Business plan and feasibility study for a restaurant

Beyond the taste quality of a restaurant, its longevity depends on how well its offering aligns with the demands of the target market. A thorough analysis of the environment prior to the creation of the restaurant and the launch of its activities will allow you to build your project on solid foundations.

What is a market study and a business plan for a restaurant ?

A thorough market study should be conducted before establishing a restaurant and will serve as the foundation for developing a business plan tailored to the market of the future business. It is essential to analyze both existing and potential competition through a benchmark to identify the establishment’s potential clientele.

The most commonly used model for conducting a market analysis is the SWOT analysis—Strengths (internal positive factors), Weaknesses (internal negative factors), Opportunities (external positive factors), and Threats (external negative factors). This tool helps make informed decisions for your project by prioritizing the investment of time and money in key areas. External factors can be further detailed using the PESTEL model (Political, Economic, Social, Technological, Environmental, and Legal). A PESTEL analysis allows you to establish a diagnosis, identify weak external signals, and adapt your strategy accordingly.

Following the environmental analysis, the restaurant should complete its business plan with a marketing mix. The most commonly used marketing mix tool is Kotler’s 4 Ps:

People: Communication strategy
Place: Distribution strategy
Product: Product strategy
Price: Pricing strategy

To delve deeper into restaurant design and establish a unique brand identity, Kapferer’s six-faceted brand identity prism can be very useful. This model helps formalize all internal and external facets of the brand, including:

Personality: The people who represent the brand, its values, and its history
Physique: What is visible and tangible, such as design, location, products, and communication materials
Culture: The values shared by employees and customers
Relationship: The emotions and connections that customers build with the brand
Reflection: The image that customers want to project to others through their attachment to the brand
Self-image: The perception customers have of themselves as consumers of the brand and the internal emotions they experience

Since the restaurant industry operates in a market where profit margins rely on a delicate balance, the financial analysis of your project will be a crucial part of your business plan. The financial structure, the budget required, and the projected revenue are all critical aspects to evaluate during the creation of your business to determine its feasibility and long-term viability.

Our best pratices

The success of a restaurant is closely tied to the quality of its location. Therefore, it is highly recommended to analyze the restaurant’s environment within its catchment area—the distance and time separating potential customers from the point of sale. This determines its commercial attractiveness. The more a restaurant is considered gourmet, the wider its catchment area will extend, as customers are more likely to travel greater distances for a unique gastronomic experience that offers an escape. This is reflected in the Michelin Guide’s rating system, where a 2-star restaurant is described as “excellent cooking, worth a detour,” and a 3-star restaurant as “exceptional cuisine, worth a special journey.”

Although essential when opening a restaurant, it is also beneficial to conduct regular satisfaction surveys during the restaurant’s operation to continually optimize its performance.

To meet the evolving expectations of increasingly diverse customers and a less captive market, a restaurant owner should consider the following elements in their business plan:

Establishing a strong identity for the establishment
Maintaining a consistent and coherent offering
Emphasizing quality in both cuisine and service
Waiting a few years before considering expansion, such as franchising
Making significant investments in digital marketing for effective and polished communication

New generations of consumers are increasingly seeking “transformative” experiences where they can enjoy authentic encounters. Therefore, a business plan should cover all touchpoints between the restaurant and the customer, ensuring that every aspect of the experience reflects the brand’s identity (interior decor, sales materials, service, visual presentation of dishes, and their taste). It can be useful to map the customer journey from the moment they first interact with the restaurant (through its website, social media, table reservation by phone or online platform, arrival at the restaurant, departure, and even post-visit interactions like newsletters and satisfaction surveys). Mastering the customer journey will allow you to better meet their expectations. A satisfied customer can then be retained, increasing their visit frequency or average spend. Delighting customers is crucial to the success of your restaurant project, as they can become ambassadors for your restaurant within their social circles.

The support we offer you

The DUCASSE Conseil teams support you in your strategic thinking to achieve a strong and distinctive positioning. It is essential today to make clear choices regarding products, take a stand on décor, provide excellent service, and ensure the expertise needed for high productivity. When we conduct an initial on-site visit to understand your needs and environment, we identify your strengths and areas for improvement to help you maximize your restaurant’s potential. Following this visit and discussions with your company’s management, the project team will refine what the new culinary identity of the restaurant could be.

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