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.

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Executive Summary

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.

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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.

Restaurant Bussines Plan - 3 Years Profit Forecast
Operational and Strategic Planning
This deliverable will contain a business development road map that will help the company achieve its goals and become a market leader.

Company Summary

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?

Step1: Planning

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.

Restaurant Bussines Plan - Startup Cost
Start-up Expenses 
Research and Development$21,000
Expensed Equipment$53,000
Start-up Assets$342,000
Cash Required$356,000
Start-up Inventory$42,000
Other Current Assets$227,000
Long-term Assets$271,000
TOTAL ASSETS$1,238,000
Total Requirements$1,611,000
Start-up Expenses to Fund$373,000
Start-up Assets to Fund$1,238,000
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
TOTAL ASSETS$2,085,000
Liabilities and Capital 
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$45,000
Other Current Liabilities (interest-free)$0
Planned Investment$1,611,000
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$401,000
Total Funding$1,611,000
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    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.

    Take Away

    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.

    Delivery Services

    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.

    Online Ordering

    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.

    Restaurant Bussines Plan - Marketing Segmentation

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    5.2.1 Couples

    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.

    5.2.2 Teens

    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.

    5.2.4 Singles

    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.

    Market Analysis       
    Potential CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
    Working People27%28,00029,00031,00032,00034,00010.00%

    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

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    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.

    Marketing Strategy

    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

    Restaurant Bussines Plan - Sales Monthly

    6.4 Sales Yearly

    Restaurant Bussines Plan - Sales Yearly

    6.5 Sales Forecast

    Restaurant Bussines Plan - Unit Sales
    Sales Forecast   
    Unit SalesYear 1Year 2Year 3
    Take Away58,00061,48065,169
    Delivery Services35,00037,10039,326
    Online Ordering29,00030,74032,584
    TOTAL UNIT SALES168,000178,080188,765
    Unit PricesYear 1Year 2Year 3
    Take Away$45.00$52.20$60.55
    Delivery Services$56.00$64.96$75.35
    Online Ordering$40.00$46.40$53.82
    Dine-In$2,392,000.00 $2,941,203.20 $3,616,503.45
    Take Away$2,610,000.00 $3,209,256.00 $3,946,101.18
    Delivery Services$1,960,000.00 $2,410,016.00 $2,963,355.67
    Online Ordering$1,160,000.00 $1,426,336.00 $1,753,822.75
    TOTAL SALES$8,122,000.00 $9,986,811.20 $12,279,783.05
    Direct Unit CostsYear 1Year 2Year 3
    Take Away$43.00$49.00$57.00
    Delivery Services$54.00$60.00$72.00
    Online Ordering$38.00$44.00$49.00
    Direct Cost of Sales   
    Dine-In$2,300,000.00 $2,828,080.00 $3,307,878.40
    Take Away$2,494,000.00 $3,012,520.00 $3,714,621.60
    Delivery Services$1,890,000.00 $2,226,000.00 $2,831,472.00
    Online Ordering$1,102,000.00 $1,352,560.00 $1,596,635.60
    Subtotal Direct Cost of Sales$7,786,000.00 $9,419,160.00 $11,450,607.60
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      Personnel plan

      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

      Personnel Plan   
       Year 1Year 2Year 3
      Operations Manager$13,000$14,300$15,730
      Public Relations Manager$24,000$26,400$29,040
      Marketing Manager$11,000$12,100$13,310
      Delivery Boys$27,000$29,700$32,670
      Total Salaries$184,000 $202,400 $222,640
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        Financial Plan

        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

        General Assumptions   
         Year 1Year 2Year 3
        Plan Month123
        Current Interest Rate8.12%8.19%8.22%
        Long-term Interest Rate8.39%8.46%8.51%
        Tax Rate23.89%24.36%24.89%

        8.2 Break-even Analysis

        Restaurant Bussines Plan - Break-even Analysis
        Break-Even Analysis 
        Monthly Units Break-even5337
        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 1Year 2Year 3
        Sales$8,122,000 $9,986,811 $12,279,783
        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$336,000 $567,651 $829,175
        Gross Margin %4.14%5.68%6.75%
        Sales and Marketing and Other Expenses$136,000$148,000$156,000
        Leased Equipment$0$0$0
        Payroll Taxes$28,000$29,000$30,000
        Total Operating Expenses$358,000 $389,700 $419,240
        Profit Before Interest and Taxes($22,000)$177,951$409,935
        Interest Expense$0$0$0
        Taxes Incurred($4,400)$35,590$81,987
        Net Profit($17,600)$142,361$327,948
        Net Profit/Sales-0.22%1.43%2.67%

        8.3.1 Profit Monthly

        Restaurant Bussines Plan - Profit Monthly

        8.3.2 Profit Yearly

        Restaurant Bussines Plan - Profit Yearly

        8.3.3 Gross Margin Monthly

        Restaurant Bussines Plan - Gross Margin Monthly

        8.3.4 Gross Margin Yearly

        Restaurant Bussines Plan - Gross Margin Yearly

        8.4 Projected Cash Flow

        Restaurant Bussines Plan - Project Cssh Flow
        Pro Forma Cash Flow   
        Cash ReceivedYear 1Year 2Year 3
        Cash from Operations   
        Cash Sales$56,000$60,480$65,318
        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
        ExpendituresYear 1Year 2Year 3
        Expenditures from Operations   
        Cash Spending$41,000$42,000$44,000
        Bill Payments$24,000$25,000$26,000
        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
        Cash Balance$24,000$26,000$27,000

        8.5 Projected Balance Sheet

        Pro Forma Balance Sheet   
        AssetsYear 1Year 2Year 3
        Current Assets   
        Accounts Receivable$24,000$26,880$30,213
        Other Current Assets$1,000$1,000$1,000
        TOTAL CURRENT ASSETS$285,000 $319,200 $358,781
        Long-term Assets   
        Long-term Assets$10,000$10,000$10,000
        Accumulated Depreciation$20,032$22,436$25,240
        TOTAL LONG-TERM ASSETS$22,000 $24,640 $27,720
        TOTAL ASSETS$295,000 $330,400 $371,700
        Liabilities and CapitalYear 4Year 5Year 6
        Current Liabilities   
        Accounts Payable$19,400$21,728$24,422
        Current Borrowing$0$0$0
        Other Current Liabilities$0$0$0
        SUBTOTAL CURRENT LIABILITIES$17,000 $19,040 $21,401
        Long-term Liabilities$0$0$0
        TOTAL LIABILITIES$16,500 $18,480 $20,772
        Paid-in Capital$29,000$30,000$31,000
        Retained Earnings$53,000$57,770$63,547
        TOTAL CAPITAL$281,000 $306,290 $336,919
        TOTAL LIABILITIES AND CAPITAL$297,500 $330,400 $371,700
        Net Worth$291,000$317,190$348,909

        8.6 Business Ratios

        Ratio Analysis    
         Year 1Year 2Year 3INDUSTRY PROFILE
        Sales Growth7.28%8.07%8.94%3.00%
        Percent of Total Assets    
        Accounts Receivable9.22%10.22%11.32%9.80%
        Other Current Assets2.16%2.39%2.65%2.40%
        Total Current Assets150.23%152.00%152.00%158.00%
        Long-term Assets11.56%11.60%11.64%12.00%
        TOTAL ASSETS100.00%100.00%100.00%100.00%
        Current Liabilities4.92%4.96%5.00%4.34%
        Long-term Liabilities0.00%0.00%0.00%0.00%
        Total Liabilities7.60%7.66%7.73%7.38%
        NET WORTH100.20%101.00%101.93%110.00%
        Percent of Sales    
        Gross Margin94.36%96.91%99.62%99.00%
        Selling, General & Administrative Expenses92.30%94.79%97.45%97.80%
        Advertising Expenses1.20%1.23%1.27%1.40%
        Profit Before Interest and Taxes41.23%42.34%43.53%33.90%
        Main Ratios    
        Total Debt to Total Assets0.18%0.18%0.17%0.40%
        Pre-tax Return on Net Worth74.23%74.70%76.00%75.00%
        Pre-tax Return on Assets94.30%99.02%103.97%111.30%
        Additional RatiosYear 1Year 2Year 3 
        Net Profit Margin33.20%34.23%35.29%N.A.
        Return on Equity55.20%56.91%58.68%N.A.
        Activity Ratios    
        Accounts Receivable Turnover7.77.87.8N.A.
        Collection Days100100100N.A.
        Inventory Turnover3233.633N.A.
        Accounts Payable Turnover151616.3N.A.
        Payment Days272727N.A.
        Total Asset Turnover2.52.52.6N.A.
        Debt Ratios    
        Debt to Net Worth-0.04-0.03-0.04N.A.
        Current Liab. to Liab.111N.A.
        Liquidity Ratios    
        Net Working Capital$255,000$269,280$284,360N.A.
        Interest Coverage000N.A.
        Additional Ratios    
        Assets to Sales0.860.870.89N.A.
        Current Debt/Total Assets1%0%0%N.A.
        Acid Test2828.328.69N.A.
        Sales/Net Worth2.12.22.3N.A.
        Dividend Payout000N.A.


        1. 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.
        2. 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.
        3. 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.
        4. 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.

        Download Restaurant Business Plan Sample in pdf