How to make a feasibility study for a new restaurant

How to make a feasibility study for a new restaurant

How to make a feasibility study for a new restaurant

Ready to turn that restaurant idea into a reality? Congratulations! He is on his way to becoming a caretaker, with two-thirds of a million other people in the United States alone.


You are limited in your work in this industry. In addition to challenges such as finding staff and dealing with high food costs, you should also make yourself stand out in the competition if you want to own a restaurant.

But it can be done & the first step in finding investors, homeowners, and potential customers to be happy about your restaurant is to learn about the possibility of a restaurant.


This article will outline the possibilities, explain the steps that must be taken to have restaurants, and identify the best practices to follow.

A feasibility study of a project performance or vision analysis. Those conducting the feasibility study want to evaluate the steps needed to bring the idea to fruition and determine whether those measures and the desired outcome are possible in a coordinated manner. The study concludes when all stakeholders decide whether the project should go ahead or stop.


Any businesses that conduct research are likely to look at how their financial estimates can be achieved and how their marketing could impact them. At a restaurant, conducting a feasibility study may involve answering the following questions:

One · Will my concept stand out in this market?

Two · Will my concept appeal to those in this market?

Three · Will my projected revenue exceed my costs?

Four · Will I hit my financial goals? If so, when?

If this sounds similar to your brilliant business plan, that is okay – it should. But it is important to remember that a restaurant’s feasibility analysis is not a replacement for its business plan.


Restaurant Feasibility Study Outline

The research that takes place in the restaurant should draw a line between the brief and the detail. That means investors and stakeholders will want to know exactly how you came to this conclusion, so do not include details when it comes to financial speculation. There is an opportunity to highlight countless things in any possible study, but resist the temptation to expand into areas, where it is unnecessary.

To help organize your ideas, research, plus conclusions, make sure your investigation into the possibility of your restaurant being described in the following sections.

Section 1: Executive Summary

Your research that may be completed should begin with a summary, even if this is the last section you are writing. This is because your management summary should be a few paragraphs or page content, summarizing the top-level findings of your research and your final recommendations regarding the Go or No-Go decision.

Places to cover your management summary – and, in short – can include the following:

  • Overview of your restaurant.
  • Projected revenue & profit.
  • Projected costs & expenses.
  • Break-even point in dollars & in time.
  • Competitive advantage for your area.
  • Market research & proof of concept.
  • Your Go plus No-Go Decision.

Section 2: Market Overview and Analysis

This section should highlight how your restaurant idea may be in the market you intend to operate. The fact that a restaurant that promotes your concept is doing well in Los Angeles does not mean that it is an automatic success story elsewhere in the world.

The mandatory stage of Market Overview and Analysis will require an in-depth study of the current state of your target market – industry and population. Other questions you may want to answer, include the following:

  • How saturated is the restaurant industry where you are looking to operate?
  • Are there other similar restaurants in your area?
  • What is the demographic of your market?

Section 3: Business Explanation

This is where you will highlight the concept of your restaurant, its type of food, and its competitive advantages. Talk about how and why it will appeal to the market you just described in the previous section.

You will also want to highlight what you will bring yourself to this project. Are you an entrepreneur with many successful business launches? Do you have decades of food experience that you will get to the business? Are you working with a well-known chef who can boost the restaurant’s reputation before it opens? All of this makes your dining experience seem more realistic.

Section 4: Financial Projections

This is an area of ​​investors who will probably respond immediately – they will want to know if their investments are likely to be recouped, which is often repeated.

This section is not an abrupt change. There should be charts and supporting documents such as a pro forma income statement and sales forecast – all with a clear idea of ​​how you got to the numbers you reached.

You will also need to specify your expected costs, income, breakpoint, and financial requirements.


The cost of opening a restaurant can be added immediately – the average start-up costs will set you back $ 375,000. You will need to consider immediate opening costs such as furniture and equipment, long-term fees such as rent and insurance, and flexible long-term expenses such as food costs. Write down all of these costs (yes – all of them), how much they will cost, and how you got the price.


Give a complete breakdown of the money you expect to make in the first year and where it will come from.


Investors will want to know how quickly they can get their money back. You will demonstrate this by analyzing even on vacation, which determines how much food you will need to sell and when your business expenses will be charged for the money you have made.

Briefly speaking, the dining point in a restaurant is calculated by dividing the planned costs by differentiating between the average per guest per item and the average variable price per guest.

Capital Requirements

Lastly, your financial sector should clarify how much money is needed to get this idea down and how much investment you want from investors.

Section 5: Conclusion

Okay, it’s time to make a decision.

In the meantime, cover your findings related to your market, your finances, and your leadership potential. Give a Go or No-Go decision as to whether you believe the idea of ​​a restaurant is based on what you have included in this study.

Few Tips for How to Conduct a Feasibility Study for a Restaurant

Identifying possible studies will undoubtedly take a lot of time and effort – but it is a necessary step in bringing your idea to your restaurant. If this is an entirely new place for you, here are five tips to help you conduct a proper lesson happening at your restaurant without having to have your hair cut.

  • Work With a Consultant
  • Be Rational
  • Know Your Industry
  • Location, Location, Location
  • Stay Positive

You are Good to Go!

Once you have completed your study of the possibility of a restaurant and protect investors, you are close to the restaurant business branch. Just remember to make this report more thorough, well-researched, and purposeful as possible, and you will be opening your great restaurant as soon as possible.