of House Staff
- Servers
- Bartenders
- Hosts
- Back of House Staff
- Line Cooks
- Prep Cooks
5 - Restaurant technology.
In today's world, restaurant technology is no longer a luxury item but rather a necessity for optimizing performance. Technology can play a role in nearly every aspect of your restaurant, so it will be up to you to prioritize its best fit. For example, a small coffee shop might not require such extensive technology as a three-meal restaurant. Then again, if it's a part of your dream, your business plan is the place to help make it become a reality.
Here are some of the restaurant technology resources you might want to consider for your business:
- Point of Sales (POS)
- Hiring and Onboarding
- Workforce Management
- Scheduling
- Payroll
- Inventory Management
- Reservations
6 - Service style.
Different service styles impact your guests, but they will affect the back end of your restaurant as well. Carrying out the design and scope of your restaurant, your service style will also impact the payment structures of your operation.
Fundamentally, the four most basic service styles in a restaurant are:
- Fast Food or Quick Service
- Fast Casual
- Casual
- Fine Dining
Remember that whatever service style you decide on, it should seamlessly align with your brand. If you're not sure how you can stand out, take a look at competitors in the service style you have chosen and see if you can do things better.
7 - Market research.
Opening a restaurant comes with a lot of research—and not just about food, vendors, and staff. Restaurant owners need to conduct a wide range of market research to help better understand the current business situation in the area.
Some questions you might want to ask yourself and find the answers to are:
- What are competitors in your niche selling or making?
- Are your competitors busy?
- What are your competitors doing well?
- What can your competitors do better?
8 - Demographic research.
In addition to researching the market, you'll also want to get an idea of who your target market is and how to approach them more effectively. Identifying this early on is crucial in developing your voice and understanding how to reach your audience more effectively.
Here are some tips on research points when identifying your target demographic:
- Vegetarian/vegan eating preferences
- Age group
- Families
- Average household income
9 - Location details.
Finding the right location for your restaurant is no easy feat, but with a decent amount of research under your belt regarding the market and demographic, you should be able to find a location best suited for your restaurant.
Additional factors to consider when looking into your location might be the price differences between renting, leasing, or owning your property. Look into the commercial real estate side of things and see what makes the most sense for your budget, both short-term and long-term.
10 - Marketing plan.
Developing your marketing plan will look very similar to your business plan, with details more specifically honed in on your marketing efforts. To be able to draft your marketing plan, though, you'll need to keep critical items, like your business plan, budget, and priorities, close at hand.
Here's how you can get started:
- Solidifying your brand.
- Reminding yourself of your target audience.
- Performing a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis.
- Defining your market differentiators.
- Crafting your pitch.
- Prioritizing your marketing objectives.
11 - Launch plan and timeline.
Every solid restaurant business plan should have an appropriate launch plan and timeline associated with it. In this timeline, you should be detailing how you will spend the time leading up to your opening day.
There is no one-size-fits-all for launch plans and timelines, but here's a generalized timeline to help get you started. This particular timeline is broken down into weeks and begins 12 weeks before opening day.
- Permitting, Construction, and menu development.
- Branding, security, and corporate identity.
- Tending to back-of-the-house needs.
- Tending to front-of-the-house needs.
- Handling small wares.
- Developing relationships with vendors.
- Bringing on staff.
- Implementing technology.
- Promoting and training of staff.
- Additional training and tasting menu.
- Adding initial inventory.
- Launching a soft opening.
- Opening day.
12 - Consultants and specialists.
Restaurant consultants and specialists can help in a wide range of areas of the opening of your business. Part of your restaurant business plan should include whether or not you plan to seek additional help from these outside sources. If you are unsure of whether or not these services are necessary, take a look at some of the areas of expertise they can cover:
- Franchising
- Selecting property and location.
- Establishing efficiencies in hiring and training.
- Developing menus and pricing.
- Planning finances.
- Aiding with accounting services.
- Designing branding and concepts.
13 - Financials and funding.
To wrap up your business plan, you'll need to touch on the financials and funding side of things. Generally speaking, you can anticipate the average cost of a restaurant startup in a rented building to be just over $3,000 per seat or $275,000. Alternatively, as an owner of your building, the average opening costs increase significantly to $4,000 per seat or $475,000.
Since you will be opening a restaurant, you will incur many one-time costs that can be pretty costly. These costs might include a rental deposit, purchasing equipment, or ordering tables. Additionally, you'll have to account for ongoing expenses of the operation of your restaurant—things like rent, payroll, and utilities.
Funding
Thankfully, you don't have to front all of the opening costs alone. There are countless restaurant financing options to consider.
Here are some of the more popular options worth researching further:
- Loans from family and friends.
- Purchase order financing.
- Equipment financing.
- Commercial real estate loans.
- Crowdfunding
- Business line of credit.
- Merchant cash advance.
- Small Business Administration (SBA) Loans.
- Alternative Loans.
- Brick-and-Mortar Bank Loans.
Conclusion.
It's no surprise to find that if you are thinking of opening a restaurant, you need to crack down on the development of your restaurant business plan. With so many moving pieces involved in opening a restaurant, having a solid business plan can help keep you on the right path towards achieving your dreams!
