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How to Start a Take Out Food Business: A Step-by-Step Guide

Sydney Kida | April 6, 2022 |

The take out food industry has experienced a massive boom throughout the COVID-19 pandemic. During the second and third quarters of 2020, the top four leading food delivery apps in the U.S. saw their revenues rise by $3 billion .

Even as life begins to return to normal, take out restaurant ideas continue to grow in prominence nationwide. What does this mean for the humble restaurant owner trying to get their business back on its feet?

Opportunity.

Dine-In vs. Take Out: How Take Out is Changing the Restaurant Business

Take out (sometimes spelled takeout and take-out) has altered the restaurant business irrevocably. While people like to point to the COVID-19 pandemic, take out changed the industry long before coronavirus became a thing.

Perhaps the main reason for takeout’s growth is the ease of ordering. Food delivery apps require a couple of clicks, and your order is already on its way. Giving people an entire list of choices and the option to order from the comfort of their sofas tends to encourage them to eat off premises vs. dining on site.

The younger generation of millennials is also driving growth among take out providers. They boast the most spending power and lean toward take out delivery more than other generations. For example, USA Today reported that 77% of millennials ordered food delivery compared to 51% of other diners during a three-month period in 2018.

Figuring out how to start a take out food business is, therefore, a viable option for companies looking to increase their revenues.

Finally, it’s essential to look at how people spend their evenings. If more people choose to watch Netflix over a night on the town, why wouldn’t they also order dinner at home?

How to Start a Take Out Food Business

Deciding how to start a new take out restaurant requires following several defined steps to put the infrastructure for success in place.

Before going into a takeout restaurant business plan, here are some tips for a takeout restaurant and what makes it successful.

Step One – Plan Your Concept

Take out restaurant design ideas must be optimized entirely for delivery, as this is your primary revenue generator.

Your kitchen’s layout, storage, and logistics must focus on the two key metrics of time and temperature. Get one of them wrong, and you risk killing any repeat business. Perfect your take out restaurant menu ideas and make sure they are optimized for time and temperature.

Most restaurants will maintain smaller menus for this reason. Not everything is suited for take out.

You should also think about your ingredients. Group dishes by the ingredients required to keep your workflow efficient. Remember, unlike dine-in customers, take out customers value speed over everything else.

Step Two – Choose Your Niche

Identify any gaps in the market. If Italian pizza take out restaurants have saturated your area, the chances are it’s not a wise investment.

Think about who you want to cater to and figure out an image of your ideal customer. Some examples of niches include:

• Office workers
• People with special diets
• Seniors with limited mobility

Talk to people on the street and find out what your local area lacks. Your take out restaurant design ideas may not be 100% unique, but you still need that underserved market.

Step Three – Set Up Your Physical Operations

Going through registering your business and applying for any licenses you might need in your state may take weeks, so think about these administrative burdens in advance.

Once you have your concept and your menu, it’s time to build the physical gears that will keep your take out food business turning.

Here are the primary considerations you’ll need to think about:

• Kitchen – Where will you produce your food? You may want to consider a low-rent area that's close to a densely populated place. Make sure it has the space and layout conducive to producing your unique menu.
• Point of Sale (POS) – Technology helps you to run your business. Choose a POS platform that allows you to easily take online orders, manage the payment side, and ensure your kitchen/delivery service runs efficiently.
• Staffing – How many staff do you need to run your kitchen? How much will it cost you to maintain that staff per month?
• Logistics – Do you have a place set up for collection or your own fleet of delivery drivers?

These tasks take longer than most people expect, so avoid setting a launch date before everything is in place. Furthermore, your state may have special requirements regarding commercial kitchen certifications and any required health inspections.

Step Four – Choose Your Distribution Providers

Getting your food to your customers requires a reliable distribution provider. Figuring out how to start a take out food business requires you to take the time to research and factor in distribution costs.

Whether you decide to opt for a third-party provider and eat the commissions or invest in creating your own delivery fleet is up to you.

Remember, your needs might change, so you can alter your distribution model later.

Step Five – Market Your Business

Take out businesses rely on the digital space to gain brand exposure. Craft a unique story that allows you to stand out from the crowd. What makes your take out restaurant special?

Focus on aspects like SEO, social media presence, and how you will convince those first customers to give you a try. Marketing begins from day one of coming up with your business idea. Save money during those initial months by drumming up interest before you officially open for business.

Innovative Take-Out Restaurant Ideas for Your Future Food Business

Staying on the cutting edge of the food industry is what will allow your business to thrive. Think about how you can integrate new ideas into your growing take out business for a better customer experience.

Here are some great tips for a takeout business in the future:

• Make-Your-Own Meals – Offer care packages, such as a build-your-own pizza kit to make ordering take out more fun and tailored to the customer.
• Creative Naming – Get creative with your naming, according to whatever is trendy at the time. Make people smile and make your meals memorable.
• Loyalty Schemes – Promote repeat businesses by bringing the classic retail loyalty scheme to the world of take out.
• Build Relationships – Handwritten notes, postcards, and formal loyalty programs help to bring the human touch to digital transactions.
• The Unconventional – Consider going beyond burgers and pizza and opting for more unconventional take out foods, such as omelets, steaks, and special sauce.

Think outside the box by examining your competitors and looking at what they aren’t doing. There are always openings for getting creative.

Starting Your Takeout Restaurant Business Plan

The pillar of how to start a take out food business is your business plan. Think of it as your professional roadmap to success.

Even if you already have a brick-and-mortar restaurant, your business plan provides direction, alignment, and orientation.

Take Out Restaurant Description

Outline what your take out place is going to be. Define the style of cuisine, the options available, the legal structure of your business, and operating hours.

It’s also the time to come up with a prototype menu. Include no more than 10-15 dish ideas at this stage.

Target Audience Analysis

Conduct market analysis of your target market. Form an image of your ideal customer, such as how old they are, their spending power, professions, interests, and what they expect from a take out establishment.

Understanding your ideal customer will help you give them the experience they expect when ordering take out.

Competitor Analysis

You also need to know who you’re coming up against, as you did with your target audience. A complete competitor analysis will examine a sampling of restaurants in your area.

Don’t just focus on the competitors offering the same cuisine as you. It helps to know what options customers have in the area, how much they charge, and the most common complaints they receive.

Either go out into the community and place orders yourself or make use of online reviews to find out more.

Organizational Sections

Labor, facilities, and associated financial costs and projections should also form a crucial part of your business plan. These are the hard figures that will tell you about the viability of your business and whether you need to make any changes.

You will also have a section dedicated to marketing, branding, and delivery models. The organizational sections are where you delve deep into the nuts and bolts of your business.

Starting a take out business for the first time doesn’t need to be intimidating. You’re moving into a booming industry with tremendous growth potential. How you establish your business and the tools you adopt will define whether you are a success or a failure.

Help with income stream diversification and creating a better customer experience with the revolutionary restaurant POS from Revel Systems®.

Find out why so many take out establishments are using Revel to transform their organizations by requesting a free product demo now.

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How to Write a Restaurant Business Plan in 2024 (Step by Step Guide with Templates)

A restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations . This includes anything from your restaurant's menu design, location, financials, employee training, and a lot more.

Creating a solid business plan is important, as it helps: Transform your restaurant ideas into reality. Boosts entrepreneurial success by 16% ( Harvard Business Study ). It equips you to navigate challenges before they arise. Attracts potential investors.

Planning is key to restaurant success. Without a plan, you're more likely to join the 26% of restaurants that fail within a year.

To set yourself up for success create a restaurant business plan. Here's how to get started. 

What is a restaurant business plan? 

A restaurant business plan is a guide for your restaurant, so outside parties (like investors) can see your goals, vision, and how you’ll get there. Length and detail vary from executive summaries to full-length documents. It’s good to give investors as much information as possible upfront. Every business should have a plan, new or old. Plans help you stay focused and get back on track.

Every business should have a business plan, whether new or existing. Business plans help you focus on your goals and can help get back on track if you stray from them.

Steps to include in your business plan 

Your restaurant and mission statement needs to reflect your brand and goals, but you don't have to start from scratch.

The Eat App Restaurant Business Plan template , created by industry professionals and packed with insider information, is your go-to manual for creating a profitable business plan.

Your finalized business plan should have 11 essential elements, no matter how you write it. Continue reading below. 

1. Executive summary

A restaurant business plan should always begin with an executive summary. Why?

80% of venture capitalists say they read the executive summary first.

62% of investors say they would not continue reading a business plan if the executive summary did not capture their interest.

A strong executive summary can increase the likelihood of securing funding by up to 40%.

An executive summary not only acts as the introduction to your restaurant business plan samples but also as a summary of the entire idea.

The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.

The executive summary also helps you envision the identity of your restaurant which essentially shapes the customer experience and sets you apart from competitors.

To establish a distinct identity, you need to focus on common elements of an executive summary, including:

• A mission statement 
• Proposed concept development
• Cuisine selection
• The overall execution
• The potential costs
• Expected return on investments (ROI)

Let's take a more in-depth look at the concept development, cuisine selection, and mission statement.

1.1 Concept Development

Selecting the type of restaurant, service style, and atmosphere is the first step towards creating a unique dining experience. Whether you envision a sample menu for a:

• cozy, intimate bistro
• bustling quick-service deli
• fast-casual restaurant
• fine dining establishment

Your concept should reflect your passion and expertise in the industry.

1.2 Cuisine Selection

Your choice of cuisine can make or break your restaurant. Choosing the right one is key to standing out from the competition and your target market.

So consider:

• Market demand
• Expertise and passion
• Ingredient availability
• Competition
• Profitability
• Cultural fit
• Seasonality
• Dietary restrictions and trends

In the highly competitive restaurant industry, keeping track of current and emerging cuisine trends can be a significant advantage.

1.3 Creating a mission statement

A good mission statement tells investors and customers about your restaurant. It’s a compass for the decision-makers and staff to follow to achieve what you want.

Here’s how:

• Identify the purpose of the restaurant.
• Contemplate the brand’s image.
• Account for the target audience.
• Incorporate company values.
• Ensure brevity and comprehensiveness.

Related content: How to Write a Restaurant Mission Statement 

Your mission statement should be unique to your restaurant and to your customers. A good mission statement will be your North Star, and all decisions and touchpoints will follow.

A well-conceived mission statement can provide a guiding light to keep your restaurant moving in the right direction. It helps ensure that every decision you make and every interaction you have is in line with your core values and goals.

2. Company description

This is where you carefully introduce the company in the restaurant business plan.

Include the name of the restaurant you are launching in this field along with its address, phone number, and other important information.

Then, also include the owner's information as well as a synopsis or explanation of their background. The restaurant's legal position and its short- and long-term objectives should be outlined in the second section of the company description.

To demonstrate your understanding of the changes in the local food business and the reasons why the most independent restaurant investors will be successful in this market, please submit a brief market research.

Here's an example of the page layout:

Company Description

Restaurant Name: [Restaurant Name]

Location: [Restaurant Address]

Contact: [Restaurant Phone Number] | [Restaurant Email Address]

Owner: [Owner Name]

Experience: [Owner Name] has over [Number] years of experience in the restaurant industry. They have worked in various roles, including [List of Roles]. They are passionate about food and creating a memorable dining experience for their guests.

Legal Standing: [Restaurant Name] is a [Type of Legal Entity] registered in [State/Province].

Further reading

• How to Write a Great Restaurant Description

3. Market analysis

The market analysis portion of the restaurant business plan is typically divided into three parts.

3.1 Industry analysis

Who is your target market ? Who will your restaurant serve? This section will tell investors about your target market and why they will choose your restaurant over others. Knowing your target market is key to tailoring your restaurant to their likes and needs.

By digging into demographics, preferences, eating habits, and trends you can hone your concept and marketing strategy to reach and appeal to your target market.

An example of analyzing your target market

Comprehending your target market is key to customizing your restaurant offerings to their preferences and needs.

By diving into demographics, preferences, dining habits, and trends, you can fine-tune your concept and marketing strategy to reach and appeal to your target audience effectively.

Demographics and preferences

Identifying your primary target market involves considering factors such as:

For example, a family-orientated area will want a family-friendly restaurant with a menu that caters to all ages and dietary requirements. A trendy urban area with a young affluent population will want upmarket dining and innovative food.

Cultural and ethnic backgrounds also play a big part in restaurant preferences, different backgrounds have different tastes and customs that influence their dining choices. By understanding your target market demographics and preferences, you can create a concept that resonates with them and drives success.

Dining habits and trends

As the industry changes, it’s important to stay on top of dining habits and trends. For example, online ordering and delivery have changed the way we eat, many are looking for the convenience of having their meals delivered to their door. Health trends have also impacted dining habits, more and more people are looking for healthy options when eating out.

3.2 Competition analysis

It’s natural to think everyone will come to your new restaurant first, so research your competition to make that happen. Who else has a customer base in the area?

Note everything from prices, hours, and service style to menu design to the interior of the restaurant. Then tell your investors how you’re different.

3.3 Marketing analysis

Your investors will want to know how you’ll market the restaurant. How will your marketing be different from what’s already out there? Who’s your target audience and how will you reach them? What will you give to guests? List it all.

• How To Conduct a Restaurant Market Analysis

The menu is the heart of a restaurant. You can’t run without it. You probably don’t have a finished menu yet, but you should have a mock menu for your restaurant business plan. Pick a design you like and add your logo to the mock.

There are several resources available online if you need assistance with menu design or don't want to hire a designer.

But the price should be the most important component of your sample menu. The cost research you've completed for investors ought to be reflected in your prices. They will have a clearer idea of your restaurant's intended price range as a result. 

You'll quickly see how important menu engineering can be, even early on.

5. Employees

The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant's business plan and management team.

The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.

6. Restaurant design

The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine.

Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.

The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment. 

7. Location

The location you settle on for your restaurant should be well aligned with your target market (making it easier to cater to your ideal customer) and with your business plans.

At this stage in the process, it's not uncommon to not have a specific location in mind - but you should at the very least have a few options to narrow down.

Pro Tip: When you approach your investors about potential locations, make sure to include as much information as possible about each venue and why it would be ideal for your brand. 

Example for choosing an ideal location

Choosing the ideal location for your restaurant is a pivotal decision that can greatly influence your success. 

To make the best choice, consider factors such as foot traffic, accessibility, and neighborhood demographics.

By carefully evaluating these factors, you’ll be better equipped to maximize visibility and attract your target market.

7.1 Foot traffic and accessibility

Foot traffic and accessibility are important factors in selecting a location that will attract customers and ensure convenience.

A high-traffic area with ample parking and public transportation options can greatly increase the likelihood of drawing in potential customers.

Additionally, making your restaurant accessible to individuals with disabilities can further broaden your customer base and promote inclusivity.

7.2 Neighborhood demographics

Analyzing neighborhood demographics can help you determine if your restaurant’s concept and cuisine will appeal to the local population.

Factors such as income levels, family structures, and cultural diversity can all influence dining preferences and habits.

By understanding the unique characteristics of the neighborhood, you can tailor your offerings and marketing efforts to resonate with the local community.

Conducting a market analysis can be a valuable step in this process.

To gather demographic data for a particular neighborhood, you can utilize resources such as the U.S. Census Bureau’s American Community Survey and reference maps.

Armed with this information, you can make informed decisions about your restaurant’s concept, menu, and pricing, ensuring that your establishment is well-positioned for success within the community.

Conducting market research will further strengthen your understanding of the local demographic.

• Why does restaurant location matter?

8. Market overview

The market overview section is heavily related to the market research and analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.

Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the other restaurants that could prove to be competition and what your strategy is to set yourself apart.

9. Marketing

With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world.

The next marketing strategy and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.

Read more : How to write a restaurant marketing plan from scratch

10. External help

To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running.

This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems.

Explain to your other potential investors about the importance of each and what they will be doing for your restaurant.

11. Financial analysis

The most important part of your restaurant business plan is the financial section. We would recommend hiring professional help for this given its importance.

Hiring a trained accountant will not only help you get your own financial projections and estimates in order but also give you a realistic insight into owning a restaurant.

You should have some information prepared to make this step easier for the accountant.

He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.

In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator. 

• Your Complete Guide to Restaurant Financing and Loans

A well-crafted restaurant business plan serves as a roadmap to success, guiding every aspect of the venture from menu design to employee training.

By carefully considering each component of the plan, aspiring restaurateurs can increase their chances of securing funding, attracting customers, and achieving their long-term goals.

Remember, a restaurant business plan is not just a document to satisfy investors; it is a living tool that should be revisited and updated regularly as the business grows and evolves.

By staying committed to the plan and adapting it as needed, restaurateurs can ensure that their culinary dreams have a solid foundation for success.

This article was originally published on 20 November 2017 and updated on 13 June 2024 .

Growth Marketing Manager at Eat App

Saif Alnasur used to work in his family restaurant, but now he is a food influencer and writes about the restaurant industry for Eat App.

Reviewed by

Nezar Kadhem

Co-founder and CEO of Eat App

He is a regular speaker and panelist at industry events, contributing on topics such as digital transformation in the hospitality industry, revenue channel optimization and dine-in experience.

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How to Write a Restaurant Business Plan: Complete Guide

• January 31, 2023
• Food & Beverage

👇 Check all our resources on restaurants 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) to open a restaurant , you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your restaurant . Use this template to create a complete, clear and solid business plan that get you funded. Let’s dive in!

1. Restaurant Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a restaurant?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write your restaurant’s executive summary?

Provide a precise and high-level summary of every section that you have included in your business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.

Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.

The executive summary usually consists of 5 major sub-sections:

• Business overview : start by introducing your restaurant and the products and services that you intend offer. Mention the type of restaurant you intend to open (such as fine dining, casual dining, fast casual, ghost restaurant, café, pub, etc.), the menu and prices. Also add here the total number of customers your restaurant can host at once, its location, and some details on the surface and the design layout
• Market analysis : summarise the market where you will operate and provide a brief about the target audience , market size , competitors , etc. No need to provide granular data here, save it for the Market Overview section later on (or the appendix)
• People : introduce your restaurant’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, speak about your hiring plans.
• Financial plan : how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart depicting your key financials statements
• Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last?

Restaurant Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Restaurant Business Overview

This is the section where you will provide details about your restaurant and the chosen business model. You must address some important questions that lenders and/or investors generally ask .

Here is a quick list of some of those questions you must address:

• What is the rationale behind you opening this type of restaurant today?
• What’s the restaurant’s location and why did you select that location?
• Why did you select the type of restaurant you want to open?
• What will be the products and services you will offer?
• What will be your pricing strategy and why?
• What will be your opening days / hours?
• How many customers can you serve at once (capacity)?
• What is the surface of your restaurant? How is the restaurant designed (incl. dining rooms and kitchen area)?
• What will be the legal structure of your company?

a) History of the Project

Any business must have two components:

• Passion & experience of the business owner
• Rationale behind starting this type of business today

Passion & experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have been a restaurant manager in a popular restaurant for 6 years, and now you want to start your own restaurant and use your knowledge to run it more efficiently.

However, if you don’t already have experience, that’s fine. You must demonstrate your passion and some industry knowledge (you may have conducted thorough research).

What is your restaurant’s mission?

For example, there may not be any fine dining restaurant in your area where wealthy residents or tourists can enjoy an upscale meal experience in a sophisticated and elegant environment.

But that’s not all: your market must be suitable for your business to thrive.

For instance, if you are planning to open a fine dining restaurant in a low-income area, it is probably not going to attract many customers. Similarly, if the population of the target market has a high percentage of people preferring takeaway/delivery food options because of their busy lifestyle, a fine dining restaurant may not be a good idea.

b) Business Model

This sub-section of the Business Overview will explain your business model. Describe the following points briefly:

• Will you buy an existing restaurant and do some remodeling, or will you start a new restaurant and design it from scratch?
• Will you buy a franchise or do you plan to open an independent restaurant instead?
• The type of restaurant you want to open and why

What are the different types of restaurants?

There are multiple types of restaurants. Some of them that you may consider include, but are not limited to:

• Fine Dining : They provide upscale meal experience with several courses. The atmosphere is sophisticated and classy. They can be franchises or individually owned. Of course, they are quite expensive.
• Casual Dining : This type of restaurants serve customers at their tables and the food prices are moderate. The atmosphere is not very sophisticated. Though the décor is often unique, it can be based on the type of food a restaurant serves.
• Fast Casual : These restaurants will make your food available quickly, but the food is healthier than fast food. Also, food is cheaper than casual dining. They have a counter service (you must collect food from the counter) and the décor is more contemporary.
• Ghost Kitchens : ghost kitchens (or “dark kitchen”) restaurants do not have a storefront, a dining room, signage, or décor. They operate using food delivery partners and take orders through online ordering or phone ordering.
• Fast Food : Think of Taco Bell , KFC , Burger King , etc. The food is relatively cheap and is served quickly. Food ingredients are usually preheated or precooked, and food delivery happens over the counter or via a drive-through window.
• Buffet Style : These restaurants are similar to the Family Style restaurants but with a fundamental difference. People get to select from a selection of food that are made available against a fixed price. However, customers need to serve themselves and they are allowed to return to the buffet for as many times as they want.

c) Products & Services

Of course, the products you will offer in your restaurant will depend on the type of restaurant you are opening. A Buffet Style restaurant, for example, usually prefer specialty cuisines like Indian, pizza, home cooking, Chinese, etc. Similarly, if you are opting for a Diner, you will most likely offer fried foods (fish & chicken), breakfast items, burgers, etc. at a low cost.

It is a good idea to give a list of food and drinks that you want to sell. Depending on the scale of your operations, you may have too many menu items. It is not possible to list every item on your menu, but make sure that you are listing the most important ones. If you specialize in one or a few specific dishes, mention that, too.

d) Pricing Strategy

In this sub-section, you must explain the pricing strategy of your restaurant. If you have multiple competitors (in the same niche) in the vicinity, you cannot have huge pricing variation, especially for the similar food items. Pricing will, of course, depend on the type of restaurant you are opening, and the food items you are offering.

For example, if you are sourcing the raw materials only from organic farms that do not use fertilizers and pesticides, your menu items will have a higher price tag.

Similarly, you cannot expect to charge expensive Fine Dining-like prices if you are opening a Casual Dining restaurant instead.

Create a pricing table and ensure to provide an average price range for your products. You don’t need to provide exact pricing for each product. Use price ranges instead.

Offering a pricing table is important because your pricing strategy will allow investors to tie your pricing strategy with your financial projections .

e) Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Restaurant Market Overview

A complete understanding of the market where you want to operate is important for the success of your business.

For example, if your intentions are to open a classy Fine Dining restaurant in a low-income area, you will not attract enough customers. Similarly, if you want to open a fast-food restaurant in a place where family dining is more popular, it will be a disaster.

Therefore, you must cover here 3 important areas:

• Market size & growth : how big is the restaurant industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : who is your target audience? What type of restaurants do they prefer? How regularly do they visit restaurants for dining? What type of food do they prefer? How much do they spend at restaurants on average?

a) Restaurant Industry Status Quo

How big is the restaurant industry in the us.

According to Finance Online , there were over 1 million restaurants (all types combined) in the US in 2021. The industry recovered post a 60% drop in sales in April 2020 due to the pandemic, and recorded an annualised market size of over $1 trillion dollars in July 2022 ($1,033 billion)..!

How big is the restaurant industry in your area?

Once you provide the overall picture of the US, divert your attention to the area where you want to operate. It might not be possible to find region or area-specific studies, and hence, you must estimate the market size .

For example, if there are 1,000,000 restaurants in the country with total annual revenue of $1 trillion, the average annual revenue for each establishment is around $1 million.

Therefore, if the area where you want to open your restaurant has 30 restaurants, you can safely assume that the restaurant industry in your area is worth approximately $30 million.

How fast is the restaurant industry growing in the area?

You must show the expected growth rate of the restaurant industry in your area. This information may not be available via online research papers. However, assessing the growth rate will not be difficult as you can use metrics such as the number of competitors in your area.

For instance, if there were 25 restaurants in 2018 and 30 restaurants in 2022, the average annual growth rate would be 5%.

What are the current restaurant market trends in your area?

It is vital to understand the trends of the restaurant industry in your area. Understanding trends will allow you to devise marketing strategies.

Understanding trends won’t be easy. You must conduct research and talk with your target audience. Additionally, you must also study your competitors to understand their target audience, the products they sell, etc.

Some common questions you may ask the target audience include:

• What type of restaurants do they prefer?
• At what time of the day do they prefer to visit a restaurant (breakfast, lunch, dinner)?
• How frequently do they visit restaurants?
• What type of foods do they usually order?

You can ask as many questions as you need to understand the evolving trends.

b) Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their food offerings, marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same products & services, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.

Here is a sample table that you can use:

The table you will create will depend on what information you need and want to include based on your proposed business model.

Restaurant SWOT Analysis

Try to provide a SWOT analysis . It must be crisp and highly focused. SWOT stands for Strength, Weakness, Opportunities, and Threats.

Here is a sample that you can use as a reference:

• Strength: 8 years of senior manager experience in a reputed Michelin Star Fine Dining restaurant operated & owned by a renowned chef and a master’s degree in Hospitality management, experienced senior chef with 22 years of experience
• Weakness: Startup cost, zero reputation
• Opportunities: An affluent neighborhood with a rising demand for fine dining establishments, only one fine dining restaurant in the 3-mile radius
• Threats: Increasing cost of raw materials because of geo-political turmoil restricting international trade routes

A clear understanding of your strengths and weakness along with opportunities and threats in the real market can help you to design your marketing strategy. It also helps potential investors to assess the risk and reward profile of your business.

c) Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience.

Some important points that you must include in your customer analysis include:

• Age and gender distribution (you can get local demographic data from census.gov )
• Per capita expenditure on dining
• Frequency of restaurant visits
• Average monthly income and disposable income
• Average bill size per visit
• Average yearly or monthly spending on food at restaurants
• Type of restaurants preferred
• The expected price range for food
• Inclination towards loyalty programs & free perks
• Things they dislike about existing restaurants and what they expect to be improved

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers and increase sales .

4. Sales & Marketing Strategy

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

• What is your USP ?
• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost ?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

Let’s expand a bit on a few questions below:

What marketing channels do restaurants use?

A few marketing channels that restaurants typically use are:

• Word-of-mouth, recommendations,
• Local listing & reviews (e.g. Google reviews)
• Online booking platforms (e.g. TheFork , Opentable , etc.)
• Influencer marketing
• Print media, etc.

It is not necessary to use all channels. You can start by focusing on a few of them and include other marketing strategies later instead.

What is your unique selling proposition?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs can be:

• Organic raw materials : we source organic farm fresh raw materials from local farmers
• Authentic Indian food : prepared by a Michelin Star chef from India
• Family run restaurant : run by a family, helping families connect over delicious food
• Price : affordable food & menu for the quality vs. competitors
• Location : the restaurant is located in a busy street, thereby attracting many customers who can easily glance over the menu
• Uniqueness : you may be the only tapas-style restaurant around, in an area where people are fond of this type of restaurant

5. Management & People

You must address 2 things here:

• The management team and their experience / track record
• The organizational structure : different team members and who reports to whom?

a) Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your restaurant business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the restaurant you are proposing. If they have specialized training, achievement, and experience (such as a degree in hospitality management, 3 Michelin stars, experience in developing menus for 5-star hotels, etc.), add that information.

b) Organization Structure

Even if you haven’t already hired a restaurant manager, server, chef, head cook, busser, cashier, bartenders, and other relevant staff members, you must provide here a chart of the organizational structure defining the hierarchy of reporting.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a restaurant.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your restaurant is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new restaurant, renovate your restaurant, etc.)
• The 5-year financial projections

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your restaurant . For a restaurant, startup costs are all the expenses you incur before you open your restaurant and start making sales . These expenses typically are:

• The leasing deposit for the space (if you rent) or to buy the real estate (if you buy)
• Renovations and improvements
• Equipment & appliances
• Furniture & tableware

Of course, the startup costs depend on a number of factors, like the size of your restaurant, its location, the facilities, the menu, etc.

On average, it costs $484,000 to $685,000 to open a casual restaurant with 150 seats (2,500 sq. ft.) in the US.

Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a restaurant, read our article here .

b) Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model for your restaurant.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your restaurant.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even ?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 15%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of covers (customers or orders) over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing, cost of raw materials (food supplies) and your sales volume. Indeed, a small change in these assumptions may have a significant impact on your revenues and profits.

7. Use of Funds

This is the last section of the business plan of your restaurant. Now that we have explained what your restaurant’s business model and concept are, what is your menu, your marketing strategy, etc., this section must now answer the following questions:

• How much funding do you need ?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any restaurant business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our restaurant financial model template , you won’t have any issues answering these questions.

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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• November 22, 2023

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How to Write a Restaurant Business Plan

Sally Lauckner is an editor on NerdWallet's small-business team. She has over 15 years of experience in print and online journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.

Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

When starting a business—no matter what type of business that may be—a business plan is essential to map out your intentions and direction. That’s the same for a restaurant business plan, which will help you figure out where you fit in the landscape, how you’re going to differ from other establishments around you, how you’ll market your business, and even what you’re going to serve. A business plan for your restaurant can also help you later if you choose to apply for a business loan .

While opening a restaurant isn’t as risky as you’ve likely heard, you still want to ensure that you’re putting thought and research into your business venture to set it up for success. And that’s where a restaurant business plan comes in.

We’ll go through how to create a business plan for a restaurant and a few reasons why it’s so important. After you review the categories and the restaurant business plan examples, you can use the categories to make a restaurant business plan template and start your journey.

Why you shouldn’t skip a restaurant business plan

First-time restaurateurs and industry veterans alike all need to create a business plan when opening a new restaurant . That’s because, even if you deeply understand your business and its nuances (say, seasonal menu planning or how to order correct quantities), a restaurant is more than its operations. There’s marketing, financing, the competitive landscape, and more—and each of these things is unique to each door you open.

That’s why it’s so crucial to understand how to create a business plan for a restaurant. All of these things and more will be addressed in the document—which should run about 20 or 30 pages—so you’ll not only have a go-to-market strategy, but you’ll also likely figure out some things about your business that you haven’t even thought of yet.

Additionally, if you’re planning to apply for business funding down the line, some loans—including the highly desirable SBA loan —actually require you to submit your business plan to gain approval. In other words: Don’t skip this step!

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How to write a restaurant business plan: Step by step

There’s no absolute format for a restaurant business plan that you can’t stray from—some of these sections might be more important than others, for example, or you might find that there’s a logical order that makes more sense than the one in the restaurant business plan example below. However, this business plan outline will serve as a good foundation, and you can use it as a restaurant business plan template for when you write your own.

Executive summary

Your executive summary is one to two pages that kick off your business plan and explain your vision. Even though this might seem like an introduction that no one will read, that isn’t the case. In fact, some investors only ask for the executive summary. So, you’ll want to spend a lot of time perfecting it.

Your restaurant business plan executive summary should include information on:

Mission statement: Your goals and objectives

General company information: Include your founding date, team roles (i.e. executive chef, sous chefs, sommeliers), and locations

Category and offerings: What category your restaurant fits into, what you’re planning to serve (i.e. farm-to-table or Korean), and why

Context for success: Any past success you’ve had, or any current financial data that’ll support that you are on the path to success

Financial requests: If you’re searching for investment or financing, include your plans and goals here and any financing you’ve raised or borrowed thus far

Future plans: Your vision for where you’re going in the next year, three years, and five years

When you’re done with your executive summary, you should feel like you’ve provided a bird’s eye view of your entire business plan. In fact, even though this section is first, you will likely write it last so you can take the highlights from each of the subsequent sections.

And once you’re done, read it on its own: Does it give a comprehensive, high-level overview of your restaurant, its current state, and your vision for the future? Remember, this may be the only part of your business plan potential investors or partners will read, so it should be able to stand on its own and be interesting enough to make them want to read the rest of your plan.

Company overview

This is where you’ll dive into the specifics of your company, detailing the kind of restaurant you’re looking to create, who’s helping you do it, and how you’re prepared to accomplish it.

Your restaurant business plan company overview should include:

Purpose: The type of restaurant you’re opening (fine dining, fast-casual, pop-up, etc.), type of food you’re serving, goals you have, and the niche you hope to fill in the market

Area: Information on the area in which you’re opening

Customers: Whom you’re hoping to target, their demographic information

Legal structure: Your business entity (i.e. LLC, LLP, etc.) and how many owners you have

Similar to your executive summary, you won’t be going into major detail here as the sections below will get into the nitty-gritty. You’ll want to look at this as an extended tear sheet that gives someone a good grip on your restaurant or concept, where it fits into the market, and why you’re starting it.

Team and management

Barely anything is as important for a restaurant as the team that runs it. You’ll want to create a section dedicated to the members of your staff—even the ones that aren’t yet hired. This will provide a sense of who is taking care of what, and how you need to structure and build out the team to get your restaurant operating at full steam.

Your restaurant business plan team and management section should have:

Management overview: Who is running the restaurant, what their experience and qualifications are, and what duties they’ll be responsible for

Staff: Other employees you’ve brought on and their bios, as well as other spots you anticipate needing to hire for

Ownership percentage: Which individuals own what percentage of the restaurant, or if you are an employee-owned establishment

Be sure to update this section with more information as your business changes and you continue to share this business plan—especially because who is on your team will change both your business and the way people look at it.

Sample menu

You’ll also want to include a sample menu in your restaurant business plan so readers have a sense of what they can expect from your operations, as well as what your diners can expect from you when they sit down. This will also force you to consider exactly what you want to serve your diners and how your menu will stand out from similar restaurants in the area. Although a sample menu is in some ways self-explanatory, consider the following:

Service : If your brunch is as important as your dinner, provide both menus; you also might want to consider including both a-la-carte and prix fixe menus if you plan to offer them.

Beverage/wine service: If you’ll have an emphasis on specialty beverages or wine, a separate drinks list could be important.

Seasonality: If you’re a highly seasonal restaurant, you might want to consider providing menus for multiple seasons to demonstrate how your dishes (and subsequent purchasing) will change.

Market analysis

This is where you’ll begin to dive deeper. Although you’ve likely mentioned your market and the whitespace you hope to address, the market analysis section will enable you to prove your hypotheses.

Your restaurant business plan market analysis should include:

Industry information: Include a description of the restaurant industry, its size, growth trends, and other trends regarding things such as tastes, trends, demographics, structures, etc.

Target market: Zoom in on the area and neighborhood in which you’re opening your restaurant as well as the type of cuisine you’re serving.

Target market characteristics: Describe your customers and their needs, how/if their needs are currently being served, other important pieces about your specific location and customers.

Target market size and growth: Include a data-driven section on the size of your market, trends in its growth, how your target market fits into the industry as a whole, projected growth of your market, etc.

Market share potential: Share how much potential there is in the market, how much your presence will change the market, and how much your specific restaurant or restaurant locations can own of the open market; also touch on any barriers to growth or entry you might see.

Market pricing: Explain how you’ll be pricing your menu and where you’ll fall relative to your competitors or other restaurants in the market.

Competitive research: Include research on your closest competitors, how they are both succeeding and failing, how customers view them, etc.

If this section seems like it might be long, it should—it’s going to outline one of the most important parts of your strategy, and should feel comprehensive. Lack of demand is the number one reason why new businesses fail, so the goal of this section should be to prove that there is demand for your restaurant and show how you’ll capitalize on it.

Additionally, if market research isn’t your forte, don’t be shy to reach out to market research experts to help you compile the data, or at least read deeply on how to conduct effective research.

Marketing and sales

Your marketing and sales section should feel like a logical extension of your market analysis section, since all of the decisions you’ll make in this section should follow the data of the prior section.

The marketing and sales sections of your restaurant business plan should include:

Positioning: How you’ll describe your restaurant to potential customers, the brand identity and visuals you’ll use to do it, and how you’ll stand out in the market based on the brand you’re building

Promotion: The tools, tactics, and platforms you’ll use to market your business

Sales: How you’ll convert on certain items, and who/how you will facilitate any additional revenue streams (i.e. catering)

It’s likely that you’ll only have concepts for some of these elements, especially if you’re not yet open. Still, get to paper all of the ideas you have, and you can (and should) always update them later as your restaurant business becomes more fully formed.

Business operations

The business operations section should get to the heart of how you plan to run your business. It will highlight both internal factors as well as external forces that will dictate how you run the ship.

The business operations section should include:

Management team: Your management structure and hierarchy, and who is responsible for what

Hours: Your hours and days of operation

Location: What’s special about your location that will get people through the door

Relationships: Any advantageous relationships you have with fellow restaurateurs, places for sourcing and buying, business organizations, or consultants on your team

Add here anything you think could be helpful for illustrating how you’re going to do business and what will affect it.

Here, you’ll detail the current state of your business finances and project where you hope to be in a year, three years, and five years. You’ll want to detail what you’ve spent, what you will spend, where you’ll get the money, costs you might incur, and returns you’ll hope to see—including when you can expect to break even and turn a profit.

Financial statements: If you’ve been in business for any amount of time, include existing financial statements (i.e. profit and loss, balance sheet, cash flow, etc.)

Budget: Your current budget or a general startup budget

Projections: Include revenue, cash flow, projected profit and loss, and other costs

Debt: Include liabilities if the business has any outstanding debt or loans

Funding request: If you’re requesting a loan or an investment, lay out how much capital you’re looking for, your company’s valuation (if applicable), and the purpose of the funding

Above all, as you’re putting your financials together, be realistic—even conservative. You want to give any potential investors a realistic picture of your business.

Feel like there are other important components but they don't quite fit in any of the other categories (or make them run too long)? That’s what the restaurant business plan appendix section is for. And although in, say, a book, an appendix can feel like an afterthought, don’t ignore it—this is another opportunity for you to include crucial information that can give anyone reading your plan some context. You may include additional data, graphs, marketing collateral (like logo mockups), and more.

Start Your Dream Business

The bottom line

Whether you’re writing a restaurant business plan for investors, lenders, or simply for yourself and your team, the most important thing to do is make sure your document is comprehensive. A good business plan for a restaurant will take time—and maybe a little sweat—to complete fully and correctly.

One other crucial thing to remember: a business plan is not a document set in stone. You should often look to it to make sure you’re keeping your vision and mission on track, but you should also feel prepared to update its components as you learn more about your business and individual restaurant.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How to write a restaurant business plan + free template (2024)

By Homebase Team

Whether you’re living the dream of opening your own restaurant or reworking your existing concept, a restaurant business plan template takes a ton of stress out of writing a business plan.

With prompts for every section you’ll need, we’ve created our free restaurant business plan template to be your operational foundation (you’re welcome!). Something you can download, customize, and come back to whenever you make business decisions for your restaurant.

But first, let’s go through all the ways a written business plan helps shape your restaurant, and why it boosts your business’s chance of success.

What is a restaurant business plan?

A restaurant business plan is a written document that lays out an overview of a restaurant, its objectives, and its plans for achieving its goals.

It’s needed across all kinds and sizes of restaurants, and can be a handful of pages long or much more detailed. A well-written restaurant business plan not only helps you organize your ideas, it’s also a key part of getting investor funding .

Starting a restaurant? Here’s why you need a business plan. 

Creatively, opening a new restaurant can be incredibly exciting. But it’s also super complicated. From licenses, to equipment, to building a team, each phase needs a lot of attention to detail.

Before you jump in, it’s important to shape your plan of attack, organizing your business ideas into a clear, concise narrative that an outsider could easily understand. A business plan is an essential part of this—and here’s why.

Your business plan helps you:

Set short and long-term goals.

A restaurant business plan not only shows how your business will operate in its early stages, it also shows what steps it’ll need to follow as time goes by. Setting both your short and long-term goals at the outset makes you more likely to achieve them.

Understand your resource needs.

Going through the exercise of writing a restaurant business plan is as important as having the finished document in front of you. As you organize your thoughts, your resource needs—from the amount of capital you need to raise all the way down to the equipment you need to find—will take shape. 

Reduce potential risks.

Sadly, some 60% of restaurants fail within the first year of opening. One of the main reasons? A failure to plan. Your business plan will help you plan for most challenges at your restaurant before they come up, keeping you on the right side of that number.

Develop a marketing strategy.

As you do your market analysis and figure out who your customers are likely to be, the ways you’ll promote your business will get clearer. The more specific you are with your market research, the easier and more effective your marketing efforts will be.

Build your team.

Your business plan helps you see who you’ll need on your team and which roles you’ll need to fill first . For investors, it’s a document showcasing everyone’s collective experience, personalizing your restaurant in their eyes and packing a professional punch.

Share your vision.

Whether you’re using your business plan to secure startup funding or need additional capital after you’ve already opened, your restaurant business plan shows an investor or lender exactly why they should get behind you. 

The 9 elements of a strong restaurant business plan.

Your restaurant business plan will be unique to your vision. But all good business plans hit standard points, and whoever reads yours will expect them. As you develop and finalize your ideas, here are nine key elements you should include. 

1. Executive summary

A strong restaurant business plan begins with a strong executive summary. This is a sharp, concise overview of your restaurant and your opportunity to grab people’s attention.

Here’s where you communicate, in a nutshell, what kind of restaurant you want to run. Which demographic will you be targeting? Why is your business something the community wants or needs? Especially if you’re asking for financing, include a snapshot of your financial information and growth plan as well. 

Your executive summary should briefly lay out:

• Your mission statement. Why are you starting this restaurant now, in this location? 
• Your idea. What’s the concept of this restaurant?
• Your plan of execution. What are your key steps to making this concept work?
• Your potential costs. What are your expected expenses?
• Your anticipated ROI. How much do you expect your restaurant to make?

Many investors will make a split-second decision off of the executive summary alone—it might be all they’re going to read, so make every word count.

2. Company description

Now it’s time to let your creativity out and give your restaurant concept life. Give a more detailed description of your concept that lets your passion for what you’re creating come through. 

Flesh out all the other details of your proposed restaurant, including your restaurant’s:

• Style of cuisine and any unique selling points or differentiators that will make customers choose you
• Service style
• Restaurant name (or at least ideas)
• Size, seating style, and capacity
• Location ideas or the location you’ve scouted or secured
• Ambiance ideas including décor, lighting, and music
• Operating hours
• Other service offerings like whether you’ll offer delivery or takeout, delivery guarantees, catering, and any retail products you plan to sell
• Legal structure (e.g. sole proprietorship, LLC) 
• Existing management and their roles, including yours
• Experts or advisors you’ve brought on board

3. Market analysis

Present the research you’ve done on your target market. Make a couple of buyer personas to represent your future customers, explaining:

• Where your target customers live
• Their income levels
• Their dining-out and/or ordering-in pain points (e.g. lack of late opening hours, lack of family friendliness)
• How often they dine out or order in

Go through which other restaurants already have a customer base in your area, then explain why people will choose your restaurant over others. 

4. Sample menu

Even at the business plan stage, menu engineering is crucial. The specific menu items you’re likely to serve—the biggest thing that will set you apart—should shine through with descriptions that are short, clear, and evocative. If you have an executive chef already, this is a great area for them to add input.

Use language that will get people excited about trying your offerings. Hire a designer or use an online program to create your own mockup using the same colors, fonts, and design elements as the rest of your branding. 

5. Business structure

Dive deeper into your business structure (sole proprietorship, partnership, LLC, etc.) and organizational management. Show what your different employee positions will be (co-founders, managers, servers) to give a sense of your team’s makeup. An organizational chart can be helpful here.

Investors won’t expect you to have your entire team on board at this stage, but you should have at least a couple of people firmed up. For the roles that are already filled, including your own, summarize your collective experience and achievements. Bullet points work well, or some people choose to go into more detail with full resumes for the executive team or critical team members.

6. Restaurant design and location

Long before you sign a lease, make sure that your new offering will outshine existing ones nearby. In this section of your business plan, explain why your chosen location, or the ones you’re narrowing down, are going to be an effective space for your target market.

Consider things like:

• Neighborhood demographics
• Foot traffic
• Labor costs
• Accessibility

Hand in hand with location, your restaurant’s interior design—both in its floor plan and its ambiance—is also crucial to your business’s viability. Come up with a captivating restaurant design that communicates your theme and matches your cuisine, creating a memorable customer experience. Decide how many tables you’ll be serving, and plan out any outdoor seating.

Touch on things like:

• Team uniforms
• Flatware and glassware

7. Marketing strategy

How do you plan to market your restaurant? Your plan for grabbing customers’ attention is vital to getting diners through the door, especially at the beginning before word-of-mouth advertising has taken off.

What kind of offers will you provide? Will you have promotional events, direct mail, or a social media strategy ? Go through your planned marketing campaigns and explain how each of them will help secure your target market. 

8. Takeout and delivery options

If you’ve decided to have takeout and delivery at your restaurant—pretty important for most target markets—decide whether you’ll use your own drivers or a professional fleet like Uber Eats or DoorDash.

Show how you’ll provide the smooth digital experience your customers will expect. Decide if and how your website will come into play, bearing in mind that in 2023, 40% of consumers preferred to order directly from the restaurant website .

9. Financial projections

Your restaurant’s projected budget need to be solid, especially if you’re using your business plan to get startup funds. Without this, investors have no way of knowing if your business is a good investment or when it will become profitable.

Hire an experienced accountant with expertise in running restaurants and write down your market research, your planned costs , and your projected income. Show how investor funds will be used and whether you’ll be putting up collateral to get a loan. Give a sales forecast, usually for the first five years, and make sure to give a break-even analysis.

Get started with our free restaurant business plan template.  

As the team behind Homebase , we know how much there is to consider when you’re starting a new restaurant. We’re proud to be an all-in-one partner for thousands of restaurants large and small—helping make everything from staffing, to scheduling, to team communication easier for business owners.

And we know that your restaurant business plan is a high-stakes document. That’s why we created our free restaurant business plan template to make sure nothing gets overlooked.

Check out our free, downloadable template to get your ideas into shape, get started on your restaurant journey—and get investors excited to jump on board with you. 

Download your restaurant business plan template for free: Restaurant business plan + free template (2024)

Stop chasing down phone numbers with our built-in team communication tool. Message teammates, share updates, and swap shifts — all from the Homebase app.

Restaurant business plan template FAQs

What is the basic planning document for a successful restaurant.

The basic planning document for successful restaurants is a restaurant business plan. A restaurant business plan lays out a restaurant’s long and short-term goals and its plans for achieving those goals. Restaurant planners use it both to finetune their ideas and to secure investor funding.

How to write a restaurant business plan.

When writing a restaurant business plan, include an executive summary, a detailed restaurant description, market analysis research, a sample menu, a breakdown of your business structure, the design and location of your restaurant, your planned takeout and delivery options, your marketing strategy, and your financial projections.

What makes a business plan template for restaurants different from a standard business plan?

A restaurant business plan template differs from a standard business plan by including things like menu engineering, interior design, kitchen operations, front-of-house management, takeout and delivery offerings, and location analysis, which are unique to the food service industry.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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Restaurant Business Plan Template

Written by Dave Lavinsky

If you want to start a restaurant or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their restaurants. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a restaurant business plan step-by-step so you can create your restaurant’s business plan today.

Download our Ultimate Restaurant Business Plan Template here >

What Is a Restaurant Business Plan?

A restaurant business plan provides a snapshot of your restaurant business as it stands today, and lays out your projected growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research, information about your target market, and a sample menu to support your winning restaurant business plan.

Why You Need a Business Plan for a Restaurant

If you’re looking to start a restaurant or grow the existing restaurant you need a business plan. A restaurant business plan will help you secure funding, if needed, and plan out the growth of your restaurant in order to improve your chances of success. Your restaurant business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Restaurants

With regards to funding, the main sources of funding for a restaurant are bank loans and angel investors. With regards to bank loans, banks will want to review your restaurant business plan and gain confidence that you will be able to repay your loan and interest.

To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional restaurant business plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a restaurant is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding or, like a bank, they will give you a loan. Private equity groups are also a good source of funding for restaurant chains looking to expand further.

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How to write a restaurant business plan.

Use the following restaurant business plan template which includes the 10 key elements for how to write a restaurant business plan that will help you start, grow, and/or secure funding for your business.

Executive Summary

Your executive summary provides an introduction to your restaurant business plan, but it is normally the last section you write because it provides a summary of each key section of your business plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of restaurant business you are operating and the status; for example, are you a startup, do you have a restaurant that you would like to grow, or are you operating a chain of restaurants?

Next, provide an overview of each of the subsequent sections of your business plan. For example, give a brief overview of the restaurant industry. Discuss the type of restaurant you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer a financial analysis of your business.

Company Overview

In your company analysis, you will provide a brief description of the type of restaurant you are operating.

For example, are you writing a small restaurant business plan or a business plan for a restaurant franchise. Further, you might operate one of the following types:

• Fine Dining : characterized by the fancy decor, a dress code, and high prices
• Casual Dining : offers waiter/waitress service in a nice (but not overly fancy) atmosphere with moderate prices
• Fast Casual : characterized by quality food (close to the quality of casual dining) but no waiter/waitress service in an accessible atmosphere
• Fast Food : quick service style provided at the counter or via a drive-through. Lowest quality food and lowest prices
• Steak Restaurant : focuses on steak entrees and is usually a higher priced and fancier restaurant
• Buffet Restaurant : may or may not offer waiter/waitress service. Patrons serve themselves from buffet food selection
• Ethnic Restaurant : focuses on a specific ethnic cuisine such as Indian food, Mexican food, or Moroccan cuisine.

Within these types of restaurants, there are also ethnic food specialties such as American, Italian, Japanese, Chinese, Indian, etc.

In addition to explaining the type of restaurant you operate, the Company Analysis section of your restaurant business plan needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• Your mission statement and how it connects to your restaurant’s brand.
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new restaurant openings, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, also called a Market Analysis, you need to provide a market overview and an overview of the industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the restaurant industry educates you. It helps you understand the target market in which you are operating.

Secondly, research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards speedy restaurant services, it would be helpful to ensure your business plan calls for take-out or other quick-service options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your business plan, you achieve just that.

The following questions should be answered in the industry analysis section of your restaurant business plan:

• How big is the restaurant business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your restaurant? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your restaurant business plan must detail the customer base or target market you serve and/or expect to serve.

The following are examples of customer segments: business executives, college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of restaurant you operate. Clearly, baby boomers would want a different atmosphere, pricing and sample menu options, and would respond to different marketing promotions than teens.

Try to break out your customers in terms of their demographic and psychographic profiles. With regards to diner demographics, include a discussion of the ages, genders, locations, and average income levels of the new customers you seek to serve. Because most restaurants primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. This should also include how your customers choose where they should eat, their dining habits, and how much they are willing to spend on a meal.

The answers to the following questions should be included in your customer analysis:

• Who is your target market?
• What are their needs and wants?
• How do they make dining decisions?
• What motivates them to choose one restaurant over another?

The more you can understand and define these needs, the better you will do in attracting and building customer loyalty.

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Competitive Analysis

This competitive research should help you identify the direct and indirect competitors that your business faces and then focus on the latter.

Direct competitors are other restaurants.

Indirect competitors are other options that customers have to purchase from you that aren’t directly competing. This includes restaurants, supermarkets, and customers preparing dishes for themselves at home. You need to mention such competition to show you understand that not everyone frequents a restaurant each day.

With regards to direct competition, you want to detail the other restaurants with which you compete. Your greatest competitors will be restaurants located very close to your specific location, who are of the same type (e.g., fine dining, casual dining, etc.) and who offer the same cuisine (Japanese, Italian, etc.).

For each such competitor, provide an overview of the other businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of repeat customers do they serve?
• What menu items do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the existing customers’ perspective. And don’t hesitate to find out this information from customers by reviewing your competitors’ Yelp listings and other review pages.

The final part of this section is to document your areas of competitive advantage. For example:

• Will you provide superior food items?
• Will you provide menu items that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your meals?
• Will you provide better customer service?
• Will you offer better pricing?

Think about your unique selling points that will help you outperform your competition and document them in this section of your business plan.

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Marketing plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a restaurant business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of restaurant that you documented in your Company Analysis. Then, detail the specific menu items you offer/will offer.

Price : Document the prices. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu items you offer and their prices.

Place : Place refers to the location of your restaurant. Perform a location analysis and mention how the location will impact your success. For example, is your restaurant located next to a heavily populated office building, or gym? Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate food trucks, detail the locations where the trucks will operate.

Promotions : the final part of your restaurant marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your restaurant’s front store extra appealing to attract passing customers
• Search engine marketing and optimization
• Social media posting/advertising
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your restaurant business plan explained your goals, your operational plan describes how you will meet them.

This section of your restaurant business plan should have two key elements as follows:

• Everyday short-term processes include all of the tasks involved in running your restaurant such as serving customers, procuring supplies, keeping the restaurant clean, etc.
• Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your restaurant’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in the restaurant business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience operating restaurants and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Pro-Forma Profit & Loss Statement / Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows how much revenue you expect to earn or have earned, and then subtracts your costs to show your actual or projected profit.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Pro-Forma Balance Sheets

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.

For instance, if you spend $250,000 on building out your restaurant, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Pro-Forma Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

For example, let’s say a company approached you with a massive $100,000 catering contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for ingredients, supplies, equipment rentals, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180-day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a restaurant:

• Location build-out including design fees, construction, etc.
• Cost of equipment like stoves, refrigerators, blenders
• Cost of ingredients and maintaining an adequate amount of supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections, detailed cost analysis and/or break-even analysis in the appendix of your business plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint, location lease, or initial menu design.

Taking the time to write your own restaurant business plan for your business is a worthwhile endeavor. It will help you communicate your ideas and provide potential investors with the information they need to make an informed decision about investing in your restaurant.

A well-crafted business plan will also give you a road map for growing your business and achieving your long-term goals. So, while it may take some time to put together, it will be well worth the effort in the end.

If you follow the restaurant business plan template above, by the time you are done, you will truly be an expert. You will really understand the restaurant business, your competition, and your existing customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful restaurant concept.

Want more tips? Check out our related articles:

• How to Start a Restaurant
• Restaurant Startup Costs: How Much Does It Cost To Start a Restaurant?
• How To Write a Restaurant Marketing Plan + Template & Examples
• How To Get Funding To Start and/or Grow Your Restaurant

Restaurant Business Plan Template FAQs

What is the easiest way to complete my restaurant business plan.

Growthink’s Ultimate Restaurant Business Plan Template allows you to quickly and easily complete your restaurant business plan.

Where Can I Download a Free Restaurant Business Plan PDF?

You can download our restaurant business plan PDF template here . This is a restaurant business plan template you can use in PDF format.

Where Can I Find a Small Restaurant Business Plan PDF?

Our small restaurant business plan PDF is a free resource to to help you get started on your own small restaurant business plan.

Don’t you wish there was a faster, easier way to finish your Restaurant business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan professional services can help you create a winning business.

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Restaurant Business Plan: What To Include, Plus 8 Examples

• Business Growth & Management , Templates & Guides

Do you want to ensure the success of your new foodservice endeavor? Write a restaurant business plan.

In this article, the experts at Sling tell you why a business plan is vital for both new and existing businesses and give you tips on what to include.

Table Of Contents

What Is A Restaurant Business Plan?

Why is a restaurant business plan important, questions to ask first, what to include in an effective restaurant business plan, how to format a restaurant business plan, efficient workforce management is essential for success.

At its most basic, a restaurant business plan is a written document that describes your restaurant’s goals and the steps you will take to make those goals a reality.

This business plan also describes the nature of the business itself, financial projections, background information, and organizational strategies  that govern the day-to-day activity of your restaurant.

A restaurant business plan is vital for the success of your endeavor because, without one, it is very difficult — sometimes even impossible — to obtain funding from an investor or a bank.

Without that all-important starting or operational capital, you may not be able to keep your doors open for long, if at all.

Even if funding isn’t a primary concern, a business plan provides you — the business owner or manager — with clear direction on how to translate general strategies into actionable plans  for reaching your goals.

The plan can help solidify everything from the boots-on-the-ground functional strategy  to the mid-level business strategy  all the way up to the driving-force corporate strategy .

Think of this plan as a roadmap that guides your way when things are going smoothly and, more importantly, when they aren’t.

If you want to give your restaurant the best chance for success, start by writing a business plan.

Sitting down to write a restaurant business plan can be a daunting task.

As you’ll see in the What To Include In An Effective Restaurant Business Plan section below, you’ll need a lot of information and detail to ensure that the final document is both complete and effective.

Instead of starting with word one, it is hugely beneficial to answer a number of general questions first.

These questions will help you narrow down the information to include in your plan so the composition process feels less difficult.

The questions are:

• What problem does the business’s product or service solve?
• What niche will the business fill?
• What is the business’s solution to the problem?
• Who are the business’s customers?
• How will the business market and sell its products to them?
• What is the size of the market for this solution?
• What is the business model for the business?
• How will the business make money?
• Who are the competitors?
• How will the business maintain a competitive advantage?
• How does the business plan to manage growth?
• Who will run the business?
• What makes those individuals qualified to do so?
• What are the risks and threats confronting the business?
• What can you do to mitigate those risks and threats?
• What are the business’s capital and resource requirements?
• What are the business’s historical and projected financial statements?

Depending on your business, some of these questions may not apply or you may not have applicable answers.

Nevertheless, it helps to think about, and try to provide details for, the whole list so your finished restaurant business plan is as complete as possible.

Once you’ve answered the questions for your business, you can transfer a large portion of that information to the business plan itself.

We’ll discuss exactly what to include in the next section.

In this section, we’ll show you what to include in an effective restaurant business plan and provide a brief example of each component.

1) Executive Summary

You should always start any business plan with an executive summary. This gives the reader a brief introduction into common elements, such as:

• Mission statement
• Overhead costs
• Labor costs
• Return on investment (ROI)

This portion of your plan should pique the reader’s interest and make them want to read more.

Fanty & Mingo’s is a 50-seat fine-dining restaurant that will focus on Sweruvian (Swedish/Peruvian) fusion fare.

We will keep overhead and labor costs low thanks to simple but elegant decor , highly skilled food-prep staff, and well-trained servers.

Because of the location and surrounding booming economy, we estimate ROI at 20 percent per annum.

2) Mission Statement

A mission statement is a short description of what your business does for its customers, employees, and owners.

This is in contrast to your business’s vision statement which is a declaration of objectives that guide internal decision-making.

While the two are closely related and can be hard to distinguish, it often helps to think in terms of who, what, why, and where.

The vision statement is the where of your business — where you want your business to be and where you want your customers and community to be as a result.

The mission statement is the who , what , and why of your business — it’s an action plan that makes the vision statement a reality

Here’s an example of a mission statement for our fictional company:

Fanty and Mingo’s takes pride in making the best Sweruvian food, providing fast, friendly, and accurate service. It is our goal to be the employer of choice and offer team members opportunities for growth, advancement, and a rewarding career in a fun and safe working environment.

3) Company Description

In this section of your restaurant business plan, you fully introduce your company to the reader. Every business’s company description will be different and include its own pertinent information.

Useful details to include are:

• Owner’s details
• Brief description of their experience
• Legal standing
• Short-term goals
• Long-term goals
• Brief market study
• An understanding of the trends in your niche
• Why your business will succeed in these market conditions

Again, you don’t have to include all of this information in your company description. Choose the ones that are most relevant to your business and make the most sense to communicate to your readers.

Fanty & Mingo’s will start out as an LLC, owned and operated by founders Malcolm Reynolds and Zoe Washburne. Mr. Reynolds will serve as managing partner and Ms. Washburne as general manager.

We will combine atmosphere, friendly and knowledgeable staff, and menu variety to create a unique experience for our diners and to reach our goal of high value in the fusion food niche.

Our gross margin is higher than industry average, but we plan to spend more on payroll to attract the best team.

We estimate moderate growth for the first two years while word-of-mouth about our restaurant spreads through the area.

4) Market Analysis

A market analysis is a combination of three different views of the niche you want to enter:

• The industry  as a whole
• The competition your restaurant will face
• The marketing  you’ll execute to bring in customers

This section should be a brief introduction to these concepts. You can expand on them in other sections of your restaurant business plan.

The restaurant industry in our chosen location is wide open thanks in large part to the revitalization of the city’s center.

A few restaurants have already staked their claim there, but most are bars and non-family-friendly offerings.

Fanty & Mingo’s will focus on both tourist and local restaurant clientele. We want to bring in people that have a desire for delicious food and an exotic atmosphere.

We break down our market into five distinct categories:

• High-end singles
• Businessmen and businesswomen

We will target those markets to grow our restaurant  by up to 17 percent per year.

Every restaurant needs a good menu, and this is the section within your restaurant business plan that you describe the food you’ll serve in as much detail as possible.

You may not have your menu design complete, but you’ll likely have at least a handful of dishes that serve as the foundation of your offerings.

It’s also essential to discuss pricing and how it reflects your overall goals and operating model. This will give potential investors and partners a better understanding of your business’s target price point and profit strategy.

We don’t have room to describe a sample menu in this article, but for more information on menu engineering, menu pricing, and even a menu template, check out these helpful articles from the Sling blog:

• Menu Engineering: What It Is And How It Can Increase Profits
• Restaurant Menu Pricing: 7 Tips To Maximize Profitability
• How To Design Your Menu | Free Restaurant Menu Template

6) Location

In this section, describe your potential location (or locations) so that you and your investors have a clear image of what the restaurant will look like.

Include plenty of information about the location — square footage, floor plan , design , demographics of the area, parking, etc. — to make it feel as real as possible.

We will locate Fanty & Mingo’s in the booming and rapidly expanding downtown sector of Fort Wayne, Indiana.

Ideally, we will secure at least 2,000 square feet of space with a large, open-plan dining room and rich color scheme near the newly built baseball stadium to capitalize on the pre- and post-game traffic and to appeal to the young urban professionals that live in the area.

Parking will be available along side streets and in the 1,000-vehicle parking garage two blocks away.

7) Marketing

The marketing section of your restaurant business plan is where you should elaborate on the information you introduced in the Market Analysis section.

Go into detail about the plans you have to introduce your restaurant to the public and keep it at the top of their mind.

Fanty & Mingo’s will employ three distinct marketing tactics to increase and maintain customer awareness:

• Word-of-mouth/in-restaurant marketing
• Partnering with other local businesses
• Media exposure

We will direct each tactic at a different segment of our potential clientele in order to maximize coverage.

In the process of marketing to our target audience, we will endeavor to harness the reach of direct mail and broadcast media, the exclusivity of the VIP party, and the elegance of a highly trained sommelier and wait staff.

8) Financials

Even though the Financials section is further down in your restaurant business plan, it is one of the most important components for securing investors and bank funding.

We recommend hiring a trained accountant  to help you prepare this section so that it will be as accurate and informative as possible.

Fanty & Mingo’s needs $250,000 of capital investment over the next year and a half for the following:

• Renovations to leased space
• Dining room furniture
• Kitchen and food-prep equipment
• Liquor license

Projected profit and loss won’t jump drastically in the first year, but, over time, Fanty & Mingo’s will develop its reputation and client base. This will lead to more rapid growth toward the third and fourth years of business.

Most entrepreneurs starting a new business find it valuable to have multiple formats of their business plan.

The information, data, and details remain the same, but the length and how you present them will change to fit a specific set of circumstances.

Below we discuss the four most common business plan formats to cover a multitude of potential situations.

Elevator Pitch

An elevator pitch is a short summary of your restaurant business plan’s executive summary.

Rather than being packed full of details, the elevator pitch is a quick teaser of sorts that you use on a short elevator ride (hence the name) to stimulate interest in potential customers, partners, and investors

As such, an effective elevator pitch is between 30 and 60 seconds and hits the high points of your restaurant business plan.

A pitch deck is a slide show and oral presentation that is designed to stimulate discussion and motivate interested parties to investigate deeper into your stakeholder plan (more on that below).

Most pitch decks are designed to cover the executive summary and include key graphs that illustrate market trends and benchmarks you used (and will use) to make decisions about your business.

Some entrepreneurs even include time and space in their pitch deck to demonstrate new products coming down the pipeline.

This won’t necessarily apply to a restaurant business plan, but, if logistics permit, you could distribute small samples of your current fare or tasting portions of new dishes you’re developing.

Stakeholder Plan (External)

A stakeholder plan is the standard written presentation that business owners use to describe the details of their business model to customers, partners, and potential investors.

The stakeholder plan can be as long as is necessary to communicate the current and future state of your business, but it must be well-written, well-formatted, and targeted at those looking at your business from the outside in.

Think of your stakeholder plan as a tool to convince others that they should get involved in making your business a reality. Write it in such a way that readers will want to partner with you to help your business grow.

Management Plan (Internal)

A management plan is a form of your restaurant business plan that describes the details that the owners and managers need to make the business run smoothly.

While the stakeholder plan is an external document, the management plan is an internal document.

Most of the details in the management plan will be of little or no interest to external stakeholders so you can write it with a higher degree of candor and informality.

After you’ve created your restaurant business plan, it’s time to take steps to make it a reality.

One of the biggest challenges in ensuring that your business runs smoothly and successfully is managing  and optimizing  your team. The Sling  app can help.

Sling not only includes powerful and intuitive artificial-intelligence-based scheduling tools but also many other features to help make your workforce management more efficient, including:

• Time and attendance tracking
• Built-in time clock
• Labor cost  optimization
• Data analysis and reporting
• Messaging and communication
• And much more…

With Sling, you can schedule faster, communicate better, and organize and manage your work from a single, integrated platform. And when you use Sling for all of your scheduling  needs, you’ll have more time to focus on bringing your restaurant business plan to life.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com  today.

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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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Restaurant Business Plan: Step-by-Step Guide + examples

Dreaming of opening a 🍴 restaurant? Passion, creativity, and delicious food are key. But for long-term success, a business plan is essential too.

Maja Jankowska

Are you dreaming of owning your own restaurant? Picture the sizzle of a hot skillet, the laughter of satisfied guests, and the fulfillment of sharing your culinary creations with the world. But before you dive into this flavorful adventure, there’s a crucial ingredient you can’t overlook: a winning restaurant business plan.

What is a business plan for?

A business plan is a vital document for every restaurant owner. It provides a roadmap for success, helps secure funding, guides financial and operational decisions, mitigates risks, and facilitates effective communication. 

Just like any other business, a restaurant needs a well-crafted business plan to ensure its success and sustainability. Without a business plan, you risk operating in the dark, making decisions on a whim, and facing unexpected challenges that could have been avoided. 

Investing time and effort into creating a solid business plan sets your restaurant on the path to achieving your culinary dreams and exceeding customer expectations.

Create Restaurant’s Business Plan in these 9 steps:

✔️ 1. Start with an executive summary ✔️ 2. Describe your concept ✔️ 3. Conduct Market analysis ✔️ 4. Define your management and organization ✔️ 5. Give a sample “yummy”  Menu ✔️ 6. Create design and branding ✔️ 7. Provide a Location ✔️ 8. Establish Marketing plan ✔️ 9. Define Financial plan

1. Executive summary

The executive summary is like the appetizer of your restaurant business plan – it’s the first bite that leaves a lasting impression. Its purpose is to capture the essence of your entire plan and entice time-crunched reviewers, such as potential investors and lenders, to delve deeper into your vision. It’s worth noting that the executive summary should be the final section you write.

To craft a concise and captivating summary, it’s crucial to highlight key points, including your unique concept, target market, and financial projections. Additionally, bear in mind that the executive summary sets the tone for the rest of your plan, so it’s essential to make it irresistible and leave readers yearning for more.

When it comes to the executive summary of your restaurant business plan, brevity is key . You have only one page to capture the attention of readers, but don’t worry, it’s definitely doable. Here’s what your executive summary should include:

• Restaurant concept : What does your business do?
• Goals and vision : What does your business want to achieve?
• Restaurant differentiation : What makes your menu/concept different, and what sets you apart?
• Projected financial state : What revenue do you anticipate?
• The team : Who is involved in the business?

2. Describe your concept

In the world of restaurant business plans, there’s a section that holds immense importance. It’s the one that answers two fundamental questions: Who are you, and what do you plan to do?

This is the section where you fully introduce your company, and it deserves special attention. Share all the important details that paint a vivid picture of your unique business. Include the restaurant’s name, location, and contact information. Additionally, provide relevant details such as the chef’s background and what makes your restaurant stand out in the market.

Curious about concept creation? Watch our short video featuring a summary of an example restaurant concept below! 👇

Now is your opportunity to showcase your vision and establish a unique identity for your restaurant. Utilize this section to highlight what sets you apart and capture the reader’s imagination.

3. Market analysis

Market analysis helps you understand your potential customers, competition, and overall restaurant market trends. It’s like having a crystal ball to shape your restaurant’s success.

Target audience 

When it comes to your potential market, you want to know how many people are hungry for what you’re serving. Sounds exciting, right? To estimate this, you’ll gather data on your target customers, like their age group or preferences, and combine it with industry trends. It’s like finding the perfect recipe to satisfy their cravings.

Competition

Now, let’s tackle the competition. Every restaurant has rivals, even if they’re serving a unique dish. It’s crucial to identify direct or indirect competitors and understand what makes you stand out. Are you offering affordable prices, a one-of-a-kind experience, or catering to a specific niche? Highlight your “secret sauce” that sets you apart from the rest.

Market analysis for restaurant’s business plan

Market analysis also involves a SWOT analysis. Don’t let the jargon scare you. It simply means evaluating your strengths, weaknesses, opportunities, and threats. Think of it as a superhero assessment for your restaurant. Identify what you excel at, areas for improvement, potential market opportunities, and external factors that could impact your success.

Example of SWOT analysis for a restaurant

Remember, market analysis is like a compass guiding your restaurant’s journey. It helps you make informed decisions, attract investors, and stay ahead of the game. So, embrace the power of market analysis, and let it shape the destiny of your delicious dining destination.

4. Management and organization

Effective management and organization are critical for success in the restaurant sector. This section of your business plan introduces the talented individuals who will lead your restaurant to new heights.

Outline your legal structure, whether it’s an S corporation, limited partnership, or sole proprietorship, providing key information for stakeholders.

Showcase your management team using an organizational chart to highlight their roles, responsibilities, and contributions. Their expertise and guidance are crucial for seamless operations and exceptional customer experiences.

With a strong management team in place, your restaurant is poised for success. They are the driving force behind your journey to greatness. Let’s meet the key players who will make it happen!

Streamline your operations and optimize your financial performance With resOs , you can efficiently manage reservations, track inventory, analyze sales data, and streamline your overall workflow. Get your FREE plan

5. Sample “yummy” Menu 

In the restaurant industry, your menu plays a main role as the core product. Include a section in your business plan that highlights key details about your menu offerings to engage readers.

If you offer a diverse range of dishes, provide a brief overview of each category. Alternatively, if your menu focuses on specific specialties or signature dishes, provide more detailed descriptions for each item.

You can also mention any upcoming menu additions or unique culinary creations that will enhance profitability and attract customers.

6. Design and branding 

When it comes to starting a restaurant, don’t underestimate the power of design and branding. They’re the secret ingredients that can make your establishment truly stand out. Think about it – when customers walk through your front door, what do they see? The right design and branding can instantly captivate their attention and make them feel right at home.

So, take some time to envision the overall aesthetic and mood you want to create.

Do you imagine a cozy and rustic setting or a sleek and modern vibe?

Let your creativity shine through! Include captivating photos of similar restaurants that inspire you and give potential investors a glimpse of your vision.

And don’t forget about your logo! If you’ve already designed one, proudly showcase it in your business plan. It’s the visual representation of your restaurant’s personality and will help establish brand recognition.

resOS’ customizable interface for your booking system

Stand out in the competitive restaurant industry with resOS’ customizable booking management system . Personalize every aspect of the interface to reflect your restaurant’s unique brand identity. Seamlessly integrate your logo, colors, and visual elements, creating a cohesive and immersive experience for your guests. With resOS, you have the power to revolutionize your restaurant’s image and leave a lasting impression.

Details matter too! Share your plans for specific design elements , from the choice of furniture to the color palette that will adorn your space. The more you paint a vivid picture, the more investors and customers will be enticed by your unique ambiance.

7. Location

For a restaurant, location can make or break the business. Occasionally, a restaurant concept is so good that people go out of their way to find it. But, more realistically, your location needs to be convenient for your target market. If it’s hard for your customers to get to you, hard for them to park, and not something they notice as they drive by, they’re unlikely to check your restaurant out.

In your business plan, make sure to discuss the potential locations that you hope to occupy, assuming you haven’t already secured the location. Explain why the location is ideal for your target market and how the location will help attract customers.

Unlock the potential of your restaurant’s location and streamline reservations with resOS. Our platform offers seamless integration with Reserve With Google , allowing customers to easily discover and book tables directly from Google search results and maps. By enabling this feature, you’ll maximize your restaurant’s visibility and attract more diners with just a few clicks. Experience the power of location-based reservations with resOS .

Be sure to explain the complete costs of your location and what kinds of renovations will be necessary to open your restaurant.

8. Marketing plan

In today’s competitive restaurant industry, it’s important to showcase your marketing strategy to investors. They want to know how you’ll create buzz and keep it going before and after your grand opening.

Create a winning business plan with a strong marketing focus. Our Restaurant Business Plan Steps Graphic (👆 see above) is your visual guide, including key marketing strategies. Download or save for later and plan your path to success.

Whether you’ve enlisted a top-notch Marketing company or have a solid ready-to-go marketing plan, highlight your chosen path. Discuss the unique strengths of your selected agency and why they stand out, including their notable clients. Alternatively, showcase your in-house plan, leveraging social media, your website, and valuable media connections.

A well-crafted marketing plan holds the key to differentiating your restaurant and attracting customers. Prepare to tantalize taste buds and offer an exceptional dining experience. Stay in tune with the latest restaurant industry trends, leverage effective marketing tools, and optimize your online presence. 

Lastly, integrate a robust restaurant booking system to streamline reservations and enhance the overall customer experience. With these strategic elements in place, success is within your reach.

9. Financial Plan

Financial analysis is a crucial part of your restaurant’s business plan. It helps investors assess the profitability of your concept and whether it’s a worthwhile investment. In this section, you’ll outline how you plan to allocate your funds in the first year and provide projections for costs and revenues.

Here are the 🔑 key components to include:

Investment Plan: Explain the initial investment costs, such as kitchen equipment, furniture, employee wages, legal fees, marketing expenses, and working capital. This shows how you’ll use your funds effectively.

Profit and Loss Projection: Estimate your restaurant’s costs and sales figures in the profit and loss statement. Consider factors like the size of your establishment, your target market, and the existing competition in your chosen location.

Break-Even Analysis: Show investors the monthly revenue you need to achieve to cover all your expenses and reach profitability. This analysis considers overhead costs, operational expenses, and factors that may affect revenue fluctuations throughout the year.

Claim your FREE plan on resOS today! Ready to revolutionize your business management? Join resos.com for FREE and take control of your operations. ✅ Seamless calendar integration ✅ Customizable booking forms ✅ Automated reminders ✅ Real-time availability updates Don’t miss out! Sign up now at resos.com and experience stress-free scheduling. Your time is valuable, so claim your FREE plan today!

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How to Write a Small Restaurant Business Plan + Free Sample Plan PDF

Makenna Crocker

10 min. read

Updated March 18, 2024

Free Download:  Sample Restaurant Business Plan Template

From greasy spoon diners to Michelin Star restaurants, food service has captured the hearts and imaginations of countless culinary entrepreneurs.

In the United States, 90% of restaurant owners operate small restaurants with fewer than 50 employees . And 70% operate in just one location.

If you’re passionate about food and dream of opening a restaurant, you have plenty of company. But cooking skills alone won’t cut it. You need a plan.

In this article, we’ll walk you through writing a small restaurant business plan, from conducting market research to developing promotional strategies and creating a financial forecast. 

Need more guidance? Download our free small restaurant business plan template .

Why write a small restaurant business plan?

Starting a restaurant from scratch isn’t cheap.  Startup costs range from $175,000 to $750,000 and include hefty upfront expenses like:

• Building lease
• Kitchen equipment
• Ingredient sourcing

The financials section of a business plan gives you space to compile these costs into an expense budget and compare them to your revenue projections . These will be invaluable in helping you determine if your restaurant concept is financially viable.

And if you need a bank loan or investor to help fund your restaurant , they’ll want to see a plan that includes financial projections (more on that later).

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• How to write a small restaurant business plan

The business plan is not only where you lay out your plan, vision, and goals for the restaurant – it pushes you to thoroughly research and understand your market , competitors , and customers to make informed decisions. It guides you through the intricacies of opening and running a small restaurant and helps you keep your finances in order.

Here are some tips for writing a small restaurant business plan that sets you up for success.

• Start with a company overview

A good place to start is to think about the big picture. What do you want your restaurant to be? Are you envisioning upscale dining in a candlelit, intimate setting? Or maybe you’re going for comfort food in a family-friendly atmosphere?

Capture the essence of your restaurant with a brief, attention-grabbing overview. Think of the start of your overview section as an elevator pitch. You’re introducing your concept and vision to highlight what will make your business unique .

Just keep it succinct. 

You’ll need to include other important information about your business here, such as the legal structure of your business and the qualifications of you and your management team.

If you’re writing a business for an existing restaurant, you should also cover its history – when the restaurant was founded, who was involved, and milestones it has reached.

• Understand your target market

Conducting a thorough market analysis is key to the success of your small restaurant. In an industry as competitive as the restaurant business, you’ll need to have your finger on the pulse of your dining market if you hope to create a unique offering.

Defining your target market is essential when starting your restaurant, helping answer questions like:

• Is there demand in the local market for your food?
• Who are your primary competitors? 
• Is there building space for lease near where your target customers live or work?
• What types of partnerships with food distributors (wholesalers, farmers, butchers, etc.) will be needed to ensure a steady flow of fresh ingredients?

The first step is to identify who your diners will be. 

It’s unrealistic to try to appeal to every single customer. So, ask yourself who you envision walking through your doors. Are they:

• Adults aged 40 and over, with lots of disposable income and exotic culinary tastes.
• Children, young adults, and families looking for quick, convenient food that doesn’t stretch their budgets.

Of course, these aren’t the only two customer demographics for a restaurant. But you should get the sense that these customer segments have very different preferences.

Read more: Target market example

Understanding your target market involves more than just demographics. Consider their:

• Spending habits
• Daily routines

If you plan to operate in a busy city center, your target market might include working professionals seeking quick lunch options or upscale dining options after work. But if you’re opening in a less visible area near residential neighborhoods, you may be more likely to target families.

• Size up your competition

With a target customer in mind, you need to understand who you’ll be competing with for their dining budget.

Analyzing your competitors is about understanding their strengths, weaknesses, and strategies. 

Start by identifying direct competitors (other small restaurants) and indirect competitors (like fast-food chains or food trucks). Observe how they attract customers, the ambiance they create, and the variety and pricing of their menus.

Get a feel for their operational strategies:

• How much staffing do they have?
• How fast (or slow) is their service?
• What kinds of supplier relationships do they seem to have?

And their marketing tactics :

• How do they engage with customers?
• What deals or promotions do they offer?
• What kind of reviews are they getting online?

Finally, think about their long-term position: 

• Have they expanded or downsized recently?
• Have they changed their operating hours?
• Have they changed their menu?

As you observe these competitors and their customers, ask yourself what they are doing right and where they are coming up short. 

This knowledge will help you identify gaps in the market and opportunities to offer a unique experience.

• Create a detailed operations plan

With so many moving pieces to manage as a restaurant owner, writing an operations plan is just as important as creating a market analysis.

The operations section of your business plan details how your restaurant will function daily. 

It should briefly touch on every aspect of running the business–from staffing needs to how often you will need to buy new ingredients, kitchen equipment, or dining utensils.

Your operations plan will reflect the unique needs of your business, but a typical restaurant operations plan might include:

• Staffing and training: Lay out a staffing plan, with the roles and responsibilities of each team member. Include strategies for hiring, training, and employee retention.
• Equipment and technology: Outline your dining, kitchen, and technology needs, from tables and chairs to ovens and point-of-sale systems.
• Supply chain management: Explain your ingredient sourcing and inventory management strategies and your plan to build relationships with suppliers.
• Customer service policies: Describe how you manage customer service needs and feedback to ensure a positive dining experience.
• Health and safety protocols: Detail procedures for maintaining kitchen hygiene practices and food handling standards to ensure food safety and compliance with health regulations.

Without an operations plan, you’ll lack a documented strategy for managing your kitchen workflow, maintaining customer satisfaction, or even basic tasks like inventory or staffing.

And if you’re writing a business plan to get a bank loan or investment , they’ll want to see that you have a plan for successfully managing the restaurant. 

• Actively market your restaurant

Your small restaurant may serve the most mouthwatering dishes in town, but no one will discover it without effective promotional strategies. 

You need to develop a comprehensive marketing plan to showcase your culinary delights and entice customers through your doors.

Consider both traditional and digital marketing channels to reach your target audience. Traditional methods may include:

• Hosting special events
• Participating in local food festivals
• Partnering with complementary businesses in your community

Digital strategies may include:

• Creating an engaging website
• Building a strong presence on social media platforms
• Utilizing online review platforms to build credibility and foster positive word-of-mouth.

When developing your promotional strategies, consider the following tips:

Be smart about your online presence

Build a visually appealing and user-friendly website that showcases your restaurant’s ambiance, menu, and story. 

Leverage social media platforms to engage with your audience, share enticing food photos, and run targeted advertising campaigns.

Consider promotions

Encourage repeat business by implementing a loyalty program that rewards customers for their patronage. Offer incentives such as discounts to certain customer segments, like seniors, veterans, or students.

Engage with the local community

Participate in community events, sponsor local sports teams or charity initiatives, and establish partnerships with neighboring businesses. 

Becoming an active community member will build brand awareness and loyalty.

Don’t ignore your pricing and financial strategy

According to data from the National Restaurant Association , about 60% of restaurants fail in their first year, and 80% close within five years.

You need to understand your startup and ongoing operating expenses to run a successful small restaurant.

Start by estimating your startup costs , including:

• Site acquisition (down payment if owning the space, initial payment if leasing)
• Building improvements
• Equipment purchases
• Licenses and permits
• Initial inventory
• Menu creation

Then, account for ongoing operating expenses, such as:

• Employee wages
• Mortgage or rent payments
• Ingredient costs

Pricing your menu items strategically is essential to ensuring profitability. Analyze ingredient costs, consider portion sizes, and compare prices in your local market to determine competitive yet profitable pricing.

Conduct a break-even analysis to determine the number of customers you need to serve to cover costs and start generating profits. Regularly review your financials and adjust your pricing as needed to maintain a healthy bottom line.

Consider these financial aspects when developing your small restaurant business plan:

Budget Allocation

Determine how you will allocate your budget across different areas of your restaurant, such as kitchen equipment, interior design, marketing, and staff training.

Prioritize investments that will have a direct impact on customer experience and operational efficiency.

Revenue Streams

Identify multiple revenue streams for your restaurant. This may include revenue from food sales, catering services, private events, or partnerships with local businesses.

Diversifying your revenue sources can help stabilize your cash flow.

Cost Control

Develop strategies to control costs without compromising quality. Efficient inventory management, negotiation with suppliers, and staff training on waste reduction can contribute to cost savings.

Sales Forecasting

Create a sales forecast based on your market research, pricing strategy, and seating capacity. Consider seasonal fluctuations and special events that may impact your restaurant’s performance.

Other information to include in your small restaurant business plan

As a restaurant owner, a few components of your business plan are unique to your industry. 

None of these fit neatly into any one section of a business plan. We suggest addressing them in additional sections or within the appendix .

Restaurant location and layout

Include information about your restaurant’s location . 

Some of this information will be included in your market analysis, but once you’ve secured a location, you should go deeper and analyze factors like:

• Rent and utilities
• Foot traffic
• Parking availability
• Nearby businesses

Explaining the layout of your restaurant – especially your kitchen – is also important. Consider adding photos or diagrams of each room to your plan. 

Diagrams can be especially helpful. You can add in-depth details for seating arrangements in the dining room or how staff should move efficiently throughout the kitchen.

What do many people do before deciding whether to eat at a restaurant? 

They look at the menu.

You can gain or lose customers on the strength of your menu. It affects numerous business areas, from marketing to pricing and operations.

For instance, if you’re running a family-friendly restaurant but your prices are too high, people will see that on your menu and may decide to eat somewhere cheaper. 

On the other hand, if you’re running a fine dining restaurant , but your menu fails to describe your dishes in an appealing way, diners may go somewhere they perceive as having higher quality meals.

That makes the business plan a great place to create menu concepts. 

You can experiment with different offerings, price points, and menu designs until you’re confident about sharing them with customers. 

And since business plans are continuously updated as your business changes—you can see how your menu has changed over time and what’s been most successful.

Download your free small restaurant business plan template

If you’re ready to start a restaurant, you can download our free small restaurant business plan template from our library of over 550 sample business plans . 

Get started today, and discover why businesses that plan grow 30% faster than those that don’t .

More restaurant business plan examples:

• Food truck business plan
• Coffee shop business plan
• Bakery business plan
• Brewery business plan

Makenna Crocker is the Marketing Specialist at Richardson Sports. Her work focuses on market and social trends, crafting gripping and authentic content, and enhancing marketing strategy to foster stronger B2B and B2C relationships. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through content that positively influences and inspires others.

Table of Contents

• Why you need a plan
• Don’t ignore your pricing and financial strategy
• Additional info to include
• Free business plan template

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How to Write a Restaurant Business Plan: A Step-by-Step Guide

Discover how to craft a winning restaurant business plan that charts a path toward success.

Whether you're seeking investment, planning for growth, or simply looking to establish a clear operational blueprint, a comprehensive restaurant business plan is indispensable. A meticulously prepared restaurant business plan serves multiple functions: attracting investors, forecasting profits, and strategizing for sustainable growth. 

In today's food service sector, a detailed plan will help you navigate the complexities of the market confidently. This guide will walk you through creating a robust restaurant business plan and help define your path to success. 

How to develop a restaurant business plan

When creating a restaurant business plan, the goal is to outline profit generation strategies. In addition to the financial aspects, a well-structured business plan should encompass factors like branding, staffing, and marketing, so before you start drafting, take a moment to take these initial preparatory steps. 

Define your restaurant concept and priorities

During the startup phase, establish your priorities. If you're launching a fast food eatery, you might focus on quick service, a wide menu selection, and competitive prices — but if it's a food truck , you might prioritize mobility and affordability. If you're establishing a high-end restaurant, your priorities likely are exceptional customer care, a sophisticated ambiance, and top-quality ingredients. Here's the bottom line: Can you explain your restaurant idea quickly and concisely? What about your restaurant idea is unique and gets you excited? Develop a clear vision of your restaurant and list what's most important to you — your business strategy will reflect your concept. 

Review sample restaurant business plans 

Learning from others is key, so get networking or researching any connections in the industry so you can review established restaurant business plans. Look at how other plans showcase unique selling points, and undertake market analysis to identify areas for cost optimization and margin improvement. Ultimately, your plan should reflect your distinct vision, but understanding how others built out their vision and the structure they adhered to is valuable in helping you develop your restaurant business plan. 

Calculate startup and ongoing costs

Assess your financial needs as you plan your restaurant budget and consider the range of startup costs. Are you taking over an existing space or are you renovating and building from scratch? Calculate all associated expenses such as operations, leasing, renovations, equipment, initial inventory, and licensing fees — you'll want to consider every variable cost line by line, which varies widely based on your business model.

Estimate your daily operational costs, such as rent and utilities. How much will ingredients cost to make your menu and what does your payroll look like? What roles do you need to hire to get your operation running? Then think about your marketing budget — how much will it cost to design the website, the take-out menu, and additional promotional materials? These questions should help inform your financial plan, budget, and overall cost of launching and running your restaurant effectively.

Key sections of a restaurant business plan

For a successful restaurant concept, aim for a culinary experience that fills a gap for your target customers, even if they still need to be made aware of it. While drawing inspiration from various sources, remember that a well-crafted restaurant business plan typically includes elements like an executive summary, company overview, industry analysis, operations plan, marketing plan, financial analysis, and restaurant menu.

1. Executive summary

An executive summary describes the big picture for your restaurant. Offer a compelling overview of your restaurant concept. Introduce yourself, your vision, and the market you're addressing. Include items like your mission statement , core values, and key differentiators. Remember, this is the first thing potential investors will read. It needs to grab their attention, convince them that there is a strong potential for success, and get them excited about what you bring to the table.

2. Company overview

You've already provided an overview of your restaurant concept, so now dive into the details of your restaurant, including its legal structure. Here, you can describe your restaurant concept in more detail, including cuisine, service style, operating hours, and ambiance. What makes your restaurant different? Include the contacts, owner details, location, and other relevant information about the restaurant you're opening. 

3. Industry analysis

A thorough analysis demonstrates your understanding of the broader restaurant market, so identify current trends affecting the sector and analyze your local competitors and nearby businesses. Are you close enough to office buildings to expect daily lunch rushes? Are you in a shopping center where there's great foot traffic? Is there a movie theater nearby with more opportunities for dinner service? 

Describe the neighborhood's economy, demographic makeup, and projected growth. Are there other opportunities and challenges you anticipate and is there any additional information potential partners or investors find helpful? This section allows you to be specific while showcasing your initiative to prove what gaps your restaurant fills.

4. Operations plan

An operations plan details the day-to-day running of your restaurant, from the organizational structure and kitchen workflow to customer service protocols and employee play. Outline your restaurant's processes, plans, and procedures that will ensure efficiency and quality, making sure to include information on suppliers and equipment needs. Will you be bringing in a notable chef, mixologist, or sommelier? What restaurant technology will you invest in and will you pursue an exclusive partnership with a third-party delivery service ?

A majority of merchants say that without DoorDash, their overall revenue (58%), new customer growth (52%) and revenue growth (51%) would have been lower.

5. Marketing plan

Your marketing plan should articulate how to attract and retain customers through customer awareness and acquisition initiatives, advertising, public relations, community engagement, and events. Discuss branding, promotional tactics, and community engagement strategies . Detail your plans for digital marketing, traditional advertising, and any unique campaigns or events designed to build buzz and loyalty and keep your patrons active.

Will your team take on your marketing initiative, or will you hire a social media consultant or PR agency to help you with launch and post-launch activity? If you're using an external vendor, it's important to include their client list, successful case studies, and a brief write-up of the services they'll provide for you. How you communicate with your patrons outside the walls of your restaurant will inform your marketing strategy .

6. Financial analysis

Arguably the most scrutinized section, the financial analysis provides a detailed forecast of your revenue, costs, and profitability. When do you think your restaurant will break even? Calculate and project when you feel your restaurant's monthly expenses become less than the income it'll generate — remember, these timelines can take anywhere from six months to years. 

When you're pre-launch, your forecasts are essentially educated guesses, so anchor these guesses in thorough market research, actual expenses, and expected earnings. Use realistic assumptions to build credibility with potential investors to include a five-year outlook covering estimated revenue and capital expenditure budgets.

Once your business is operational, provide concrete financial data like cash flow and profit and loss statement , especially spanning the past five years. Utilize visually engaging charts and graphs to showcase financial achievements, enabling investors to quickly assess your company's financial well-being.

7. Restaurant menu 

Include a sample menu or a detailed description of your offerings, as this section will help readers visualize the dining experience and understand how your menu aligns with your restaurant concept. Highlight signature dishes or unique ingredients that make your menu stand out from your competitors. Consider this section an extension of your restaurant branding, so work closely with your chef to create an eye-catching menu with evocative menu descriptions that follow strong design principles. 

Get professional feedback on your restaurant business plan, review, and refine

Once your draft is complete, seek feedback from experienced restaurateurs, mentors, or business advisors ​​— their insights can help refine your plan, making it more compelling and effective. Be open to constructive criticism and use it to polish your plan before presenting it to potential investors. Remember that incorporating diverse perspectives can lead to a more robust and successful business strategy in the long run.

Download a free sample restaurant business plan

Breaking down the process of creating a restaurant business plan into segments can make the task more manageable, as you can develop a comprehensive and robust plan by addressing each part individually. Crafting a business plan may appear challenging, but it demonstrates to potential investors that you have a well-thought-out strategy for success. 

Ready to create your own winning restaurant business plan? Download the free Restaurant Business Plan template to get started.

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How to write a comprehensive restaurant business plan

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Are you considering opening a new restaurant , adding a virtual restaurant , or pivoting your restaurant’s business strategy to adapt to the shifting restaurant industry? Make sure you take the time to build a restaurant business plan. Why?

• Business plans are like professional road maps — they literally lead the way to success
• They’re critical if you’re looking for investors and need to outline your restaurant’s current wins and future revenue potential
• They help you foresee challenges before they arise, so you can sidestep some catastrophes and be better prepared for the others

Some 26% of restaurants fail within a year of opening, and failure to plan is one of the primary reasons those restaurants close. Create a business plan, and you’re setting yourself up to be on the right side of that statistic.

Here’s how to do it.

What is a restaurant business plan?

Before you learn how to write a business plan , it’s crucial to understand what a business plan is — and what it isn’t.

The goal of a business plan is to create a guide that helps you navigate each stage of launching and running your business. That plan should also be comprehensive and articulate enough that a total stranger, for instance an investor, could read through it and easily understand your vision, your goals, and how you intend to turn your restaurant dream into a reality.

Business plans come in a variety of structures and they can be as short as a single page or long enough to bind into a booklet. You may want to start with a lean startup plan that focuses on a high-level take on your strategy, then follow up with a more detailed plan that elaborates on key points and offers investors more information.

In short, your business plan should communicate everything you have and plan to put into your restaurant to ensure ongoing success.

11 elements every restaurant business plan should include

Your restaurant and mission statement should be unique to your business and your vision, but that doesn’t mean you have to start completely from scratch. Crafted by industry experts and packed with insider knowledge, the Grubhub Restaurant Business Plan template is your step-by-step guide to whipping up a winning business strategy. Take a look at our editable business plan template to start planning your restaurant. However you write it, your finalized business plan should include seven key sections.

1. Executive summary

This is a brief summary of your company, why it’s something the community wants or needs, and why it will be successful. Many different types of restaurants speak to various demographics, and it’s important to know  what kind of restaurant you want to run . Are you opening a quick-service deli focused on takeout sandwiches and ready-to-eat salads? Or are you going to be the first tapas restaurant in a city eager for more variety?

If you’re using your business plan to ask for financing, the SBA recommends including financial information and high-level growth plans in your executive summary, too. Your executive summary should include:

• Mission statement: A concise description of your restaurant’s purpose
• Proposed concept: The summary or outline of the restaurant idea
• Execution: How you plan to make this proposed concept work
• Potential costs: A brief overview of expected exprenses
• Anticipated ROI: How much the restaurant is expected to make

Think of your summary as your opportunity to capture your reader’s attention. Many investors will make a split-second decision based on the executive summary alone — if this section is all they’re going to read, make every word count.

2. Company description

Now it’s time to launch into a more detailed description of the company, including its  vital differentiator(s) , target audience, and any other factors that could sway investors like experts you’ve brought on board as advisors or a location you’ve already scouted or secured.

You’ll want to include the legal structure of the business, explaining whether you’re a sole proprietorship, LLC, etc., and list out existing management and their roles (including your own).

Now comes the fun part: Writing out a description of your concept. This is where you can let your creative side come out, showcasing your passion for what you hope to create and using plenty of adjectives to engage your readers and give your concept life. You’ve already decided what  type of restaurant  you’re opening, now flesh out all the other details:

• Service style (counter vs. sit-down, casual vs. fine dining, etc.)
• Restaurant size and seating capacity
• General ambiance, including décor and music
• Options for styles of seating, lighting, and other fixtures
• Operating hours
• Style of cuisine
• Peripheral service offerings such as retail products, delivery/takeout, and catering
• Unique selling points such as using produce grown on an adjacent farm or a 30-minute lunch guarantee to serve the area’s office workers better

3. Target market analysis

Detail your target market, using buyer personas to indicate who you see being your primary customer and what their dining habits might look like. These personas should include information on where target customers live, their income levels, their pain points (do they hate long waits or want restaurants that are open later?), and how often they dine out or order in.

The more specific you are during this step of the process, the easier it will be to create marketing to reach them.

4. Sample menu

If you’re a new restaurant, including a sample menu is the only way investors will know what you plan on serving. It’s not enough to say you’re going for “rustic Italian,” as that could mean different things to different people. Chances are your menu is your key differentiator, or at least part of it — otherwise, why will customers choose you over tried-and-true competitors already offering similar dishes?

Collaborate with your chef and keep the core tenets of  great menu design  in mind:

• Know your audience and tailor your design and descriptions to your target customer base — a college crowd eager for drink deals and shareable eats will be more interested in pictures and flashy pricing than diners looking for a white tablecloth experience
• Menu descriptions should be short but evocative — choose words that help customers understand exactly what they’ll be eating and get them excited about trying it (for example, say “succulent tea-smoked duck with anise-scented plum sauce” rather than “duck with plum sauce”)
• Refer to menu psychology when determining and placing pricing, sticking to simple numerals (no dollar signs) placed to the right of the menu item with no dots or dashes in between
• Use that same psychology to guide customers through your offerings, using call-out boxes and bold text to highlight more profitable items
• View your menu as an extension of your restaurant branding , using the same colors, design elements, and fonts

5. Organizational management

While you’ve touched on your organizational structure and management earlier on in your business plan, now you’ll explain  your business structure  and share a more comprehensive look at your team. An organizational chart can be helpful, as is a summary of your collective experience. Some people include a bullet list of the team’s top achievements that’s easy to scan and digest. This section should include any employe positions you will need to fill and a plan for how you will train these employees .

In addition to listing out co-founders, managers, servers, etc., you can attach resumes from your executive team or critical players like a well-known mixologist that’s helping you develop your cocktail program.

6. Restaurant design

Restaurant interior design is crucial for your customer’s experience. The ambiance and floor plan impact how they perceive your business and whether it’s a good enough place to eat at. In fact, even the color of the walls and types of flooring can impact people’s moods and how they feel while in your restaurant.

Come up with a restaurant design that matches your theme and cuisine. This is also the time to plan out any patio seating , and decide on how many tables can you can serve.

7. Location

You may already have a specific location picked out or even have a building purchased. If so, this section is less of a concern for you. It’s important to ensure that your location is going to benefit you rather than hurt your business. If you still need to find the right space to host your business, the location you end up choosing should be in line with your target market and be an easily accessible place for them to eat.

Before you sign a lease, it’s a good idea to check out the other competition in your area. If you found the perfect building for your pizzeria but it’s next to another popular pizza shop, it may be hard to convert customers to your cheesy creations. You want to enter a market where you can grab diner’s attention with new offerings rather than rival existing ones.

8. Marketing plan

With so many restaurants vying for customers’ attention, marketing is extremely important for getting diners through the door (or onto your website). Crafting a marketing plan for your restaurant gives you a blueprint for all potential advertising and outreach. Promotional events, social media, and paid ads are just some ways you can help get your restaurant off the ground, and investors will be very interested to hear what you have planned.

9. Takeout and delivery

Having reliable delivery and takeout services is pretty important for most target audiences. In fact, 51% of consumers said if they cannot order delivery or takeout from a restaurant, they probably won’t visit them for dine-in as often. Offering off-premise dining options will increase your order volume and customer base.

If you’re hoping to have takeout and delivery capabilities at your restaurant, Grubhub makes it easy . Whether you want to use your own drivers or our professional fleet, we offer :

• Grubhub Delivery: Our fleet of Grubhub Drivers pick up and deliver orders to your customers’ doors. We coordinate and pay the delivery drivers — all you have to do is provide the food.
• Supplemental Delivery: Utilize our delivery fleet of 300,000 drivers to widen your customer base.
• Self Delivery: Use your own drivers to deliver Grubhub orders to diners. You have full control over delivery and fees, but benefit from Grubhub online ordering.
• Pickup: Set up a Grubhub account to accept pickup and deliver orders from your customers, letting you reach new customers and increase sales.

10. External providers

To make your restaurant a reality, you’ll likely need a bit of help. Make a list of any external companies or software you plan to use or hire to get your restaurant up off the ground. This could be accountants who you wish to balance your books or designers who can help make your design dreams a reality. This list may also include outside suppliers for your food and beverages. Who is it that you want to partner with when it comes to receiving your raw ingredients and materials? Do you want to source locally or use a distant distributor? Whoever it is that you want to potentially work with, write them down!

Luckily, when you join Grubhub you not only do have your food delivery and pickup service partner chosen, you can also simplify your order and menu management using Grubhub for Restaurants’ easy technology integration . Our tech integrations allow orders to come from the Grubhub app or Grubhub.com directly to your kitchen. Plus, you can create a customized online ordering site with Direct . Encourage customers to place a commission-free order right from your restaurant’s website.

11. Customer service policies and procedures

As a business owner, you want to give your customers a five-star experience at your restaurant. Creating customer service policies and procedures will help ensure that your staff create a great dining experience for your customers. Have a blueprint for how certain situations will be handled and what you’ll do if problems arise. For example, if a customer has an issue with the food, your entire staff should know how to handle the circumstance and what to say to the diner. Then, ensure that your staff is all on the same page about your expectations for them and consistently utilize the same guidelines and approach.

12. Financial projections

Finally, it’s time to address the financial side of your business, especially if you’re using your business plan to acquire startup funds or additional capital after you’re already operational.

If you’re pre-launch, your projections are just that: guesses. But these guesses should be based on market research, actual expenses, and projected income, culminating in a five-year look at everything from estimated revenue to capital expenditure budgets.

If your business is up and running, you’ll include actual financial records such as cash flow statements and your P&Ls, ideally for the last five years. Use colorful charts and graphs to highlight financial wins and make it easier for investors to gauge your company’s financial health quickly.

If you’re asking for funding, specify how those funds will be used and whether you have collateral you’re able to put up to secure a loan.

Start writing your own restaurant business plan

Now that you understand the various steps for creating a strategic restaurant business plan , it’s time for you to create your own. Download our Restaurant Business Plan template to draft your restaurants’ operational foundation. Use this as a playbook for you to refer back to whenever you make business decisions.

Once you get your business plan off the ground, consider partnering with Grubhub. Platforms like Marketplace can make it easier than ever to capture the attention of new customers and reinvigorate relationships with existing customers by offering quick-click access to ordering and stress-free pickup or delivery.

Ready to reach millions of hungry customers? Sign up for  Grubhub for Restaurants  today!

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How to Write a Restaurant Business Plan [with a Template & Instructions]

Feb 3, 2022

A restaurant business plan can help you put the “business” in your restaurant. After all, restaurants aren’t just about offering hospitality , serving your favorite recipes or creating a cozy ambiance. They need to generate revenue to support you and your employees. With a business plan serving as your blueprint, you can stay focused on meeting your goals and running a lasting enterprise.

In this guide to creating and using your restaurant business plan, you’ll learn:

What is a restaurant business plan?

A restaurant business plan is a document that explains the who, what, where, when, why and how of your restaurant. It serves as a source of truth for your vision for the business, and can help you stay accountable to your goals and stakeholders. A typical business plan includes sections on your restaurant’s concept and team, the competition, your marketing plan, financial projections, an executive summary and more. 

Why is it important to have a restaurant business plan?

Writing a business plan is a critical step on the road to becoming a restaurant owner . This document helps keep everyone involved in starting and managing the business aligned on goals and means. A business plan gives you direction and holds you accountable as you make decisions.

It’s also a helpful tool to share with potential investors. A business plan shows that you’re serious about the business, have done your research on the competition and target market and understand the risks and key financial and regulatory aspects of running a business.

How to write a restaurant business plan

Here’s a step-by-step breakdown of exactly what you should include in the business plan for your restaurant.

Executive summary

The executive summary serves as both an introduction to the business plan and a summary of everything else found in the document. Write it as a high-level overview of your plan, and write it last so you can pull from other sections.

Business introduction

Start with the basics of your business, including the restaurant’s name, its mission and values, your concept and a sample menu .

If you need help conjuring a business mission and values, consider your restaurant’s purpose. Why does it exist? What does your business stand for?

When describing the concept, you can be straightforward (e.g., a fast-casual Vietnamese restaurant), but you can also add color by including your inspiration for the business. For example, you could share that you want your restaurant to be the Chipotle of Vietnamese food to help make the cuisine more accessible and widespread. 

Include a sample menu that you and potential investors can reference as you finalize the dishes you’ll serve.

Explain who will be in charge of running your restaurant or bar . Will it be you, or will you hire a CEO or general manager ?

Describe which roles you will need to hire for and when you plan on doing that. Include an organizational chart for future reference. And, since the restaurant industry is notorious for high employee turnover , it’s important to explain what you plan to do to retain hospitality staff .

List any kinds of external consultants you plan to engage, like an accountant or marketing agency.

The financial analysis section of your restaurant business plan is one of its most important. Writing one is a useful exercise that helps you plan and understand where the funds to start your business are coming from, and how you will spend that money and your revenue.

Include insights about your funding sources . Where will the money to support your startup costs – and keep it running until it’s profitable – come from? Personal savings, friends and family, investors? How much money will you need to start the business?

Additionally, work out your operational budget . List how much you plan to spend on payroll, technology, furniture and decor, equipment, inventory and marketing. 

Next, include details about your business model and revenue streams . Most restaurants will start with on-premises dining, then may add additional revenue streams via online ordering , catering and selling merchandise.

Finally, include financial projections . How long do you anticipate it will take to become profitable? How much revenue do you think you’ll make in your first year of business?

In this section, explain where you will go for legal counsel and which licenses and permits you will obtain.

Create a plan for keeping up with labor regulations, such as fair labor practices , overtime and wage requirements. 

Designate a member of your team, like the general manager, to keep licenses up to date and ensure you’re complying with local regulations and are ready for health inspections.

Marketing analysis & plan

This part of your restaurant business plan should include the following sections:

Technology plan

Tech is a critical part of running an efficient, modern restaurant. Decide which restaurant technology you’ll need to run your business. As you research tech vendors, make sure the solutions you choose can grow with your restaurant.

Consider the following types of tools:

Create a timeline to mark milestones for the days leading up to your restaurant’s opening, and what you hope to accomplish in the years after opening day. Take inspiration for milestones from these examples:

Restaurant business plan template

Take a screenshot, copy and paste or print this restaurant business plan sample to kickstart the writing process.

(Summarize the rest of your restaurant business plan)

Proposed restaurant name: 

Mission and values:

Leadership team:

Hiring plan:

External consultants:

How will you fund the business?

How much money do you need to start the business?

What will your operational expenses be?

When will the business start making a profit?

Which licenses and permits will you need to obtain?

Market analysis & marketing plan

Where will the restaurant be located?

Competitive analysis:

SWOT analysis:

Price analysis:

Marketing plan:

Which tools and vendors will you be using?

CRM: SevenRooms

Reservations: SevenRooms

Online ordering: SevenRooms

Inventory management:

Accounting:

Leading up to opening day

Opening day:

6 months from opening:

1 year from opening:

5 years from opening:

Need more inspiration? Check out these restaurant business plan samples for more ideas.

Stay focused with a restaurant business plan

Creating a restaurant business plan can help you stay focused on your goals and prove to external stakeholders and potential investors that you’re serious about the business. While the specifics of your restaurant will change between its grand opening and several years in operation, a business plan can keep you accountable to your original goals and vision. Use our restaurant business plan template to start jotting down your ideas.

SevenRooms can help you achieve your business goals by equipping you with the technology you need to run a successful restaurant. Request a demo today.

FAQs about restaurant business plans

​​1. what is a business plan for a restaurant.

A restaurant business plan is the blueprint that outlines your vision, and explains in detail how the new business will take shape and operate once its doors are open.

2. Is it profitable to open a restaurant?

Restaurants are profitable, but have lower profit margins compared to other industries, which should be factored into your restaurant business plan.

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Here is a free business plan sample for a restaurant.

Have you been toying with the idea of opening your own restaurant but feel overwhelmed about where to start?

Look no further, as we're about to guide you through a comprehensive business plan tailored for the restaurant industry.

Creating a robust business plan is a crucial step for any aspiring restaurateur. It serves as a roadmap, outlining your vision, objectives, and the strategies you'll employ to turn your culinary dreams into a thriving reality.

To streamline your planning process, take advantage of our restaurant business plan template. Our seasoned professionals are also on hand to review and refine your plan at no extra cost.

How to draft a great business plan for your restaurant?

A good business plan for a restaurant must be tailored to the unique challenges and opportunities of the food service industry.

To start, it's important to provide a comprehensive overview of the restaurant market. This includes up-to-date statistics and an analysis of current trends, which you can find in our restaurant business plan template .

Your business plan should articulate your concept clearly. Define your target audience (locals, tourists, business diners, etc.), and describe the distinctive character of your restaurant (fine dining, fast-casual, ethnic cuisine, etc.).

Market analysis is a critical component. You need to thoroughly understand your competitors, the dining habits of your potential customers, and the overall demand for your type of restaurant in the area.

Detailing your menu offerings is essential. Explain the variety of dishes, the culinary style, and how your menu will appeal to the tastes and dietary preferences of your target market.

The operational plan is vital for a restaurant. It should outline the location, dining room design, kitchen setup, sourcing of ingredients, and the flow of service.

For a restaurant, it's crucial to highlight the quality and sourcing of ingredients, culinary expertise, and adherence to health and safety regulations.

Discuss your marketing and sales strategies. How will you draw in new customers and keep them coming back? Consider promotional tactics, loyalty programs, and potential for ancillary services (like catering or delivery).

Incorporating digital strategies, such as a robust website, online reservations, and a social media presence, is increasingly important for restaurants.

The financial plan is a cornerstone of your business plan. It should include startup costs, revenue projections, operating expenses, and the point at which you expect to break even.

Restaurants can have variable margins, so precise financial planning and a clear understanding of your cost structure are imperative. For assistance, refer to our financial forecast for a restaurant .

Compared to other businesses, a restaurant business plan must pay special attention to factors like the freshness of ingredients, labor costs in a high-turnover industry, and the potential need for extended operating hours.

A comprehensive business plan is a tool for the owner to crystallize their vision and strategy, as well as to attract investors or secure loans.

Investors and lenders will look for a solid market analysis, realistic financial projections, and a clear plan for day-to-day operations.

By presenting a thorough and substantiated plan, you showcase your dedication and preparedness for managing a successful restaurant.

To achieve these goals while saving time, you can fill out our restaurant business plan template .

A free example of business plan for a restaurant

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a restaurant .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market analysis and projections.

The restaurant industry is a dynamic and ever-evolving sector with significant impact on the economy.

Recent studies have valued the global restaurant market at over 3 trillion dollars, with expectations for continued growth, driven by the increasing consumer demand for diverse and high-quality dining experiences.

In the United States alone, there are over 1 million restaurant locations, contributing to an annual revenue of approximately 800 billion dollars for the restaurant industry.

These statistics underscore the integral role restaurants play in American society and their substantial contribution to the economy.

Industry Trends

Current trends in the restaurant industry indicate a shift towards health-conscious dining, environmental sustainability, and technological integration.

There is a rising trend in farm-to-table restaurants, where the emphasis is on fresh, locally sourced ingredients, appealing to consumers who value food provenance and sustainability.

Technology is also revolutionizing the dining experience, with the adoption of digital menus, online reservations, and contactless payment systems enhancing customer convenience and operational efficiency.

Delivery and takeout services have seen a surge, accelerated by the pandemic, leading to the growth of virtual kitchens and delivery-only restaurant models.

Moreover, the demand for dietary-specific menus, such as gluten-free, keto, and plant-based options, is growing as consumers become more health-conscious and dietary-aware.

These trends highlight the restaurant industry's adaptability and responsiveness to the evolving preferences and values of modern diners.

Key Success Factors

Several factors contribute to the success of a restaurant in a competitive marketplace.

Foremost, the quality and uniqueness of the culinary offerings are vital. Restaurants that provide a memorable and delicious dining experience can build a strong, loyal customer base.

Innovation in menu creation and presentation can distinguish a restaurant from its competitors and attract food enthusiasts looking for new experiences.

The location of the restaurant is also critical, as high foot traffic areas can lead to higher visibility and patronage.

Exceptional customer service is imperative for ensuring that guests leave with a positive impression and the desire to return.

Efficient operations management, including cost control, waste reduction, and sustainability practices, are essential for the financial health and public image of the restaurant.

Lastly, the ability to keep pace with industry trends, such as offering online ordering or incorporating special diet menus, can be decisive in maintaining relevance and success in the restaurant business.

The Project

Project presentation.

We are excited to introduce our gluten-free restaurant concept, designed to cater to the needs of individuals with gluten sensitivities, celiac disease, or those who simply prefer a gluten-free lifestyle. Strategically located in a bustling urban area with high foot traffic or near health and wellness centers, our restaurant will offer a diverse menu of gluten-free dishes, ranging from appetizers and main courses to desserts, all crafted with premium, gluten-free ingredients.

Our emphasis is on the flavor, quality, and presentation of our dishes to ensure a delightful dining experience that rivals that of traditional cuisine.

Our restaurant is poised to become a go-to destination for gluten-free dining, enhancing the lives of those with dietary restrictions by providing a safe and enjoyable eating out experience.

Value Proposition

The value proposition of our gluten-free restaurant lies in its commitment to offering a gourmet dining experience without the gluten. We understand the challenges faced by those with dietary restrictions and are dedicated to providing a diverse menu that doesn't compromise on taste or quality.

Our dedication to culinary excellence, coupled with a strict adherence to gluten-free standards, ensures that our customers can dine with confidence and pleasure. We aim to create a welcoming atmosphere where all guests can savor a meal that caters to their health needs and palate preferences.

As a cornerstone of the community, our restaurant will not only serve delectable gluten-free meals but also act as an advocate for gluten-free living, educating patrons on the advantages of such a diet.

Project Owner

The project owner is a seasoned restaurateur with a passion for health-conscious cuisine and an empathetic understanding of the dietary challenges faced by individuals with gluten intolerance.

With a background in restaurant management and a commitment to nutritional wellness, the owner is driven to establish a gluten-free restaurant that stands out for its dedication to taste, quality, and customer health.

Armed with a mission to provide a safe and enjoyable dining environment for those requiring or choosing gluten-free options, the owner is determined to make a positive impact on the community's health and dining culture.

Their passion for gastronomy and their commitment to inclusivity are the cornerstones of this venture, aiming to enrich the lives of those in search of sumptuous and safe gluten-free dining experiences.

The Market Study

Market segments.

The market segments for this gluten-free specialized restaurant are categorized into distinct groups.

Firstly, there are individuals with gluten intolerance or celiac disease who require a strict gluten-free diet for their well-being.

Additionally, there is a growing demographic of health-conscious consumers who opt for a gluten-free lifestyle to improve overall health.

The market also encompasses patrons who are exploring gluten-free dining options out of curiosity or personal taste preferences.

Healthcare professionals, including dietitians and physicians, represent another segment as they may recommend our restaurant to patients seeking gluten-free meal options.

SWOT Analysis

Conducting a SWOT analysis for this gluten-free restaurant initiative highlights several key points.

Strengths include a specialized focus on gluten-free cuisine, culinary expertise, a dedication to high-quality ingredients, and a burgeoning market for gluten-free dining.

Weaknesses might involve the higher costs associated with sourcing premium gluten-free ingredients and the challenge of differentiating ourselves in a niche market.

Opportunities can be found in broadening our customer base to include not only those with dietary restrictions but also the wider public interested in healthier dining options, along with the potential for educational outreach.

Threats may consist of volatile prices for gluten-free ingredients and the task of distinguishing our restaurant amidst the competition in the gluten-free dining space.

Competitor Analysis

An analysis of competitors within the gluten-free restaurant industry indicates a competitive landscape.

Direct competitors include other gluten-free restaurants and mainstream dining establishments that offer gluten-free menu options.

These competitors vie for the attention of a clientele that values health and quality in their dining experience.

Potential competitive edges include the caliber of our gluten-free dishes, the breadth of our menu, brand recognition, and the ability to stay abreast of dietary trends while providing an outstanding dining experience.

Understanding the strengths and weaknesses of these competitors is crucial for carving out a unique position in the market and ensuring customer loyalty.

Competitive Advantages

Our dedication to the authenticity and quality of our gluten-free cuisine is central to our competitive advantage.

We offer a wide array of appetizers, entrees, and desserts, all crafted with the finest gluten-free ingredients to deliver superior flavor and satisfaction.

Our commitment to customer education and engagement helps to foster a loyal customer base and establish trust in our brand.

We pride ourselves on transparency regarding our sourcing and preparation methods, providing peace of mind to our health-focused patrons.

You can also read our articles about: - how to open a restaurant: a complete guide - the customer segments of a restaurant - the competition study for a restaurant

The Strategy

Development plan.

Our three-year development plan for the gluten-free restaurant is designed to establish us as a leader in the health-conscious dining sector.

In the first year, we aim to build a strong local following by offering a diverse menu of delicious, gluten-free dishes and exceptional service.

The second year will focus on expanding our reach by opening additional locations in key urban centers and optimizing our supply chain for quality and efficiency.

In the third year, we plan to diversify our menu with seasonal offerings and collaborate with nutritionists to create balanced meal options, further solidifying our reputation as a trusted dining establishment for health-conscious consumers.

Throughout this period, we will prioritize customer satisfaction, sustainability, and culinary innovation to adapt to market trends and customer feedback.

Business Model Canvas

The Business Model Canvas for our gluten-free restaurant targets individuals with gluten sensitivities, celiac disease, and those who prefer a gluten-free lifestyle.

Our value proposition is centered around a commitment to flavorful, high-quality gluten-free meals, a welcoming dining atmosphere, and educational initiatives about the benefits of gluten-free eating.

We will serve our customers through our restaurant locations and offer online ordering for pickup and delivery, utilizing our dedicated kitchen spaces and culinary team's expertise.

Key activities include meal preparation, customer service, and community engagement.

Our revenue streams will be generated from dine-in, takeout, and catering services, while our costs will be associated with ingredients, labor, and operational expenses.

Access a detailed and customizable Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on engagement and experience.

We plan to educate our target market on the advantages of gluten-free dining and establish trust in our brand through the consistent quality of our meals. Our tactics include interactive social media campaigns, hosting community events, and offering cooking workshops.

We will also seek endorsements from nutritionists and health influencers to validate our menu offerings.

Additionally, we will leverage food bloggers and local media to generate buzz and attract a wider audience, all while upholding our dedication to culinary excellence and menu innovation.

Risk Policy

The risk policy for our gluten-free restaurant is focused on mitigating risks associated with food preparation, supply chain management, and customer health.

We will strictly adhere to gluten-free food handling practices, source our ingredients from reputable suppliers, and implement rigorous staff training.

Regular audits will be conducted to ensure the integrity of our gluten-free offerings. We will also maintain a conservative financial approach to manage costs effectively.

To protect against unforeseen events, we will have comprehensive insurance coverage, ensuring that we can provide safe, high-quality meals with confidence.

Why Our Project is Viable

We are committed to launching a gluten-free restaurant that meets the increasing demand for health-focused dining options.

With our dedication to culinary innovation, customer education, and a superior dining experience, we believe our restaurant will thrive in the competitive food industry.

We are passionate about enhancing the well-being of our patrons and are eager to adapt to their evolving needs, ensuring the long-term success of our gluten-free restaurant concept.

We are prepared to make the necessary adjustments to navigate challenges and seize opportunities, looking forward to a prosperous future in the gluten-free dining space.

You can also read our articles about: - the Business Model Canvas of a restaurant - the marketing strategy for a restaurant

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a restaurant and our financial plan for a restaurant .

Initial expenses for our gluten-free restaurant include the cost of leasing and renovating a suitable dining space, equipping the kitchen with specialized equipment for gluten-free cooking, sourcing high-quality gluten-free ingredients, training staff on gluten-free food preparation and cross-contamination prevention, as well as expenses for branding and executing targeted marketing strategies to attract health-conscious customers.

Our revenue projections are based on an in-depth market analysis of the local demand for gluten-free dining options, taking into account the increasing number of people with gluten sensitivities and the general trend towards healthier eating habits.

We expect a gradual increase in patronage, beginning with a conservative estimate and expanding as our restaurant's reputation for delicious and safe gluten-free cuisine grows.

The projected income statement outlines the anticipated revenue from our gluten-free menu offerings, the cost of goods sold (including ingredients and kitchen operations), and operating expenses (such as rent, marketing, staff wages, etc.).

This leads to a projected net profit that is essential for assessing the long-term viability of our restaurant.

The projected balance sheet will display assets unique to our restaurant, like kitchen equipment and food inventory, alongside liabilities such as loans and projected operational costs.

It will provide a snapshot of the financial condition of our gluten-free restaurant at the end of each fiscal period.

Our projected cash flow statement will detail the cash inflows from sales and outflows for expenses, enabling us to predict our financial needs and maintain a healthy cash balance to support restaurant operations.

The financing strategy outlined in our business plan will specify the sources of funding we intend to tap into to cover our initial costs.

We will keep a close eye on the working capital requirement for our gluten-free restaurant to ensure we have sufficient funds on hand for day-to-day expenses such as ingredient purchases, inventory management, and payroll.

The break-even analysis will determine the sales volume required to cover all our costs, including the initial investment, and begin generating profits.

It will signal the point at which our restaurant becomes financially sustainable.

Key performance indicators we plan to monitor include the profit margin on our gluten-free dishes, the current ratio to evaluate our ability to meet short-term liabilities, and the return on investment to gauge the efficiency of the capital we have invested in our restaurant.

These metrics will be instrumental in assessing the financial performance and overall success of our gluten-free restaurant.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a restaurant .

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More From Forbes

Writing a restaurant business plan.

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Introduction

If you're considering opening a restaurant, your first step should be writing a business plan. A well-written business plan can help you raise money, manage your restaurant and succeed. Here's what you need to know about writing one:

Executive Summary

An executive summary is a short but powerful document that can help you to get your point across quickly and effectively. Although it is usually the first section of a business plan, it should be the last piece written. It should be one page at maximum and clearly describe your business plan's critical points in a way that makes sense to anyone who reads it. The purpose of an executive summary is to convince potential investors or lenders that they will profit from investing in your restaurant idea, so avoid unimportant details or lengthy descriptions of how great your food tastes.

An excellent way to write an executive summary is by starting with an introduction paragraph that summarizes what the rest of your plan contains—this helps readers understand why they should continue reading further into the document. Then go into discussing why this particular project is worthwhile; why people need it. How will it benefit them? Next comes some background information about yourself: include any relevant experience or education related to running this business. Finally, end with future goals: where do you see yourself after opening the shop?

Here are some items to include in your restaurant business plan:

Best Travel Insurance Companies

Best covid-19 travel insurance plans, concept validation and business model testing.

Before you launch your business, it's important to validate your concept and test the viability of your business model. You can do this by conducting market research, talking with potential customers, and interviewing industry experts with similar business experiences. You can also test the viability of your plan by completing an "experience economy" analysis. That is, looking at ways people enjoy spending money on experiences rather than goods (such as dining out). For example, if people value experiences over material goods, opening a restaurant may be a good idea!

Labor Costs and Staffing Plan

Labor costs, including direct and indirect labor, are essential to your labor budget. Direct costs refer to wages paid directly to employees, while indirect expenses include benefits like healthcare coverage and payroll taxes. To calculate these figures, you'll need to estimate the number of full-time equivalents (FTE) positions you'll need and their average salaries. This calculation can be tricky because each restaurant has its unique staffing plan based on its size, location, cuisine type, and reputation among customers, not to mention any other factors that might affect staffing decisions (e.g., whether it's open 24/7).

The first step is deciding whether or not you want full-time staff or part-time workers who work only during peak times such as lunchtime rush hour or Friday night dinners out with friends at restaurants nearby yours. As tempting as it may seem, wait to write anything down until after reading through the following sections because several factors are explicitly related to determining how many people we'll need overall.

You want your menu to be focused and simple. Try to add only a few items, as too many menu items may confuse customers, making it difficult for them to choose what they want.

If there are any "signature" items on your menu, include them first when listing off your offerings so that people know what kind of food you serve before even stepping inside the restaurant. Also, incorporating local ingredients into these specialties will help build community spirit around supporting local businesses.

Site selection is a critical factor in your success. After conducting a comprehensive market study, the site selection is based on the data you discover to determine if your customers are in and frequent that area. David Simmonds, Founder and CEO of ResolutRE , a Commercial Real Estate firm in Austin, Texas, states: "More than ever, entrepreneurs opening a restaurant need to analyze what their own customers look like on paper (demographics, psychographics, etc.), so then when they are examining a market, they can find the highest concentration of their customers within that market. From that data, they are able to determine the number of restaurants that the market could support, and from there, create the blueprint for their expansion."

Your plan should describe your ideal location . Your chosen location must be close to your target market and similar businesses, such as restaurants or cafes. The site should also have high foot traffic and be accessible by car, bike, and public transportation. Simmonds goes on to say: "Analytics reinforces or disputes instincts. It is a necessary part of the expansion process, whether the restauranteur has 1 unit or 37.

Marketing Strategy

When developing your business plan, think about the marketing strategy you will use. Your plan should consider and explain the following marketing tactics:

• Advertising: You can use print or online ads on social media sites like Facebook and Instagram. Also, consider running commercials on local television stations.
• Public relations: This can include writing articles about your restaurant in local newspapers or magazines, hosting events at your restaurant (such as wine tastings), speaking at community events like Chamber of Commerce meetings with other business owners in the area, participating in charity events related to foodservice industries like Feeding America—the possibilities are endless! The idea is to get people talking about what makes YOU unique so they think of YOU first when ready for their next dine-out experience!
• Social media: Let's face it—most millennials don't even pick up the phone anymore; they prefer texting over talking face-to-face because it feels intimate somehow, and guess what? By interacting directly with customers through social media platforms like Facebook Messenger or WhatsApp (which allows users from all over the world access 24 hours per day, seven days per week), we can offer immediate customer service support during high-demand times such as weekend brunch hours without having employees sitting idle during slow periods throughout weekdays when traffic drops off significantly due the lack of demand generated elsewhere.

Profit and Return on Investment Analysis

• Profit is the difference between your sales revenue and your costs. To calculate it, you need to know the following:
• Sales revenue (how much money you expect to make from selling food)
• Cost of goods sold (the cost of ingredients and supplies)
• Other operating expenses (including labor, rent, and utilities)

The reader of your business plan should be able to find these numbers in your budgeting worksheet and financial projections spreadsheet.

Financial Plan

The financial plan is the most critical part of your business plan. It should clearly show how much money you need to start, run and grow your restaurant.

You will need to show a projected profit and loss statement. The projected profit and loss statement (P&L) shows how much revenue comes in, what expenses are incurred, and what profits are made over time. In addition, the P&L shows all revenue sources, including but not limited to sales of food/alcoholic beverages and income from private parties. It must also project all costs associated with operating the restaurant, such as Cost of Goods (raw materials) and salaries for employees - these include both front-of-house roles such as waiters or bartenders, as well as back-of-house roles like chefs who prepare food during off hours so it can be served fresh upon opening each day - cleaning supplies needed throughout each week, etc., depreciation costs associated with long term assets such as ovens that wear down over time and waste of unused food product.

Multi-Year Projections of Revenue and Costs

Accurate projections are the key to a successful business plan. They help you to understand how much money you will make and how much you will need to make it happen. Projections also help with understanding what your costs will be.

For example, if I were starting a restaurant today and wanted my business plan projections for opening day and going out one, three, and five years.

Then I would look at similar restaurants that serve similar foods, noting their prices, portion sizes, and any specialties they offer, such as breakfast all day or lunch specials every Friday during football season. This research of other restaurants will give you a basis for your projections. Include the documentation of this research in the narrative of the plan.

A Business Plan Is Your Road Map To Success.

A business plan can help you raise money by demonstrating that you have a viable idea for a restaurant. In addition, investors want to see that others are interested in investing in your vision, so they'll be more likely to give you money if they see other investors involved with it as well. An excellent example is when an investor wants to invest but only if another investor does first; this way, both parties feel comfortable investing because they know someone else believes in the project enough to put their own money into it too!

A well-written business plan helps manage restaurants by giving owners information about how much money will be coming in over time, so there aren't any surprises when bills come due every month - which could lead businesses into trouble if left unchecked."

This article has given some insights into how to write a business plan for opening a restaurant. Do your research and learn other aspects of good business plan writing. I know that it can be a lot of work, but I also know that the payoff is worth it. Not only will you have a better understanding of what it takes to open up shop and run it successfully but also potential investors will be more likely to fund your project if they see that you've done your research. And remember: don't be afraid to ask other restaurant owners for help or advice; many of them have been where you are now.

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Should you tip on restaurant takeout? Or a coffee order? Here's when it's OK to decline.

• Some people are experiencing " tipping fatigue" as more businesses request tips for more products and services.
• But customers are pushing back, even as some workers say they're relying on tips more than ever.
• Is it OK to simply not tip in some cases — even when you're asked to? Here's what experts say.

Tipping culture appears to be spreading everywhere you look — and some customers are sick of it, wondering when it's OK to simply not tip.

After all, these days, when you make a purchase at a coffee shop, convenience store, or even a self-checkout kiosk , you might be prompted on the checkout screen for a tip.

While some customers might be ignoring these prompts in a bout of tipping fatigue , others might just be wondering what the unspoken rules are these days.

Their frustration is clear: Roughly 59% of US adults have a negative view of tipping (a decrease from 66% in 2023) and more than one in three think tipping culture has gotten out of control, according to a Bankrate survey from June.

"People are being asked to tip in contexts where they have not traditionally been asked to tip, and they're being asked to tip larger amounts in those occupations where they are used to leaving tips — and it's that felt social pressure that's irritating people," said tipping expert Michael Lynn , who is a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration.

Business Insider talked to tipping and etiquette experts to figure out exactly when you can forgo a tip without making a faux pas.

'Take it as a suggestion, not an obligation'

During the pandemic, people began tipping more generously, which set a new precedent for how much some workers expected to earn from tips. Now, as the world adjusts to a post-pandemic normal, some businesses have continued relying on tips to bolster their workers' wages. 

The ubiquity of checkout stations with tip prompts also comes from the growing number of businesses that have adopted consumer-facing point-of-sale systems , like Toast or Square, over the past several years. 

Thomas Farley, a New York-based etiquette expert known as Mister Manners told Business Insider that those factors don't necessarily translate into the expectation that customers should also tip more. 

"Just because the screen in these point-of-purchase or over-the-counter-type transactions provides you with that suggestion, you should take it as merely that: a suggestion and not an obligation," Farley said. 

You can skip the tip at self-checkout kiosks ...

We know to tip for the service we receive, but what if we're providing the service ourselves?

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"The thing that really just blows my mind is that people are being asked to tip for self-service kiosk and checkout lines," Lynn said. "That's the one that surprises me the most because it's not clear who's receiving those tips."

If you're ringing up your own items, don't worry about tipping, he says.

... and skip tipping for takeout and counter service, like coffee

If you're picking up your own food, you can likely skip the tip, too. ( Food delivery, of course, is different when it comes to tips .)

"If you don't want to leave a tip for your takeout order, it's just sitting there on the counter and you grab it, you've already paid for it and you're out, you're just going to grab it and go," said etiquette expert Avery Johnson of The Southern Academy of Etiquette. Still, she notes you can tip 10% or more on carryout if you had special requests, like extras, for example.

Lynn also skips the tip on takeout — and in counter-service situations, like getting a cold brew and a pastry at a coffee shop. 

Don't feel pressured to tip for a sweatshirt you just bought

Tip prompts that pop up when you're making retail purchases are where the rules of tipping etiquette might get a little blurry, Farley said. Say you landed tickets to see the biggest concert of the year , and you want to buy a $100 sweatshirt to commemorate the experience. You pay a visit to the stand selling concert merch where the salesperson needs to pull down the sweatshirt you picked from a rack with a pole. When you go to check out, the screen prompts you for a tip on the transaction. 

Customers who have never tipped for this type of transaction before might wonder if they should fork out a few more dollars here. 

Farley said that even in these types of scenarios, customers aren't expected to tip. "It's challenging to have a transaction, especially if somebody smiles, and they're pleasant, and, you know, they, provide nice service, but there is still no obligation to do so," he said.

… or a tipping on meal for which you already paid gratuity 

Farley said the most unexpected tip request he's ever received was at a sit-down restaurant where the menu had already indicated that a standard gratuity fee of 20% would be included in the bill. 

When the server handed Farley the final bill, though, he was hit with a prompt for another 20% tip by the card reader.

"I was very confused," Farley said. When he asked the waiter why there was a second charge, he said the server told him the 20% gratuity charge was for the whole staff to split, but 20% prompt on the card reader was specifically for his service that night.  "The service was not 40% service, the service was 20% service, but I was stuck into paying 40%," Farley said. 

If you're worried you might find yourself in this situation, Farley said you can ask the restaurant to waive the initial gratuity fee. "If you feel strongly about it, and you feel that burden shouldn't be on you, restaurant owners that I've encountered, and have read interviews with, will say that for any consumers that push back and request that that charge be removed, they will comply." Otherwise, he suggested "do your homework" on a restaurant's tipping policy, so you can avoid a potentially awkward encounter. 

Watch: Sneaky ways Costco gets you to buy more

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Breaking News

Restaurant service fees are staying after all with Newsom signature of last-minute bill

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Those 3, 5 and 20% fees at the bottom of your menu could be here to stay.

With little time to spare, a new law will allow restaurants and bars to continue charging service fees, healthcare costs and other surcharges when listed clearly for diners to see. The practice was set to be outlawed beginning Monday.

On Saturday , Gov. Gavin Newsom signed Senate Bill 1524, an emergency measure to exempt California food and beverage vendors from Senate Bill 478 — a law that goes into effect in July and targets ticket sellers, hotel and travel websites and other businesses that charge “hidden” or “junk” fees.

Before Newsom signed SB 1524 , which was introduced in early June, restaurants and bars were included in the affected businesses, and Atty. Gen. Rob Bonta had advised that the food and beverage vendors roll such fees into listed menu prices to avoid the possibility of legal action.

“These deceptive fees prevent us from knowing how much we will be charged at the outset,” the attorney general, who co-sponsored SB 478, said in a statement the day it was signed. Bonta could not be reached for comment regarding the exemptions allowed by SB 1524.

Numerous business operators in the service industry have been vocal against SB 478, which passed in October. They said they feared that raising list prices during a tumultuous year marked by closures and inflation would cost them more customers and support. Multiple restaurateurs told the Los Angeles Times that the process of revising or entirely overhauling their tipping and surcharge system could result in the loss of staff benefits or all-out closures. SB 1524’s rules allowing such surcharges could affect tens of thousands of restaurants throughout the state.

The shocking state of the restaurant industry: ‘We can’t afford to be open. We can’t afford to be closed.’

The industry is facing a crisis as new legislation, inflation, higher wages and pandemic fallout have chefs and owners worried for the future of mom-and-pop restaurants.

May 15, 2024

“We’re the most regulated of any business out there, and we are struggling to survive in the broken system that has been handed to us throughout many, many decades,” said Eddie Navarrette, a co-founder of the Independent Hospitality Coalition, a restaurant advocacy group. “When you add more regulations, whatever it may be, it makes things more difficult. Things are already difficult … there is a mass exodus of our small-restaurant community. I think it’s a huge relief, just to have one less thing being thrown at them right now.”

Navarrette spent weeks campaigning for SB 1524’s passage, writing letters, meeting with upwards of 35 policy advisors, legislators or their representatives, knocking on doors at the state Capitol, and explaining the usage of service fees within the restaurant industry, whose tip-based employee earnings make it different from most fields that will be affected by SB 478.

Surcharges, health fees and service charges are regularly used within the industry to stabilize wages across dining rooms and kitchens — where servers often receive tips but cooks and dishwashers do not — and to help offset the cost of benefits such as healthcare. Businesses with larger service fees, such as 18% or 20%, often note that tips are not expected.

“It’s confusing why the restaurants are claiming that they need to do things differently, because it just feels like they’re saying that they need to hide the cost of their food for us, and that doesn’t feel right,” said Jenn Engstrom, state director of the California affiliate of the Public Interest Research Group (CALPIRG) a nonprofit organization that advocates for consumer interests and protections.

“It feels like you’re being duped,” she said. “That’s what it feels like: that they’re trying to trick you.”

Restaurants may be able to keep service fees if menu shows the charges

Reversing course, the author of a bill to ban junk fees has proposed emergency legislation to carve out an exemption for restaurants.

June 6, 2024

Some local restaurants have come under fire on accusations of misusing service fees or other surcharges, though multiple chefs and restaurateurs told The Times that these “bad actors” are few and far between.

“Every restaurateur that I know who cares in this industry is using it in a way that is so immensely appropriate and responsible and forward-thinking that if it was to go away, it would be really crippling to everybody,” Kato restaurateur Ryan Bailey told The Times earlier this year.

The new bill, which passed unanimously in the state Assembly and Senate in late June, was co-written by Sen. Bill Dodd (D-Napa) — who also co-wrote SB 478 — as well as Sen. Scott Wiener (D-San Francisco) and Assemblymembers Matt Haney (D-San Francisco), Jesse Gabriel (D-Encino) and Cecilia Aguiar-Curry (D-Winters).

It is supported by the California Restaurant Assn. and the labor union Unite Here, both of which represent thousands of hospitality workers in California.

SB 1524 “will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits,” Matthew Sutton of the California Restaurant Assn. said in a statement. “And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out.”

While some restaurateurs and bar operators are breathing a sigh of relief over the continuation of service fees, others are frustrated with the government’s quick change in tack.

Following the attorney general’s guidance for SB 478, in April restaurateur Dustin Lancaster rolled a 4% surcharge into the menu list prices of two of his L.A. restaurants, L&E Oyster Bar and El Condor. He said that SB 1524 would not prompt him to revert to a service-fee model, at least for the foreseeable future, and that it wasn’t “so simple to just unbake the cake.”

“This is, sadly, all too familiar territory for restaurants in California,” Lancaster told the L.A. Times this week. “Just like in COVID, they jerk us around and expect us to pivot and change our model repeatedly as if it’s no big deal to small businesses. Restaurants continue to shutter [at] an alarming rate in L.A., and this sort of unnecessary about-face is why California continues to be the least small-business-friendly state in America.”

At Bell’s, a Michelin-starred restaurant in Santa Barbara County’s Los Alamos, owners diligently tracked the progress of both state Senate bills and awaited final word before determining whether to remove their 20% service charge, which benefits all nonmanagerial staff.

And even before SB 1524’s passage, Bell’s listed the charge on its the lunch and dinner menus, on its web page for frequently asked questions, and on its homepage section on takeout orders. The new law will allow the restaurant to continue its practice without reconfiguring its business model.

Greg Ryan, an owner of Bell’s, told The Times that he had been listening to and was understanding of customers, legislators and his team, and that he wanted to do what was best for his staff.

For months, the practice has felt like a balancing act.

As SB 1524 made its way through California’s Assembly and Senate, outcry on social media and in public forums such as Reddit was swift and vocal, with multiple anonymous posters commenting that to retaliate for the exemption, they would stop leaving tips. Another Reddit user created a spreadsheet that tracks surcharges and service fees in restaurants across the state.

‘Do y’all think tipping culture has gotten out of control?’ Inside our evolving tipping dilemma

The norms around whom, and how much, Americans tip have shifted in recent years — and consumers are increasingly confused.

April 27, 2023

An L.A. restaurateur, speaking anonymously for fear of customer retribution, told The Times that they’d seen an increase in tips of $1, 0% or other low amounts over the course of the month, possibly in response to the 3-4% service fees their restaurant was charging.

“I’m not thrilled with the bill,” CALPIRG’s Engstrom said of SB 1524. “I think it was better when restaurants and bars also had to have really clear upfront pricing, so that consumers could do easy comparison shopping. When I decide to go out to a restaurant with my family, I check the prices first, on the menu, online.”

That SB 1524 requires clear posting of fees is a benefit, she said, but it’s not as strong as SB 478 with the attorney general’s initial guidance that called for rolling service fees into listed prices. Engstrom called SB 478 “a great model bill,” saying she would love to see similar consumer-protection legislation in other states, or federally — without many carve-outs for industries, regardless of how service fees factor into their business plans.

“I think [SB 1524] is unfortunately kind of a step backwards, but it’s still transparent,” she said. “You can still see it; you just have to do the math.”

More to Read

Hidden fees, gun taxes, date-rape testing kits: New California laws that take effect in July

July 1, 2024

In 11th-hour reversal, state Senate passes emergency bill to exempt restaurants from service-fee ban

June 27, 2024

Hotel and Airbnb price tags may soon spike. For travelers, that’s a good thing

June 18, 2024

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Stephanie Breijo is a reporter for the Food section and the author of its weekly news column. Previously, she served as the restaurants and bars editor for Time Out Los Angeles, and prior to that, the award-winning food editor of Richmond magazine in Richmond, Va. Born and primarily raised in Los Angeles, she believes L.A. to be the finest food city in the country and might be biased on that count but doesn’t believe she’s wrong.

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Money blog: 'Bleak' new security measure seen in Tesco store

Welcome to the Money blog, your place for personal finance and consumer news and tips. Leave a comment on any of the stories we're covering below.

Monday 1 July 2024 17:36, UK

Energy price cap falls

• Energy price cap falls today - here's what you need to know
• Thinking about switching? These are the cheapest energy tariffs available right now
• Are prepayment prices the cheapest way now?
• Will energy prices return to levels seen before COVID?

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Ask a question or make a comment

Olive oil has become the latest staple to undergo "bleak" anti-theft measures.

The cooking product was spotted encased in netting and tagged with an alarm in an unspecified Tesco store, leading one customer to ask: "What has the world come to?"

It is just the latest product to be subject to supermarket security measures that have surprised customers, after an out-of-hours smoke machine was introduced in another Tesco store last month.

Neither security features are part of a universal policy and have been implemented only in individual stores, Sky News understands.

"All 'anti-shoplifting' measures are theatre," said one shopper on X, beneath a photo of the olive oil.

"This is so bleak," said another, while a third joked the oil "has to wear fishnets now".

We revealed earlier this year that there had been a 110.5% increase in the price of olive oil since January 2021.

High temperatures and droughts in Spain, the world's leading producer and exporter, have dented the harvest - a problem only worsened by global inflationary pressures.

Separately, a bacterial disease called Xylella Fastidiosa has attacked and killed century-old olive trees, severely diminishing yields in southern Europe.

And heightened prices have led organised criminal gangs to steal the "liquid gold".

Read more on what's behind exploding olive oil prices here...

Recently we reported on how Barcelona had cracked down on tourism by planning to abolish short-term holiday lets . 

The Spanish city has now gone further in its war on overtourism by banning the display and sale of "offensive" souvenirs. 

It says sexist and homophobic messages on some souvenirs are tarnishing Barcelona's image. 

The ERC's deputy spokesperson Jordi Coronas said the ban included products such as "penises with the Barcelona brand, T-shirts with sexist or homophobic comments, or simply comments that, when displayed on these products, devalue Barcelona". 

Ahead of our Q&A, switching service Uswitch provided us with a list of what it considers the cheapest energy tariffs on the market right now.

It's worth reading the advice from Which? in our Q&A below (see 15.02 post) before deciding to switch from a standard variable tariff (that's what most households are on) - but if you're aware of the risks, then cheaper energy is available...

A big thanks to all those who submitted a question for our Q&A on the day the energy price cap fell - and sorry if we didn't get to yours.

A big thanks also to Emily Seymour, Which? energy editor, and Kate Mulvany, a principal consultant at Cornwall Insight, for tackling 10 of your questions so thoroughly.

Scroll down to read through their answers.

Does the UK have a secure enough energy supply in your view and what would it take for blackouts to occur this or any other winter?

Kate Mulvany, a principal consultant at Cornwall Insight, says..

The outlook for the upcoming winter appears promising, with strong gas reserves across Europe providing a healthy buffer to seasonal demand. 

While a very cold winter would increase the need for gas for heating across Europe, the UK's ability to secure gas and electricity from multiple sources keeps the risk of disruption to the flow of energy relatively low. 

Quite a few things would need to go wrong at the same time for there to be an increased risk of a widespread blackout. 

However, short-term blackouts would still be possible - as indeed at any time of year - due to storms or other weather incidents, as well as through localised network issues. 

It's worth mentioning that ministers have claimed the UK faces blackouts without new gas-fired power stations...

The bigger risk for homes in the UK is the pressure on energy bills. Although electricity and gas supplies appear healthy, affordability remains a concern, as seen in recent winters - particularly 2022-23.

Edward Morgan:

What's the best deal currently on the market in your view and does it come with any risks?

Emily Seymour, Which? energy editor, says...

As we said in one of our previous answers, there isn't a "one size fits all" for the best deals out there as it will all depend on individual circumstances. 

However, there are some tariffs available that are cheaper than the current price cap and might be worth considering. 

When Which? last checked, Ecotricity and Ovo both had fixed deals available for cheaper than the July price cap. 

However, Ecotricity's deal requires a smart meter - or you to agree to have one fitted - and Ovo's is only available if you also buy annual boiler cover, so you'll need to weigh up if this is right for you. Both also come with exit fees if you want to leave early. 

Tracker tariffs change in price relative to the price cap every three months when the price cap is reset to offer slightly cheaper rates than you'd be paying otherwise, and could be worth considering. They're currently available from E.ON Next , Scottish Power and Fuse Energy .

Consumers can use switching services - like Which? Switch Energy - to keep an eye on the best fixed deals available and compare deals to see what's cheapest for them. 

We'd always recommend checking the exit fees on fixed deals so you're not tied into a tariff if something better becomes available.

Why doesn't the government de-link the price of fossil fuel-generated electricity from that generated from renewable sources? Surely cheaper energy would be the result?

The current government has explored various methods to decouple wholesale gas and electricity prices through a programme called the Review of Electricity Market Arrangements (REMA). 

However, each option identified presented potential drawbacks for customers, as well as benefits. 

For example, one proposed solution was to set different prices for electricity generated by renewable sources compared to that generated by more carbon-intensive methods, such as burning gas. 

A significant challenge is that the country cannot yet generate all its electricity from renewable sources 24/7. 

During shortfalls, such as on a winter evening with low wind, non-variable renewable generation methods would still need to be used, meaning customers would still see the impacts of gas prices in those of electricity.

If I do not qualify for pension credit but receive housing benefit on top of my state pension, will I qualify for extra heating allowance/cold weather payment?

For the Warm Home Discount, Cold Weather Payment and Winter Heating payment, you should receive any discounts automatically if you're eligible. 

For the Warm Home Discount, each energy supplier also has its own eligibility criteria, which are approved by the energy regulator Ofgem, so you should check with your provider to see whether you meet its requirements.

If you were born before 25 September 1957, it's also likely you'll be able to get Winter Fuel Payments of between £100 and £300 for winter 2023-24. 

The payments are to help pay for your gas or electric heating in winter. You should get this automatically and should contact the Winter Fuel Payment Centre if you think you're eligible but haven't received anything. 

Energy companies are obliged to help you if you tell them you are struggling to pay and will not disconnect you if you miss a bill payment. 

If you are struggling with your bills, let your provider know and explain that you want to establish a payment plan that you can afford. 

Discuss your options with them, as they may include a review of your payments, a reduction in your payments or a payment break, more time to pay, and access to hardship funds.

Will energy prices ever return to levels seen before COVID - if not, why not?

Kate Mulvany, a principal consultant at Cornwall Insight, says...

At this point in time, we are not expecting a return to pre-COVID prices.

This is primarily due to the significant rise in the wholesale prices of electricity and gas following the Russian invasion of Ukraine. 

The cost of the fuel - the wholesale cost or the commodity cost - is the largest part of the energy bill. 

Although some non-wholesale components of energy bills may decrease, the main factor driving prices is the cost of commodities. 

The UK's heavy reliance on imported electricity and natural gas exacerbates this issue. 

Therefore, increasing investment in domestic renewable and low-carbon energy sources is crucial to reduce this dependency.

Additionally, implementing measures to decouple electricity and gas prices in the wholesale market could help lower bills.

Why does Ofgem allow the price cap to be so high when we know how high the profits of energy companies are which in turn causes so much hardship for UK families?

The price cap limits the unit rates and standing charge levels that suppliers can charge domestic customers across many circumstances. 

Some parts of the energy price cap are directly regulated by Ofgem, while others, such as wholesale energy costs, reflect market conditions. 

The price cap includes various elements such as wholesale energy costs, network costs (the cost of moving gas and electricity around the country), operating costs, environmental and social policy costs, and the allowable profit for suppliers.

The role of energy suppliers is to purchase electricity from generators and sell it to customers, managing customer service, billing and other retail functions. 

Ofgem's formula for the price cap includes an allowance for suppliers to make a profit, which is overall a relatively small percentage of the total price cap amount. 

Headlines about energy companies' profits can refer to companies involved throughout the energy industry, not just suppliers. 

For example, companies that extract and transport gas or which generate electricity might not have prices directly regulated by Ofgem. 

There is global competition for energy, and so attempts for the UK to control wholesale costs might have an impact on security of supply. 

Since the cap limits unit rates and standing charge levels, but not the total bill, there has been increasing support for a social tariff, which would offer discounted deals to vulnerable households. 

Social tariffs for energy are not a new policy; they have been implemented before and are currently used in other sectors, such as telecommunications and broadband.

I read prepayment is the cheapest way now - why is this and is it likely to remain the case? If so, how do I get one?

Prepayment unit prices are a little cheaper than the price-capped variable tariffs for direct debit customers at the moment.

Prepayment prices used to always be more expensive than paying by direct debit to account for higher admin costs, but the government pledged to scrap the extra charges for prepayment meter customers and prices are now more balanced.

However, I'd have a couple of words of caution to anyone thinking of switching to prepayment just for cheaper unit prices.

Most notably, this price difference is only for customers paying a price-capped variable rate - as soon as you look at fixed deals, direct debit customers tend to have access to cheaper options, with fewer available for prepayment customers. 

Next, prepayment meters aren't as convenient - you will need to remember to physically top up your meter when your credit runs low. 

Finally, prepayment meter customers aren't able to spread their energy costs evenly throughout the year like direct debit customers - so you will need to pay significantly more into your account through the winter and less in the summer, which can be difficult to budget for.

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