Table of Content

    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

    Strategic/Operational Business Plan
    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
    Legal $235,000
    Consultants $0
    Insurance $28,000
    Rent $32,000
    Research and Development $21,000
    Expensed Equipment $53,000
    Signs $4,000
    TOTAL START-UP EXPENSES $373,000
    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 FUNDING
    Start-up Expenses to Fund $373,000
    Start-up Assets to Fund $1,238,000
    TOTAL FUNDING REQUIRED $1,611,000
    Assets
    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
    Liabilities $28,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $45,000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $73,000
    Capital
    Planned Investment $1,611,000
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,611,000
    Loss at Start-up (Start-up Expenses) $401,000
    TOTAL CAPITAL $2,012,000
    TOTAL CAPITAL AND LIABILITIES $2,085,000
    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:

    Dine-In

    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.

    Note

    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

    Franchise Business Plan

    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 Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Couples 35% 39,000 41,000 43,000 45,000 47,000 10.00%
    Teens 20% 22,000 23,000 26,000 28,000 29,000 10.00%
    Working People 27% 28,000 29,000 31,000 32,000 34,000 10.00%
    Singles 18% 15,000 16,000 17,000 19,000 21,000 11.00%
    Total 100% 104,000 109,000 117,000 124,000 131,000 10%

    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 Sales Year 1 Year 2 Year 3
    Dine-In 46,000 48,760 51,686
    Take Away 58,000 61,480 65,169
    Delivery Services 35,000 37,100 39,326
    Online Ordering 29,000 30,740 32,584
    TOTAL UNIT SALES 168,000 178,080 188,765
    Unit Prices Year 1 Year 2 Year 3
    Dine-In $52.00 $60.32 $69.97
    Take Away $45.00 $52.20 $60.55
    Delivery Services $56.00 $64.96 $75.35
    Online Ordering $40.00 $46.40 $53.82
    Sales
    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 Costs Year 1 Year 2 Year 3
    Dine-In $50.00 $58.00 $64.00
    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 1 Year 2 Year 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
    Chefs $8,000 $8,800 $9,680
    Waiters $45,000 $49,500 $54,450
    Delivery Boys $27,000 $29,700 $32,670
    Guard $40,000 $44,000 $48,400
    Receptionist $16,000 $17,600 $19,360
    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 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.12% 8.19% 8.22%
    Long-term Interest Rate 8.39% 8.46% 8.51%
    Tax Rate 23.89% 24.36% 24.89%
    Other 0 0 0

    8.2 Break-even Analysis

    Restaurant Bussines Plan - Break-even Analysis

    Break-Even Analysis
    Monthly Units Break-even 5337
    Monthly Revenue Break-even $131,450
    Assumptions:
    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
    Sales $8,122,000 $9,986,811 $12,279,783
    Direct Cost of Sales $7,786,000 $9,419,160 $11,450,608
    Other $0 $0 $0
    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%
    Expenses
    Payroll $184,000 $202,400 $222,640
    Sales and Marketing and Other Expenses $136,000 $148,000 $156,000
    Depreciation $2,100 $2,200 $2,300
    Leased Equipment $0 $0 $0
    Utilities $2,800 $2,900 $3,000
    Insurance $2,100 $2,100 $2,100
    Rent $3,000 $3,100 $3,200
    Payroll Taxes $28,000 $29,000 $30,000
    Other $0 $0 $0
    Total Operating Expenses $358,000 $389,700 $419,240
    Profit Before Interest and Taxes ($22,000) $177,951 $409,935
    EBITDA ($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 Received Year 1 Year 2 Year 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
    Expenditures Year 1 Year 2 Year 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
    Dividends $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
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $281,000 $314,720 $346,192
    Accounts Receivable $24,000 $26,880 $30,213
    Inventory $4,000 $4,480 $4,900
    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 Capital Year 4 Year 5 Year 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
    Earnings $194,000 $211,460 $232,606
    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 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.28% 8.07% 8.94% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.22% 10.22% 11.32% 9.80%
    Inventory 5.44% 6.03% 6.68% 9.90%
    Other Current Assets 2.16% 2.39% 2.65% 2.40%
    Total Current Assets 150.23% 152.00% 152.00% 158.00%
    Long-term Assets 11.56% 11.60% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.92% 4.96% 5.00% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.60% 7.66% 7.73% 7.38%
    NET WORTH 100.20% 101.00% 101.93% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.36% 96.91% 99.62% 99.00%
    Selling, General & Administrative Expenses 92.30% 94.79% 97.45% 97.80%
    Advertising Expenses 1.20% 1.23% 1.27% 1.40%
    Profit Before Interest and Taxes 41.23% 42.34% 43.53% 33.90%
    Main Ratios
    Current 32 33 34 32
    Quick 33 33.2 34.03 33
    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.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32 33.6 33 N.A.
    Accounts Payable Turnover 15 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $255,000 $269,280 $284,360 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.86 0.87 0.89 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 28 28.3 28.69 N.A.
    Sales/Net Worth 2.1 2.2 2.3 N.A.
    Dividend Payout 0 0 0 N.A.

    FAQ

    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.
    1. 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.
    1. 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.
    1. 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