Hello fellow food lover, we're almost as excited as you are for your new business venture.
We know how much work starting a restaurant business from scratch can be. That's why we've put together a super-straightforward, thorough, and free business template specifically designed for all of you enterprising restaurateurs.
Cluboid want to guide you through every step of the preliminary process, helping you create a comprehensive business plan that covers everything from company logistics and potential problems, to market analysis and finances.
Your business plan is your opportunity to demonstrate just how worthy your business is of investment, so it's important to show you have every avenue of your business concept under control. You wouldn't want to miss anything vital now, would you? Now you don't have to...
You've reviewed what a business plan is, and why you need one to start and grow your business. It's time to dig into the process of actually writing a business plan.
In this step-by-step guide, We'll take you through every stage of writing a business plan that will actually help you achieve your goals.
Although it's the first element of a business plan, it's actually a lot easier to leave this part until last. That way, you can use the details from the plan to, well, summarise.
Ideally your restaurant's executive summary can stand alone as a plan in itself, and many investors will ask only for this part when making their decisions. If their interest is peaked enough, the remainder of the plan will be requested. It should be thorough, realistic and specific enough to establish a viable business idea.
The executive summary introduces your restaurant, explains what you do, what you sell, and will often lists some of your USPs like special products or services. They generally establishes some kind of problem or gap in the market, and will outline how your restaurant plans to provide a solution in clear objectives.
This is your opportunity to demonstrate your expertise and professional background - i.e. the elements of your experience which make you adequately trained and in the best position to fix the concern established in your executive summary.
For a restauranteur this would include if and where you went to culinary school, work placements, any work with notable chefs, perhaps travel if you feel it has benefitted your awareness of international cuisine, or inspired you to hone a skillset like Parisian pastry or a flair with Southeast Asian spices.
Your personal profile is essentially an owner's biography that will explain how you arrived at the decision the begin your restaurant.
This is primarily a portion for an owner that intends to leave the day-to-day running of the restaurant in the hands of a manager besides himself. If that is not the case, feel free to remove this section and elongate your personal profile.
You can alternatively use the space to detail a little about the employee infrastructure, list your departments, their functions and a bit about the requirements of each respective department head. This may even cover staff salaries, benefits and training costs.
Investors want a demonstration that your business is sustainable, so the more detail you can provide about your kitchen staff, your wait staff, your front of house team, HR etc., the better! You might even decide to provide some kind of visual aid - like a chart or flow diagram - to demonstrate how the chain of command will look.
Here you want to establish an awareness of the general market conditions, both with regards to the restaurant industry specifically, the economy and the location where you plan to run the business from. What is your potential customer reach? What is the value of the market as it stands?
You want to contextualise your restaurant and explain how it will fit. This will include making reference to nearby businesses, as well as the location's average amount of through-traffic etc. The more data you can cram in here, the better. Investors will use this section to establish the level of risk involved in the project, so to have it backed by sourceable statistics will anchor it in fact and play to your favour.
Identify some market trends - perhaps the rise of veganism, the steady increase in gluten allergies or the boom in the fine wine market - and using data, demonstrate how your restaurant will cater to them.
A business acronym for 'Strengths, Weaknesses, Opportunities, Threats.' This is your chance to demonstrate how thorough and thought through you are.
To be clear, this is the SWOT of the business, not of yourself. It can however include things that you as an owner will bring to the table. Strengths, for example may be that you have a pre-existing following or a background in business/marketing. It might also include the fact that you are the only restaurant within a certain radius to offer this cuisine or the plot has particular location advantages. Try to back up both strengths and opportunities with as much hard data as possible so it doesn't come across as biased.
Similarly, it is important not to sugarcoat the negative elements of your SWOT analysis because you think they'll hurt your chances of investment. Investors will spot a missed threat or weakness a mile off and likely judge you for the oversight. Instead, spend time on the wording so that they seem like fixable teething problems. Don't say 'No customers or following', say 'New to the area - we are yet to build a solid brand reputation.'
This section expands on what you made reference to in 'The market' section. You have explained how many people you hope to reach, now is time to specify who.
You should already know who you intend to target, so here you will demonstrate great insight into that demographic. To do this, many businesses create what is known as a 'buyer persona', which helps them get into the head of their ideal customer, gauge their interests, behaviours, aspirations, what drives them etc. This will drastically improve your ability to market effectively too - but we'll get to that!
Try to make these personas feel 3-dimensional - we know it feels tempting to be abstract and say 'everyone' is a potential customer because, well, everyone eats - but who will realistically visit your restaurant based on their financial circumstances, their travel distance, their age group, their interests?
It might feel like your potential is bigger if your market is essentially anyone, but it actually just means that you're not filling a niche. Better to vie for the attention of a select few, and do it well than vie for the attention of everyone and do it badly. You may even choose to pin your target market up against others within the restaurant industry for comparison.
Here you should detail everything that makes your restaurant likely to be profitable for an investor that isn't available elsewhere - your 'unique selling points/propositions'. You can go into more depth about the strengths mentioned in your SWOT analysis and also use this section to highlight data which shows the niche that your particular business model will fill. What services or menu items will you offer that no one else does?
Something like: '42% of London commuters purchase breakfast on the move, and our close proximity to the train station will mean we are the only viable option for organic morning meal choices throughout the week,' or 'We boast the only (fully recyclable takeout packaging/exclusively gluten free menu etc.) within 3 kilometres.'
Spend some time analysing some of your major competitors in the proposed area. Write about how many restaurants there are, how many of those have potential overlap with your target market? Do any of them have a similar menu, cuisine or concept? What are your competitors USPs and how will you endeavour to trump them? This will help highlight any competitive advantages your restaurant has within its context.
For the purposes of demonstration you might also consider including something of a matrix diagram showing how your restaurant fares against the competition. For instance, Competitor A might offer a vast seafood menu and competitor B might offer delivery. You on the other hand, do both. A visual indication of this can be very effective.
Explain a bit about the channels of distribution you will use to spread the word about your restaurant. Will you enlist the help of flyers and billboards? Offer free giveaways? Invest in print advertising or go to trade shows? How will you maintain a significant online presence? Does the concept of your restaurant provide great guerrilla marketing potential? Detail how much these are likely to cost, but be realistic in your estimations.
It's also important to pin each marketing idea against a company objective. Investors are interested in seeing how each campaign will get you closer to a pre-established goal. You might hire flyerers to distribute discount vouchers to get people to pop in. You might hire a sandwich board to establish brand image about town or improve your social media following. Discuss what your intention is with each marketing activity.
This is the painstaking bit. You need to provide a detailed breakdown of exactly how you plan to productively spend every cent of the investment you are asking for. You should then pin this against a realistic projection of the revenue you expect.
Investors need to see that the cost of their investment fundamentally will not exceed the return. How you will make it worthwhile for them must be very evident, here. Don't make them work for it.
In this section include:
- Cashflow Analysis - How much are you asking for and how are you putting it to use? Provide a breakdown of inflow and expenditures. Everything from supplies to legal fees should be itemised here.
- Anticipated P&L Statement - Obviously, you're not actually open yet, so most of this is conjecture. Make educated guesstimations to list your restaurant's sales profits and losses.
- Breakeven Analysis - How much does your restaurant need to make, every month, to break even once all costs are deducted?
- Sensitivity Analysis - What factors will affect the profitability of the restaurant? By how much? Identify some key variables, perhaps you require more wait staff over the holidays so staff salaries will increase?