When you apply for financing for your new restaurant, your lender may ask you to submit a business plan along with your loan application. This plan is a critical piece of the loan review process. The contents of it can be the make-or-break factor in whether you receive the financing you need. With so much at stake, it's a must that you learn how to write a business plan for your restaurant.

Why is a business plan important to lenders?

Lenders want to see that you have a viable idea and a sustainable plan worth funding. They also want to evaluate whether you have the means to bring your plan to fruition.

When compiled correctly, your business plan will help lenders learn about your restaurant, its financial capacity, the competitive challenges it’s up against, the members of your team who can help you realize your vision, and other key elements that can contribute to its success. Lenders will evaluate your business plan, make assessments about your business’s strength, and determine the likelihood that your restaurant will be able to repay any capital they provide.

How do I write a business plan for my restaurant?

Business plans can be simple. There's no need to create an elaborate format. What's important is content. At a minimum, your plan should include the following sections:

A cover sheet	Set a professional tone by creating a cover sheet that includes your company’s name and logo, the title of the document, the date on which you prepared it, and your contact information.
A table of contents	List the section titles of the document and the page on which the lender may find them. MS Word makes creating a table of contents simple.
An executive summary	Create a section titled Executive Summary and write a one-page summary of your restaurant and your plan for its success. You might choose to structure it in the following way: Explain the history of your restaurant or how your idea came to be. Describe the market the business serves and the challenges it faces. Explain how you'll use your team's skills to build a competitive advantage. Share your strategy for future growth. Highlight your estimates for future sales, cash flows, and profitability. Explain your need for financing.
An explanation of the opportunity	Create a section titled Opportunity and explain the key challenges the restaurant faces. Your explanation should include the following subsections: Problem Statement Proposed Solution Market Size and Characteristics Key Competitors Competitive Advantages
An explanation of your approach to helping the business succeed	Create a section titled Methodology and describe the methods you’ll use to grow and strengthen your business. Your description should include the following subsections: Marketing and Sales Plan Current Operational Capabilities Key Performance Milestones Metrics That Define Success
A description of the business	Create a section titled Company and describe your restaurant's structure, key members of your team, and any advisors who are helping you establish or run the business.   Create another section titled Progress and describe the steps your business has taken to form, develop its offerings, reach its target market, and achieve early-stage goals.
Your financial plan	Create a section titled Financial Plan and include your forecasts and a description of why you need capital. You should include the following components: The methodology you’ve used to create your financial forecasts A chart depicting your projected revenue by month A chart depicting your projected expenses by month A graphic that shows your forecasted net profit or loss over the next three years A paragraph that describes the sources of funding you’re pursuing and how you’ll use the funding you raise Valuations of the collateral you’re able to put up against the loan Your plan for repayment Accountant-prepared financial statements, which should include your projected profit and loss, projected balance sheet, projected cash flows, and projected capital expenditures for the next year (with monthly detail) and the next three years Relevant business ratios, which may include: Net profit margin: net profit after taxes / net sales Gross profit margin: (revenue – cost of goods sold) / revenue Profit margin: (revenue – expenses) / revenue Quick ratio: (current assets – inventory) / current liabilities Return on investment: (gain from investment – cost of investment) / cost of investment Current ratio: current assets / current liabilities
The business’s historical financials	Create a section titled Historic Financials and include three years of income statements, cash flow statements, and balance sheets.   Note: If you started your business less than three years ago, you should include yearly or monthly statements that date back to its founding.
Additional materials	Create a section titled Appendix and include any other documents that are relevant to your funding request. These may include: Your resume Proof of any relevant degrees or training Your tax returns

How can I make my plan look professional?

Here are some tips:

• Use a professional font, like Times New Roman or Calibri, that’s easy to read on- and off-screen.
• Use a bold, slightly larger font for headings and subheadings that’ll help lenders find content quickly and easily as they review your document.
• Create easy-to-read charts that’ll help the lender understand your projections and forecasts.
• Use chart and text colors that are pleasing on- and off-screen.
• Embed color graphics of your site, team, menu, and marketing collateral into the appropriate sections of your plan.
• Ensure that your business’s name and contact information are included on every page of the document. You can insert this information into the document’s header and set it to appear on every page except the cover sheet.
• Run a spelling and grammar check on the document.
• Update the table of contents after finalizing every other change.

Before you submit the plan, you should print a hard copy and review it for typos and formatting issues. Once the document is ready, you can print it to a PDF file (here's how) and submit it to your lender.

Can you help me write a business plan for my restaurant?

Yes! With our newest service, we can structure, write, and polish your restaurant business plan. You can learn more about this done-for-you service here.

Looking for a DIY option? You can use a service like LivePlan, which can help you pitch, plan, and track the success of your business plan. Many owners use this service to browse sample plans (including many specific restaurant plans), organize their ideas, build robust financial projections, and access professional guidance through the planning process.

LivePlan | The Modern, Lean Business Plan

Over 1 million small businesses use LivePlan for business planning, forecasting, and financial management, but here's what we think you'll love: more than 500 sample plans you can view as you build your own. Follow this link to visit their website and explore all of LivePlan's features.

Want a pro to look it over when you're finished? We're happy to consult and provide the expert feedback you need. Check out how we can help here.

Projectionhub is another great service that can help you take on the projection piece of your plan. This service offers 50+ industry-specific templates expertly prepared by a CPA for as little as $49. For a limited time, you can save up to 15% on this service with the code OWNERACTIONS (some restrictions apply; contact Projectionhub for details).

What’s next?

Business loans are a great source of capital, but you should think about other financing options, too. In our article, Your Go-to Guide to Raising Capital for Your Small Business, we’ll help you evaluate your options and find solutions that can help you achieve your goals.

Your Go-to Guide to Raising Capital for Your Small Business

Real estate, equipment, inventory, technologies, wages, and insurance are some of the many costs you’ll need to cover when starting a new business. Those costs can be substantial, and to a person with limited cash on hand, they can seem insurmountable. Fortunately, there are many ways to raise the capital you need for startup. In […]

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After working through the financing process, you can use the cash you raise to develop your product, market to a wider audience, improve your processes, or realize other important early-stage goals. Each of these objectives presents a new set of challenges. Our articles can help you with every action you need to take. Check out our restaurant guide. Then, log into your owner’s portal for free, personalized guidance that will help you make your venture a success.