Restaurant business plan: a step-by-step template with a worked example

What is a restaurant business plan and what is it for?

Many future restaurant owners see the business plan as paperwork for the bank. That is a costly mistake. It is the only time you can test your project on paper, before signing a lease and ordering a kitchen. If the numbers do not work, it is better to know now.

In France, Bpifrance Création, the public website for business founders, splits a business plan into five parts: how the project started, who is behind it, the strategy (including market research and sales strategy), the action plan, and financial forecasts for the next three years. We follow that outline below, applied to a restaurant. It works just as well outside France.

This guide is part of our guide to opening a restaurant. For start-up costs and how to fund them, read our restaurant startup costs guide too.

What sections go into a restaurant business plan?

Aim for 15 to 25 pages including appendices. A banker reads the summary and the tables first, so make them clear. Here is the outline we suggest.

The summary: write it last

The summary is read first but written last, once all the numbers are settled. On one page it should answer five questions: what (the concept), where (address and area), who (you and your team), how much (the funding needed and how much you put in) and when (the target opening date).

The concept: be specific

“Quality food in a friendly atmosphere” says nothing. Write instead: “40-seat bistro, market-led cooking, two-course lunch menu, short evening menu, closed Sunday and Monday”. Attach a sample menu with prices: it lets the reader check your average spend. To set those prices, use our guide to food cost and menu pricing.

How do you forecast a restaurant’s sales?

Restaurant sales are worked out service by service, never by guesswork. The basic formula:

Sales excluding tax = covers × average spend excluding tax × number of services

Average spend is what one customer spends on average, drinks included. Count it excluding tax: the VAT you collect is not yours. For the rates that apply in France, see our guide to restaurant VAT in France.

Worked example (fictional)

A 40-seat bistro, open 5 days a week, lunch and dinner, 47 weeks a year. The assumptions below are examples to show the calculation, not market averages.

Making the assumptions believable

• Cover numbers come from your market research: footfall past the address, how busy competitors are, offices and residents nearby.
• Average spend comes from your menu: price of a set menu, of a single dish, share of customers who order dessert, coffee or a glass of wine.
• Plan a ramp-up: the first months are rarely full. Start lower and grow month by month; write down your own pace and justify it.
• Allow for seasons: school holidays, summer, the festive period. Your monthly cash flow plan should show them.
• Count real closing days: annual holidays, bank holidays, weekly closing days.

Then build a cautious version. Bpifrance Création advises keeping income low and costs high. In our example, a 20% drop gives €259,440 excluding tax: that is the figure to compare with your break-even point.

Which financial tables do you need?

The financial forecast rests on three tables, plus the break-even calculation. Your accountant can lay them out, but the assumptions must come from you.

1. The start-up financing plan

On the left, everything you must pay before opening (works, equipment, rent deposit, opening stock, starting cash). On the right, where the money comes from (your own funds, personal loans, bank loan). The two columns must match. The cost lines are listed in our startup costs guide.

2. The 3-year forecast profit and loss account

It compares sales with costs to show whether the business makes a profit. The main lines for a restaurant:

• sales excluding tax (food, drinks, takeaway);
• purchases of food and drink (food cost);
• staff costs (wages and employer contributions, including your own pay);
• rent and service charges;
• energy and water;
• insurance, accountant’s fees, subscriptions (till, software, website);
• maintenance, linen, small equipment;
• marketing;
• loan interest and depreciation.

3. The month-by-month cash flow plan

This is the most useful table at the start. It tracks money in and money out every month, at least for the first year. It shows the dips: a quiet January, a loan repayment, VAT to pay over, a works invoice paid late. A restaurant that is profitable over the year can run short of cash for two months: this table helps you see it coming and fund it in advance.

How do you work out a restaurant’s break-even point?

The break-even point is the level of sales at which you stop losing money. Below it, every month costs you; above it, you make a profit.

To work it out, split your costs in two:

• fixed costs, which you pay even with an empty dining room: rent, base wages, insurance, subscriptions, loan repayments;
• variable costs, which follow sales: mainly food and drink purchases.

Break-even = fixed costs ÷ (1 − variable cost share of sales)

Continuing the example (fictional)

What it means: the restaurant needs about 48 covers a day to cover its costs. The starting assumption (60 covers) leaves some room, but the cautious version (−20%) comes to €259,440, only about €2,300 above break-even. A banker will notice. Options: cut a fixed cost (rent, evening staff), rework the average spend or back up the footfall figures better.

Thinking in covers per day is the clearest way for a restaurant owner. It is just as useful after opening to track how you are doing: see our restaurant profitability guide.

Which assumptions must you justify, and how?

A business plan reads as a chain of assumptions. Unsupported ones cast doubt on everything else. For each one, note where the figure comes from.

Public data helps support the market section: in France, Insee publishes local statistics (population, household income) for each town. Our market research guide explains where to find them and how to study your future competitors.

Who reads your business plan and what do they look at?

Depending on your project, your file will be read by a bank, a support network or a partner. Each looks at different things.

• The bank looks at your own contribution, your experience, the cash flow plan and your ability to repay every month, even in the cautious scenario.
• Personal loan networks in France (Initiative France, Réseau Entreprendre, Adie) look at the founder and how well everything fits together. According to Bpifrance Création, its “prêt d’honneur Création-Reprise” is an interest-free personal loan with no guarantee, from €1,000 to €80,000, granted on top of a personal loan from one of these networks. It strengthens your own funds and reassures the bank.
• A partner or investor looks at who does what, the expected profit and when they get their money back.

Before you send your file

• The amounts in the financing plan match the summary and the P&L.
• Every assumption is written down, with its source.
• The cautious scenario is shown, and it still works.
• Your own pay is in the costs (even if modest in year one).
• Major quotes are attached.
• Someone else (accountant, former restaurant owner, network adviser) has read the file.

A summary template to copy

Here is a summary outline to adapt. Replace each bracket with your own figures.

PROJECT SUMMARY
Project: [type of restaurant], [number] seats, [address / area], opening planned for [month year].
Concept: [food, set menus, lunch / dinner / takeaway], open [days].
Team: [you: background in a few words], [partner or chef: background]. [Number] staff at opening.
Target customers: [local workers, residents, tourists…], [what sets you apart from competitors].
Key figures: year-1 sales ex. tax: [amount]; break-even: [amount] a year, i.e. [number] covers a day.
Funding needed: [total], including own funds [amount], personal loan(s) [amount], bank loan requested [amount] over [term].

Once the file is ready, move on to the formalities: the alcohol licence, the permits needed to open and your opening marketing.

The restaurant owner’s guide

Open, run, grow: each stage has its full guide and detailed guides, with their reading time.

This guide for your trade

• Restaurants
• Bars
• Restaurant website

Go further

• Opening a restaurant in France: the complete guide
• Restaurant startup costs
• Restaurant market research
• Food cost and menu pricing
• Promoting a new business opening