Your business plan is a roadmap for the development of your new restaurant. A restaurant business plan is a framework that helps you plan and forecast all aspects of restaurant management and operations. This includes menu design, location, financials, and much more. It also helps you turn your restaurant ideas into reality.
Without further ado, let’s list some elements you absolutely need to keep in mind when crafting a good business plan for your first restaurant.
Get comprehensive insurance
If owners don’t have restaurant insurance coverage, owning a restaurant can be fraught with financial and legal concerns. Make sure you've covered all of your bases when it comes to safeguarding your assets and income by purchasing the appropriate insurance policies.
A good general liability insurance plan protects your business from a variety of claims. This includes property damage, bodily injury, and general public personal injuries that occur during normal operations. This plan should also provide coverage for medical expenses.
There’s also liquor liability coverage. When a customer leaves your restaurant or bar inebriated and drives, they may be involved in an accident or, worse, commit a vehicular crime. The victim's family may file a lawsuit against your business for criminal and civil damages as a result of your negligence.
Finally, you should also consider worker’s compensation. Accidental staff injuries in restaurants are common, including minor cuts, scratches, bumps, and bruises. But there are also more serious incidents like catastrophic slip-and-falls, grease or fire burns, and head or back injuries.
These three types of insurance should be enough to protect your business from legal troubles and unexpected costs.
A service section is a must
This business plan section is especially important for fine-dining concepts, ideas with a distinct service style, or if you have strong emotions about the role of service in your restaurant.
Discussing the details of the guest's service experience can be an effective means of demonstrating your approach to hospitality to investors.
- Will your restaurant offer counter service to get customers out the door as quickly as possible?
- Do you want it more more akin to a theater, with captains placing plates in front of patrons at the same time?
- Will you have a sommelier if you have a large wine program as part of your business?
If you don't think service is a significant part of your business, mention it briefly in the concept section but don’t omit it from your business plan.
Team and management section
You'll want to designate a section for each member of your team. Even those who haven't been hired yet. This will give you an idea of who is responsible for what tasks. It will also show you how you should structure and build out your staff to get your restaurant up and running.
The following should be included in the team and management section of your restaurant business plan:
- Overview of management. Who is in charge of the restaurant? What are their experience and qualifications? What responsibilities will they have?
- Other employees you've hired. This includes their profiles, as well as other positions you need to fill.
- Percentage of ownership. Who owns what percentage of the restaurant, or is it an employee-owned business?
As your business evolves and you continue to work on this business plan make sure to update this section with new information. Especially because the members of your team will affect both your business and how people perceive it.
You should offer a sample menu so that readers and guests know what they can expect from you. This also makes you think about what you want to serve to your customers. Also how your menu will differentiate itself from other restaurants in the neighborhood.
Although an example menu is self-explanatory in certain aspects, consider the following:
- A separate drinks list may be necessary if you plan to place a strong emphasis on specialty beverages or wine;
Here, you describe the current state of your company's finances and forecast where you want to be in a year. Three years. Five years. You want to include information about what you've spent, what you'll spend, and where you'll receive the money. Also any charges you might incur, and the expected returns. Including when you'll break even and turn a profit.
Your finances section should include:
- Funding request;
- Financial statements.
Whether you're developing a restaurant business plan for investors, lenders, or just yourself and your team. The most essential thing to remember is to make sure it's thorough. Keep in mind that a business plan is not set in stone, so feel free to change various things if your vision starts to change.