Restaurant business plan for starting your own business
Thinking to start a restaurant business is a great idea because people demand great convenience when it comes to food. People who are single, or working parents, they do not have time to cook and prefer fresh food from restaurants. To start a restaurant business and make it successful, you need a business plan for a restaurant. In this article, we will guide you on how to write a restaurant business plan. There are many samples of restaurant business plans available out there on the internet, but you need to find the one that best suits you. Here we have discussed in detail the business plan for potential investors.
No matter if you need a business plan for a startup Subway, a restaurant business plan, a fine dining restaurant business plan, an organic food restaurant business plan, a fast food restaurant business plan sample, or an ethnic Indian restaurant food plan, this template would help you in all instances.
2.1 The Business
Red Spice will be a registered restaurant in Houston, Texas. If you are looking for sample business plan for a restaurant, this article has everything you need. This restaurant aims to provide healthy and hygienic food to everyone. People who are unable to cook due to their busy routine can take advantage of restaurants like these. If you are searching how to write a business plan for a restaurant, this article will look in detail how the restaurant business will be started and operated.
2.2 Management of Restaurant
In the business plan for small restaurants, the importance of management is highlighted. Red Spice will be managed by a fully trained and experienced team. With a small investment, Clint has planned to set up a restaurant with a great interior and high-quality food. With the assistance of managers, Clint will look into everything himself. The hired team will contain trained chefs, waiters, accountants, receptionists, and managers.
Red spice will be managed by four managers. They will look after all the public relations, regular operations, and human resources of the business.
2.3 Customers of Restaurant
In all the sample business plans for restaurants, you will find that a restaurant business attracts a variety of customers. To start and run a restaurant in the right way, one should know its audience. The decisions of a business depend upon the kind of customers it is attracting. For a restaurant business, the customers will include working parents, singles, tourists, and couples.
2.4 Business Target
Like example business plan restaurant, this restaurant has a target to provide healthy and hygienic food to people who do not have the time to cook. Our primary target is to become the best restaurant within four years of its launch. Our secondary target is to recover the investment within two years after its launch. Our target is to increase the net profit gradually every year.
3.1 Company Owner
The owner of red spice restaurant is Clint Wood. He has always been a food lover. But due to studies, he had to stay away from home for years and that realized him the importance of homemade hygienic food. There he planned to become an entrepreneur and starting a business that would benefit people like him. In the business plans samples for restaurants, you will find the solid reasons and emotions behind starting the business.
3.2 Why the Restaurant Business is being started?
The reason behind starting this business is the problems that Clint faced during his studies. He had to face intense heath issues by not getting enough hygienic food. Apart from that, the food that restaurants offer in that area was quite expensive. Keeping all these factors in mind, clint decided to benefit the people by starting a relatively cheaper and better restaurant. He made a restaurant opening business plan and made his business successful.
3.3 How the Restaurant Business will be started?
To start any business, planning is important. Analyze the place where you plan to open a restaurant. What is the kind of people living there? What type of food do they like to eat? At what time do people usually come to the restaurants? In a restaurant sample business plan pdf, planning is crucial to start a business in the right direction. When you understand the customers, you will be able to make important decisions like the restaurant’s menu, etc.
Step2: Define your brand
Defining your brand is required to run it smoothly. Some essential questions define your brand. These include
- What was the need to open this restaurant?
- What is our story?
- What facilities do we provide to our valuable customers?
- Why do people should trust us over our competitors?
- What brands are we inspired by?
Step3: How to promote and market a business
Besides providing exceptional service to the customers, it is equally important to reach out to people and let them know about your business. The restaurant sample business plan pdf emphasizes the importance of marketing in the success of any business. Using social media platforms to aware people of the business is a wise idea.
Step4: Establish a web presence
Social media platforms are common among people these days. Everyone has an access to Facebook, Instagram, and Twitter. The web presence is the representation of the business on the internet. The stronger your restaurant’s online presence, the more engagement, and visibility you command across social media, email, and websites. The business plan template restaurant-free includes the idea of establishing a web presence of your restaurant and how you can execute it to make your business successful.
|Research and Development||$21,000|
|TOTAL START-UP EXPENSES||$373,000|
|Other Current Assets||$227,000|
|Start-up Expenses to Fund||$373,000|
|Start-up Assets to Fund||$1,238,000|
|TOTAL FUNDING REQUIRED||$1,611,000|
|Non-cash Assets from Start-up||$1,622,000|
|Cash Requirements from Start-up||$378,000|
|Additional Cash Raised||$49,000|
|Cash Balance on Starting Date||$36,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$45,000|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,611,000|
|Loss at Start-up (Start-up Expenses)||$401,000|
|TOTAL CAPITAL AND LIABILITIES||$2,085,000|
Services of Restaurant
When writing a business plan for a restaurant, you need to list down all the services that your restaurant will provide. The services that your restaurant will provide depend on the people living in that area. Business plan pdf of a restaurant contains an analysis of the population living in the restaurant’s area. You need to mention all the services you want to provide to the people like in business plan example for restaurant.
Red Spice will provide the following services:
Red Spice will provide the facility of dine-in. We will also provide a free Wi-Fi facility in our restaurant. People who are waiting for food can browse through their mobiles or can play games.
Red Spice will also provide the facility of take away. People who are busy at work and do not have the time to eat in a restaurant can get their food packed and they can pick it up.
People who have tough routines and are unable to manage time to come and pick food can order food at their homes and workplaces. We provide delivery services and cash-on-delivery facilities to our customers. The main aim is to facilitate people so that they can get the full benefit out of our restaurant.
We have given the facility of ordering online to provide ease to our customers. They can see the menu online and can order food that will be delivered to their home.
Marketing Analysis of Restaurant
To make a business plan to open a restaurant, you will need to run a complete analysis of the market. It will tell you the trends in the industry and understand if the business can be profitable and feasible. If you know how to make a business plan for a restaurant, you can produce great revenue out of your restaurant. It is because there is no such restaurant in the area that provides high-quality food at such affordable rates.
5.1 Market Trends
The next step in restaurant business marketing plan is to look at the marketing trends. Nowadays, 34 percent of restaurants spend their employee’s time in marketing. Social media platforms are now widely used for marketing. Around 67% of restaurants use social media platforms to advertise.
Restaurants are popular among people nowadays. According to research, out of every five, three people order online or takeout once a week. This number will keep on growing and at the end of 2021, the revenue in the food delivery segment will be $26.5 billion.
The largest segment to use online ordering will be 32 percent and the consumers will be around ages 25-34.
5.2 Marketing Segmentation
The customers of Red Spice Restaurant will be from the following market segments.
Franchise Business Plan
One of the main market segments for the restaurant business will be couples. The newlyweds who like to spend some time with each other come to the restaurant.
Teens love to try new food. If they like food and taste somewhere, they include it in their list and often visit there.
5.2.3 Working People
Another category includes the employees and workers who work in offices or businesses located near our restaurant. These people do not have time to cook food for themselves and they mainly rely on the restaurants.
People living independently away from their homes are also included in our market segment. These people do not find it necessary to cook for themselves and they prefer restaurants.
Some people have a tight routine that they do not manage the time to cook. So, they prefer getting ready-made food to save their time and energy.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- Building a trustworthy relationship among customers
- Providing healthy food and a hygienic environment
- Arranging the best interior to impress the customers
- Making an excellent customer care service for our loyal customers
- Providing affordable food as compared to other restaurants in town
- Recovering the initial investment within two years of launch
- Increase the revenue every year
5.4 Product Pricing
Great service. Good turnaround time and quality work.
Product pricing is one of the main factors in deciding the marketing and sales strategy. It can be a difficult task because startups have to attract new customers. If the restaurant offers food at a very high price, people will not prefer it over another already existing restaurant in that vicinity. In the business plan restaurant, prices should be carefully decided so the business can run smoothly.
We have considered the market demands, and have priced all our products in the ranges similar to our competitors.
If you are aware of how to create a business plan for a restaurant, you would know that sales strategy is an important component in establishing a business. It should be developed with attention and great care.
6.1 Competitive Analysis
The next step in knowing how to write start restaurant business plan is to run a detailed competitive analysis of the business. Here is what’s discovered in the analysis:
- It has been found that there is no restaurant in the area that provides food at such an affordable price.
- The nearby restaurants do not provide delivery services and cash-on-delivery facilities. There is a majority of working people in that area and facility of delivery would drive a lot of business to our restaurant.
6.2 Sales Strategy
There are many other restaurants near Red Spice restaurant and we have a tough competition. But we believe that no restaurant is providing such high-quality food at an affordable rate. We are preferred over other established businesses because of our prices. Red Spice is well known for its unique recipes and taste. If you know how to make a restaurant business plan, you should focus on the sales strategy and how you can advertise your restaurant to increase the revenue.
Here’s the strategy for this business:
- We will associate our restaurant with community events and charity.
- We will use social media platforms to advertise Red Spice restaurant.
- We will make our online presence so that we can reach out to more and more people.
- We will use the advertisements channels in the area to reach out to the people.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||168,000||178,080||188,765|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|Subtotal Direct Cost of Sales||$7,786,000.00||$9,419,160.00||$11,450,607.60|
To run a restaurant successfully and smoothly, the staff should work as a team. The environment of the restaurant depends on the number and type of staff which should be determined in the initial stages. That is why a business plan is required before starting a restaurant business.
7.1 Company Staff
The following people will be needed to run the Red Spice business:
- Clint Wood will be the owner and CEO of the business.
- 3 Managers to look after operations, public relations, and marketing.
- 5 Chefs.
- 5 Waiters.
- 3 Delivery Boys.
- 1 Guard.
- 1 Receptionist.
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
|Public Relations Manager||$24,000||$26,400||$29,040|
The budget for restaurant business plan contains all the finances and employee’s salary. This article includes financial plan for restaurant business plan. It also includes the cost of all the furniture and specialized equipment to start the restaurant.
- Cost of making and managing interior
- Salaries of the staff.
- Cost of the managing inventory
- Cost of food and utensils
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.19%||8.22%|
|Long-term Interest Rate||8.39%||8.46%||8.51%|
8.2 Break-even Analysis
|Monthly Units Break-even||5337|
|Monthly Revenue Break-even||$131,450|
|Average Per-Unit Revenue||$238.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,400|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$7,786,000||$9,419,160||$11,450,608|
|TOTAL COST OF SALES||$7,786,000||$9,419,160||$11,450,608|
|Gross Margin %||4.14%||5.68%||6.75%|
|Sales and Marketing and Other Expenses||$136,000||$148,000||$156,000|
|Total Operating Expenses||$358,000||$389,700||$419,240|
|Profit Before Interest and Taxes||($22,000)||$177,951||$409,935|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$21,000||$22,680||$24,494|
|SUBTOTAL CASH FROM OPERATIONS||$77,000||$83,930||$90,644|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$77,000||$84,000||$91,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$65,000||$67,000||$70,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$65,000||$70,200||$75,816|
|Net Cash Flow||$19,000||$20,000||$21,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$285,000||$319,200||$358,781|
|TOTAL LONG-TERM ASSETS||$22,000||$24,640||$27,720|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$17,000||$19,040||$21,401|
|TOTAL LIABILITIES AND CAPITAL||$297,500||$330,400||$371,700|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.16%||2.39%||2.65%||2.40%|
|Total Current Assets||150.23%||152.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||92.30%||94.79%||97.45%||97.80%|
|Profit Before Interest and Taxes||41.23%||42.34%||43.53%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.23%||74.70%||76.00%||75.00%|
|Pre-tax Return on Assets||94.30%||99.02%||103.97%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.20%||34.23%||35.29%||N.A.|
|Return on Equity||55.20%||56.91%||58.68%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$255,000||$269,280||$284,360||N.A.|
|Assets to Sales||0.86||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
- How to create a restaurant business plan?
You can use this restaurant business plan free sample to create a business plan for your own business.
- How to write restaurant business plan?
If you want to write a business plan for your own business, you can take help from this free business plan restaurant business template.
- How to start a restaurant business plan?
First of all, you have to avail this business plan for restaurant free download and then prepare a plan for your own business on similar lines. Execute each step as they’re listed in this plan and you’ll be good to go.
- How to start a franchise restaurant business plan?
Consult this restaurant franchise business plan sample to see the different steps involved in starting your own franchise restaurant.
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