Let’s start off with a familiar story about Joe.
Joe’s an existing restaurant owner and already has two locations. But, he wants to open a few more. Friends have told Joe he should definitely create a restaurant business plan this time.
But Joe has no clue how to write one. And to be honest, he’s not entirely convinced he wants to spend time learning how. After all, he’s already managed to open locations without one.
Plus, he now has loads of experience and knowledge. Writing a business plan seems like a complete waste of time.
Why Even Existing Restaurant Owners Need a Business Plan
Joe’s friends are quick to point out that opening those first two locations was a big struggle because he didn’t have a business plan:
He was often stressed because he wasn’t clear on his concept, target market, and restaurant operating procedures. He was also making marketing and financial decisions on the fly. A business plan would’ve given him a blueprint to follow, reduced his stress, and helped him move along smoothly from the start.
Finding the funds was also a painstaking process. Again, a business plan would’ve sped up the entire process and given investors greater confidence in his vision. Having data, financials, and a plan would’ve allowed investors to see that he had thought his concept through, his business was viable, and he wasn’t just winging it.
Joe knows his friends are right, but he’s still confused: “How exactly do I write a business plan?”
If Joe’s story sounds familiar, or you’re just genuinely finding it hard to create a business plan, then you’re in the right place.
This post highlights eight essential elements you should include in any restaurant business plan and provides 12 tips to help you write yours.
The Key Elements of Any Good Restaurant Business Plan
Let’s get started with the basics.
1. Executive Summary
This summary, usually located right after your table of contents, provides a one-page overview of your entire business plan. This overview outlines your main idea and how it will work. It also lists any business partners and, if you’re targeting investors, details the funding requirements.
2. Business Overview
Your business overview is a page you can quickly reference if you’re approaching investors or need a bank loan. It includes a short summary of the technical details of your business.
These details include your legal name, trade name, contact number, mailing address, business number, nature of your business, and date of inception.
Want to learn more about this section?
3. Business Description
Here you’ll describe your business in detail by providing information on the following:
Business structure. Is your restaurant a sole proprietorship, partnership, or something else?
Concept. Define your concept and what makes it unique compared to other restaurants. Be clear on whether your restaurant is a full-service restaurant, family-style concept, fine dining restaurant, and so on.
Mission statement. This statement describes what you do for customers, employees, and owners. It also clarifies what you offer your target market (your ideal guest).
Short and long term goals. What are your plans for year one? And after that? A goal may include opening more locations.
Menu services. Include a sample menu in your business plan and explain the inspiration behind the menu.
Location. If you haven’t secured a location when you start writing your plan, still mention the areas you're considering.
4. The Marketplace
Where does your business fit in the competitive landscape? In this section you’ll clearly define:
Your target audience. Include both demographics and psychographics.
The market need you’re filling. Perhaps you’re a restaurant that satisfies customers' desire for vegan food. Maybe you’re a coffee shop appealing to millennials who crave coffee experiences.
How you’re filling that need. Using the coffee shop example, you may choose to provide guided tours of your roastery or host workshops on making coffee.
Who your competition is. This includes both direct and indirect competition. Research the market by visiting your competition, seeing how they do things, and pinpointing what you can do better.
Market trends. Find statistics to prove there’s demand for concept. For example, a simple Google search for coffee demand in the U.S. yields ample results.
List your competitive advantage, opportunities, and challenges. Start by looking at your competition and see where you fit in with the mix.
How will you attract and retain customers? Detail your positioning and, pricing and promotion strategies. Promotion strategies may include a mix of online and traditional media.
Want to learn more about this section?
6. Business Operations
How do you plan to run your business day-to-day? In this section, include details about:
Your team. Who will be working at your restaurant? If you haven’t filled any positions yet, simply list the roles that need filling.
Supplier relationships. List your suppliers across various categories like food, alcohol, cleaning services, marketing, payroll, and technology (POS).
Technology. Will you use mobile deliver apps? What about an iPad POS system?
Insurance. Ensure you follow mandatory insurance requirements and research any other special coverage you may need.
Licensing. Licenses you’ll probably require include a business license, liquor license, music license, sign permit, and food handler’s permit.
7. Financial Plan
How soon will you start making money? And how do you plan to manage your finances?
Your financial plan is arguably one of the most critical elements of your business plan. It helps determine how viable your idea is and shows investors whether your business is an attractive investment (or not).
Make sure you complete a financial forecast that includes four key areas:
To help you compile your forecast, grab a sample forecast on page 21 of our Ultimate Guide to Writing a Restaurant Business Plan.
8. Business Plan Summary
Your business plan summary ties your entire message together and usually includes a simple, “Thank you.”
Want the whole guide to restaurant business plans?
12 Tips for Writing an Amazing Business Plan
Now that you understand what key elements to include in your business plan, let’s look at 12 tips for writing yours.
1. Follow a Business Plan Template
Before writers start writing, they usually have a basic outline. Before builders build a house, they first consult a blueprint. Both the blueprint and the outline act as a template – a starting point – for their projects.
By following the same approach when writing your business plan, the entire process will be much smoother. Luckily for you, you already have that template from the eight steps we’ve listed above. Simply transfer them over to a word document and get started.
2. Create a Detailed Outline
Using the template, create an even more detailed outline. Make your way through all the sections of your business plan and jot down key points under each section. The idea here is to get your initial thoughts on paper.
3. Embrace the “Good Enough” Mindset
Transforming your idea into reality can be a challenging process. As you move through the sections of your plan, you may get stuck and have nothing to say.
If this happens, make a note to come back to it later and move on. You’re not aiming for perfect – good is good enough. You can always include more detail after you've done more research.
4. Research to Find Statistics and Inspiration
You will need to research to find statistics to back up your arguments, with specific sections requiring more research than others (e.g. the “Marketplace” section).
You can also use the research process for inspiration. Collect information that’s relevant, whether it links to online articles, newspaper clippings, or quotes you can use to inspire your writing.
You may even want to find examples of business plans online that will spark your creativity and give you ideas on how to better present yours.
5. View Your Business Plan as a Work in Progress
Writing a business plan takes time as you get a grip on the details and fine-tune your message. The length of time can vary from a few weeks to months – even years.
The key is to embrace this process and view your business plan as an ever-evolving document you can add to over time. Eventually, your plan will become clear, and you’ll have a final product.
6. Know Who Your Audience Is
Who are you writing for? Investors? Just you and your staff? Your audience will dictate the contents of your plan, the level of detail, and what language you’ll use.
If you’re writing for investors, your plan will need to be more detailed than if you’re writing for internal stakeholders. And because investors may have limited knowledge of restaurant terminology, avoid industry jargon and instead use plain English.
Want the whole guide to restaurant business plans?
7. Have a Rough Idea of Your Location
Choosing a location can be difficult, and chances are you won't have one when you start writing your business plan. However, attempt to at least pinpoint the area where your restaurant will be located.
Why? It will inform much of the information you’ll include such as who your competition is, what zoning laws apply, and approximate rent costs.
8. Be Clear on Your Restaurant Concept
When opening a new restaurant, you have many different concepts to choose from like a brewery, coffee shop, bistro, fast food chain or a full-service restaurant. You need to be clear on your concept before diving into the nitty-gritty details of your business plan, particularly the financials.
9. Use Visuals, Charts, and Tables
They say "a picture is worth a thousand words.”
Use images, graphics, tables, and charts to explain complex ideas, add color to your document – both literally and figuratively – and present specific information. Tables and graphs, for example, will help you present information with a lot of numbers in a format that’s easier to digest.
10. Summarize Each Section of Your Business Plan
After you’ve completed a section of the plan – whether it be the “Business Overview," “Marketplace,” “Financial Plan” etc. – write a short summary that highlights the critical details and key takeaways of that section.
11. Don’t Write the Business Plan Summary by Only Summarizing Sections
When writing the final business plan summary that ties together your entire message you may be tempted to summarize the various sections of your business plan. Resist this urge as it’ll lead to a boring summary that doesn’t drive action.
Articulate what makes you unique and why your business will work.
Once again ask for the required funding if you need an investor.
Say “thank you” to the reader to show that you appreciate their time.
12. Write Your Executive Summary Last
Because an executive summary summarizes your entire document, write it last – after you’ve covered all the details.
Writing a restaurant business plan is essential – even if you already own a restaurant. A business plan acts as a blueprint you can follow, reduces stress, and boosts investor confidence.
Of course, writing one can feel overwhelming if you have no clue where to start. But, it’s more than possible as long as you include the eight critical elements of any good business plan and follow the 12 tips above.
And remember, writing your business plan is a process. Embrace it. Chip away at it. One day, you’ll have a crystal clear plan to help you open yet another successful location.
Ready to start planning?
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