The Complete Guide to Run a Restaurant Business

In the United States, there are currently over 647,000 restaurants. However, the number of independent restaurants has decreased in recent years.

A variety of factors can contribute to restaurant failure. However, proper planning can help you avoid many of them. A formal restaurant business plan identifies potential challenges and opportunities, allowing you to keep your restaurant open for years. And it’s absolutely necessary if you intend to seek a loan or investors, which can be difficult as an independent restaurant.

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Running a Small Restaurant Business Tips

Do you want to learn how to write a restaurant business plan? Here are some pointers to get you started.

Conduct your research

Before you sit down to write your business plan, do some research on the market in your area and your target customers. You’ll be more likely to succeed if you can back up your ideas and plans with actual market research.

In a phone interview with Small Business Trends, Dennis Gemberling of Perry Group International, a hospitality consulting firm, said, “Don’t be so tied to what you think is going to work or what you want to do.” You should be more focused on what your target market and customers want, as well as what you believe you can accomplish.”

Locate the Appropriate Concept

One of the first decisions you’ll need to make and outline in your business plan is the type of restaurant you want to open. This does not simply imply making a menu and specifying a type of food. However, you should also include a general price point and the type of experience you intend to provide. Fast casual and counter service restaurant concepts, for example, are particularly popular right now. However, full-service restaurants can be very successful in certain markets.

“Think about who your customer is and what they’re looking for,” Gemberling advises. Do they want to get in and out quickly, or do they prefer a more relaxed dining experience?”

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Determine where you will find customers

Even the best restaurant concepts can fail if there is a communication breakdown between the company and its customers. If you want to be successful, you must consider how and when you will reach out to customers. This section can cover anything from marketing strategies to peak seasons for your restaurant.

“You really need to drill down into the customer aspect, from the beginning to the end of the journey,” Gemberling says. When you capture customers, where will they come from? What hours of the day, days of the week, and months of the year will you be reaching out to them?”

Locate Your Ideal Location

Choosing the right location can help you get your restaurant in front of your ideal customers more easily. However, you must also consider the cost.

In an email to Small Business Trends, Gregg Sourbeck, solutions coach with and, stated, “Rent should be no more than 8% of annual sales.” Too many new restaurant owners, unfortunately, end up working for their landlord.”

Examine Your Competitors

Though Gemberling warns restaurant owners against simply modelling their business after other successful units in the area or assuming that a concept will work because it has worked for another restaurant, seeing what others are doing can be beneficial. Create a mental picture of your community’s restaurant scene. Then you can determine if there are any gaps in the market or how you’ll be able to differentiate your restaurant while potentially capitalising on some of the popular trends that are benefiting other restaurants.

Investigate the Finances

It’s time to get specific as you progress through your business plan. This includes a breakdown of your prices, expenses, and any other factors that will affect your bottom line. There are some general industry guidelines to follow to ensure the viability of your business.

According to Sourbeck, “‘Prime Cost’ should be no more than 60% of total gross sales if the business is doing less than $850,000.” If the company makes more than $850,000, the prime cost cannot exceed 55 percent. “Total Cost of Goods Sold plus Total Labor Costs” equals “Prime Costs.”

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Get Started with Templates and Resources

If you have your general ideas and research covered but need some assistance putting it all together, there are numerous online templates and other resources you can use as a starting point.

Gemberling highly recommends reviewing the business plan examples, forms, and tips available at He claims that the site’s small monthly fee for access to all of its content and community features is well worth the investment.

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