Restaurant Business Plan
If you’re opening a restaurant or looking to grow your existing restaurant, a detailed business plan is crucial for success.
The following restaurant business plan template outlines the key elements to include in a comprehensive plan. This template can be used to create a business plan for any type of restaurant, including but not limited to: casual dining, fine dining, fast-casual, or quick-service concepts.
Sample Restaurant Business Plan
I. Executive Summary
Business Overview
[Company Name], located at [insert location here] is a new, upscale restaurant focusing on providing organic, healthy and/or premium food and beverage products. Our product line fits nicely with health trends nationwide – as individuals are seeking healthier lifestyles complimented by natural, low-fat, and organic foods.
Products Served
[Company Name] will offer a full menu of appetizers, salads, soups, sandwiches, entrées and desserts. All products will use 100% all natural and organic ingredients. Several products on the menu will be highlighted as being lower in fat, cholesterol, or sodium.
In addition to a full menu of food items, [Company Name] will offer beer, wine, coffee, tea, and soft drinks.
Customer Focus
[Company Name] will primarily serve the residents within a 15-mile radius of our restaurant. The demographics of these customers are as follows:
- 27,827 residents
- Average income of $74,700
- 58.9% married
- 49.6% in Management/Professional occupations
- Median age: 38 years
In addition to this prime adult demographic for an upscale and healthy restaurant, there are five elementary school, a middle school, and a high school. This will make [Company Name] an ideal location for parents to spend time while waiting for their children or to bring their children to after school.
Management Team
[Company Name] is led by [Founder’s Name] who has been in the restaurant business for 20 years. While [Founder] has never run a restaurant himself, he has taught cooking classes at the local culinary institute for 20 years and has worked as a sous-chef at some of the most upscale restaurants in the community over the past 10 years. As such [Founder] has an in-depth knowledge of the restaurant business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- There is currently no upscale and healthy restaurant in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passerby’s each day.
- The management team has a track record of success in the restaurant business.
- The upscale and healthy restaurant business is a proven business and has succeeded in communities throughout the United States.
- Market trends such as healthy and organic living support our business opportunity as well as growing awareness about the obesity epidemic and repercussions of non-nutritious eating
Financial Highlights
[Company Name] is currently seeking $370,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $250,000
- Working capital: $120,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
II. Company Overview
Who is [Company Name]?
[Company Name], located at [insert location here] is a new, upscale and healthy restaurant focusing on providing organic and delicious foods to the local community.
[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the restaurant business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented a restaurant that enjoyed tremendous success. After several discussions with the owner of the restaurant, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.
Specifically the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.
[Company Name]’s History
Upon returning from Fort Lauderdale, surveying the local customer base, and finding potential location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the restaurant.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and website located at www…
- Created the menu
- Determined equipment and inventory requirements
- Began recruiting key employees with experience in the restaurant industry
[Company Name]’s Products
Below is [Company Name]’s initial menu. All items will be 100% natural and organic. As you can see all items are classified under the following six main categories:
- Appetizers
- Soups
- Salads
- Sandwiches
- Entrées
- Desserts
The location has 40 dedicated parking spots which should suffice even in peak hours.
[Company Name] plans to be open 7 days a week, from 12PM to11PM. As demand dictates, we may extend or reduce our hours. Likewise, as demand dictates, we may offer delivery service.
III. Industry Analysis
The following industry trends and statistics bode well for [Company Name].
According to a recent National Restaurant Association Restaurant Industry Forecast, annual restaurant industry sales are expected to reach $566 billion.
Full-service restaurants are expected to reach $182.9 billion; in contrast, quick service restaurants are expected to grow to $163.8 billion, a gain of 4.0 percent over last year. Eating-and-drinking places will see an increase in sales from of 2.2 percent from last year, totaling $395 billion.
The forecast projects that while overall restaurant industry sales will increase in current dollars by 2.5 percent over recent figures; the numbers translate to an inflation-adjusted decline of 1.0 percent. The industry will remain a cornerstone of the economy, representing 4 percent of the U.S. gross domestic product.
Consumer and Menu Trends
Among top trends restaurateurs see are an expanded focus on value, healthy options in kids’ meals, locally sourced items and green initiatives.
- Among 1,600 of American Culinary Federation member chefs, it was decided that balanced children’s meals was number 4 on list of the most popular recent trends and fruit/vegetable side items for kids ranked sixth. In a separate survey, quick-service operators named healthy options in kids meals as the No. 1 food trend in the segment.
- Overall, chefs ranked nutrition/health as the No. 11 trend on restaurant menus—this includes healthy foods, produce and fruit, smaller dishes, fish and gluten-free/ allergy According to Association consumer research, three in four adults say they are trying to eat healthier now at restaurants than they did two years ago. Nearly three in 10 adults – 27 percent – have gone online to search for nutrition information about restaurant food, up from 24 percent a year ago.
- Restaurateurs will also continue to show increasing leadership in becoming “greener”— by taking action such as reducing energy and water use—in step with patrons’ interest in environmental issues. About four in 10 full-service-restaurant operators and nearly three in 10 quick service operators say they plan to devote more of their budgets to green initiatives. Restaurant patrons like the idea: 44 percent surveyed recently said they are likely to make a restaurant choice based on an operation’s practices in the areas of energy and water conservation.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].
The area we serve is affluent and has an affinity to healthy and organic foods and beverages like we will be offering.
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following customer segments:
- Local office workers: approximately 5,000 individuals work in offices within a quarter mile of our location, and we expect a fair portion of these individuals to frequent us during lunch hours.
- Students: there is a middle school and a high school in the town and the high school are within one half mile. Students from these schools will be targeted to frequent [Company Name].
- Families and Couples: We expect couples and families to frequent our restaurant and enjoy our dinner atmosphere.
V. Competitive Analysis
Direct & Indirect Competitors
The following restaurants are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Joe’s Tavern
Joe’s Tavern is the town’s leading local restaurant and has been in business for 32 years. Joe’s offers a wide array of foods, with local bands as entertainment, and is a highly family friendly environment. .
Joe’s has an extensive menu, with some healthy options and some fried foods and bar favorites. While it has an established clientele, Joe’s Tavern does not differentiate itself as a healthy food choice.
Old Time Organics
Old Time Organics has been in business for 5 years. It offers a variety of baked goods, organic teas and coffees, and sandwiches served to-go.
While Old Time Organics’ food is entirely organic, they have a very limited selection of items and are not open for dinner. The location only has four sit down tables and is thus targeting to-go customers that are either stopping for a quick breakfast or picking up baked goods and coffee for work.
Freddy’s Deli
Freddy’s Deli is a recently opened restaurant. It offers breakfast, lunch, and dinner and is open until 1am nightly.
[Company Name] has several advantages over Freddy’s Deli including:
- Freddy’s Deli does not offer products, including pastries, sandwiches, soups and more, made with organic ingredients
- Freddy’s has very little ambience and due to enormous portion sizes and low quality ingredients, the food is largely unhealthy
While we expect that Freddy’s Deli will continue to thrive based on its location and excitement about a new restaurant, we expect that more and more customers will frequent [Company Name] based on the high-quality and organic ingredients we use and product selection.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- 100% Natural/Organic/High-Quality Ingredients: getting 100% Natural/Organic baked goods, soups, sandwiches and more in the local market is challenging and is being increasingly demanded by the local community
- Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influencers. As such, it will be relatively easy for us to build branding and awareness of our restaurant.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering organic, high-quality food items including baked goods, sandwiches, soups, salads and more
- Offering a convenient location that offers both eat-in or take-out options
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be individuals working and/or living within a 15-mile radius of each of its store. The Company’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the restaurant.
Public Relations
We will contact all local and area newspapers and television stations to tell them about the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Sampling
[Company Name] employees will initially give free food samples to passerby’s to enable them to taste the quality of our products and learn about us.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the store, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the stores.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing ingredients
- Hiring and training staff
Kitchen Functions
- Food preparation
- Ongoing menu creation and modification
Restaurant Service Functions
- Order taking and fulfillment (for take-out and dine-in)
- Customer service
- Janitor/maintenance personnel to keep the restaurant clean
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] store |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the restaurant business for 20 years.
While [Founder] has never run a restaurant himself, he has taught cooking classes as the local culinary institute for 20 years. Two courses that he taught included:
1. How To Cook for Everyday Eating
This course was designed to give students an overall understanding of basic dishes that could be cooked for everyday healthy home-style meals
2. Vegetarian Cooking
This course was designed to give students an overall understanding of how to cook with the necessary vitamins and proteins needed to enrich a vegetarian diet without compromising on taste.
[Founder] has also worked part-time at restaurants throughout the region. Specifically, he has worked for Giana’s Pâtisserie and Mike’s Place, where he was responsible for overseeing kitchen quality.
[Founder] graduated from the University of ABC where he majored in Communications.
Hiring Plan
[Founder] will serve as the restaurant manager. In order to launch the restaurant, we need to hire the following personnel:
- Wait staff (4 full-time equivalents to start)
- Chefs (3 to start)
- Sous-chefs (2 to start)
- Assistant Restaurant Manager (will manage cash register and other administrative functions)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of natural and organic food products to its customers.
The Company will have dine-in, takeout, and possibly delivery systems to cater to a broad spectrum of customers in its target market.
The major costs for the company will be food production costs and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $370,000 to launch its restaurant. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $250,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions & Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years. Please see the Appendix for more detailed financial forecasting information.
| Menu Items | % of Sales | Quantity | Average Price Point | Cost of Goods Sold |
|---|---|---|---|---|
| Beer | 25% | 2.25 | $7.33 | 16% |
| Cocktails | 20% | 2.25 | $7.00 | 19% |
| Wine by Glass | 10% | 2.25 | $8.67 | 25% |
| Food Items | 45% | 1 | $17.67 | 30% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
