Try these tips to write the best business plan to win over investors and launch your restaurant the right way
A restaurant business plan is the most important ingredient for when you open a new restaurant. A roadmap to success, the business plan will outline the opportunities and potential pitfalls your new restaurant will face. Without it, you are unlikely to receive financing from banks, investors, and other sources.
Why Write a Restaurant Business Plan in the First Place?
Unfortunately, so many restaurateurs skip the step of writing down their restaurant business plan, especially when opening their second or third location. Putting pen to paper is too daunting, and instead of thinking out possible scenarios for their new restaurant, they rush to open the doors as fast as possible and bring in new patrons. Here’s why that’s not a good idea:
1) When you don’t think through how you’re going to market your new restaurant, what your customer service policies are, or how the organization will be structured, this will create a lot of stress for you 2-3 months down the line as you develop new procedures. Rather than working “on” your restaurant, growing and expanding it, you’ll be working “in” your restaurant. With a restaurant business plan, you’ll have a blueprint with training, procedures, and analysis to succeed.
2) Without a restaurant business plan, you will have a hard time finding capital—be it from banks, venture capitalists, or even friends and family. Investors need to know that you have thought this business idea through and have the answers to potential problems you will face. Only then will wise investors consider funding your venture. Not only do you need to map out your business operations structure, but you also need to include data and analysis to show why your restaurant will be profitable in the long run.
Build a Better Restaurant Business Plan
Before you start writing your restaurant’s business plan, take a deep breath. Use mind mapping software to visualize your ideas, create an outline, and if possible, start with a business plan template to save time. When you’re ready to start, here are the essential components of a restaurant business plan:
The executive summary acts as both the introduction to and the summary of your entire idea for this new restaurant. This section should present a complete and concise summary designed to catch the reader's attention and entice him or her to explore the rest of the plan. An executive summary includes things like the mission statement, proposed concept, execution, overview of potential costs, and anticipated return on investment.
A clear, convincing, and catchy executive summary is crucial to securing investors. If from the first few paragraphs they don’t see potential in your business, their decision may already be made. Be sure to cite reasons for success and attractive numbers, but save the full explanation for the body of the business plan. Leave investors wanting to know more about your company by assuring them that reading about your restaurant is worth their time (and ultimately their money).
The company overview introduces information about the ownership and management structure, location, and business concept. Outline the vision for the customer's experience. Describe the brand. Identify the service style, design, layout, general theme, and unique aspects of the overall concept.
The industry analysis section should describe the existing market in the specific location or area in which you plan to open the new restaurant. This section could cover things like the growth of the local economy and restaurant industry, infrastructure projects, nearby business and residential areas, and average traffic counts in the area.
The competitive analysis section should explain the existing landscape of restaurants in the area, especially restaurants with similar concepts. Investors will want to understand what about your new restaurant will give it a competitive advantage. In this section, include a competitive matrix comparing your restaurant to others with pricing, hours, meal ideas, and seating.
The marketing plan explains your marketing strategy, including tactics, such as public relations, advertising, social media, loyalty programs, and more. It delves into how you will promote the restaurant before opening, and how you will build an engaged customer once the business is operational.
The business operation section should paint a picture of how the restaurant will operate day-to-day once it is operational. Outline exactly who your food vendors will be, how you will track sales and inventory including what point of sale you will use and why, as well as any other restaurant tools you will be using. Also outline your restaurant staffing plan (who will you hire first and why?), as well as your training plan (what checklists will certain managers have to follow every day?).
The financial analysis is often the final section of your restaurant business plan, and the meatiest. Investors expect to see a breakdown of how you plan to spend their investment in the first year. Include projected revenue, anticipated costs, projected profit and loss statement, and expected cash flow. You could even go as far as to create a break-even analysis, outlining how long it should take before you will break even on their investment.
Everything you lay out earlier in the plan is a prelude to this, and will mean nothing if this section doesn’t back up the claims of success you have made. Without a convincing financial forecast, you will lose a lot of faith from potential investors!
Start with a Restaurant Business Plan Template
A restaurant business plan template can save you time and money when starting your next restaurant. The template will act as a guideline when writing, giving tips and tricks to make sure your plan will wow someone into investing in your restaurant. Plus, you can edit the template directly, adding your specific restaurant’s name and specifications, without having to worry about design or layout.
Download your free restaurant business plan template and get started today.