The business plan describes in a precise way the concept, the strategy and the means to be implemented to succeed in your restaurant opening project. It allows you to put all the chances on your side to become a successful restaurant owner. Find out how to draw up a business plan for your restaurant in 7 steps.
What is a business plan for the restaurant industry?
A business plan is a kind of analysis and forecast file that will help convince financiers (banks, partners, suppliers, etc.) to invest in your restaurant. It is therefore fundamental that your business plan contains precise information, and that it is presented in a well-structured way.
In fact, a business plan consists of two parts. The first part focuses on your restaurant concept and the second part will support your financing needs with figures.
What is the purpose of a business plan for your restaurant?
To start a restaurant, you have to find funds. And to find funds, you have to develop a convincing business plan! The business plan will allow potential investors to quickly understand the profitability of your project.
Beyond the financial dimension, the business plan will give visibility to your project andevaluate its feasibility. It allows you to raise all the questions essential to the launch of your new concept and to shed light on possible grey areas.
Therestaurant business plan must be accurate in order to convince your banker to give you the funds to launch your future restaurant. The more thorough you are, the more likely you will be taken seriously by an investor, a future partner or a bank.
Also read: Creating a restaurant chain: 9 things to know
7 steps to create a business plan for your restaurant
The business plan you will present must represent the first 3 years of the restaurant's life.
1. Describe the concept of the future restaurant
The concept of your future restaurant must be at the heart of your business plan. Your banker has no time to lose and wants to understand your project quickly. This is why it is advisable to describe the concept of your future restaurant in a simple and explicit way, in a few lines. If your project is similar to an existing concept, you can draw parallels so that he understands the concept. On the other hand, if your project is totally innovative, try to find similar models so that it can be connected to a reference base.
Remember that financiers do not like uncertainty! You must be as clear as possible in the presentation of your concept. Detail in a few lines your motivations and your assets for the success of this project.
2. Introduce the team
In the eyes of the funder, the team represents the people who will carry the project. It is therefore fundamental in the presentation of your project. The key to the success of your business plan is to surround yourself with people who have experience in the field. You must present a team that will be complementary. Ideally, one of the founding members of the project should have already managed a restaurant. From an administrative point of view, at least one of the partners must have his operating certificate.
The presentation of the team is essential to obtain a real credibility with your investor. For some investors, the personality of the founder and the presentation of his partners can be as important as the project itself!
3. Discuss the location of the future restaurant
The location of your restaurant is obviously very important. You will have to explain how your future restaurant will be adapted to the clientele of the geographical area. In this part, you will make an analysis of the clientele.
In the business plan, the importance of location will depend on the type of restaurant you want to set up. If you plan to open a restaurant that is only focused on take-out, the location will not really be important. On the contrary, if you want to do table service, the location appears to be a crucial element to attract customers to your place.
Next, you need to do a direct and indirect competition analysis. How is your restaurant different from the competition?
Tip: You must show that you have chosen the location according to the type of clientele you are targeting. This will reassure the banker and save you time with your real estate agent! When you are looking for a location, you can describe precisely what you are looking for. Thus, your real estate agent will have an exact idea of what you want. A time saver for everyone!
Please note: in the global budget, the rent of the location must represent 6% to 10% of your projected turnover. Thus, the cost of the rent will depend on the amount of your estimated turnover.
4. Establish your business strategy
Describe your commercial strategy with regard to pricing policy, choice of products, etc. You mention all the means and actions to quickly reach the profitability of your restaurant space.
The commercial strategy serves to answer the following questions: What are the characteristics of my customers? How can I adapt my offer to my customers? At what price to sell the food products? To achieve this, you need to conduct a market study.
5. Choose the legal status
One of the most common questions when starting a restaurant project is the legal form. Partners must choose the legal status that is most appropriate for their situation. In this section, you explain your choice (Sole proprietorship / Company / Etc.).
The legal status will have an impact on the liability, the tax and social regime, the financial commitment, etc.
6. Present the figures
This is the time to translate your project into numbers and tables.
In the business plan, you must show 3 tables:
- The financing plan: On the one hand, there are the resources (personal financial contributions and bank loans) and on the other hand the investment needs necessary to launch the project. To be viable, the total resources must be equal to, or greater than, the total needs.
- The income statement: One column for revenues and one column for all expenses (rent, salaries, etc.). It is in this table that your strategy appears. You must present an annual growth rate over 3 years.
- The cash flow plan: The cash flow plan is derived from the two previous tables. It includes the turnover + your financial contributions, from which we will subtract all the operating expenses and the repayment of the loans. The result gives you the cash balance.
As a general rule, we usually say that the minimum financial contribution should be 30% of the total cost of your project. For example, if you estimate the total cost of your project at 200 000€, your initial financial contribution should be 60 000€ minimum.
Do you know the Xerfi studies? It is the reference to obtain a market study and complete forecasts on the turnover of the restaurant industry. It can be very useful for your business plan!
7. Estimate your turnover
In order to rationally estimate your turnover, the method consists in answering the following 3 questions:
- What was the turnover of the previous business?
- What is the turnover of the competitors in the neighborhood? What is the average ticket of the neighboring restaurants?
- What is the turnover of the same type of restaurant elsewhere in France?
These questions allow us to have a fairly accurate idea of the projected turnover.
Otherwise, it is always possible to go through a firm of experts who will make a customized study of market and potential.
In this section, youanalyze the break-even point. With figures, you provide accurate information to show the level of sales above which the restaurant begins to make a profit.
To go further: The 4 steps to open a fast food restaurant
What is the key to a successful business plan?
Tip #1: Talk to others
Once you have developed your business plan, talk about your project to your friends and family (especially if you have restaurant owners around you!). They will give you an outside view and provide you with valuable advice.
Tip #2: Your file must be "salesy
The business plan must be well written, neat, concise and well structured. The reader must understand your project from the first reading of the file.
Tip #3: Call in an expert
Our ultimate advice is to call in an expert. Develop your restaurant concept with peace of mind with a team of experts at your side. They will accompany you from A to Z to improve the profitability of your project.
