Have you noticed that while starting out with anything, one always takes the first step by mapping out a guide, a blueprint or an outline? Be it an idea for the best invention or starting your work plan for the week, all these starts with an outline.
Now let’s get to restaurants. How are they any different? You may envision the theme, the food, the crowd and everything else. But without a proper blueprint or a plan, let’s just say a minor incident could serve as a major setback on your path to scaling further.
If you do not have a restaurant business plan, a minor issue such as staffing, menu upgrades, and customer inflow could setback your progress to profit and serve your audience.
Even though the plan serves to benefit you and your restaurant operations, having a thought-out restaurant business plan is effective in the long run. In this blog, we’ll explain the components of a restaurant business plan, how to map it out and its effective usage to drive your restaurant to success.
7 elements to Ace your restaurant business plan
From our end, we assure you that we have been in the same place, before sketching out a small restaurant business plan. A paper in front of us, pen in hand and countless questions across different departments or sectors of the restaurant. Rather than the specific questions such as the number of staff you may have overall, it’s best to start out with the general questions and topics that provide an outline of the restaurant.
1. Summary and description of the restaurant
Starting out with a summary and a description of the common elements of the restaurant provide an overview of the entire concept. This is the main billboard that advertises your restaurant and brings potential investors to the rest of your business plan. The common elements to include in a small restaurant business plan include,
- A mission statement that describes what your business it, who it caters to, and how it may function in its existence
- Overview of concept
- Proposed execution plan
- Labour and overhead costs
- Return on Investment
To provide an example, one can start out with,
Cinnamon house is a 100-seat small restaurant that focuses on desserts from across the world.
A simple, cafe type of decor with photos of places around the world will be used, with specially skilled chefs in dessert making and servers to handle the customers.
The location is estimated to be in a colony that has a demand for desserts and is a frequently visited place by customers across town, hence the estimate of ROI is around 30 percent per annum.
2. Market analysis
A market analysis is the responsibility of the restaurant to map out an analysis that includes demographics, possible competitors and information that engages potential investors.
1. Industry analysis
How has the cuisine that you have picked for the restaurant performed in recent years? Does the locality fit the sales expected? Doing a thorough analysis of the niche picked and it’s past performance and current predictions can help potential investors and you as an owner have a better idea of the execution of the plan.
2. Competitor analysis
Rather than foster hostility with the first competitor you meet or claim that your restaurant is ‘better’, it’s advised that one takes a closer look at how they work and their prices, and learn from their mistakes. This saves time and provides practical lessons as to what might work for your restaurant and what would not. Experimenting is a good idea, but proper analysis of past restaurants with a similar or different niche can help make wiser decisions for your own business.
3. Marketing analysis
In the world of social media and mobile phones in everyone’s hands, a simple banner outside your restaurant might just not do. Having a marketing strategy in any restaurant business plan is crucial as it may be a major source of attracting customers. Are there any promotional events or flea markets happening where a pop-up store could be set? How do you plan on using social media or other channels of marketing? Allocating a starter budget, and an outline for marketing and promotion of what makes your restaurant unique is essential before starting the restaurant.
3. Building and interior design
Similar to how a menu is what drags the customer in, the ambiance or the interior design of your restaurant must be envisioned in a manner that is clearly communicable to you or possible investors. This part of your restaurant business plan is what showcases your vision, and how you bring the concepts of your restaurant to life. Here are some elements to include in this part of your restaurant business plan assignment,
- The style of serving and the number of customers your restaurant can support at a time
- Location of the business, any tax obligations
- Seating styles
- Type of furnishing and decor, colours and patterns to put forth the theme of the restaurant
- The ambiance and a sample menu
- Operating hours and number of staff, with their working hours
- Related services such as online deliveries, pop-ups, branches
- The unique selling point of the restaurant
Having a good descriptive summary is the hallmark of your restaurant business plan assignment. The key here is not only to write it in a way that is fit for you as the owner but also for a layman visiting or interested in the restaurant. Write about what you envision, what you would want to sell, the type of ambiance, events, and so on. Any significant factors about the restaurant and its services should be informed.
4. A sample menu
From the brick-and-mortar perspective, ambience plays an important role for customers that dine in. The menu also plays an equivalent role but the spotlight on the menu is often seen in catering, online or home deliveries. Your menu should reflect your concept and the diversity of food you cater to. Beyond the variety, here are some menu aspects to consider
- Offers, and on which varieties and types
- Description of the items
The focus of every small restaurant business plan should be a simple, communicative menu. Even at the beginning with fewer dishes on the menu, it should be descriptive enough for the customers to understand the offerings. We recommend starting with a menu template or a simple design to effectively showcase the items offered to customers or potential investors.
5. Financial layout
Capital. Beyond the other features that help set up your restaurant, capital forms the foundation. Let’s assume you have an interested investor or are bootstrapping for your restaurant. Going out and about the expenditure without a proper plan can be harmful to a new business. Instead, start with the floor plan to the equipment you need, including a financial layout in your restaurant business plan. Some key concepts to include are,
- Location and amount based on the space rented
- Demographics of each set up within the restaurant, and divisions based on kitchen, dining area
- Furniture and interior decoration
- Equipment needed for the restaurant
- Staff salaries on average and number to be hired
- License fees
- Marketing fees
- Inventory and stock fee and management
- Restaurant kitchen equipment
Rather than the accuracy in the outline, making sure you have listed all the possible elements that require financial support is necessary. To refine the accuracy, hiring an accountant can help prepare a cost-effective budget. Having an idea of when profit might occur, seasons of less footfall and possible seasons of growth can also be proposed in the restaurant business plan.
6. Organizational management
Being a restaurant owner is quite like being the team’s major lead. It’s important to know that while you cannot handle all operations, making sure you have an organizational plan in place can strengthen your business. Your organizational plan should include staffing, the hiring process, training, daily operations, the process as well as the people in charge, customer satisfaction and suppliers.
Your team is what runs your restaurant when you aren’t around. List out team managers, servers, chefs, sous chefs, cashiers, and so on and assign responsibilities and managerial roles. Further, ensure that you have a good rapport and communication with the ones in managerial positions, and engage in their hiring process. Having an organizational chart of the people in charge of different departments provides clarity in your restaurant business plan assignment.
7. Technology for smoother business
If you’re still in the era of manual work, your restaurant business plan may fall behind compared to the technology used by competitors or in the industry. Keeping up with the right technology makes operations smoother, qualifies your staff and enables faster and smoother customer service. Hence, this guarantees faster delivery and happier reviews.
Even if you’re unprepared or unaware of what goes in the tech stack, here’s a general idea of some controls,
- Software for table management
- Restaurant order management system
- Stock management and inventory
- Scheduling and dispatch of orders
- Payment and forms of payment accepted
- Security controls
- Time, attendance and employee performance
While these are an overview of some controls that are better off being digitized or automated, the controls can be divided into administrative, daily functions, and sales roles. Include in your restaurant business plan if you aim to automate certain tasks, the type of software used, the duration of assessing its performance and monitoring of variables across the restaurant.
For instance, here’s a fast-food restaurant business plan sample,
At Dine& Dash, we will be accepting dine-ins and online orders. To manage our online ordering system, we will be using suitable software to manage orders in one dashboard, and ensure effective communication to chefs for the preparation and seamless delivery of orders.
Our idea is to partner with third-party delivery services to allow discovery of the restaurant as well as to serve as a medium for online orders.
Hence, having a rough idea such as this might not be permanent, but provides a window into the type of software or technology that can be employed best for the restaurant. Based on what works best as well as the features required, the restaurant business plan can elaborate on why the particular software was chosen and how it benefits the business.
Why is a restaurant business plan important?
Even if the funding of your restaurant or estimated profits are not the key goal in the beginning, starting out the right way is. A restaurant business plan is an overview of your vision and it forms a blueprint to turn to, and a bucket list for when different parts of the restaurant slowly come together. A restaurant business plan is optimal for investors to glance at and possibly invest, and for customers to estimate if entering the restaurant is worth their time and experience. The profits, the reviews and the marketing are all secondary and depend on formulating the right actionable plan to drive your strategy to success. Hence, a restaurant business plan assignment is a must-have as a roadmap to help your business flourish in tough or easier times.