The A-Z of Writing a Restaurant Business Plan



How to Write a Small Restaurant Business Plan

More than 647,000 restaurants currently operate in the U.S. But the number of independent restaurants actually fell in recent years.

Many factors can lead to restaurant failure. But overall, proper planning helps you avoid many of them. A formal restaurant business plan identifies potential challenges and opportunities so you can keep your restaurant afloat for years to come. And it’s absolutely necessary if you plan to seek out a loan or investors, though getting financing as an independent restaurant can be quite difficult.



Tips on Writing a Small Restaurant Business Plan

Wondering how to write a restaurant business plan? Here are some tips to help you get started.

Do Your Research

Before you actually sit down to write your business plan, you should do some digging into the market in your area and your target customers. If you can back up the ideas and plans you have with actual market research, you’ll be more likely to have a positive outcome.

Dennis Gemberling of Perry Group International, a consulting firm for the hospitality industry, said in a phone interview with Small Business Trends, “Don’t be so tied to what you think is going to work or what you want to do. You should be more tied into what your potential market and your customers want and what you think you can actually pull off.”

Find the Right Concept

One of the first things you’ll need to decide and outline in your business plan is what type of restaurant you plan on starting. This doesn’t just mean creating a menu and specifying a type of food. But you should also outline the general price point and the type of experience you plan on providing. For example, fast casual and counter service restaurant concepts are especially popular right now. But full service restaurants can also be very successful in specific markets.



Gemberling says, “Think about who your customer is and what they’re looking for. Do they want to get in and out quickly or do they want a more atmospheric type dining experience?”

Figure Out Where You’ll Find Customers

Even the best restaurant ideas can fail if there’s a communication gap between the business and its customers. If you want to succeed, you’ll need to think about how you’ll reach customers and when. This section can include everything from marketing strategies to busy times of year for your restaurant.

Gemberling says, “You really need to drill down into the customer aspect, from the beginning to the end of the journey. Where will your customers be coming from when you capture them? What times of day and days of the week and months in the year will you be reaching them?”

Find Your Ideal Location

Choosing the right location can help you more easily get your restaurant in front of your ideal customers. But you also need to consider the cost aspect.

Gregg Sourbeck, solutions coach with RestaurantSystemsPro.net and TheRestaurantExpert.com specified in an email to Small Business Trends, “Rent should be no higher than 8% of annual sales. Sadly, we see too many new restaurant owners end up working for their landlord.”



Look at Your Competition

Though Gemberling cautions restaurant owners against simply modeling their business to mimic other successful units in the area or assuming that a concept will work because is is working for another restaurant, it can help to at least see what others are doing. Develop a picture of the overall restaurant scene in your community. Then you can identify if there are any gaps in the market or how you’ll be able to set your restaurant apart, while still potentially taking advantage of some of the popular trends that are benefiting other restaurants.

Drill into the Finances

When you get further into your business plan, it’s time to get really specific. This means outlining your prices, expenses and any other factors that will impact your bottom line. There are some general industry guidelines to keep in mind to make sure that your business is going to be viable.

Sourbeck says, “‘Prime Cost’ no higher than 60% of total gross sales if the business is doing less than $850,000. No higher than 55% prime cost if the business is doing more than $850,000. Prime Costs is “Total Cost of Goods Sold” plus ‘Total Labor Costs.’”

Find Templates and Resources to Get Started

If you’ve got your general ideas and research covered but need some help putting it all together, there are plenty of online templates and other resources that you can use as a jumping off point.



Gemberling strongly recommends checking out the business plan examples, forms and tips that you can access at Restaurantowner.com. The site charges a small monthly fee for access to all of its content and community features, which he says is well worth the investment.

You can also find examples and templates from Bplans, Toast and Formswift. You might download or look over a few different options to find the ones that are most applicable to your particular model and ideas.

Image: Depositphotos.com 1 Comment ▼


Annie Pilon - Staff Writer


Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found on her personal blog Wattlebird, and exploring all that her home state of Michigan has to offer.

One Reaction

  1. Aira Bongco

    First, you need some basic knowledge of writing a business plan and then create one from there.

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