Financing Your Restaurant and Projecting Profits PDF Free Download
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The state of the industry
01 Why now is a great time to be in the restaurant business
Building a business plan
02 Turning your idea into a viable business plan
Ways to get funding
03 Whether or not you need outside funding — and how to get it
Detailing your budget
04 Tips on creating and managing an operating budget using business templates
Tracking your revenue
05 Tracking profits and losses so you know where every penny is going
Driving incremental sales
06 Boosting revenue through delivery
Conclusion: The last bite
07 Cashflow keeps the kitchen open
CHEAT SHEET Top 15 restaurant industry statistics
CHECKLIST 6 key ingredients of a winning restaurant business plan
HOW TO Pitch your restaurant concept to investors
WORKSHEET Budget calculator
WORKSHEET P&L (profit and loss) table
Click each section to skip forward
What’s in this guide
You’ve settled on a restaurant concept — and you’re excited about what’s in store.
Congratulations! Maybe you’ve gone even further — sketching out your menu,
thinking about your brand, and picking a spot (if not, no worries — there’s plenty
of time, and we’ll guide you through it all). For now, let’s take a minute and explore
how you’re going to fund your new — or refreshed — business concept.
2Financing Your Restaurant and Projecting Profits •
CHAPTER 1
The state of
the industry
Why now is a great time to be in
the restaurant business
There’s no doubt about it, starting a restaurant is
tough. But before you get discouraged, consider
the bigger economic picture, where the prognosis
is good. In 2019, more than 90% of restaurateurs
expect their profits to increase1 — to $863 billion
in the U.S. alone, where annual restaurant sales
are projected to take up an impressive 4% of the
country’s Gross Domestic Product (GDP).2
In fact, today’s Restaurant Performance Index (RPI)
is at 100.4. (Anything above 100 qualifies as a time
of growth for restaurants.) So, while the industry is
healthy and growing, it comes down to this: it’s not
the quality of food that makes or breaks your
business, it’s the security of your finances. And
in terms of projected industry growth, now is a
great time to be in the restaurant business.
When it comes to restaurant delivery, growth
is even more imminent. In 2018, the global
delivery market was worth $43 billion By 2022,
it’s expected to surpass $76 billion.3 Partnering
with DoorDash — the category leader owning
27% of the market share4 — can help you
maximize profits from the very start.
The bottom line? There is money to be
made in restaurants. Especially now, when
the future of the industry is so bright. You
just need to be strategic. In other words,
you need a business plan.
4The state of the industry •
There are over 1 million restaurants in the U.S. alone.5
The average diner considers more than 4 restaurants before deciding where to eat.6
Most diners in the U.S. decide what to eat within 2 hours of their meal.6
Digital channel sales are on track to reach 30% of total sales for U.S. restaurants alone by 2025.6
60% of U.S. consumers — and 90% of Millennials — order delivery or takeout once a week.7,8
70% of restaurant guests are looking for healthy restaurant menu options.9
For 79% of diners, “taste” is the main factor in deciding where to eat.6
90% of guests research a restaurant online before dining — more than any other business type.10
86% of Millennials try a new restaurant after seeing food-related content online.6
For 63% of diners, “discounts and promotions” on new technologies such as mobile are important.6
67% of customers who’ve placed an order online visit restaurants more frequently
than those who don’t.6
Mobile ordering apps, like DoorDash, will generate $38 billion in revenue in 2020.6
92% of consumers read restaurant reviews, but 77% prefer peer reviews
versus critic reviews.10
1.6 million new restaurant jobs will be created by 2028.5
8 in 10 restaurant owners started their industry careers in entry-level positions.5
CHEAT SHEET
15 restaurant industry stats that show
it’s an exciting time for restaurants
5The state of the industry •
CHAPTER 2
Building the
business plan
Turning your idea into a viable business plan
First, take some time to read through business plans from other
restaurants: both similar and different. Where do their numbers fall?
What expenses strike you as high or low — and why? Where do you
think you can streamline your costs — or increase your food margins?
Study, study, study.
How to get started
with a business plan
Architecting a business plan for your restaurant can be daunting — especially if
you’re someone who’d rather be testing menus or greeting guests. Nevertheless,
it’s an essential part of getting your restaurant off the ground.
In simplest terms, your business plan outlines — in a detailed and organized fashion
— how you intend to generate profit. More than that, it’s the key strategy document
you’ll need to engage investors and the road map that keeps you on track in the
heat of day-to-day operations. Here are a few pointers for putting yours on paper:
7
On the next page is a sample restaurant business plan checklist to get you cooking.
Once you’ve gotten a sense for how other restaurant owners
model their businesses, make a list of your estimated startup costs.
Questions to ask yourself include:
• Will you be doing a new build? Or will you be taking over
an existing restaurant space, and renovating? What are the
associated costs (think construction, materials costs, rent during
the build-out)?
• What furniture and equipment do you need to buy?
• Are you seeking a liquor license — what will that cost (can you take
one over)?
• What marketing materials will you need? Think about your website,
your dining room and take-out menus, and other collateral: what
will these cost to design and write? Partnering with DoorDash
can help manage these costs — a professional photoshoot and
optimized delivery menu are included with sign up. You’ve got a
whole lot of flexibility here — average restaurant startup costs can
range from a few thousand to a few million dollars.
Add up your startup costs.
While your restaurant needs to be unique, your business plan can
follow a template that’s already well-established. You can download
samples from sites like RestoHub or OpenTable. While every template
is slightly different, they’ll all follow the same general formula:
executive summary, business overview, industry analysis, marketing
plan, operations plan, financial analysis.
Don’t reinvent the wheel.
8Building a business plan •
Executive summary
Articulate the big picture for your restaurant.
Introduce who you are, your vision, and what
problem you’re solving or market need you’re
addressing. Include items like your mission
statement, core values, and key differentiators.
Business overview
Whereas the executive summary is all about
the big idea, the business overview (or
company description) provides high-level
insight on the concept, brand, structure,
location, design, and so on.
Industry analysis
Go in depth about where your restaurant fits
into the marketplace. Talk about the local
competition near your chosen location, the
projected growth and economy in the area, the
targeted demographics, and everything else a
potential partner, investor, or third party ser-
vice like DoorDash would need to know about
who you’re serving, where, and why.
Operations plan
An overview of the day-to-day operations
of your restaurant. This includes the
organizational structure, employee pay,
customer service policies, and plans for the
general restaurant processes and procedures
— including partnering with DoorDash for
deliveries. Essentially, lay out the action steps
for how your restaurant will function.
Marketing plan
All things advertising, public relations, and
social media will live here. How are you going to
market your restaurant to customers? How will
you keep them coming back to the restaurant
and also placing delivery orders from home?
For inspiration, check out “10 Marketing Tips
For Restaurateurs.”
Financial analysis
Include all things monetary — your
investments, projected profits and losses (P&L)
based on costs and sales, expected cash-flow,
revenues, projected incremental sales through
DoorDash, and an analysis of what it’ll take
to break even. Use charts, graphs, and other
visual aids that to show the data.
A good business plan is like a menu: thought-out, unique, and enticing. Just as your menu will
eventually have customers eager to order, you want your business plan to have investors — and
others who read it — eager to read more and get on board. When assembling your business
plan, consider these essential ingredients:
CHECKLIST
6 key ingredients of a winning
restaurant business plan
9Building a business plan •
Having an efficient delivery system is vital to driving up revenue, because
there’s never been a higher demand for it — it’s the secret ingredient in your
business plan.
The caveat? Some restaurants don’t have the time, staff, or resources to
expedite their delivery processes past a certain point, unless they partner with
an external service.
Third party services or logistics platforms are fancy terms for technology
companies that will coordinate and handle all of your deliveries. Partnering
with DoorDash — the fastest-growing delivery platform in the industry — can
help you raise your delivery profits by up to 40-60%,8 while taking addressing
concerns about timing and drivers. Even better, these partnerships can help
boost incremental sales.
What are incremental sales?
Say you anticipate serving 50 customers during the lunch
rush. But your marketing efforts prove wildly successful,
and you end up getting 53 customers in-store. Then,
you get an additional 16 delivery orders (if you’re signed
up with DoorDash, you’ve got a roster of outstanding
Dashers to handle the job). With no additional labor,
and minimal ingredient and material costs, you’ve now
exceeded sales projections.
Simply put, incremental sales are profits you wouldn’t
have made otherwise.
Your partners: how third-party
partnerships and services give
you an edge
In today’s high-speed world, customers value instant
gratification more than anything. Convenience and
on-demand service are, in many ways, dominating
the restaurant industry.
10Building a business plan •
CHAPTER 3
Ways to
get funding
Whether or not you need outside
funding — and how to get it
Recent banking regulations are making
it increasingly difficult for aspiring
restaurateurs to secure loans for their small
businesses. But there are still plenty of
restaurant business loans available, each
with their own special niche. Equipment
loans can help you procure capital to
finance your kitchen equipment; working
capital loans can help you cover operating
costs before your business reaches a steady
income; and a line of credit can help you
meet operational costs — and deal swiftly
with the unexpected.
While many turn to bank or small business
loans as a way to finance their restaurants
with outside funding, some turn to equity
partners. Choosing your partners wisely
is easier said than done — but it’s an
extremely important process that can
make or break your venture. Ensure that
you and your potential investor(s) align on
not just the money, but also the goals and
vision for the restaurant. If you can’t find
someone who shares your vision, it’s best
not to bring anyone on.
Get familiar with all of your
loan options, and the pros
and cons of each.
If you do decide to bring on
investors, choose wisely.
Should you self-fund, or consider
working with investors?
Financing a budding restaurant can be daunting, but when deciding on how to best fund
it, there are clear steps you can take. Ultimately, the biggest question may come down to
whether or not you choose to bring in outside funding. Here are some things to consider:
12Ways to get funding •
1
Introduce
yourself
4
Walk through
market size
2
Give your
elevator pitch
3
Explain
the need
You believe in your restaurant. Now it’s time to show investors why they should, too.
Investors receive more pitches than they can read. To capture their attention, you
need a strong pitch that makes you stand out. This template can help get you
started on your restaurant pitch to raise funding:
Start with your restaurant’s
name and logo, your
name, and your contact
information.
What’s the size of the
market you’re attempting
to enter? What’s the size
of the opportunity you’re
proposing? It’s important to
show investors that you’ve
thought through not only
your own restaurant, but also
the market you want to enter.
What’s your big idea? Why
is this idea for a restaurant a
good one? What is it that you
plan to do?
What will your restaurant
have that others don’t?
Why does the city need
another restaurant?
Maybe you’re proposing a
convenient lunch spot in a
neighborhood with lots of
new office buildings and
growing lunchtime demand.
Explain to investors why your
idea is not only a good one,
but a necessary one.
HOW TO
Pitch your restaurant concept
13Ways to get funding •
7
Present your
business model
and financial
forecast
10
Thank them
for their
time
6
Demonstrate
early interest
9
Map out
the team
8
Plan how
you’ll use the
investment
Though this will give potential
investors a general sense of
what your plan is, including
your stance on partnering
with delivery services. The
added revenue will intrigue
potential investors.
If an investor makes it all
the way through your pitch,
they’ve already invested a
valuable asset in your idea:
their time. Say thank you!
Then follow up in a few days.
Why should investors feel
good about you? Have
you gotten an enthusiastic
response from catering? Is
there a lot of interest right
now in the kind of food you
will be offering? Find a way
to show investors that your
idea has momentum and
public validation.
Do you have a business
partner or other investors?
Give potential investors a
sense of the team they’d
be investing in.
Why do you need the
funding? How are you
planning on using the
money?
5
Size up your
competition
Show that you know a lot
about the type of business
you want to open, and have
looked into others like it.
Use this part of your pitch to
point out what differentiates
your restaurant. Why will
patrons choose to eat
your food instead of your
competition’s?
14Ways to get funding •
CHAPTER 4
Detailing
your budget
Tips on creating and managing
an operating budget
Price out your menu
Visualize your team — then quantify them Minimize food costs
Project your sales volume
Now let’s talk rent Think bigger
As you start working through your menu, you’ll
need to decide on a food cost percentage —
the portion of sales spent on food. At most
establishments, this falls between 28-35%.11
For each item on your menu, determine what
the cost will be based on the ingredients. To
calculate the right price, simply divide the raw
food cost by your ideal food percentage.
As many as 53% of profitable restaurants
cited hiring as their number one challenge.1
But it doesn’t need to be yours. Think about
who you’ll want and need on your team. How
many servers do you imagine depending on
for the Saturday night shift? Will you need a
bartender, a sommelier? Think about your
back-of-house staff: a head chef, line cooks,
your bussers. Add up their hourly wages, and
map out your staff costs on a spreadsheet.
You’ll learn all about how to build and grow
your team in future guides.
Let’s talk about another key expense: food. For
52% of restaurant professionals, controlling food
and operating costs are an ongoing challenge.1
It’s important to find local purveyors you can
really rely upon — and relentlessly track and
optimize your spending. Who are some local
purveyors you can use, and how do their prices
differ? What items can you save money on by
buying in bulk? Are there ways you can increase
inventory management to reduce food from
spoiling or being stolen?
After you price out your menu, think about
volume. Which hours will you be open? How
many “covers” do you think you’ll do per meal
or per day? How many DoorDash deliveries will
you fill? DoorDash does more than 800,000
deliveries per day3 — which makes us equipped
to take you to the next level.
What location suits your target market? What
will you need in terms of square footage?
One rule of thumb suggests that your rent
should never exceed 10% of your restaurant’s
gross sales. Does this sound possible, if you
think about your target neighborhoods —
and pair that with your menu prices and
forecasted volume?
It’s almost 2020. The strictly-brick-and-mortar
restaurant model is long gone. On-site dining
is declining — and it’s being replaced by large
numbers of take-out and delivery customers.
Third-party partners like DoorDash can help
you think beyond the traditional restaurant
approach, expand your addressable market,
and keep your cash flowing like fine wine.
The kitchen is open, the grill is fired up, and you’re officially in business. Now, you’ve got
to stay in business. Here are a few tips on budget items that can make or break your
restaurant’s success. Manage them wisely, so can keep doing what you love — preparing,
serving, and delivering delicious food — knowing that your finances are in good shape.
Now, let’s determine if the costs of running your restaurant line up with your projections
using the budget calculator on the next page.
16Detailing your budget •
Marketing & Promotional Materials
Social Media Ads
Online Ads
Print Collateral/Menus
Other Ads (Newspaper, etc.)
TOTAL $
Amount Allotted ($) Amount Spent ($)
Repairs & Equipment
New Major Equipment Purchased
New Minor Equipment Purchased
Repairs
TOTAL $
Amount Allotted ($) Amount Spent ($)
Technology and subscription services
Technology Purchases
Vendor Fees
Support/Services/Repairs
TOTAL $
Amount Allotted ($) Amount Spent ($)
Continued
WORKSHEET
Budget calculator
17Detailing your budget •
How does your total amount spent
compare to your allotted budget?
TOTAL $
Amount Allotted ($)
Theft, Damages, Emergencies, Legal
Legal Emergencies/Lawsuits
Theft
Property Damage
TOTAL $
Amount Allotted ($) Amount Spent ($)
Services & Taxes
Accounting Service Fees
Professional Cleaning
Restaurant Consultant Work
Mandatory Inspections
Third Party Delivery Service
TOTAL $
Amount Allotted ($) Amount Spent ($)
Wages/Hiring Costs & Losses
Front of House Wages
Back of House Wages
Restaurant Consultant Work
Hiring/Replacement Efforts
TOTAL $
Amount Allotted ($) Amount Spent ($)
Amount Spent ($)
18Detailing your budget •
CHAPTER 5
Tracking
your revenue
Tracking profits and losses
on your way to success
Understanding profit & loss
To understand where you are within your budget and get a clear picture of your total
profits and losses (P&L), make data your best friend. To identify the metrics of your
business and improve your margins, you won’t just need to ensure you’re using the right
technology to yield data-driven insights — you’ll also need to leverage those insights to
inform intelligent business decisions.
Figure out what’s boosting and what’s hurting your business’s bottom line by regularly
using and updating P&L statements. P&L statements contain two major sections: sales
and costs. Listing every item for each can be tedious, but it’s the only way to get a clear
picture of where your money is coming from — and where it’s going.
While there are a ton of sample online templates, customizing your statement to your
own restaurant — with its unique costs — is your best bet. This way, you can maximize
clarity, specificity, and efficiency when breaking it down into actionable insights.
After all calculations, you’ll have a number for both your gross profit and your net
profit/loss. It’s best to gather P&L statements weekly to get a sense of what’s impacting
your business costs most regularly, but monthly and annual statements are also
important to glean long-term insights, track overall progress, forecast costs — and set
yourself up for successful business growth.
This includes all of the items that
contribute to your total sales: food,
beverages, and incremental sales
made through food delivery.
This includes all restaurant
expenses including goods sold,
labor costs, and operating costs.
Sales Costs
20Tracking your revenue •
Sales
COGS
Gross Profit
(Total Sales — Total COGS)
Food
Wine
Beer
N/A Beverages
Merchandise
Catering
Third Party Delivery Service
TOTAL SALES
Food
Wine
Beer
N/A Beverages
Merchandise
Catering
Third Party Delivery Service
TOTAL COGS
Week of Week of Week of Week of
WORKSHEET
P&L (profit and loss) table
21Tracking your revenue •
Operating Costs
Labor Costs
Miscellaneous
Rent
Utilities
Property Tax
Waste Removal
Insurance
Equipment Repairs
TOTAL OPERATING COSTS
P&L statements will allow you to see how individual items work within your overall budget,
but for generally tracking your budget effectively, taking proactive measures wherever
you can is a good first step. Just like many business owners, plenty of restaurateurs have
the proper tools in place to gather the insights they need — but fail to act on them.
Week of Week of Week of Week of
Net Profit/Loss
(Gross Profit
— Labor Costs
— Operating Costs)
22Tracking your revenue •
CHAPTER 6
Driving
incremental sales
Boosting revenue through delivery
With all the trends buzzing around the restaurant industry, it’s getting harder and harder
for restaurant owners to drown out the noise, sort through the information overload,
decide what will keep their restaurants relevant — and stand out apart of the fast-
growing competition. Luckily, one of the easiest ways a restaurant can increase revenue
doesn’t involve going organic, selling rainbow bagels, or adding plant-based meat
substitutes to the menu.
Partnering with a third-party for delivery is a simple and
effective way for restauranteurs to increase revenue.
Delivery maximizes the resources and labor that
restaurants already have by bringing in more orders and
making more sales that they otherwise wouldn’t have
— incremental sales. But by partnering with a delivery
service such as DoorDash, restaurants can secure more
incremental sales and new customers, while capitalizing
on a major industry trend that’s only just getting started.
The $43 billion in 2018 delivery is expected to rise to
$76 billion by 2022.3 DoorDash is a leading third-party
delivery service in the U.S., owning 27% of the market
share4 and reaching 80% of consumers.12
What’s more, DoorDash provides 24-hour support to its restaurant partners, as well
as additional business growth opportunities and resources — free photo shoots and
promotional options are available to all DoorDash partners.
After labor, real estate, and food costs are accounted for, profits from dine-in orders
end up around 10%. Profits from delivery orders are closer to 40%-60%.8 Filling delivery
orders doesn’t require additional labor or additional real estate costs, it just adds about
30% in food and delivery costs respectively. But thanks to incremental sales and their
added revenue, profits increase regardless — and so does the bottom line. Once you tell
DoorDash about your restaurant and upload your menu, we can start managing all the
logistics of your orders in no time — and delivering them.
The answer is delivery
% of market share owned
by DoorDash
% of consumers reached
by DoorDash
size of delivery market
by 2020
$76B
27%
80%
24Building incremental sales •
CONCLUSION
The last bite
Cashflow keeps the kitchen open
At the end of the day, it won’t matter how unique or
delicious your food is. If your finances aren’t in order, you’ll
be dining alone before long. From your initial startup costs,
to the months (and years, we hope!) that follow, upping
your money management game will be a never-ending
challenge. The marketplace is always evolving — and as a
restaurateur, you’ll need to always look for new ways to cut
costs, monitor spending, and diversify income streams.
DoorDash is here to help you drive those sales. Our
delivery platform is the fastest-growing in the industry —
we’re available in all 50 U.S. states and parts of Canada and
Australia (and that’s just the beginning).
Our tips and tools — along with guidance from DoorDash
support — can help you double or triple your customer
base and bolster profits in mere months by:
• Boosting sales in volatile weather
• Marketing to people in — and outside of — your
immediate area, reaching more customers than
foot traffic alone
• Getting customers hooked via promotions that
bring them back for more
Everything we do is
about empowering
you to do what you
do best: providing
your customers with
an unforgettable
food experience.
26
The last bite •
Want to speak with a sales representative? Contact us
Or call 1-855-554-5779 (Monday-Saturday)
Get Started Free
1. Sign up for DoorDash. Visit get.doordash.com and tell us about your business.
2. Receive orders. Once your account is activated, your team prepares orders.
3. Offer delivery or pickup. Get orders to customers, wherever they are.
Ready to grow your business
with DoorDash?
27
1. Toast, “2019 Restaurant Success Report”
2. National Restaurant Association, “2019 Restaurant Industry Factbook”
3. DoorDash, “Industry Breakdown: The Growth of Third Party Logistics”
4. Edison Trends, “Which on-demand food platform has the most market
share of total consumer spend across the USA in 2019?”
5. National Restaurant Association, “Industry Statistics”
6. Facebook, “2019 Restaurant Trends and Insights Report”
7. Nation’s Restaurant News, “Restaurant takeout and delivery are taking a
bite out of dine-in traffic”
8. DoorDash, “How Margins Break Down On Delivery Orders”
9. Upserve, “Restaurant Menu Trends: What to Expect to See on More
Menus in 2019”
10. Upserve, “Digital Marketing for Restaurants: How to Get Found Online”
11. The Houston Chronicle, “Common Food & Labor Cost Percentages”
12. DoorDash, “Here’s How Restaurants Can Bring In More Business With
Less Effort”
Sources
29
About DoorDash
DoorDash is a global technology company that connects consumers with their
favorite local and national businesses. Founded in 2013, DoorDash enables
local businesses to address consumers’ expectations of ease and immediacy
and thrive in today’s convenience economy. By building the last-mile logistics
infrastructure for local commerce, DoorDash is bringing communities closer,
one doorstep at a time. Get started at get.doordash.com.
