How to write a restaurant business plan (2023)

Here's the truth about opening a restaurant. According to his studyCornell University, over 26% of independent restaurants do not survive the first year and nearly 60% fail in the third year. That's why creating a solid restaurant business plan is so important. This can give you a chance to concretely structure your thinking and evaluate your ideas from a higher perspective before spending a single dollar.

While there are no guarantees in life (and especially in business) with a little preparation, training and guidance, you can avoid many of the pitfalls that set others up. In this article, you'll learn how to get started writing a restaurant business plan—and how to get training that can help.start your own catering business.

Define your business idea

A business plan should start with a basic conceptual overview. Where did the idea for your restaurant or food business come from? And how is your idea unique compared to what else is currently on the market? Who is your target market and what (generally) will you serve them?

Think of the idea as a bird's-eye view of your business.

You can also include a shipping statement in this section. It will be one or two short sentences that describe the value the company provides to customers and employees and can set an inspiring goal. A good example isThe Kitchen American Bistroin Boulder, Colorado, which has the following mission:

“We believe in the power of good food and good drink to connect people as family, friends and community. The Kitchen remains committed to our mission of creating community through food.”*

Articulating the big picture as a stated mission gives your business depth beyond making money. Using this as a guiding principle, it will be reflected in your marketing, operations and the behaviors of those who join your team.

Do a market analysis

Where will your proposed restaurant fit into the overall food service market? Is there an unserved position in your area? Or will you be competing with established companies? And if so, how will your concept stand out?

Everything from local factors like a lack of competition to national factors like a booming economy can make or break your restaurant. A market analysis can help you assess the challenges and opportunities you will face when you open your doors.

Food entrepreneurship at Escoffier

Discover more details on many of the topics covered in this Escoffier articleFood Entrepreneurship Programs. The Culinary Entrepreneurship course explores specific topics such as business planning and getting started with writing a business plan.

Describe your service style

Will your restaurant have good food? meter service; An all-day cafe with waiters? A buffet? Outdoor brewery?

Make sure it is clearly defined. If your service style is simple, you can include it in the concept section. But if it's more complex, it might warrant its own section in your business plan. For example, you might plan to offer a raised table with several well-thought-out touch points. You'll want to make it very clear what that will be like.

Your service style will have a direct impact on your staffing levels, which will affect your labor costs. That's why it's vital to include this information and related cost estimates in your business plan.

How to write a restaurant business plan (1)

A full service wait staff like this will cost more than a polite front desk staff.

Create your sample menu

ONEgreat restaurant menuspecifically designed to appeal to its target market while staying true to its concept. Even if you're not 100% sure what your restaurant's final menu will include, create a sample version of your business plan.

The menu is your product and will affect everything in your restaurant, from the cost of the food (usually between 25% and 35% of the menu price) to the number of cookers you need to the layout of your kitchen.

You should also price this menu to see if it can be served at a price that suits your target audience. A family restaurant with a $20 hamburger, for example, creates a disconnect between the target market and the menu price.

How to write a restaurant business plan (2)

The science behind menu design

Creating and designing a menu can be complicated. You have to balance the art of making good food with the practicality of food and labor costs. In Escoffier's Food Entrepreneurship programs, students can explore topics such as visual design and price analysis.

Determine the design and installation location

Once you have a sense of your concept and menu, you can start planning what your restaurant will look like and where it will be located.

The kitchen is the most expensive part of a restaurant's total cost. And every square meter occupied by the cooking area is a square meter that cannot accommodate customers. Industry wisdom holds that a kitchen should be in between25% and 30%of the total restaurant space – including storage. Therefore, you need to design your kitchen as efficiently as possible.

In the dining room, you will need tables and chairs, possibly a booth and maybe a bar. You might have plans for artistic, custom lighting or a state-of-the-art draft beer tap system. Renderings from your architect and/or interior designer can help you show what you envision.

Includes all equipment,furnitureand supplies you plan to purchase for both the back and front of the house so you can estimate the cost of building your restaurant.

You will also need to decidewhereyour restaurant will be. This will affect rent, guest parking, foot traffic and even hours of operation. If you are in a business district, for example, you can choose to open only for lunch.

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Select the management team and define the needs of the team

A great plan without a great team is likely to fail. An important part of your business plan is to define the various roles and responsibilities of your managers and employees.

Depending on the size of your business, your plan may include an organizational chart that explains which position reports to whom, how many people you will hire, the key skill sets of the management team, and the unique things each employee brings to the table.

You can also highlight special achievements or accolades for managers you plan to hire, such as a senior general manager orchef with impressive credentials.

If you attend culinary school or enroll in a food entrepreneurship program, some of these team members may even be former classmates. After all, business is about relationships between people, and culinary school is a conducive environment for making those critical connections that can serve you well in the future.

Forecast your costs, revenues and potential profits

Anyone looking to start a food service business is likely to wonder how much the entire venture will cost and what the return on investment might be. If you've gone through all of these steps, you'll be well on your way to better understanding the fundamental costs of doing business and what you can do to help them become a profitable business.

Your business plan should detail the funding you'll need to get your business up and running, associated marketing and staff costs, and variable costs such as ingredients. Your business plan should be detailed enough to calculate profits and expenses for the first few years of your business to ensure your plan is financially viable.

How to write a restaurant business plan (4)

Monitoring the restaurant's profits

Profit margins for restaurants are relatively low compared to other businesses. A core course in Escoffier's Food Entrepreneurship Associate Degree curriculum explores management accounting concepts, culinary mathematics, and an overview of basic business accounting transactions, such as reading financial statements. He can explain the practical application of these concepts in the hospitality industry and how to manage costs for long-term profitability.

Create a marketing plan

The first steprestaurant or food truck marketingis to determine who your ideal customer will be. Are they looking for dates, family restaurants or group dinners? What do they like to eat? What are your wants and needs? You will target specific food profiles such asvegetarian, paleo or gluten free?

Once you know who your customers are, how will you reach them? Most likely, you will need to start a website, including location, hours and menu. You can also choose topromote your restaurant on social media, sharing photos and videos on platforms like Twitter, Instagram, TikTok and Facebook. You can also work withlocal food influencers, taking advantage of their biggest platforms to promote their new restaurant.

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Share photos taken by your customers to connect with your audience.

While your marketing plan will certainly change and evolve over time, it's wise to have an overall strategy in place before you open your doors so you can have a successful opening.

Marketing 101

Escoffier's Food Entrepreneurship programs include courses infood styling and photography, social media and hospitality marketing. Graduates can be ready to identify their ideal customers and approach them for better visibility and increased sales.

A business education can mean preparation

While it's obvious that you need to have a passion for the food and beverage world before starting a food service business, it's hard to start any business withoutprofessional guidancewho have real world experience.

Em EscofierFood Entrepreneurship Programs, students can work with qualified experts from the culinary world who can help them avoid pitfalls common to new business owners. A combination of culinary theory and hands-on business experience can prepare students for the complexities of food service, with a constant focus on profitability.

To find out more about what students can expect from Food Entrepreneurship programmes,contact our Import Department. They can answer your questions and help you develop a plan that will bring you closer to your dreams of business ownership.

Did you like this article? Here are a few more you might like.

  • How to open a restaurant with little or no money
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  • The complete guide to starting a home catering business

*Information may not reflect the experience of all students. Results and results may be based on various factors, such as geographic region or previous experience.

This article was originally published on June 29, 2020 and has since been updated.


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