How to Create a Business Plan to Set up a Restaurant

Business Plan to Set up a Restaurant

Dedicating yourself to your own restaurant can be a profitable investment whenever you choose the right place, have a reasonable gastronomic knowledge and, above all, offer an exquisite experience to the client. Mind you, prepare to run a very sacrificial business.

If you want to set up a restaurant, the first thing you should do is, as in any other case, assess the potential success of the business. Do not launch into the project without carrying out this step.

Most companies usually fail precisely because they do not validate the viability of the idea. For this, we must take into account the characteristics of the hospitality industry and, above all, the investment necessary to finance the business. Get detailed information about business planning and its importance, on this website:

Buy or rent the place?

Doing a business plan, at least a year, will help you establish the items you need to start and reach the critical break-even point. The purchase or rental of the premises will be the initial expense that will require the greatest investment. In case of acquiring the premises (buying), the investment will rise considerably, depending on the area and the size of it. If you have sufficient resources, it is preferable to acquire the premises than to pay rent.

On the other hand, choosing to rent so as not to exhaust your funds initially on the purchase allows other expenses to be met. In short, the decision will depend on your possibilities and the risks you are willing to take. If you decide to rent, value the reforms that you will have to make (ask for several quotes) and keep in mind if it allows you to develop the idea you had in mind.

Necessary material

Another important expense to face is the purchase of equipment. You will need industrial items, such as cold rooms, gas cooking range, freezer, oven, kitchen utensils, coffee maker, register, etc. Also, consider the ancillary services you’ll need initially such as construction work, installation, and safety inspections by experts in commercial gas installation in London, among others.

In addition, in the business plan, you must take into account other expenses, such as the constitution of the company, acquisition of furniture, purchase stock, personnel and social security expenses, taxes, and operating funds you must maintain until you start earning income. Therefore, to the initial investment, you must add at least 20% of these expenses to cover unforeseen events.

To consider

Once the expenses have been determined, you will have to estimate the benefits you will obtain to calculate if the business will be profitable or not. A restaurant is profitable if it obtains at least an income that is double the expense invested in the products necessary for cooking. To calculate the necessary provisions, you must determine the number of tables in the room, the food shifts, if you only offer restaurant or cafeteria service, the number of hours you have to open the business, etc.


In catering the daily supply of products is essential, so you should see what is consumed every day to replace it. However, some products can be kept in stock because they are not perishable. Some experts recommend acquiring as much stock as possible in those products that endure the most, such as alcoholic beverages, in order to get cheaper prices.

The place, the tables and the shifts

Professionals in the sector advise dimensions for the premises of between 50 and 60 m2, although there are smaller premises that have been licensed and new business models have emerged that make it possible to reduce space. But, in the traditional concept, to make the initial investment profitable, you need at least five tables (for four people each) and double them at lunch and dinner.

Characteristics of the business

Opening a restaurant that only offers meals or a mixed business cafeteria-restaurant will depend on the public you go to, the place and the area where it is located. Experts advise to take full advantage of business opportunities and diversify services by extending the time for the operation of the business. It will thus be easier to cover the fixed expenses. On the contrary, if you intend to create a high-class restaurant, it is not advisable that you also offer snacks. There are no golden rules to succeed in this business, it all depends on what you want to offer and to whom you offer it.

The menu

Professionals in the sector explain that you can put a price that increases the margin of the menu once the elaboration expenses have been subtracted, but without losing sight of the competition so as not to renounce potential customers. It would be a mistake to overcharge for the menu in comparison with the norms in the area. The best weapon, especially at the beginning, is good value for money. Thus, you will acquire fame among the clients.

Advanced knowledge

The accounting. If you do not have accounting knowledge, it is best that you entrust it to an expert; the expenses will not be too high. This is especially advisable if the restaurant is constituted as a company since its accounting is more complex.

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