What Is a Statement of Purpose for a Restaurant?

by Craig Berman; Updated September 26, 2017
Restaurant bill

A restaurant’s statement of purpose exists to convince investors to lend it money. Commonly found in business plans, a statement of purpose offers details about the business structure, the money requested and what it will be used for. A statement of purpose should tell potential investors your basic concept, such as what kind of food will be served, but readers likely will be more focused on learning how and when they will be repaid.

Intent

A statement of purpose should include a brief and general summary of your vision for the restaurant. It serves as an introduction for the financial information that follows. It might say: “Great Restaurant will be moderately priced and offer family-style service and traditional Southern Italian cuisine. It will feature a down-home atmosphere reminiscent of Italian hospitality, with décor designed to reflect the Italian and Italian-American experience."

Ownership

To get investors, you have to tell them whether your business's ownership structure is a sole proprietorship or a partnership. If you’re running it with partners, break down who owns what percentage of the restaurant. Also include your own stake. Most investors want to see an indication that you’re investing your own resources into the enterprise, given the risk of failure.

Needs

Tell potential investors how much money you need from them, how much you need in total and what this money will be used for. Be specific in your requests. Say what the money will be used for -- leasing the space, purchasing or leasing equipment, acquiring food and beverage licenses, or whatever your business needs.

Repayment

Investors aren’t lending you the money to be nice -- they want to get their money back and earn a profit. Include the time it will take to turn a profit and when you will pay them back. Specify what you’re basing your assumptions on. For example, you might say: “A conservative estimate of 1,500 diners per week would lead to weekly sales of approximately $35,000, assuring a positive cash flow within the first six months of operation and providing a 6 percent return over the first six years."

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