How to Write a Restaurant Business Plan

In short: a restaurant business plan explains what you will sell, to whom, how you will run it and, above all, how the money works. The most useful plan is short, built from guest numbers and honest about risk.

A plan serves two readers. The first is outside: a bank, an investor, a landlord or a partner who wants to see that you have thought it through. The second is you. Writing the numbers down is how you discover that the rent is too high or that your menu needs a different price.

This guide gives the sections that matter, a worked example and the traps to avoid. If you are still deciding whether to open, start with how to open a restaurant.

The nine sections

1. Summary

One page, written last. State the concept, the location, the money you need, how it will be spent and the main reason it will work. Many readers stop after this page, so make it clear.

2. Concept and menu

Describe the format, the cuisine, the style of service, opening hours and a sample menu with prices. Explain what is different from nearby competitors without relying on words like unique or authentic. A reader should be able to picture an ordinary Tuesday evening.

3. The guest and the market

Who comes, when and why? Describe the neighbourhood: residents, offices, schools, passing trade. List five or ten direct competitors with their prices, seating and how busy they look. Use your own visits. If you quote a statistic, link its source and give its date.

4. Location and premises

Cover the address, size, seats, rent, lease length, any works needed and the permitted use. Include the main rule on opening hours or alcohol if it affects trade.

5. Operations

Explain how a day works: who prepares, who serves, how orders move to the kitchen, how you buy and receive stock, how you handle cleaning and food safety. Mention your suppliers, your systems (till, kitchen display, online ordering) and the food safety plan. See HACCP for restaurants.

6. Team

Show who runs the restaurant and what experience they bring. List the roles you will hire, how many hours and at what cost. Honest gaps are fine if you show how you will fill them.

7. Marketing

Say how guests will find you: a Google Business Profile, your own website with online ordering, social media, local partners and an opening plan. Add a small monthly budget.

8. Financial plan

This is the section that decides everything. It has four parts:

• Start up costs. The full list, including the reserve. See restaurant start up costs.
• Sales forecast. By month for the first year, then by year.
• Profit and loss forecast. Sales less cost of goods, labour, overheads and finance costs. See gross profit and prime cost.
• Cash flow forecast. Month by month, because profit and cash are not the same. See restaurant cash flow.

9. Risks and plan B

List the three or four things most likely to go wrong (slow start, a key person leaving, rising food prices, building delays) and what you would do. Readers trust a plan that names its risks.

Build the forecast from guests

Do not start with a turnover target. Start with the things you can count:

1. Seats.
2. Services per day and days open.
3. Turns per service (how many times a table is used).
4. Fill rate: the share of seats actually used.
5. Average spend per guest.

Sales equals seats times turns times fill rate times average spend. Do it separately for lunch and dinner, and for weekdays and weekends.

Now you can test it. Is 1.8 turns at 75% realistic for the area? Visit similar places on a Friday at 19:30 and count.

Find the break even point

Break even is the weekly sales at which you cover every cost. It is the number you share with your family, your partner and your lender.

The formula is fixed costs divided by the gross margin percentage. Fixed costs here include rent, salaries you must pay even in a quiet week, insurance, energy, software and loan repayments. Gross margin is 100% minus the percentage you spend on food and drink.

Compare break even to your forecast. If break even is 5,714 and your forecast is 3,375, the plan does not work as drawn. That is useful news, and cheap to learn on paper.

Show three cases

Lenders like to see how you cope when things go less well. Present three cases:

• Low: sales 20% below the expected case for the first six months.
• Expected: your best honest estimate.
• High: a better start than expected.

For the low case, say what you would do: cut hours, reduce the menu, adjust the rota or delay a hire. See labour cost and the rota.

What lenders and landlords commonly ask for

Each lender has its own checklist, so ask for it early. Typical requests include:

• The business plan and the forecasts.
• Your own contribution and personal financial position.
• Proof of relevant experience.
• Quotes for the build and equipment.
• The draft lease or heads of terms.
• Licences and permits, or the plan to get them.

In the UK, government guidance on writing a business plan and finding funding is on GOV.UK. Other countries have their own small business agencies, many of which give free templates and advice. Use an accountant for the financial pages if numbers are not your strength.

Mistakes to avoid

• A top down forecast. Saying the market is large and you will take 1% is not a forecast.
• Forgetting the reserve. Include several months of running costs.
• Underestimating labour. Include the manager, holiday cover, training and employer costs.
• Hiding the risks. A plan with no risks is not believed.
• Never updating it. After opening, replace the forecast with actual weekly figures.

Keep the plan alive after opening

Once you are trading, compare real figures to the plan each week. DineHarbor's reports give you sales, order counts and averages by day, and the weekly numbers guide shows which five to check. If real sales are below the plan, change costs early; do not wait for the bank to ask.

Writing tips that make a plan easier to trust

Write in plain sentences and put numbers in tables. Keep every assumption visible: if you expect an average spend of 25, say why, and say where the figure came from. A reader who finds one unexplained number will doubt the rest.

Put your sources in footnotes with the date you read them. If a competitor price comes from their website, say so. If you are quoting a market figure from a trade report, link it and check it is recent. Never invent a statistic to fill a gap; write "not known yet, to be tested in the first month" instead.

Ask someone who has never worked in a restaurant to read the summary page. If they cannot say what you sell, to whom and for how much, rewrite it. Then ask someone who has worked in kitchens to read the operations page and tell you what is missing. Both readers will find different gaps.

Finally, keep a one page version for yourself with only the break even, the three cases and the first ninety days of actions. That page is the one you will really use.

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