How To Write a Restaurant Business Plan

Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.

Drawing up a restaurant business plan is a fundamental step in growing your culinary visions into something strong and viable. There are 87,266 restaurants in Canada, according to recent Canadian industry statistics. The same data reveals that only 54.7% are profitable, which underscores the importance of having a solid business plan before launching.

When you are starting a restaurant, your business plan provides the strategy for how you’ll get it off the ground and make money. Investors, co-founders and partners are going to be an important part of the journey. To prove your vision to them and to stay aligned with it yourself, you need a business plan.

Here, we’ve outlined what your restaurant business plan should include.

What is a restaurant business plan?

Your restaurant business plan outlines exactly what kind of restaurant you are going to create, what it will be like and how it will become profitable. A business plan typically includes a number of standard elements that most lenders or investors will want to see before agreeing to hand over cash, so it’s worth getting it right.

Creating a business plan for your restaurant helps ensure you’ve done your research and know what steps you need to take to succeed.

A restaurant business plan may include:

• Executive summary
• Company description
• Market analysis
• Strengths, weaknesses, opportunities and threats (SWOT) analysis
• Details on menus and sourcing
• Marketing strategy
• Target market definition
• Branding information
• Organization and management overview
• Financial plan

Let’s take a look at each element in more detail.

Importance of a restaurant business plan

A restaurant business plan is the blueprint for turning your culinary vision into a sizzling success. More than just a document, it serves as the foundation for every critical decision, from refining your concept and menu to securing funding and building a loyal customer base. A well-crafted business plan for your restaurant forces you to think strategically about sourcing ingredients, selecting staff, setting up operations and marketing your concept, while also anticipating challenges and opportunities in a highly competitive industry.

Investors and lenders don’t just want to see your passion; they want proof of viability. A polished restaurant business plan demonstrates that you’ve done your market research, analyzed your competitors and mapped out a path to profitability. Not only will a business plan help you secure financing for your restaurant, it will hold you accountable to your milestones and goals as you navigate the complexities of launching and sustaining a successful business, from the drawing board to a profitable, plate-worthy reality.

Elements of a restaurant business plan

The key elements of your restaurant business plan will cover everything from concept to financials, ensuring you have a clear mission, strategy and workable numbers. As you prepare your business plan, be sure to include the following:

Executive summary

The executive summary acts as an overview of your restaurant business plan. It outlines the topics you will cover in your business plan. It also includes your objective, the restaurant mission statement and the key factors that will make your business successful and set it apart from competitors. The pivotal question to answer in your executive summary is: Why do people need my restaurant?

What to include:

• A concise but compelling introduction to your restaurant business plan
• A brief introduction to the topics you will cover
• Your mission statement

Company description

The company description outlines your restaurant’s vision and form. This is where you provide insight on how your restaurant will feel, what your goals are, what kind of experience you want to deliver, who represents your target market and who will be in charge.

You can kick off this section by talking about your founding concept — what made you want to be a restaurant owner and set up this restaurant specifically? Then you can cover the details, like the type of food you’ll serve and how you’ll adapt your menu to reflect popular trends.

What to include:

• The name of your company
• Your location
• An explanation of the concept and cuisine
• An outline of why you’re doing what you’re doing
• Your goals

Market analysis

A market analysis explains your industry, competition and geography to help you and the reader understand your restaurant’s position in the market and should include the following:

Industry analysis

An industry analysis is a qualitative and quantitative assessment of the market. Think trends, economic factors (such as ingredient shortages or supplier issues), consumer spending and attitudes and so on. All of these things will impact your restaurant business, so it’s important to explore how you’ll achieve your success in spite or because of them.

Competitive analysis

Your competitive analysis will look at competitors across the market, especially those close to your location. Find out who has the biggest market share and how near competitors’ restaurants are to yours. Once you’ve done your research, clearly explain the advantages you have over these competitor businesses and how you’ll turn disadvantages to your favour.

Geographic analysis

Include an analysis of your restaurant’s location or potential locations. Few (if any) businesses have a perfect market position. There’s always new competition, new trends and new local developments that change the landscape in which you work — and that is as true of the restaurant industry as of any other. This is why it’s important to be honest about the potential struggles you might face. Not only will it help you prepare, but it will also instill confidence in investors who can see that you take your business seriously.

SWOT analysis

A SWOT analysis studies strengths (competitive advantages), weaknesses (shortcomings or lack of expertise), opportunities (from which your restaurant can benefit) and threats (that you’ll need to beat). Splitting these areas out makes it easier to make the most of the good and plan to tackle the bad. It’s an honest view of the potential struggles and wins ahead.

What to include:

• A list of your strengths and how you’ll play to these
• A list of your weaknesses and how you’ll get better in those areas
• A list of opportunities you can develop
• A list of threats you need to tackle

Restaurant operations plan

Staffing

To run efficiently, your restaurant will need to operate with a core team, split between front-of-house (FOH) and back-of-house (BOH) staff. Describe what your team will look like: Perhaps the BOH team will include an executive chef, one or two sous chefs, line cooks, and prep cooks. FOH might consist of a general manager, an assistant manager or two, servers, hosts and bartenders (if you plan to serve alcohol), supported by a dedicated busser and food runner during peak hours. The idea is to balance expertise and flexibility, so you can scale up with part-time staff during weekends and holidays.

You’ll want to hire experienced staff for leadership roles (chefs, managers) while training entry-level positions in-house to align with your service standards. Note in your restaurant business plan how all your employees will undergo structured onboarding and cross-training in multiple stations to ensure adaptability during rushes. You might include ongoing workshops and performance incentives to keep skills sharp and morale high.

Seventy-five percent of Canadian restaurateurs spend more time on hiring compared to a year ago, according to the Square Future of Restaurants 2025 report. To retain top talent, you’ll likely want to offer competitive wages, tip transparency and opportunities for advancement, like promoting line cooks to sous chefs. Detail your scheduling plan, whether that’s a mix of set rotations (for key roles) or flexible shifts to accommodate demand.

What to include:

• Key positions and headcount
• Hiring strategy
• Training and onboarding
• Scheduling
• Employee culture and retention
• Employee policies and compliance with labour laws

Restaurant POS

Your restaurant’s POS system is the operational heartbeat of your business. In the business plan for your restaurant, be sure to note how your POS system will seamlessly integrate order processing, payment handling and inventory management into a single, efficient platform. By automating transactions and reducing manual errors, you can ensure faster table turnover and smoother service. The system’s real-time sales tracking and reporting features will also empower data-driven decisions, from adjusting menu offerings based on popularity to optimizing staff scheduling during peak hours.

Beyond streamlining day-to-day operations, you might note how your POS will enhance customer satisfaction, perhaps with features like tableside ordering and split-check capabilities, reducing wait times and improving order accuracy. Integrated inventory tracking prevents stockouts and waste, while loyalty program integration and sales analytics can help tailor promotions to boost repeat business.

What to include:

• System overview and selection criteria
• Operational benefits
• Financial and inventory management
• Customer experience features
• Security and compliance
• Cost and implementation
• Future scalability

Menus and sourcing

Everyone, including investors, wants to know what’s getting served up at your restaurant, so be thorough when writing out a sample menu in your restaurant business plan.

Include menu items, descriptions and the ingredient lists needed to make your food and drinks. Descriptions heavily influence whether your menu resonates with your target audience, so you can use it as a marketing tactic. Entice your audience with sensory descriptions that help them visualize and even taste a meal at your restaurant.

Consider testing the menu ahead of time and adding the results to your business plan. List the places you’ll be doing your product sourcing as well as any vendors and suppliers. And consider how customer tastes and attitudes may affect whether or not you use local, environmentally friendly produce to reinforce a green business approach.

The other more formal but very necessary things to cover are how your restaurant will organize stock management, what you’ll do with food waste and how you’ll tackle safety requirements.

What to include:

• A list of your menu items with descriptions
• Photos of each item
• An explanation of your menu concept
• A list of suppliers and vendors
• A list of any home-grown food sources (such as an herb garden on-site)

Restaurant marketing strategy

The marketing plan section of your restaurant business plan should describe how you plan to promote your restaurant. You can break it down into five subsections: a positioning statement, a description of your target market and how you’ll reach it, your branding strategy, how you will test your brand, and how you’ll market to drive traffic.

Positioning statement

Your positioning statement explains your restaurant’s proposition — the core of every message that will ever reach people through your marketing.

What to include:

• A description of how your restaurant is different from others and how you plan to set yourself apart from your competitors
• The one thing everyone needs to know about your business
• The segment or category in which your restaurant competes
• Compelling evidence and reasons why customers in your target market can have confidence in your differentiation claims.

Target market definition

You already mentioned your target audience in the company description, and your market research will also have revealed characteristics of the people most likely to dine in your restaurant. This subsection allows you to look at their personas in more detail and in relation to the marketing messages they want and need to hear.

An important part of understanding your target audience is finding out the marketing channels with which they interact most. Students, for example, will be active on certain social media sites, whereas older, wealthier professionals are likely to seek new restaurants in trusted magazine reviews and through word-of-mouth recommendations.

Branding

Your restaurant brand is more than just a logo — it’s your personality and the way people perceive you. You can use a simple branding exercise to get started: Curate a list of words that best describe your restaurant. Then think of the emotions you want people to feel when they visit or receive marketing communications.

With these concepts fully fleshed out, you’re ready to start thinking about color schemes, fonts, website designs and, of course, a logo. All of these should reflect your business’s personality. When finalizing your restaurant business plan’s layout, showcase some of these visual assets.

Your brand exploration should also translate to your restaurant’s interior design and layout. These two things play heavily into customer satisfaction.

Discuss how you will test different marketing strategies and measure their success. “Branding in my opinion, takes time. I think it’s important to have a vision, and then the branding follows, and then you change things and course correct as time goes on. Your own vision of what you want for yourself may change, or your clientele may change, and then you adapt as you grow,” chef Darren MacLean, owner of award-winning restaurants Shokunin, NUPO and EIGHT, told Square.

Test your brand

Before fully launching, it’s essential to validate your restaurant’s brand identity to ensure it resonates with your target audience. In your restaurant business plan, describe how you’ll do this. Perhaps you’ll host pop-up events, soft openings or limited-time menu trials to gather real-time customer feedback on your concept, food quality and service style. Or maybe you can use social media polls, surveys and direct customer interactions to assess reactions to your branding, from logo and décor to menu pricing and tone of voice.

A/B testing different branding elements (such as promotional messaging or dish presentation) is another option for revealing what truly connects with diners. By iterating based on real-world responses, you’ll strengthen your brand’s appeal before committing to a full-scale rollout. Additionally, you may want to monitor competitors and local market trends to ensure your brand stands out while meeting customer expectations. Track which aspects of your brand generate the most engagement—whether it’s a signature dish, ambiance or marketing approach — and double down on what works.

Marketing to drive traffic

With the core of your marketing approach laid out, you can start planning activities to drive traffic to your restaurant such as:

• A soft opening or pop-up restaurant teaser event
• Special discounts on certain nights of the week
• Prix fixe (multi course fixed price) menu during your city’s restaurant week
• Chef pairings
• Plan for increases in takeout sales and options
• Charitable events

Organization and management

List out the roles and responsibilities for your management, front of house and back of house teams. Both quality and quantity of employees will be a significant factor in your success, so it’s important to hire people who believe in your restaurant’s mission statement, as well as the right number of them to work efficiently.

This section should also include the business entity you’ll declare for your restaurant, whether a sole proprietorship, partnership or corporation. Your business type determines the taxes you’ll need to pay, so many fledgling business owners will speak to a financial expert before they complete their application.

Technology also plays a big role in operational efficiencies, so outline the systems you plan to use in your restaurant. An integrated restaurant point-of-sale will enable you to track all your sales, manage employees and stock/inventory, analyze business performance, update menus and floor plans easily and get customer feedback — all useful tools for a company getting to grips with demand.

A sleek, portable point-of-sale (POS) like Square Handheld, which only weighs 315 grams, allows your wait staff to take payments at the table, speeding up table turnover, which is one key strategy for making a profit in hospitality.

An effective and integrated kitchen display system (KDS) will keep front of house and back of house synced to ensure timely fulfillment of orders as well as the ability to view, track and display orders via digital tickets. For larger restaurants, you can install multiple screens in the kitchen and give each prepping station easy access to the system.

Restaurant financial plan

Last but certainly not least is the big money question: How much is all of this going to cost? This section of your restaurant business plan will include four main components: your investment plan, projected profit and loss statement, break-even analysis and expected cash flow.

Investment plan

Your investment plan outlines the capital required to launch and sustain your restaurant until it becomes profitable. This section should detail startup costs, such as leasehold improvements, kitchen equipment, POS systems, initial inventory, licences and pre-opening marketing.

Additionally, account for working capital to cover operating expenses (rent, payroll and utilities) during the initial months when revenue may be inconsistent. Specify whether funding will come from personal savings, loans or investors, and include a repayment or ROI strategy. A clear investment plan demonstrates financial preparedness and helps secure backing from lenders or partners.

Projected profit and loss statement

The profit and loss (P&L) statement forecasts your restaurant’s revenues, costs and profitability over a defined period (typically 1–3 years). Make sure to break down revenue streams, such as dine-in, takeout and catering, and itemize fixed costs, like rent and salaries, as well as variable costs, like food, supplies and utilities.

Factor in seasonal fluctuations and conservative growth estimates to avoid over-optimism. This projection not only helps you gauge when the business will turn profitable, but also serves as a benchmark for adjusting operations — like renegotiating supplier contracts or optimizing staffing — if actual performance deviates from your plan.

Break-even analysis

Your break-even analysis will calculate likely monthly sales volume you’ll need to cover all fixed and variable costs. This will help you determine at what point your restaurant will start turning a profit. To determine your break-even point, divide total fixed costs by your average contribution margin, which is your revenue per dish minus variable costs.

For example, if your fixed costs are $20,000/month, and the average dish provides $10 in net revenue, you’ll need to sell 2,000 dishes a month to break even. This metric will help you gauge your pricing strategy, control costs and determine the feasibility of your financial plan.

Expected cash flow

Cash flow projections track the timing of money coming and going out, typically on a monthly basis. Unlike your P&L statement, your cash flow projections focus on liquidity to ensure you can meet your financial obligations even when revenue drops seasonally, for example. Make sure to highlight anticipated cash gaps, say during low season if your restaurant is in a tourist town, and indicate solutions you’ll use to address those gaps, whether it’s securing a line of credit or adjusting inventory orders.

“There’s some months where it’s feast or famine in my industry,” says Tony Migliarese, owner of DOPO, told Square. “Everyone’s out in December, and then everyone’s saving in January. January is the longest month of the year for restaurant people.”

Regularly updating cash flow forecasts helps prevent shortfalls and supports strategic decisions, such as expansion or equipment upgrades. Well-managed cash flow often means the difference between survival and closure in the volatile restaurant industry.

What to include:

• Startup costs, such as tables and chairs, lighting and kitchen equipment
• Ongoing operational costs, such as utilities, rent and wages
• Your food cost percentage
• Your funding options
• How much funding (if any) you’re seeking currently, with justification
• A break-even analysis

Presentation

Everything above is just an outline for the perfect restaurant business plan — don’t let it feel restrictive. You can include other sections, add details within sections and change the order as works best.

The final consideration for your restaurant business plan is how you’ll present all your notes, scribbles and lists. So, here are some final ideas on how to organize and present all that hard work you’ve delivered:

1. Create a digital presentation. A restaurant business plan presentation consolidates all your ideas into one piece of content that’s sharable and digestible. Simple designs that avoid information overload will keep your audience’s focus on the things that matter. It’s best to keep your business plan close to your chest, so if you publish it online, make sure you’ve used the correct privacy settings.
2. Get some printouts. While most people read online, there’s still a lot to be said for a physical business plan that can be handed out and read without internet access. Use high-quality paper and get the printing done professionally.
3. Prepare notes. The opportunity to speak in person to potential new stakeholders is always going to be as nerve-wracking as it is exciting. You can make some cue cards or digital notes that help you highlight key information, entertain your audience and deliver professionally.

How to write a restaurant business plan FAQs

Why do I need a business plan for my restaurant?

A restaurant business plan provides a blueprint for success. It’s more than a document – it serves as your North Star when making important decisions, encouraging you to think strategically as you launch and grow. It’s also necessary to secure funding. Investors care about profitability, and a polished business plan shows you’ve done your market research, analyzed the competition and mapped out a path to profitability.

What is a good restaurant business plan?

A good restaurant business plan clearly defines your concept, target audience, strategy and operational plan. It shows investors your path to profitability, including a breakdown of financial projections. But it’s also honest about potential weaknesses or risks. It may include the following elements:

• Executive summary
• Company description
• Market analysis
• Strengths, weaknesses, opportunities, threats (SWOT) analysis
• Details on menus and sourcing
• Marketing strategy
• Target market definition
• Branding information
• Organization and management overview
• Financial plan

What are the main purposes of a restaurant business plan?

A restaurant business plan should accomplish three things: Define and clarify your vision, guide operations and decision-making as you grow and help secure funding by showing investors or potential partners that your idea can be profitable.

How often should I update the business plan of my restaurant?

It’s a good idea to revisit the business plan of your restaurant once a year. Your strategy may evolve as you try different approaches and gain new insights about your customer base, and you want your business plan to be current. You should also update it if you make any big changes, such as expanding your offerings with a retail line or overhauling your menu.