This is part of our series entitled, "How to Write A Business Plan." Each entry will offer detailed suggestions of what to include in a business plan for a particular business. We also suggest you take a few minutes to read our "How to Write An Effective Business Proposal" white paper, which outlines the objectives, goals and tone you all business proposals should aim for.
Business plans are an essential starting point for any successful business. Your completed plan will serve as the primary document you submit to potential investors. Additionally, composing an effective business plan will help you define your company and its goals, thereby keeping you focused on your brand which will save you money.
While business plans vary considerably depending on the type of business you hope to create, it is important to remember that each plan should clearly outline the identity of your business (who are you, what goods/services will you offer, what makes your business unique? What, in other words, is your "brand?"), identify the need or demand for that businesses services and/or products, and detail how your business will succeed financially.
A business plan for a restaurant should include the following:
Here you will outline the basic information of your restaurant. What kind of food will you serve? How big will your restaurant be? Where will it be located? What experience do you have in this industry? How and why will it succeed, financially?
Your executive summary should touch on all of the major points you'll elaborate upon in the remainder of the proposal. Think of it as your first chance to sell your business to a potential investor. You need enough specifications to prove you're well informed and have a legitimate chance to succeed, but not too much detail that your reader loses interest. The executive summary should be roughly 500 words.
The remainder of the plan should expand upon each of the points you make in the summary. Remember, if an investor is reading past the summary they're likely intrigued. Here is your chance to win them over with the proper research and framing of your business.
What kind of food will you serve? What is the philosophy of your restaurant? How will you source ingredients? What is the price point of your menu items? What kind of service will you offer (i.e. are you a fine dining restaurant? Will there be table service at all? etc.).
It is imperative to mock this up exactly as you envision your future patrons encountering the menu in your restaurant. This will allow you to approximate a portion of the experience you imagine creating in your restaurant for your potential investor. A sample menu also gives you the chance to demonstrate the creativity of your menu, further detail the identity of your brand, and show specific iterations of your restaurant's philosophical approach to food.
What will your restaurant look like? It's a good idea here to include visuals. This can be anything from professional renderings of the space, or something more abstract like a mood board. Be sure to think about the physical space of the restaurant. Will it, for example, have an open kitchen that enables guests to watch and interact with the chef and cooks? Will your food be cooked on an open fire, or in a wood-fired brick oven? Or will all food preparation be hidden from patrons' view?
Who are you? What are you and your teams' work experience in the restaurant business and related fields? What specific jobs have each of you held and how have those afforded you the skills and knowledge necessary to run a successful restaurant? How together, do your team's skills address all of the demands of a restaurant?
You don't need to have a specific address to know the neighborhood or district in which you'd prefer to open your business. Where are you looking? Why? A key here is not to assume your investor knows your area. Explain your desired neighborhood and location.
Who are your customers? How old are they? How much do they earn? What do they do for a living? Is it a family restaurant (make sure you've considered how is this is reflected in the design)? What evidence do you have that your desired customers live and patronize restaurants in your preferred location?
Think both micro and macro here. How are other restaurants doing in that area? How will your business replicate the success, or avoid the failures, of your competitors? Regarding macro-level market analysis, what is happening at the city or regional level that points to increased investment and economic activity or stability in your targeted district?
You should provide detailed plans for and examples of how you will market the restaurant both before and after it opens. How will you attract first time customers? How will you continue to bring new customers through the doors? Are you using a PR or marketing firm? If so who? If not, explain how you will do it yourself—website, social media, etc.
We highly recommend you hire an accountant with extensive restaurant experience. Once you've done so, you should work with them to calculate how much capital you need to get the business off the ground and how much cash-flow you require to keep it running long-term.
Just about all restaurants lose money for the first year or two, so you also need a detailed plan explaining when you will start turning a profit. Don't be overly ambitious here, your investor is no fool. Instead a conservative and realistic timeline will demonstrate you're thinking practically and long-term about this business. This financial projection should include:
Are you working with a law or accounting firm? Restaurant or menu consultants? An interior design firm? Do you have relationships with general contractors for construction needs? etc.
If, for example, you're a co-op, explain how it will work. If not, what are the specifics of your business structure? Note: If you do not know the answer to this question, be sure to hire an attorney to help set this up.