low budget restaurant business plan

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How to Write a Restaurant Business Plan

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When starting a business—no matter what type of business that may be—a business plan is essential to map out your intentions and direction. That’s the same for a restaurant business plan, which will help you figure out where you fit in the landscape, how you’re going to differ from other establishments around you, how you’ll market your business, and even what you’re going to serve. A business plan for your restaurant can also help you later if you choose to apply for a business loan .

While opening a restaurant isn’t as risky as you’ve likely heard, you still want to ensure that you’re putting thought and research into your business venture to set it up for success. And that’s where a restaurant business plan comes in.

We’ll go through how to create a business plan for a restaurant and a few reasons why it’s so important. After you review the categories and the restaurant business plan examples, you can use the categories to make a restaurant business plan template and start your journey.

Why you shouldn’t skip a restaurant business plan

First-time restaurateurs and industry veterans alike all need to create a business plan when opening a new restaurant . That’s because, even if you deeply understand your business and its nuances (say, seasonal menu planning or how to order correct quantities), a restaurant is more than its operations. There’s marketing, financing, the competitive landscape, and more—and each of these things is unique to each door you open.

That’s why it’s so crucial to understand how to create a business plan for a restaurant. All of these things and more will be addressed in the document—which should run about 20 or 30 pages—so you’ll not only have a go-to-market strategy, but you’ll also likely figure out some things about your business that you haven’t even thought of yet.

Additionally, if you’re planning to apply for business funding down the line, some loans—including the highly desirable SBA loan —actually require you to submit your business plan to gain approval. In other words: Don’t skip this step!

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How to write a restaurant business plan: Step by step

There’s no absolute format for a restaurant business plan that you can’t stray from—some of these sections might be more important than others, for example, or you might find that there’s a logical order that makes more sense than the one in the restaurant business plan example below. However, this business plan outline will serve as a good foundation, and you can use it as a restaurant business plan template for when you write your own.

Executive summary

Your executive summary is one to two pages that kick off your business plan and explain your vision. Even though this might seem like an introduction that no one will read, that isn’t the case. In fact, some investors only ask for the executive summary. So, you’ll want to spend a lot of time perfecting it.

Your restaurant business plan executive summary should include information on:

Mission statement: Your goals and objectives

General company information: Include your founding date, team roles (i.e. executive chef, sous chefs, sommeliers), and locations

Category and offerings: What category your restaurant fits into, what you’re planning to serve (i.e. farm-to-table or Korean), and why

Context for success: Any past success you’ve had, or any current financial data that’ll support that you are on the path to success

Financial requests: If you’re searching for investment or financing, include your plans and goals here and any financing you’ve raised or borrowed thus far

Future plans: Your vision for where you’re going in the next year, three years, and five years

When you’re done with your executive summary, you should feel like you’ve provided a bird’s eye view of your entire business plan. In fact, even though this section is first, you will likely write it last so you can take the highlights from each of the subsequent sections.

And once you’re done, read it on its own: Does it give a comprehensive, high-level overview of your restaurant, its current state, and your vision for the future? Remember, this may be the only part of your business plan potential investors or partners will read, so it should be able to stand on its own and be interesting enough to make them want to read the rest of your plan.

Company overview

This is where you’ll dive into the specifics of your company, detailing the kind of restaurant you’re looking to create, who’s helping you do it, and how you’re prepared to accomplish it.

Your restaurant business plan company overview should include:

Purpose: The type of restaurant you’re opening (fine dining, fast-casual, pop-up, etc.), type of food you’re serving, goals you have, and the niche you hope to fill in the market

Area: Information on the area in which you’re opening

Customers: Whom you’re hoping to target, their demographic information

Legal structure: Your business entity (i.e. LLC, LLP, etc.) and how many owners you have

Similar to your executive summary, you won’t be going into major detail here as the sections below will get into the nitty-gritty. You’ll want to look at this as an extended tear sheet that gives someone a good grip on your restaurant or concept, where it fits into the market, and why you’re starting it.

Team and management

Barely anything is as important for a restaurant as the team that runs it. You’ll want to create a section dedicated to the members of your staff—even the ones that aren’t yet hired. This will provide a sense of who is taking care of what, and how you need to structure and build out the team to get your restaurant operating at full steam.

Your restaurant business plan team and management section should have:

Management overview: Who is running the restaurant, what their experience and qualifications are, and what duties they’ll be responsible for

Staff: Other employees you’ve brought on and their bios, as well as other spots you anticipate needing to hire for

Ownership percentage: Which individuals own what percentage of the restaurant, or if you are an employee-owned establishment

Be sure to update this section with more information as your business changes and you continue to share this business plan—especially because who is on your team will change both your business and the way people look at it.

Sample menu

You’ll also want to include a sample menu in your restaurant business plan so readers have a sense of what they can expect from your operations, as well as what your diners can expect from you when they sit down. This will also force you to consider exactly what you want to serve your diners and how your menu will stand out from similar restaurants in the area. Although a sample menu is in some ways self-explanatory, consider the following:

Service : If your brunch is as important as your dinner, provide both menus; you also might want to consider including both a-la-carte and prix fixe menus if you plan to offer them.

Beverage/wine service: If you’ll have an emphasis on specialty beverages or wine, a separate drinks list could be important.

Seasonality: If you’re a highly seasonal restaurant, you might want to consider providing menus for multiple seasons to demonstrate how your dishes (and subsequent purchasing) will change.

Market analysis

This is where you’ll begin to dive deeper. Although you’ve likely mentioned your market and the whitespace you hope to address, the market analysis section will enable you to prove your hypotheses.

Your restaurant business plan market analysis should include:

Industry information: Include a description of the restaurant industry, its size, growth trends, and other trends regarding things such as tastes, trends, demographics, structures, etc.

Target market: Zoom in on the area and neighborhood in which you’re opening your restaurant as well as the type of cuisine you’re serving.

Target market characteristics: Describe your customers and their needs, how/if their needs are currently being served, other important pieces about your specific location and customers.

Target market size and growth: Include a data-driven section on the size of your market, trends in its growth, how your target market fits into the industry as a whole, projected growth of your market, etc.

Market share potential: Share how much potential there is in the market, how much your presence will change the market, and how much your specific restaurant or restaurant locations can own of the open market; also touch on any barriers to growth or entry you might see.

Market pricing: Explain how you’ll be pricing your menu and where you’ll fall relative to your competitors or other restaurants in the market.

Competitive research: Include research on your closest competitors, how they are both succeeding and failing, how customers view them, etc.

If this section seems like it might be long, it should—it’s going to outline one of the most important parts of your strategy, and should feel comprehensive. Lack of demand is the number one reason why new businesses fail, so the goal of this section should be to prove that there is demand for your restaurant and show how you’ll capitalize on it.

Additionally, if market research isn’t your forte, don’t be shy to reach out to market research experts to help you compile the data, or at least read deeply on how to conduct effective research.

Marketing and sales

Your marketing and sales section should feel like a logical extension of your market analysis section, since all of the decisions you’ll make in this section should follow the data of the prior section.

The marketing and sales sections of your restaurant business plan should include:

Positioning: How you’ll describe your restaurant to potential customers, the brand identity and visuals you’ll use to do it, and how you’ll stand out in the market based on the brand you’re building

Promotion: The tools, tactics, and platforms you’ll use to market your business

Sales: How you’ll convert on certain items, and who/how you will facilitate any additional revenue streams (i.e. catering)

It’s likely that you’ll only have concepts for some of these elements, especially if you’re not yet open. Still, get to paper all of the ideas you have, and you can (and should) always update them later as your restaurant business becomes more fully formed.

Business operations

The business operations section should get to the heart of how you plan to run your business. It will highlight both internal factors as well as external forces that will dictate how you run the ship.

The business operations section should include:

Management team: Your management structure and hierarchy, and who is responsible for what

Hours: Your hours and days of operation

Location: What’s special about your location that will get people through the door

Relationships: Any advantageous relationships you have with fellow restaurateurs, places for sourcing and buying, business organizations, or consultants on your team

Add here anything you think could be helpful for illustrating how you’re going to do business and what will affect it.

Here, you’ll detail the current state of your business finances and project where you hope to be in a year, three years, and five years. You’ll want to detail what you’ve spent, what you will spend, where you’ll get the money, costs you might incur, and returns you’ll hope to see—including when you can expect to break even and turn a profit.

Financial statements: If you’ve been in business for any amount of time, include existing financial statements (i.e. profit and loss, balance sheet, cash flow, etc.)

Budget: Your current budget or a general startup budget

Projections: Include revenue, cash flow, projected profit and loss, and other costs

Debt: Include liabilities if the business has any outstanding debt or loans

Funding request: If you’re requesting a loan or an investment, lay out how much capital you’re looking for, your company’s valuation (if applicable), and the purpose of the funding

Above all, as you’re putting your financials together, be realistic—even conservative. You want to give any potential investors a realistic picture of your business.

Feel like there are other important components but they don't quite fit in any of the other categories (or make them run too long)? That’s what the restaurant business plan appendix section is for. And although in, say, a book, an appendix can feel like an afterthought, don’t ignore it—this is another opportunity for you to include crucial information that can give anyone reading your plan some context. You may include additional data, graphs, marketing collateral (like logo mockups), and more.

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The bottom line

Whether you’re writing a restaurant business plan for investors, lenders, or simply for yourself and your team, the most important thing to do is make sure your document is comprehensive. A good business plan for a restaurant will take time—and maybe a little sweat—to complete fully and correctly.

One other crucial thing to remember: a business plan is not a document set in stone. You should often look to it to make sure you’re keeping your vision and mission on track, but you should also feel prepared to update its components as you learn more about your business and individual restaurant.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

How to Write a Small Restaurant Business Plan + Free Sample Plan PDF

Makenna Crocker

10 min. read

Updated March 18, 2024

Free Download:  Sample Restaurant Business Plan Template

From greasy spoon diners to Michelin Star restaurants, food service has captured the hearts and imaginations of countless culinary entrepreneurs.

In the United States, 90% of restaurant owners operate small restaurants with fewer than 50 employees . And 70% operate in just one location.

If you’re passionate about food and dream of opening a restaurant, you have plenty of company. But cooking skills alone won’t cut it. You need a plan.

In this article, we’ll walk you through writing a small restaurant business plan, from conducting market research to developing promotional strategies and creating a financial forecast. 

Need more guidance? Download our free small restaurant business plan template .

Why write a small restaurant business plan?

Starting a restaurant from scratch isn’t cheap.  Startup costs range from $175,000 to $750,000 and include hefty upfront expenses like:

• Building lease
• Kitchen equipment
• Ingredient sourcing

The financials section of a business plan gives you space to compile these costs into an expense budget and compare them to your revenue projections . These will be invaluable in helping you determine if your restaurant concept is financially viable.

And if you need a bank loan or investor to help fund your restaurant , they’ll want to see a plan that includes financial projections (more on that later).

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• How to write a small restaurant business plan

The business plan is not only where you lay out your plan, vision, and goals for the restaurant – it pushes you to thoroughly research and understand your market , competitors , and customers to make informed decisions. It guides you through the intricacies of opening and running a small restaurant and helps you keep your finances in order.

Here are some tips for writing a small restaurant business plan that sets you up for success.

• Start with a company overview

A good place to start is to think about the big picture. What do you want your restaurant to be? Are you envisioning upscale dining in a candlelit, intimate setting? Or maybe you’re going for comfort food in a family-friendly atmosphere?

Capture the essence of your restaurant with a brief, attention-grabbing overview. Think of the start of your overview section as an elevator pitch. You’re introducing your concept and vision to highlight what will make your business unique .

Just keep it succinct. 

You’ll need to include other important information about your business here, such as the legal structure of your business and the qualifications of you and your management team.

If you’re writing a business for an existing restaurant, you should also cover its history – when the restaurant was founded, who was involved, and milestones it has reached.

• Understand your target market

Conducting a thorough market analysis is key to the success of your small restaurant. In an industry as competitive as the restaurant business, you’ll need to have your finger on the pulse of your dining market if you hope to create a unique offering.

Defining your target market is essential when starting your restaurant, helping answer questions like:

• Is there demand in the local market for your food?
• Who are your primary competitors? 
• Is there building space for lease near where your target customers live or work?
• What types of partnerships with food distributors (wholesalers, farmers, butchers, etc.) will be needed to ensure a steady flow of fresh ingredients?

The first step is to identify who your diners will be. 

It’s unrealistic to try to appeal to every single customer. So, ask yourself who you envision walking through your doors. Are they:

• Adults aged 40 and over, with lots of disposable income and exotic culinary tastes.
• Children, young adults, and families looking for quick, convenient food that doesn’t stretch their budgets.

Of course, these aren’t the only two customer demographics for a restaurant. But you should get the sense that these customer segments have very different preferences.

Read more: Target market example

Understanding your target market involves more than just demographics. Consider their:

• Spending habits
• Daily routines

If you plan to operate in a busy city center, your target market might include working professionals seeking quick lunch options or upscale dining options after work. But if you’re opening in a less visible area near residential neighborhoods, you may be more likely to target families.

• Size up your competition

With a target customer in mind, you need to understand who you’ll be competing with for their dining budget.

Analyzing your competitors is about understanding their strengths, weaknesses, and strategies. 

Start by identifying direct competitors (other small restaurants) and indirect competitors (like fast-food chains or food trucks). Observe how they attract customers, the ambiance they create, and the variety and pricing of their menus.

Get a feel for their operational strategies:

• How much staffing do they have?
• How fast (or slow) is their service?
• What kinds of supplier relationships do they seem to have?

And their marketing tactics :

• How do they engage with customers?
• What deals or promotions do they offer?
• What kind of reviews are they getting online?

Finally, think about their long-term position: 

• Have they expanded or downsized recently?
• Have they changed their operating hours?
• Have they changed their menu?

As you observe these competitors and their customers, ask yourself what they are doing right and where they are coming up short. 

This knowledge will help you identify gaps in the market and opportunities to offer a unique experience.

• Create a detailed operations plan

With so many moving pieces to manage as a restaurant owner, writing an operations plan is just as important as creating a market analysis.

The operations section of your business plan details how your restaurant will function daily. 

It should briefly touch on every aspect of running the business–from staffing needs to how often you will need to buy new ingredients, kitchen equipment, or dining utensils.

Your operations plan will reflect the unique needs of your business, but a typical restaurant operations plan might include:

• Staffing and training: Lay out a staffing plan, with the roles and responsibilities of each team member. Include strategies for hiring, training, and employee retention.
• Equipment and technology: Outline your dining, kitchen, and technology needs, from tables and chairs to ovens and point-of-sale systems.
• Supply chain management: Explain your ingredient sourcing and inventory management strategies and your plan to build relationships with suppliers.
• Customer service policies: Describe how you manage customer service needs and feedback to ensure a positive dining experience.
• Health and safety protocols: Detail procedures for maintaining kitchen hygiene practices and food handling standards to ensure food safety and compliance with health regulations.

Without an operations plan, you’ll lack a documented strategy for managing your kitchen workflow, maintaining customer satisfaction, or even basic tasks like inventory or staffing.

And if you’re writing a business plan to get a bank loan or investment , they’ll want to see that you have a plan for successfully managing the restaurant. 

• Actively market your restaurant

Your small restaurant may serve the most mouthwatering dishes in town, but no one will discover it without effective promotional strategies. 

You need to develop a comprehensive marketing plan to showcase your culinary delights and entice customers through your doors.

Consider both traditional and digital marketing channels to reach your target audience. Traditional methods may include:

• Hosting special events
• Participating in local food festivals
• Partnering with complementary businesses in your community

Digital strategies may include:

• Creating an engaging website
• Building a strong presence on social media platforms
• Utilizing online review platforms to build credibility and foster positive word-of-mouth.

When developing your promotional strategies, consider the following tips:

Be smart about your online presence

Build a visually appealing and user-friendly website that showcases your restaurant’s ambiance, menu, and story. 

Leverage social media platforms to engage with your audience, share enticing food photos, and run targeted advertising campaigns.

Consider promotions

Encourage repeat business by implementing a loyalty program that rewards customers for their patronage. Offer incentives such as discounts to certain customer segments, like seniors, veterans, or students.

Engage with the local community

Participate in community events, sponsor local sports teams or charity initiatives, and establish partnerships with neighboring businesses. 

Becoming an active community member will build brand awareness and loyalty.

Don’t ignore your pricing and financial strategy

According to data from the National Restaurant Association , about 60% of restaurants fail in their first year, and 80% close within five years.

You need to understand your startup and ongoing operating expenses to run a successful small restaurant.

Start by estimating your startup costs , including:

• Site acquisition (down payment if owning the space, initial payment if leasing)
• Building improvements
• Equipment purchases
• Licenses and permits
• Initial inventory
• Menu creation

Then, account for ongoing operating expenses, such as:

• Employee wages
• Mortgage or rent payments
• Ingredient costs

Pricing your menu items strategically is essential to ensuring profitability. Analyze ingredient costs, consider portion sizes, and compare prices in your local market to determine competitive yet profitable pricing.

Conduct a break-even analysis to determine the number of customers you need to serve to cover costs and start generating profits. Regularly review your financials and adjust your pricing as needed to maintain a healthy bottom line.

Consider these financial aspects when developing your small restaurant business plan:

Budget Allocation

Determine how you will allocate your budget across different areas of your restaurant, such as kitchen equipment, interior design, marketing, and staff training.

Prioritize investments that will have a direct impact on customer experience and operational efficiency.

Revenue Streams

Identify multiple revenue streams for your restaurant. This may include revenue from food sales, catering services, private events, or partnerships with local businesses.

Diversifying your revenue sources can help stabilize your cash flow.

Cost Control

Develop strategies to control costs without compromising quality. Efficient inventory management, negotiation with suppliers, and staff training on waste reduction can contribute to cost savings.

Sales Forecasting

Create a sales forecast based on your market research, pricing strategy, and seating capacity. Consider seasonal fluctuations and special events that may impact your restaurant’s performance.

Other information to include in your small restaurant business plan

As a restaurant owner, a few components of your business plan are unique to your industry. 

None of these fit neatly into any one section of a business plan. We suggest addressing them in additional sections or within the appendix .

Restaurant location and layout

Include information about your restaurant’s location . 

Some of this information will be included in your market analysis, but once you’ve secured a location, you should go deeper and analyze factors like:

• Rent and utilities
• Foot traffic
• Parking availability
• Nearby businesses

Explaining the layout of your restaurant – especially your kitchen – is also important. Consider adding photos or diagrams of each room to your plan. 

Diagrams can be especially helpful. You can add in-depth details for seating arrangements in the dining room or how staff should move efficiently throughout the kitchen.

What do many people do before deciding whether to eat at a restaurant? 

They look at the menu.

You can gain or lose customers on the strength of your menu. It affects numerous business areas, from marketing to pricing and operations.

For instance, if you’re running a family-friendly restaurant but your prices are too high, people will see that on your menu and may decide to eat somewhere cheaper. 

On the other hand, if you’re running a fine dining restaurant , but your menu fails to describe your dishes in an appealing way, diners may go somewhere they perceive as having higher quality meals.

That makes the business plan a great place to create menu concepts. 

You can experiment with different offerings, price points, and menu designs until you’re confident about sharing them with customers. 

And since business plans are continuously updated as your business changes—you can see how your menu has changed over time and what’s been most successful.

Download your free small restaurant business plan template

If you’re ready to start a restaurant, you can download our free small restaurant business plan template from our library of over 550 sample business plans . 

Get started today, and discover why businesses that plan grow 30% faster than those that don’t .

More restaurant business plan examples:

• Food truck business plan
• Coffee shop business plan
• Bakery business plan
• Brewery business plan

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Makenna Crocker is the Social Brand Manager at Palo Alto Software. Her work focuses on market and social trends, educational content creation, and providing entrepreneurs with small business tips and tools. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through social media and sharable content.

Table of Contents

• Why you need a plan
• Don’t ignore your pricing and financial strategy
• Additional info to include
• Free business plan template

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How to Write a Restaurant Business Plan in 2024 (Step by Step Guide with Templates)

A comprehensive restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations.

This includes anything from your restaurant's menu design, location, financials, employee training, and a lot more.

Crafting a solid business plan is important, as it helps:

• Transform your restaurant ideas into reality.
• Boosts entrepreneurial success by 16% (Harvard Business Study) .
• Equips you to navigate challenges before they arise.
• Attracts potential investors.

“You have to show any potential investor that you have an actual plan, you know what you’re talking about, it looks professional, and you’re not just screwing around.” - Charles Bililies, owner of Souvla

Planning is key to restaurant success. Without a plan, you're more likely to join the 26% of restaurants that fail within a year.

Create a business plan to set yourself up for success.

Here's how to get started. 

A step-by-step guide to writing a restaurant business plan

Embarking on a restaurant venture is an exciting prospect filled with endless possibilities.

However, the key to transforming your culinary dreams into reality lies in the foundation of a well-crafted restaurant business plan.

This guide will walk you through creating a winning restaurant business plan , from defining your niche to seeking expert advice.

So, are you ready to cook up some success?  Let's get started. 

Essential components of a restaurant business plan

A well-structured restaurant business plan typically consists of the following key components:

• Executive Summary

Company Description

• Market Analysis
• Restaurant Design
• Market Overview
• External help
• Financial Analysis

Delving into each section

Now, let's take a closer look at each section of your restaurant business plan and explore the key elements to consider:

1. Executive summary

A restaurant business plan should always begin with an executive summary. Why?

• 80% of venture capitalists say they read the executive summary first.
• 62% of investors say they would not continue reading a business plan if the executive summary did not capture their interest.
• A strong executive summary can increase the likelihood of securing funding by up to 40%.

An executive summary not only acts as the introduction to your restaurant business plan samples but also as a summary of the entire idea.

The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.

The executive summary also helps you envision the identity of your restaurant which essentially shapes the customer experience and sets you apart from competitors.

To establish a distinct identity, you need to focus on c ommon elements of an executive summary, including:

• A mission statement  
• Proposed concept development
• Cuisine selection
• The overall execution
• The potential costs
• Expected return on investments (ROI)

Let's take a more in-depth look at the concept development, cuisine selection, and mission statement.

Further reading

• How to write a restaurant executive summary

Concept Development

Selecting the type of restaurant, service style, and atmosphere is the first step towards creating a unique dining experience. Whether you envision a sample menu for a:

• cozy, intimate bistro
• bustling quick-service deli
• fast-casual restaurant
• fine dining establishment

Your concept should reflect your passion and expertise in the industry.

With a broad range of options, it’s critical to scrutinize your target market and pinpoint the most suitable choice considering their preferences and your capabilities.

When planning your restaurant design, keep in mind that it should effectively complement your chosen theme and cuisine.

Additionally, consider the potential for patio seating and the involvement of your management team in making these critical decisions.

A well-thought-out concept will not only set the stage for an unforgettable dining experience but also pique the interest of potential investors.

Cuisine Selection

The cuisine you select for your restaurant can significantly influence its success.

Choosing the appropriate cuisine is vital for distinguishing your establishment from competitors and attracting your target market.

To make an informed decision, consider factors such as:

• Market demand
• Expertise and passion
• Ingredient availability
• Competition
• Profitability
• Cultural fit
• Seasonality

Dietary restrictions and trends

In the highly competitive restaurant industry, keeping track of current and emerging cuisine trends can be a significant advantage.

From regional delicacies to innovative fusion dishes, understanding what’s popular and in demand can help you tailor your offerings to the desires of your target audience.

By thoroughly analyzing the market and adapting to evolving tastes, your restaurant can remain relevant and successful in the long run.

Crafting a mission statement

A well-constructed mission statement communicates the purpose, values, and goals of your restaurant to potential investors and customers alike.

A mission statement serves as a guiding light for decision-makers and employees, fueling their efforts to achieve your restaurant’s objectives.

To create an impactful mission statement, consider the following steps:

• Identify the purpose of the restaurant.
• Contemplate the brand’s image.
• Account for the target audience.
• Incorporate company values.
• Ensure brevity and comprehensiveness.

Related content:  How to Write a Restaurant Mission Statement  

Remember, your mission statement should not only differentiate your restaurant from competitors but also resonate with your target market.

By articulating your restaurant’s unique values and vision, you’ll create a strong foundation upon which to build a thriving and successful business.

2. Company description

This is the part of the restaurant business plan where you fully introduce the company.

Start this section with the name of the restaurant you are opening along with the location, contacts, and other relevant information. 

Also, include the owner’s details and a brief overview or description of their experience.

The second part of the company description should highlight the legal standing of the restaurant and outline the restaurant’s short and long-term goals.

Provide a brief market study showing that you understand the trends in the regional food industry and why the most independent restaurant investors will succeed in this market.

Here's an example of the page layout:  

Restaurant Name: [Restaurant Name]

Location: [Restaurant Address]

Contact: [Restaurant Phone Number] | [Restaurant Email Address]

Owner: [Owner Name]

Experience: [Owner Name] has over [Number] years of experience in the restaurant industry. They have worked in various roles, including [List of Roles]. They are passionate about food and creating a memorable dining experience for their guests.

Legal Standing: [Restaurant Name] is a [Type of Legal Entity] registered in [State/Province].

Short-term Goals:

• Generate [Amount] in revenue within the first year of operation.
• Achieve a [Percentage] customer satisfaction rating within the first six months of operation.

Long-term Goals:

• Expand to a second location within five years.
• Become a recognized leader in the regional food industry.

Market Study:

The regional food industry is experiencing a number of trends, including:

• An increasing demand for fresh,  local ingredients.
• A growing interest in ethnic cuisine.
• A preference for casual dining experiences.

3. Market analysis

The market analysis portion of the restaurant business plan is typically divided into three parts.

3.1 Industry analysis

What is your target market? What demographics will your restaurant cater to?

This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.

Comprehending your target market is key to customizing your restaurant offerings to their preferences and needs.

By diving into demographics, preferences, dining habits, and trends, you can fine-tune your concept and marketing strategy to reach and appeal to your target audience effectively.

An example of analyzing your target market

  Comprehending your target market is key to customizing your restaurant offerings to their preferences and needs.

Demographics and preferences

Identifying your primary target market involves considering factors such as:

For example, a neighborhood with a high concentration of families might prefer a family-friendly restaurant with a diverse menu catering to various age groups and dietary preferences.

Conversely, a trendy urban area with a predominantly young and affluent population may gravitate towards upscale dining experiences and innovative cuisine.

Cultural and ethnic backgrounds also have a significant impact on restaurant preferences, with people from different backgrounds having distinctive tastes and customs that influence their dining choices.

By thoroughly understanding the demographics and preferences of your target market, you’ll be better equipped to create a restaurant concept that resonates with them and ultimately drives success.

Dining habits and trends

As the restaurant industry continues to evolve, staying informed about dining habits and trends is crucial for adapting your offerings and attracting customers.

For example, the rise of online ordering and delivery services has significantly influenced dining habits, with many consumers seeking the convenience of having their meals delivered to their doorstep.

Health trends have also had an impact on dining habits, with an increasing number of individuals seeking healthier options when dining out.

By staying abreast of current habits and trends, you can anticipate the needs and desires of your target market and tailor your restaurant’s offerings accordingly.

This forward-thinking approach will not only help you stay competitive but also foster long-term success in the ever-changing restaurant landscape.

• How to find your restaurant's target market

3.2 Competition analysis

It's easy to assume that everyone will visit your new restaurant first, so it is important to research your competition to make this a reality.

What restaurants have already established a customer base in the area?

Take note of everything from their prices, hours, and service style to menu design to the restaurant interior.

Then explain to your investors how your restaurant will be different.

3.3 Marketing analysis

Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others in the restaurant industry?

How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.

The most important element to launching a successful restaurant is the menu . Without it, your restaurant has nothing to serve.

At this point, you probably don’t have a final version, but for a restaurant business plan, you should at least try to have a mock-up.

Add your logo to the mock-up and choose a design that you can see yourself actually using. If you are having trouble coming up with a menu design or don’t want to pay a designer, there are plenty of resources online to help.

The key element of your sample menu though should be pricing. Your prices should reflect the cost analysis you’ve done for investors. This will give them a better understanding of your restaurant’s target price point. You'll quickly see how important menu engineering can be, even early on.

5. Employees

The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant's business plan and management team.

The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.

6. Restaurant design

The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine.

Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.

The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment. 

7. Location

The location you settle on for your restaurant should be well aligned with your target market (making it easier to cater to your ideal customer) and with your business plans.

At this stage in the process, its not uncommon to not have a specific location in mind - but you should at the very least have a few options to narrow down.

Tip: When you approach your investors about potential locations, make sure to include as much information as possible about each venue and why it would be ideal for your brand. Go into as much detail as possible - including everything from square footage to the demographics of the area.

Example for choosing an ideal location

Choosing the ideal location for your restaurant is a pivotal decision that can greatly influence your success. 

To make the best choice, consider factors such as foot traffic, accessibility, and neighborhood demographics.

By carefully evaluating these factors, you’ll be better equipped to maximize visibility and attract your target market.

Foot traffic and accessibility

Foot traffic and accessibility are essential factors in selecting a location that will attract customers and ensure convenience.

A high-traffic area with ample parking and public transportation options can greatly increase the likelihood of drawing in potential customers.

Additionally, making your restaurant accessible to individuals with disabilities can further broaden your customer base and promote inclusivity.

It’s also important to consider the competition in the area and assess whether your restaurant can stand out among existing establishments.

By choosing a location with strong foot traffic and accessibility, you’ll be well on your way to creating a thriving restaurant that appeals to your target market.

Neighborhood demographics

Analyzing neighborhood demographics can help you determine if your restaurant’s concept and cuisine will appeal to the local population.

Factors such as income levels, family structures, and cultural diversity can all influence dining preferences and habits.

By understanding the unique characteristics of the neighborhood, you can tailor your offerings and marketing efforts to resonate with the local community.

Conducting a market analysis can be a valuable step in this process.

To gather demographic data for a particular neighborhood, you can utilize resources such as the U.S. Census Bureau’s American Community Survey and reference maps.

Armed with this information, you can make informed decisions about your restaurant’s concept, menu, and pricing, ensuring that your establishment is well-positioned for success within the community.

Conducting market research will further strengthen your understanding of the local demographic.

8. Market overview

The market overview section is heavily related to the market research and analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.

Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the other restaurants that could prove to be competition and what your strategy is to set yourself apart.

9. Marketing

With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world.

The next marketing strategy and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.

Read more: How to write a restaurant marketing plan from scratch

10. External help

To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running.

This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems .

Explain to your other potential investors about the importance of each and what they will be doing for your restaurant.

11. Financial analysis

The most important part of your restaurant business plan is the financial section . We would recommend hiring professional help for this given its importance.

Hiring a trained accountant will not only help you get your own financial projections and estimates in order but also give you a realistic insight into owning a restaurant.

You should have some information prepared to make this step easier for the accountant.

He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.

In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator. 

• Important restaurant metrics to track

A well-crafted restaurant business plan serves as a roadmap to success, guiding every aspect of the venture from menu design to employee training.

By carefully considering each component of the plan, aspiring restaurateurs can increase their chances of securing funding, attracting customers, and achieving their long-term goals.

Remember, a restaurant business plan is not just a document to satisfy investors; it is a living tool that should be revisited and updated regularly as the business grows and evolves.

By staying committed to the plan and adapting it as needed, restaurateurs can ensure that their culinary dreams have a solid foundation for success.

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Saif Alnasur used to work in his family restaurant, but now he is a food influencer and writes about the restaurant industry for Eat App.

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Restaurant Business Plan Template

Written by Dave Lavinsky

Restaurant Business Plan

You’ve come to the right place to create your restaurant business plan.

We have helped over 100,000 entrepreneurs and business owners with how to write a restaurant business plan to help them start or grow their restaurants.

Below is a restaurant business plan template to help you create each section of your business plan.

Restaurant Business Plan Example

Executive summary, business overview.

Bluehorn Restaurant & Steakhouse is a new restaurant and steakhouse located in Oklahoma City, Oklahoma. The menu of Bluehorn Restaurant & Steakhouse will include bistro-type dishes that are authentically created and crafted by acclaimed Chef Peter Logan. It will be located in the trendy part of town, known as the Plaza District. The restaurant will be surrounded by classy art galleries, live theater, high-end restaurants and bars, and expensive shopping.

Owned by emerging restaurant operators Chef Peter Logan and Anastasia Gillette, Bluehorn Restaurant & Steakhouse’s mission is to become Oklahoma City’s best, new restaurant for patrons to celebrate their next big event, have a nice date night, or gather with friends or family for a fun evening while dining over finely crafted entrees, desserts, and cocktails.

Products Served

The following are the menu items to be offered by Bluehorn Restaurant & Steakhouse:

• Soups & Salads
• Gourmet sides
• Wine, Beer & Spirits

Customer Focus

Bluehorn Restaurant & Steakhouse will target adult men and women between the ages of 21 – 65 with disposable income in Oklahoma City, Oklahoma. Within this demographic are millennials, young professionals, newlyweds, young families, more established families, and retirees. Because of the pricing structure of the menu, the patrons will likely be upper middle class to the wealthy population of Oklahoma City.

Management Team

Bluehorn Restaurant & Steakhouse is owned and operated by fellow Oklahoma City natives and culinary enthusiasts, Chef Peter Logan and Anastasia Gillette. Both come with a unique skill set and complement each other perfectly. They formerly worked together at another OKC fine dining establishment and made a great team for serving guests delectable food and wine while ensuring the highest level of customer service.

Chef Peter will manage the kitchen operations of Bluehorn Restaurant & Steakhouse, while Anastasia will oversee front of the house operations, maintain and ensure customer service, and manage all reservations.

Financial Highlights

Bluehorn Restaurant & Steakhouse is seeking $300,000 in debt financing to open its start-up restaurant. The funding will be dedicated for the build-out and design of the restaurant, kitchen, bar and lounge, as well as cooking supplies and equipment, working capital, three months worth of payroll expenses and opening inventory. The breakout of the funding is below:

• Restaurant Build-Out and Design – $100,000
• Kitchen supplies and equipment – $100,000
• Opening inventory – $25,000
• Working capital (to include 3 months of overhead expenses) – $25,000
• Marketing (advertising agency) – $25,000
• Accounting firm (3 months worth and establishment/permitting of business) – $25,000

Company Overview

Bluehorn Restaurant & Steakhouse is a new restaurant and steakhouse located in Oklahoma City, Oklahoma. Bluehorn Restaurant & Steakhouse will serve a wide variety of dishes and beverages and will cater to the upper middle class to wealthier population of Oklahoma City. The menu of Bluehorn Restaurant & Steakhouse will include bistro-type dishes that are authentically created and crafted by acclaimed Chef Peter Logan. It will be located in the trendy part of town, known as the Plaza District. The Plaza District is one of Oklahoma’s trendy neighborhoods and is considered the “it” area for newlyweds, millennials, professionals, and young singles. The restaurant will be surrounded by classy art galleries, live theater, high-end restaurants and bars, and expensive shopping.

Owned by emerging restaurant operators Chef Peter Logan and Anastasia Gillette, the restaurant’s mission statement is to become the best new steak restaurant in OKC. The following are the types of menu items Bluehorn Restaurant & Steakhouse will serve- shareables, steaks, soups, gourmet sides and salads.

Bluehorn Restaurant & Steakhouse History

Bluehorn Restaurant & Steakhouse is owned by two Oklahoma City natives, Chef Peter Logan and Anastasia Gillette. They have both worked around the country in fine dining establishments and have a combined twenty years in the restaurant industry. Upon working alongside each other at another fine dining establishment in Oklahoma City, the two of them became good friends and decided to venture into owning their own restaurant.

Chef Peter is the kitchen guru and critically acclaimed chef, while Anastasia manages the front of the house and is a certified Sommelier. Together, with both of their expertise and knowledge, Bluehorn Restaurant & Steakhouse is destined to become Oklahoma City’s next big restaurant.

Industry Analysis

The Restaurant industry is expected to grow to over $220 billion in the next five years.

Consumer spending is projected to grow. The Consumer Confidence Index, a leading indicator of spending patterns, is expected to also grow strongly, which will boost restaurant industry growth over the next five years. The growth in consumer confidence also suggests that more consumers may opt to segment their disposable income to eating outside the home.

Additionally, an increase in the number of households earning more than $100,000 annually further contributes to the industry growth, supporting industry operators that offer more niche, higher-end products.  This group is expected to continue to grow in size over the next five years.

The urban population represents a large market for the industry. Specifically, time-strapped individuals living in urban areas will likely frequent industry establishments to save time on cooking. The urban population is expected to increase, representing a potential opportunity for the industry.

Customer Analysis

Demographic profile of target market, customer segmentation.

Bluehorn Restaurant & Steakhouse will primarily target the following customer profile:

• Upper middle class to wealthier population
• Millennials
• Young professionals
• Households with an average income of at least $75k
• Foodies and culture enthusiasts

Competitive Analysis

Direct and indirect competitors.

Bluehorn Restaurant & Steakhouse will be competing with other restaurants in Oklahoma City. A profile of each competitor is below. The Press Located in the trendy area known as the Plaza District, The Press has reimagined our favorite foods of the surrounding regions through the lens of home.

The menu consists of appetizers, soups, burgers and sandwiches, bowls, main dishes, sides, desserts, and a large selection of alcoholic beverages. The Press serves craft beer, domestic beer, wine spritzers, house cocktails, wine, and mimosas. They also offer brunch. The menu of The Press is affordable with the most expensive dish being $16. The wine menu is also not pretentious as the wine is sold either by the glass or bottle, with the most expensive bottle being $52 for the Gruet Sparkling Brut Rose. Oak & Ore Oak & Ore is a craft beer and restaurant in OKC’s Plaza District. They have a 36-tap beer selection and offer vegetarian, vegan, and gluten free dining options. Oak & Ore offers a rotating, 36-tap selection of their favorite brews from Oklahoma and around the world. Each beer is thoughtfully paired with a craft beer-inspired dining experience.

The food menu of Oak & Ore offers starters, salads, wings, fried chicken, sandwiches, tacos, banh mi, and sides. They also have a selection of kids dishes so the whole family can enjoy comfort food while sampling one of their delectable beers.

The Mule OKC The Mule is a casual, hip restaurant offering a large beer and cocktail menu plus sandwiches and more. Located in the constantly growing and buzzing hub that is the Plaza District, The Mule takes the timeless favorite and contorts it into a whole menu of wild offerings.

There is also a fantastic assortment of soups offered and The Mule shakes up a seasonal list of cocktails designed by their bar staff. During the winter months, patrons can stave off the cold with their versions of hot toddies and buttered rum. For the beer drinkers, they always have a reliable line-up of fresh cold brews on draft, as well as a wide selection of can.

Competitive Advantage

Bluehorn Restaurant & Steakhouse offers several advantages over its competition. Those advantages are:

• Gourmet dishes elegantly prepared to the finest standard.
• Selection of steaks sourced from local Oklahoma farms.
• An exclusive and unique wine menu that includes a wine selection of all price points.
• Highly sought after location: Bluehorn Restaurant & Steakhouse will be located in the trendy and attractive neighborhood known as The Plaza District.
• Trendy, welcoming, and energetic ambiance that will be perfect for a night out or a celebration.

Marketing Plan

Promotions strategy.

The marketing strategy for Bluehorn Restaurant & Steakhouse is as follows: Location Bluehorn Restaurant & Steakhouse’s location is a promotions strategy in itself. The Plaza District is a destination spot for locals, tourists, and anyone looking for the trendiest food fare in Oklahoma City. The Plaza District is home to OKC’s most popular bars and restaurants, art galleries, theaters, and boutique shopping. The millennials, young professionals, and foodies will frequent Bluehorn Restaurant & Steakhouse for the location itself.

Social Media Bluehorn Restaurant & Steakhouse will use social media to cater to the millennials and Oklahoma City residents. Chef Peter and Anastasia plan to hire an advertising agency to take professional photographs of the menu items and location to create appealing posts to reach a greater audience. The posts will include pictures of the menu items, as well as upcoming featured options. SEO Website Marketing Bluehorn Restaurant & Steakhouse plans to invest funds into maintaining a strong SEO presence on search engines like Google and Bing. When a person types in “local fine dining restaurant” or “Oklahoma City restaurant”, Bluehorn Restaurant & Steakhouse will appear in the top three choices. The website will include the full menu, location, hours, and lots of pictures of the food, drinks, and steaks. Third Party Delivery Sites Bluehorn Restaurant & Steakhouse will maintain a presence on sites like GrubHub, Uber Eats, Doordash, and Postmates so that people looking for local food to be delivered will see Bluehorn Restaurant & Steakhouse listed near the top.

Operations Plan

Operation functions:.

The company will hire the following:

• 4 sous chefs
• 2 bartenders
• 2 hostesses
• The company will hire an advertising agency and an accounting firm

Milestones:

Bluehorn Restaurant & Steakhouse aims to open in the next 6 months. The following are the milestones needed in order to obtain this goal.

7/1/202X – Execute lease for prime location in the Plaza District.

7/2/202X – Begin construction of restaurant build-out.

7/10/202X – Finalize menu.

7/17/202X – Hire advertising company to begin developing marketing efforts.

8/15/202X – Start of marketing campaign

8/22/202X – Final walk-thru of completed restaurant build-out.

8/25/202X – Hire team of sous chefs, servers, and bussers.

9/1/202X – Decoration and set up of restaurant.

9/15/202X – Grand Opening of Bluehorn Restaurant & Steakhouse

Bluehorn Restaurant & Steakhouse will be owned and operated by Chef Peter Logan and Anastasia Gillette. Each will have a 50% ownership stake in the restaurant.

Chef Peter Logan, Co-Owner

Chef Peter Logan is an Oklahoma City native and has been in the restaurant industry for over ten years. He was trained in a prestigious Le Cordon Bleu Culinary Academy in San Francisco and has worked in some of the nation’s most prestigious fine dining restaurants. His tenure has took him from the west coast to the east coast, and now he’s back doing what he loves in his hometown of Oklahoma City.

Chef Peter will manage the kitchen operations of Bluehorn Restaurant & Steakhouse. He will train and oversee the sous chefs, manage inventory, place food inventory orders, deal with the local food vendors, and ensure the highest customer satisfaction with the food.

Anastasia Gillette, Co-Owner

Anastasia Gillette was born and raised in Oklahoma City and has garnered over ten years in the restaurant industry as well. While in college, Anastasia worked as a hostess at one of the area’s most prestigious restaurant establishments. While there, she was eventually promoted to Front of the House Manager where she oversaw the hostesses, servers, bussers, bartenders, and reservations. Her passion always led to the beverage portion of the restaurant so she obtained her Sommelier certificate in 2019. With her wine education, Anastasia is able to cultivate an interesting and elegant wine selection for the restaurant.

Anastasia will oversee front of the house operations, maintain and ensure customer service, and manage all reservations. She will also be in charge of the bar and wine ordering, training of front of the house staff, and will manage the restaurant’s social media accounts once they are set up.

Financial Plan

Key revenue & costs.

The revenue drivers for Bluehorn Restaurant & Steakhouse will come from the food and drink menu items being offered daily.

The cost drivers will be the ingredients and products needed to make the menu items as well as the cooking materials. A significant cost driver is the fine dining equipment, serving dishes, and beer and wine glasses. Other cost drivers will be the overhead expenses of payroll for the employees, accounting firm, and cost of the advertising agency.

Funding Requirements and Use of Funds

Bluehorn Restaurant & Steakhouse is seeking $300,000 in debt financing to open its start-up restaurant. The breakout of the funding is below:

Financial Projections

Income Statement

  Balance Sheet

  Cash Flow Statement

Restaurant Business Plan FAQs

What is a restaurant business plan.

A restaurant business plan is a plan to start and/or grow your restaurant business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your restaurant business plan using our Restaurant Business Plan Template here .

What Are the Main Types of Restaurants?

There are many types of restaurant businesses. Restaurants can range in type from fast food, fast casual, moderate casual, fine dining, and bar and restaurant types. Restaurants also come in a variety of different ethnic or themed categories, such as Mexican restaurants, Asian restaurants, American, etc.  Some restaurants also go mobile and have food trucks.

How Do You Get Funding for Your Restaurant Business Plan?

Restaurant businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Another option for a restaurant business is to obtain a small business loan. SBA loans are a popular option as they offer longer loan terms with lower interest rates.

What are the Steps To Start a Restaurant Business?

1. Develop A Restaurant Business Plan - The first step in starting a business is to create a detailed restaurant business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your restaurant business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your restaurant business is in compliance with local laws.

3. Register Your Restaurant Business - Once you have chosen a legal structure, the next step is to register your restaurant business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your restaurant business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Restaurant Equipment & Supplies - In order to start your restaurant business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your restaurant business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful restaurant business:

• How to Start a Restaurant Business

Where Can I Get a Restaurant Business Plan PDF?

You can download our free restaurant business plan template PDF here . This is a sample restaurant business plan template you can use in PDF format.

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Writing a Restaurant Business Plan: A Guide

Table of contents.

In many ways, a restaurant business plan is like a detailed recipe. But instead of listing ingredients and cooking methods, a restaurant business plan provides aspiring restaurant owners an overview of their proposed establishment—and it’s as crucial as a dish’s final dash of salt. 

However, writing a strong restaurant business plan can be confusing. That’s why we’re here.

By diving into how to write a restaurant business plan, we’ll discuss the detailed information you should include so you know how to start a restaurant business successfully. That way, your business plan can be as well-built as your famous chicken club—if not as tasty. So, put on your apron, pick up your pen, and let’s get to work.

What is a restaurant business plan?

Nearly all new businesses need a business plan. That’s because a business plan details a business’s structure, operation, finances, marketing strategies, and more. Without this, your business may have difficulty attracting investors. A weak plan may even prevent you from obtaining the necessary licenses and permits.

A restaurant’s business plan is no exception. In fact, a restaurant’s business plan may be even more important than plans for other business types. That’s because restaurants are especially liable to fail within their first year.

According to some estimates, 30% of restaurants fail during their initial 12 months.

While a carefully considered plan alone may not help you stay afloat, a bad one can sink you faster than a vegetable in a pickling jar.

What to include in a restaurant business plan

Regardless of the business’s type, most business plans include the following:

• An executive summary
• A company description
• A market analysis
• A marketing strategy
• A financial strategy

In addition to these common sections, restaurant business plans typically include:

• A menu overview
• A design plan
• A location assessment
• An employee plan

Let’s unpack each of these sections in more detail.

1. Executive summary

Although the executive summary is normally at the top of restaurant business plans, it may be the last section you write. That’s because your executive summary summarizes what’s included in your restaurant business plan. In doing so, an executive summary functions like a book’s introduction, letting readers know exactly what to expect.

Writing a compelling, yet informative, executive summary is just as important as setting the right temperature on your sous vide. When investors are crunched for time, your executive summary may be the only section they read. As a result, your executive summary should be:

• Informative
• Well-written

When writing your executive summary, aim to include:

• Your concept
• How you intend to execute your concept
• An overview of costs and benefits
• Your expected profit margin

2. Company overview

Your company overview should be longer than your executive summary. Depending on the amount of detail you wish to include, your company overview may span several pages. 

This is where you’ll describe your restaurant. Here are a few items to include in your company overview:

• The restaurant’s name
• The restaurant’s backstory
• The restaurant’s management structure
• Your goals and objectives
• Your food and concept

You should also include the location of your restaurant and any legal information about franchising and trademarking. Finally, it may be worthwhile to list your background as a restaurateur and your cooking experience.

3. Market analysis

A marketing plan, or industry analysis, looks at the market forces surrounding a new restaurant. This section is important because opening a new restaurant in an area with low demand or stiff competition could spell trouble. As a result, a strong market research analysis typically focuses on:

• The restaurant’s competition
• The state of the local restaurant industry
• The average revenue of similar restaurants
• The average rate of restaurant closures in the area
• The eating habits of the prospective customer base

You might also want to note current and expected meat and produce costs.

4. Marketing strategy

Before the internet changed the marketing landscape, many restaurants relied on word-of-mouth, radio, and newspapers to promote their eateries. Now, restaurant management teams have a wide range of marketing strategies—from billboards to social media accounts.

Providing an overview of your marketing strategy can help you set your budget. It can also keep you focused on the marketing strategies that work best for your target clientele. In addition to detailing how you’ll promote your restaurant, your marketing strategy might also discuss:

• Meal discounts
• Special promotions
• Community events
• In-kind donations
• Partnerships

5. Financial Strategy

So, how much does it cost to start a restaurant business ? Restaurants aren’t typically built on spare change. In fact, according to some estimates, the average restaurant startup cost is upwards of $250,000—and that’s just the initial investment. 

Anyone who has ever worked in a restaurant knows that even fine-dining restaurants experience occasional equipment malfunctions. Some restaurants also have exorbitant food costs. As a result, knowing how you’ll pay for these expenses before they mount can give you peace of mind. 

Your financial analysis should carefully outline the following:

• Potential investors
• Operating costs
• Equipment costs
• Employee costs

Your financial strategy might also include how you’ll save on expenses. For example, you could potentially minimize your upfront kitchen costs by opting for a ghost kitchen . Thus, your financial strategy could reflect how the ghost kitchen will impact your operating costs.

6. Menu overview

Your menu overview section might be the most exciting section you write. After all, your menu is often the focal point of your restaurant. 

That said, your menu need not be totally complete. Instead, you can start menu engineering with just a general idea of your food and beverage concept. When constructing your sample menu overview section, consider the following:

• Restaurant logos
• An overview of the types of service
• Potential prices of each menu item
• A preliminary design

Once you have a firmer grasp of your menu’s general direction, you can tinker with it as your restaurant concept continues to grow.

7. Design Plan

Your restaurant’s layout can be just as important as your menu. Do you envision a central dining room flanked by smaller dining rooms? Do you prefer mostly two-top tables or community-style tables? Using your business plan to think through your restaurant idea’s design can help you budget for tables and chairs accordingly. It can also help you plan light fixtures and table decorations.

The best design plans may also include kitchen layouts. Since a successful restaurant’s efficiency is largely measured by its kitchen’s efficiency, a well-designed layout can boost productivity. When considering your kitchen’s layout and equipment , think about the following:

• Ovens and ranges
• Freezer space
• Dishwashing equipment
• Shelves and storage 
• Office space
• Prep and hand sinks

8. Location assessment

Similar to a market analysis, a location assessment measures the profitability of your restaurant based on its area. However, its focus is different from that of a market analysis. 

Instead of analyzing larger industry forces like supply and demand, location assessments look at the particular characteristics of a restaurant’s environment. These characteristics include:

• Available parking
• Population density
• Foot traffic 
• Urban development
• Future zoning regulations
• Average rent

Location assessments can be particularly useful for restaurants in underdeveloped areas. They can give you an idea of an area’s expected growth or decline.

9. Employee plan

Finally, an employee plan is a valuable element to add to your restaurant business plan template. In short, an employee plan anticipates your staffing needs. A sample employee plan might include the following:

• Staffing needs
• Shifts and hours
• Back-of-house jobs
• Front-of-house jobs
• Employee pay

The last two items are especially important. Will your employees collect individual tips, or will tips be pooled? Will gratuity already be included in the guest’s checks? Furthermore, will all employees be paid an hourly wage, or will some employees be salaried?

Your plan might also discuss how you’ll advertise jobs, your onboarding requirements, and your restaurant’s required training.

How to present a completed business plan

A recipe may contain the ingredients to make an elaborate French sandwich. But if you don’t present the sandwich right, it may just look like a regular old ham on rye. The same principle applies to business plans.

In short, designing and presenting your business plan effectively is the best way to attract potential investors. Here are a few ways to make your business plan stand out:

• Include charts and pictures : Many people have said that the “eye takes the first bite.” While this adage applies to the way food looks on the plate, it can also apply to the way restaurant concepts are presented. Charts and pictures can help potential investors visualize your concepts more fully.
• Use a template : Business plan templates have made many restaurateurs’ lives easier. That’s because these templates can enhance the presentation of information. That said, don’t be hemmed in by a template. If your restaurant defies simple categorization, it may be helpful to take a more creative approach. 
• Be confident in your plan : You’ve done most of the heavy lifting by completing your business plan. Now, it’s time to be confident in your delivery. Review your plan thoroughly to anticipate any questions.

Plan your restaurant with CloudKitchens

Writing a restaurant business plan can be more time-intensive than making a risotto. 

Fortunately, CloudKitchens can help take a few things off your plate—especially kitchen design, so you can start thinking about restaurant expansion opportunities.

Our ghost kitchens come equipped with commercial hoods, hand sinks, prep sinks, and gas points. As a result, you could spend less time thinking about how you’ll design your kitchen space and more time using it. 

You’ve spent a lot of time writing your business plan. With CloudKitchens, you can finally get back to cooking. Now that’s delicious.

Explore ghost kitchen locations across the US:

• Ghost kitchens in San Francisco
• Ghost kitchens in LA
• Ghost kitchens in NYC
• Ghost Kitchens in Toronto
• Ghost Kitchens in Atlanta
• Ghost Kitchens in Dallas
• Ghost Kitchens in Chicago
• Ghost Kitchens in Denver
• Ghost Kitchens in Miami

Eat. How to Write a Restaurant Business Plan (Step-by-Step Guide with Samples) . https://restaurant.eatapp.co/blog/restaurant-business-plan

On the Line. What is the Restaurant Failure Rate? https://pos.toasttab.com/blog/on-the-line/restaurant-failure-rate#:~:text=The%20restaurant%20failure%20rate%20is,t%20survive%20their%20first%20year

Sage. How much does it cost to open a restaurant? https://www.sage.com/en-us/accounting-software/startup-costs/restaurant/

More insights & stories

There’s more where that came from. Get in the know and check out our additional insights

Restaurant Marketing: The Ultimate Guide

Looking to improve your restaurant’s marketing strategy? Learn how to attract more customers, increase sales, & build a strong brand presence with our expert tips & tricks.

How to Increase Restaurant Sales With Ghost Kitchens

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Service offerings, Customer Stories and Updates from Techliance

How to start Restaurant Business with low investment

Nowadays, several business sectors are rising globally and in the United States. The food-service business is one of the thriving industries during 2024. So, you can start restaurant business to serve the increasing number of food lovers.

Today, entrepreneurs and startups face a dilemma. They can’t easily make a decision about which business is the right choice. Because the business world is getting more competitive daily.

They can make the correct call to start restaurant business to service ever-growing foodaholics. But the entrepreneurs who focus on the food-service business may face a great challenge for investment. If you are one of them, finally you are in the right place.

Here, you will get an idea to start restaurant business with low investment now. Expert dedicated developers can build a restaurant management solution to play a significant role. Just remember that modernizing the food-service operations yields significantly high returns.

Reasons to start Restaurant business

As you know, the food-service industry fulfills one of the most vital and basic needs of human beings. So, this business is evergreen and has more chances of success, even much more after COVID-19. First-of-all, let’s see the reasons to start restaurant business through 2024.

Begin with a small budget

Potential business prospect, highly profitable industry.

Accordingly, we discuss these motives that are making many companies and startups launch restaurant businesses.

You have the option to start restaurant business with a little capital. Presently, different concepts and models of the foodservice industry are being introduced worldwide. For example, consider the cloud kitchen concept.

Currently, the foodservice business is thriving internationally and in the USA. As people prefer to take food from outside these days. Thus, you will get a considerable number of customers. Besides, the online food service makes the restaurant business more convenient for the customers.

The restaurant business is one of the most lucrative industries across the world. But you have to select the most profitable restaurant niche so that you can actualize your dream. Also, it depends on your locality, demands, and the tastes of the people.

Related: Best apps for Food Delivery in UK for foodies

Top ways to start Restaurant business and attract Foodies

When you are going to start restaurant business, you have to consider some crucial steps. But the scenario can change depending on several factors. For instance, your budget, restaurant type, and size.

Here, you will get a universal idea of how to start restaurant business effectively. You can go big whether you have a little capital, moderate capital, or huge capital. Your success greatly depends on many aspects.

Formulate a restaurant business plan

Get approval to open a restaurant, choose suitable restaurant type, purchase required equipment, recruit appropriate employees, go mainstream through digital, design striking food menu card, promote your restaurant.

Subsequently, let’s learn the ways to start restaurant business with less investment now.

This is an important stage where you have to create a business plan for your restaurant. You must do some crucial tasks while developing a plan for your restaurant. Realize that a smart restaurant management system helps you to run your restaurant cost-effectively.

Consequently, you can perform these activities to come up with a solid business strategy for your business.

• Industry analysis
• Competitor analysis
• Target market analysis
• Geographic/local analysis
• Financial plan
• Management strategy
• Food safety plan
• Future roadmap

After completing the plan for your business, now it’s time to get started. And when you are going to open it finally, the first step is to obtain a business license. One thing you must remember is that you have to renew your license after a certain period.

The cost of getting a business permit varies from country to country, state to state, and region to region. So, check the website of the concerned department of your country, state, or area. Afterward, you will know the detailed information to start restaurant business easily.

Now, you have to decide which type of restaurant you are going to start. You can choose or finalize the decision according to many constraints. At least, deliberate over these considerations.

As, you are new in this business, so you have to start from zero. Just like you need to buy some apparatus to run your business. In this case, contact local and known dealers who can offer that equipment at a lower cost.

Based on your restaurant type and size, you have to hire the relevant workforce. For example, the manager, chefs, waiters, and delivery riders, etc. The proper hiring process can assure the success of your restaurant.

Restaurants are no longer brick-and-mortar shops as speaking of 2024. Arm your restaurant with a website to work as its virtual door. Also, you can develop a food ordering application to take your restaurant to the fingertips of users. Similarly, you can join a food aggregator service to facilitate customers.

Tip: Trends for Online Food Ordering solutions for businesses

The menu card represents what you exactly offer to the users. If you fail to create a perfect and attractive menu card, you will lose your customers. So, you have to design a restaurant menu card that is unique and interesting.

This helps you to increase your sales and enables customer retention. The website and app for a restaurant empower it to reach more foodies. Because they work as virtual menu cards. Likewise, interactive menu cards can persuade online users to try your restaurant.

Now, it is time to create brand awareness. So, you must efficiently execute the restaurant marketing plan. Proper advertisement and digital marketing help to reach more people and cover a large area.

While promoting the restaurant, you should consider your marketing budget. Also, you must contemplate whether you want to stick to your current target area . You may aim to branch out to launch more franchises in other regions in the future.

Final Thoughts

If you have determined that you are going to open a restaurant, this article is for you. Here, you get a complete blueprint of how to start restaurant business with little finance. Hence, acting upon these tips will assist you in successfully running an eatery business.

Do you want to open a food-service business that digitally facilitates users? Are you looking to modernize an established food-service setup? Techliance can join hands to accomplish your goal in less budget and ensure profitability for your business.

Ready to discuss your project?

Fill out the form below and one of our representative will get back to you soon.

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How to write a restaurant business plan

A small restaurant business plan is the roadmap you use to open a successful spot. As a first step to creating yours, ask your friends and colleagues to share restaurant business plan examples. Their restaurant business plan samples can inspire yours.

Once you’ve studied those examples, it’s time to start writing your own. No matter how much thought you’ve put into your concept or how many trusted colleagues have assured you of its greatness, you must write a restaurant business plan. It will prove the viability of your concept to potential investors and provide them with a clear and engaging answer to the question: “Why does the world need this restaurant?”

“The point of a business plan is to show that you’ve done your homework,” says Charles Bililies, owner of Souvla , a fine casual Greek restaurant in San Francisco that has received national acclaim since opening in the spring of 2014.

“You have to show any potential investor that you have an actual plan, you know what you’re talking about, it looks professional, and you’re not just screwing around.”

Quick links Branded cover Table of contents Concept Sample menu Service Management team Design Target market Location Market overview Marketing and publicity Specialists and consultants Business structure Financials

1. Branded cover

Include your logo (even if it’s not finalized), the date, and your name.

2. Table of contents

A table of contents in a restaurant business plan provides an organized overview of the document’s structure and content. It typically appears at the beginning of the plan and lists the major sections and subsections with their corresponding page numbers.

The table of contents is important for several reasons. Firstly, it allows readers to quickly navigate through the plan, enabling easy access to specific sections of interest. Secondly, it helps in presenting a professional and well-structured document, showing that you have carefully organized your thoughts and ideas. It also improves readability and comprehension, as readers can easily locate and refer back to relevant information

3. Restaurant concept

Describe your restaurant concept and get the reader excited about your idea. Specify whether the restaurant will be fine dining or more casual. Include an executive summary and go into detail about the food you’ll be serving, inspiration behind your concept, and an overview of service style.

Define clearly what will be unique about your restaurant and include your mission statement. This section should include a market analysis that shows how your restaurant will be similar and different from competing restaurants.

4. Sample menu

The menu is the most important touchpoint of any restaurant’s brand, so this should be more than just a simple list of items. Incorporate your logo and mock up a formatted menu design (tap a designer for help if needed).

Your sample menu should also include prices that are based on a detailed cost analysis. This will:

• Give investors a clear understanding of your targeted price point
• Provide the info needed to estimate check averages
• Show the numbers used create financial projections for starting costs
• Show investors that you’ve done the homework
• Prove you can stay within a budget

This section is most relevant for:

• Fine-dining concepts
• Concepts that have a unique service style
• Owners who have particularly strong feelings about what role service will play in their restaurant.

It can be a powerful way of conveying your approach to hospitality to investors by explaining the details of the guest’s service experience.

Will your restaurant have counter service and restaurant hostess software designed to get guests on their way as quickly as possible, or will it look more like a theater, with captains putting plates in front of guests simultaneously?

If an extensive wine program is an integral part of what you’re doing, will you have a sommelier? If you don’t feel that service is a noteworthy component of your operation, address it briefly in the concept section.

6. Management team

Write a brief overview of yourself and the team you have established so far. You want to show that your experience has provided you with the necessary skills to run a successful restaurant and act as a restaurant business owner.

Ideally, once you have described the strong suit of every member of your team, you’ll be presenting a full pitch deck. Most independent restaurant investors are in this for more than just money, so giving some indication of what you value and who you are outside of work may also be helpful.

Incorporate some visuals. Create a mood board that shows images related to the design and feeling of your restaurant.

Whether you’re planning to cook in a wood-burning oven or are designing an eclectic front-of-house, be sure to include those ideas. Photos of materials and snippets of other restaurants that you love that are similar to the brand you’re building are also helpful.

8. Target market

Who is going to eat at your restaurant? What do they do for a living, how old are they, and what’s their average income? Once you’ve described them in detail, reiterate why your specific concept will appeal to them.

9. Location

There should be a natural and very clear connection between the information you present in the “Target Market” section and this one. You probably won’t have a specific site identified at this point in the process, but you should talk about viable neighborhoods.

Don’t assume that potential investors will be familiar with the areas you’re discussing and who works or lives there—make the connections clear. You want readers to be confident that your restaurant’s “ideal” diner intersects with the neighborhood(s) you’re proposing as often as possible.

If you don’t have a site , this is a good place to discuss what you’re looking for in terms of square footage, foot traffic, parking, freeway accessibility, outdoor seating , and other important details.

10. Market overview

Address the micro and macro market conditions in your area and how they relate to licenses and permits. At a macro level, what are the local and regional economic conditions?

If restaurants are doing poorly, explain why yours won’t; if restaurants are doing well, explain how you’ll be able to compete in an already booming restaurant climate. At a micro level, discuss who your direct competitors are. Talk about what types of restaurants share your target market and how you’ll differentiate yourself.

11. Marketing and publicity

The restaurant landscape is only getting more competitive. Discuss your pre- and post-opening marketing plans to show investors how you plan to gain traction leading up to opening day, as well as how you’ll keep the momentum going.

If you’re going to retain a PR/marketing company, introduce them and explain why you’ve chosen them over other companies (including some of their best-known clients helps). If not, convey that you have a solid plan in place to generate attention on your own through social media, your website , and media connections.

12. Specialists and consultants

List any outside contractors you plan to retain, such as:

• General contractor
• PR and marketing

Briefly explain the services they’ll be providing for you, why you chose them, and any notable accomplishments.

13. Business structure

This section should be short and sweet. What type of business structure have you set up and why did you make that specific decision? You will need to work with an attorney to help you determine what business structure is best for you.

“Step one: write a business plan. Step two: hire a good attorney. In addition to helping me build a smart, sustainable business structure, my attorney was also a great resource for reviewing my business plan because she’s read thousands of them. She was a very helpful, experienced outside perspective for more than just legal matters,” says Charles Bililies.

14. Financial projections

Let your accountant guide you through this portion of your business plan. It is crucial that whoever you hire to help you with your finances has a wealth of restaurant experience (not just one or two places). They should be familiar with the financial specifics of starting a restaurant and know what questions to ask you.

Before creating realistic financial projections, your accountant will want to know:

• How many seats the restaurant will have
• What your average check will be
• How many covers per day you plan to do

Being conservative in these estimations is key. These three data points will be used as the basis for figuring out whether your concept is financially feasible.

Lou Guerrero, Principal at Kross, Baumgarten, Kniss & Guerrero, emphasizes, “You’ll get a lot of accountants that tell you that they’ve done a couple of restaurants, but you have to choose someone that has a deep expertise in what you’re doing. There’s nothing to gain from going with someone that doesn’t have a very restaurant-centric practice.”

A well-vetted accountant with restaurant experience will know exactly what you’ll need to have prepared to show investors.

The key projections you can expect to work on are:

• Pro forma profit and loss statement for the first three to five years of operation
• Break even analysis
• Capital requirements budget

Writing a comprehensive restaurant business plan is a crucial step towards opening a successful establishment. By seeking inspiration from examples, demonstrating your expertise, and addressing all the essential components, you can prove the viability of your concept to potential investors.

Remember, a well-prepared business plan demonstrates professionalism and a clear understanding of your goals, increasing your chances of achieving long-term success in the competitive restaurant industry.

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How to Write a Restaurant Business Plan (with Samples)

Table of contents.

Jump to: 

What Should a Restaurant Business Plan Include?

Sample restaurant business plans.

• Better Market Your Restaurant

If you’ve made the decision to start your own restaurant, congratulations! Running your own business is incredibly exciting, and can be rewarding as well. Yet having a great idea is just the first step in the process – you’ll need to put in a lot of work to make your dream a reality.

To start, you will need a concrete, detailed business plan. Not only will this plan serve as a blueprint for how you will run your restaurant, it is also necessary to secure funding. But, knowing that you need a solid restaurant business plan is different from actually writing one.

Below, we outline what you should cover in a business plan for your restaurant. This guide is meant to help you get started as you begin the process of opening up your own place. If you’re ready to move to the next level, reach out to Budget Branders for a quote on custom branded disposable products for your restaurant . Our custom printed disposables are the most cost-effective advertising your restaurant could invest in.

A business plan isn’t something that you should just slap together to check it off of your to-do list. A well-drafted business plan will demonstrate the viability of your concept to potential investors and show that you have done your homework. 

A strong business plan should contain a number of components to ensure that it covers most or all of the questions that investors may have.  It should also be professionally printed and bound, with a branded cover that includes your logo and/or slogan . The business plan should start with an executive summary, which should include a brief overview of what is contained in the entire document.

Read on to learn more about what should be contained in a restaurant business plan.

When you decided to open a restaurant, you probably did so on the basis of a great concept or idea.  Your concept is what makes your restaurant unique – and what will bring customers in the door. 

Spend some time fleshing out your concept, describing your inspiration, the type of food that you will be serving, and an overview of how your restaurant will be run.  Make sure that you explain what makes your concept unique.

For example, after a health scare, you decided to focus on a more plant-based diet. You noticed that few restaurants in the area offer vegetarian or vegan options, and decided to open a restaurant that offers a fresh take on healthy, mostly vegetarian foods. In your restaurant plan, you can describe why you decided to go this route, what type of food you plan to serve, and how this concept sets you apart from other restaurants in the region.

Sample Menu

The menu is one of the most important elements of any successful restaurant. After all, you can have the best concept and the most amazing location, but if your food is bland and uninspired, no one will want to patronize your establishment.  For this reason, a sample menu is a critical component of a restaurant business plan.

The sample menu shouldn’t just be a list of what you plan to serve. Instead, you should mock up a menu that looks like it could be handed out to diners. It should also include prices for each option that are based on a detailed cost analysis. Including these prices will demonstrate to potential investors that you have done the necessary work to make your business successful.

An attractive, pleasing design is critical to the success of any restaurant. Studies show that we use all five senses when eating, so that things such as the color of tableware can affect how a person feels about a meal. Having a good design concept can also help to lure in customers who want to take pictures – and share them on social media.

As part of your business plan, be sure to include elements of your proposed design. Include swatches of color, pictures of your inspiration, and anything else that may be relevant. For example, if you plan to cook food in a wood-burning oven, sending delicious, smoky scents wafting throughout the restaurant, describe that element in your business plan. If you want to include a wall of plants to attract Instagram Influencers, be sure to include that information as well. 

Although you may not have identified a specific location yet, it is important to include some details about where you plan to operate, as this will affect profitability. For example, if your goal is to provide to-go breakfast and lunch meals for workers, specify that you want to find a space near large office buildings or in a downtown area.

If you haven’t picked out a site for your restaurant, list the criteria that you will use to select a place. This may include information such as parking, square footage, availability of outdoor dining, accessibility to major highways, and foot traffic.

Market Overview

Before anyone can know that your restaurant is a good investment, they have to know about the market.  This section should include both micro and macro economic factors that influence profitability – everything from COVID-19 restrictions (macro) to direct competitors in your area. Describe each of these in detail, and address how you plan to overcome any challenges or differentiate yourself from other restaurants.

Target Market

In this section, you will describe who you think will eat at your restaurant. Will they be young or older? What is their average income? Talk in detail about who you think will patronize your restaurant – and why you think that your concept will appeal to them. For example, if you’re trying to appeal to a young crowd/ Gen Z , you may talk about how you plan to offer healthy choices, vegetarian options, and convenient delivery.

Service Style

We have moved beyond the basic restaurant service options of fast food and fine dining. There are a lot of different types of restaurant services now, from take-out only to fast casual to pop-ups. If there is anything unique about your planned service style, it should be included as part of your business plan. 

Management Team

One of the most critical elements of a successful business is the people who are running it. If you want investors to take a chance on your restaurant concept, you will need to show that you have the experience necessary to turn a profit. 

In this section of the business plan, introduce each member of the management team. Describe their work experience, both in the industry and in business generally. This will give potential investors a good idea of the likelihood of making money.

Business Structure

Before you open for business, you will need to establish some type of business structure – such as a partnership, an LLC, or even a corporation. Explain what business structure you have chosen and why you selected it.

Consultants

Behind every successful business owner is a team of specialists. No matter how good you may be at running a restaurant, you can’t go it alone. You will likely need a team of consultants – such as a lawyer, accountant, general contractor, or marketing agency – to truly succeed.

Investors want to know that you understand your limitations, and have planned accordingly. Listing your outside consultants shows that you have considered all of the various aspects of running a business. Be sure to explain the services that they will provide, why you selected them, and how much they charge for their services.

Marketing Plan

The success of any business is dependent in part on branding and marketing. You can have the most delicious food at the best prices around, and if people don’t know about your restaurant, they won’t patronize it. In this section, describe what you plan to do to market your business – such as developing a website, retaining a marketing company, establishing social media accounts, and even using branded paper bags for your takeout items.

Finally, it is time to get down to the nitty-gritty. How much is this going to cost? 

Most entrepreneurs will need the help of a financial professional to draft this section of the business plan. You will need to incorporate data points, such as labor cost percentages , average check amount, and how many meals you plan to serve each day, to determine whether your concept is financially viable.

An accountant can also help you make financial projections that should be included in your business plan. This may include a projected budget for capital, a break even analysis, and a pro forma profit and loss statement for the first 3 to 5 years of operation. 

Feeling overwhelmed? This may seem like a lot, but each of these elements is necessary if you want a solid business plan that will attract investors. Fortunately, there are a number of sample restaurant business plans available online for you to review:

• Specialty restaurant and bakery business plans
• Basic restaurant business plan template
• Small restaurant business plan
• Pizza shop business plan
• Fast food business plan
• Steak house business plan
• Café business plan
• Traditional restaurant business plan
• Fast-casual restaurant business plan

These samples can help you get a good idea of what you should – and should not be  – including in your business plan. If you are concerned about your ability to draft this type of document, consider reaching out for help. There are many writers and business professionals who have significant experience making business plans. Hiring one as a consultant can help make the process easier and less stressful for you.

Market Your Restaurant with Budget Branders

Writing a restaurant business plan is hard work. Marketing your restaurant doesn’t have to be. One of the easiest and most cost-effective ways to spread the word about your establishment is through custom branded disposable products.

Budget Branders offers high quality branded cups , bowls , bags , and more in quantities and at prices that make sense for small and medium sized businesses. As entrepreneurs ourselves, we understand the challenges that come from running a company – and we’re here to help.

If you’d like to learn more or to request a quote, contact us today by pressing the live chat button, or sending us a message online.

David Kranker

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How to Create a Restaurant Budget to Manage Finances & Costs

January 2, 2020 ben shabat.

If you own a restaurant, then you know how important it is to learn how to manage restaurant finances. Restaurant budgeting isn’t part of an a la carte menu – it’s an absolute must.

After all, if you don’t perfect your restaurant cash management skills, the industry can quickly chew you up.

Feeling the heat? Get your bearings with this in-depth guide on restaurant finance management.

What is a restaurant budget?

A restaurant budget is a financial limit that you determine is healthy and sustainable for your business.

Be careful not to confuse your restaurant budget with your restaurant sales forecasting, which is a prediction of how your sales will perform within the boundaries set by your restaurant budget.

Whether you need to purchase or lease equipment , recover your business after a disaster , get up-to-date on restaurant technology trends, or any other business expense – you’ll need to factor those costs into your restaurant budgeting plan.

That said, restaurant budgeting is not fool-proof; no matter how detailed your restaurant cash management plan is, there will eventually be unexpected costs that come up at some point.

Side note: When your restaurant is facing a financial squeeze, having access to same-day business loans can make all the difference. If time is less of a factor, take a few minutes to get familiar with the variety of business loans that are at your disposal. There’s no harm in staying prepared!

Why do I need a restaurant budget?

You need a restaurant budget for the same reason that you would lay out any budget: to be certain that you don’t stretch your finances out too thin.

If you don’t have a restaurant budget plan, then you’re essentially driving with your eyes shut. Maybe you have an idea of where you plan on arriving, but without a budget, your business is morely likely to crash and burn before reaching that goal. A restaurant budget isn’t just keeping your eyes on the road, but can act as a GPS to help you reach your destination.

Okay, enough with the analogies.

The bottom line:  You need a restaurant budget to ensure that your business is able to stay ahead of shifting operating expenses, keep earnings above expenditures, and keep the business growing. If you don’t have a restaurant budget, your business is operating on borrowed time.

Restaurant Budget Spreadsheet Example

Guide to creating a restaurant budget

If you’re not sure about how to get started with your restaurant budgeting plan, use the following steps to establish a foundation that you can then build on.

8 Step guide to restaurant budgeting:

1. Define your restaurant’s costs

The first step of how to manage restaurant finances is to know what your expenses are – for restaurants, specifically, those expenses can vary greatly. Here are a handful of potential costs that your restaurant may have on a normal basis:

• Administrative costs

Restaurant owners know that the costs they face from one month to the next will almost always vary – particularly when restaurants need to survive seasonal changes . That’s why it’s important to not only list where your restaurant is spending money but to also measure what the costs really are.

2. Calculate your restaurant’s costs

Whether you’re keeping old-school records with pen and paper or if you’re taking advantage of recent restaurant technology trends , tracking your restaurant’s costs is an essential step toward healthy restaurant cash management practices.

You should keep accurate records of what the expenses were, how much you paid, and what forms of payment you used. Calculating your restaurant’s costs in such a precise manner will help you determine what adjustments you should make when looking back at your totals at the end of each month.

3. Use restaurant sales forecasting

Evaluating your expenses at the end of each month is crucial, but so is restaurant sales forecasting. They say hindsight is 20/20, but that shouldn’t stop you from doing your best to predict what next month’s sales will look like. Why?

The reason you need to keep up on your restaurant sales forecasting is pretty straightforward – if you’re not making enough money to cover your base expenses (what is known as permanent working capital ), your business won’t last long. How do you create a restaurant sales forecast?

The most basic way to forecast restaurant sales is to look back at your sales records from previous years and find the average monthly sales, like this:

Sales difference from 2018 to 2019

You can then use the data you gathered about previous changes year-to-year in order to generate a restaurant sales forecast for the next year, like this:

2020 Sales Forecast

That should be a good starting point, but if you really want to get cooking, then you’ll need to keep much more precise records. Keep reading to find out how.

4. Track your restaurant’s sales

When you track your restaurant’s sales (and expenses, for that matter), you’ll find that using digital solutions is key. While there is software that you can use solely for tracking sales, it’s always better to use more comprehensive solutions – like restaurant POS systems .

The best restaurant point-of-sale systems have built-in KPI reports that give detailed records of metrics such as sales by item, sales by time of day/week/month/year, and so on. Those numbers will open up a whole new world of restaurant budgeting possibilities and can even help you create an ideal pricing strategy.

Once you have accurate records of your restaurant’s costs and sales, you can compare them.

5. Measure your sales against your costs

You’ve covered the fundamentals and now it’s time to start shaping your restaurant budgeting strategy. First off, you’ll want to use the profit margin formula to determine how much money your business is really making, after considering the expenses in relation to earnings.

The ultimate goal for any business owner is to be profitable – so if your costs are higher than your sales, you’ll know right away that there’s urgent work to be done. Of course, there may be occasions when your costs actually do outweigh your sales; for example, if you’re undergoing changes to scale up your business , there may be a month or two when your expenses are larger than usual.

In general, you’ll want to take the necessary measures to keep your sales higher than your costs. Regardless of what your current financial position might be, learning how to manage restaurant finances properly will position your business for continued success.

6. Optimize your restaurant finance management

There are three main ways that you can spice up your restaurant budgeting plan:

• Increase your restaurant’s revenue
• Decrease your restaurant’s expenses
• Use both approaches

To increase revenue, you’ll need to bring in more business and/or raise the prices on your menu. You can increase the volume of business by incentivizing existing customers to come back more often and/or by attracting more new customers with new approaches to advertising (e.g. Social Media Marketing ). Alternatively, raising your prices can be tricky and a bit risky if you’re not familiar with designing a pricing strategy – do your due diligence!

To decrease expenses, you’ll need to reevaluate your costs (See steps 1 & 2 above) and determine which of them you can change or even completely do away with. That could mean finding suppliers with better prices, shrinking the number of full-time workers (and replacing with part-time help), and so on. Be careful not to be too short-sighted on this step – it could be that decreasing your long-term expenses will require you to even replace a refrigerator that’s not working efficiently.

You may choose to double your efforts by both increasing revenue and decreasing costs. If that’s the case then you can avoid some of the financial strain by seeking a loan through Become . With the power of advanced technology, Become is able to make the business loan process quicker, easier, and more likely to end in funding for small businesses that have struggled to find funding elsewhere.

Side note: For restaurant owners, there are plenty of restaurant loans out there. But, if you know other small business owners that are in need of a boost to their finances, Become also has a wide variety of industry loans available for businesses in many different sectors.

7. Maximize your restaurant’s profits

Once you’ve balanced your restaurant budget, you can refocus your efforts on finding more and more ways to increase your profit. Gross profit and net profit often get mixed up, so be careful not to make that common mistake. It’s important to know the difference and how each measurement reflects on your restaurant’s overall financial health and stability.

Beyond the primary effect of bringing in more money, increasing profits has some secondary benefits as well. For example, if you seek out a loan through a bank or through alternative lending options , lenders will want to see a consistently strong net profit from month-to-month. The higher your net profits, the better it will look on your loan application and the higher your approval odds will be (though there are many other ways to beat challenging small business lending statistics ).

8. Maintain healthy restaurant cash management

Everything you’ve learned so far about restaurant cash management has been useful and important – but if you only run through it once and never revisit your restaurant budgeting plan again, you’ll quickly find that the benefits will be limited ( to say the least).

Your restaurant finance management efforts need to remain consistent if your goal is to maintain a stable and profitable business. One simple way to stay on top of your restaurant budgeting plan is to schedule regular monthly reviews of your budget so that you can make any necessary adjustments. That said, there should also be a more in-depth annual assessment of your restaurant budget where you look at the bigger picture of how your business performed over the year and reconsider your larger financial goals.

Hungry to get started?

You shouldn’t wait until your restaurant’s finances reach a boiling point! Avoid future challenges by getting your restaurant finance management skills up to par now.

No matter which way you cut it, each restaurant’s budgeting plan will be different from the next. So take the time to learn more about your own financial history and how it can influence your restaurant sales forecasting.

Plus, don’t forget to share this article with other restaurant owners who can make good use of the information provided here!

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How to create a restaurant budget?

Last updated on: February 14, 2023

Did you know that an average of 17% of restaurant owners shut down their businesses in their first year? Even though that doesn’t seem like a huge number, the restaurant business failure rate could be lower. 

To prevent such scenarios and ensure your restaurant thrives in the competitive market — you must make an effort to stay afloat in challenging times. 

The key to keeping a lucrative, long-lasting restaurant business is proper restaurant budgeting meant to help you control the rising business costs. 

Moreover, restaurant budgeting will keep you from overspending on unnecessary business activities, such as ineffective marketing campaigns or expensive menus.

To make sure you have an in-depth understanding of how restaurant budgeting works, in this blog post we will:

• Explain what restaurant budgeting really is, 
• Give you a detailed restaurant budget breakdown of expenses,
• Provide the necessary steps and tips for proper restaurant budgeting, and
• Clarify how restaurant budgeting and forecasting are related.

Table of Contents

What is a restaurant budget?

A restaurant budget is critical for the success of any type of restaurant because it helps in estimating whether the business will be profitable or suffer a loss. 

It also assists you in monitoring your expenses and revenue in order to see whether you’re meeting the budget benchmarks you’ve set — i.e., the revenue and expense targets for the upcoming year. 

Restaurant owners should be aware of the importance of creating a restaurant budget since it serves as a financial plan for improving business performance and maintaining profitability.

What is included in a restaurant budget?

A restaurant budget consists of 4 parts that business operators need to keep an eye on :

• Restaurant sales — Represent the total number of daily customers multiplied by your forecasted check average (total revenue acquired by sales of food, and beverages), 
• Prime cost — The sum of the cost of goods sold, and labor costs including wages, employee benefits, payroll taxes, etc.,
• Controllable income — Includes all the operating expenses such as food supplies, preventative equipment maintenance, utilities, rent, marketing, etc., and 
• Net income — The amount of money that you get after paying all the expenses.

What are the top 3 expenses of the restaurant business? 

The types of restaurant expenses vary depending on factors such as whether you’re leasing or owning the commercial space, the type of necessary equipment, the size of your operation, the location, and others.

However, the restaurant expenses you can expect are pretty much fixed and are related to:

• Food, labor, and rent expenses (primary costs), and
• Additional operating expenses (marketing and advertising, repairs and maintenance, daily administration, utilities, and legal and accounting fees).

Now, let’s delve into the three largest restaurant expenses categories a bit further. 

Restaurant expense #1: Food expenses

The food costs include three elements:

• Food cost percentage — The amount of money spent on food ingredients in relation to the revenue acquired from selling the menu dishes,
• Food ingredients — The substances that are used for preparing the dishes, and
• Food sales — The revenue received from the sales of the menu dishes. 

The food cost percentage indicates how much money the restaurant is making (or losing) on the sold dishes.

In other words, it is the amount of money spent on all the necessary ingredients to prepare the food served in the restaurant, and that has a direct effect on the profitability of the restaurant. 

Calculating food costs is important because it helps in determining whether food cost targets (i.e., the food cost percentage projected for a specific period based on the number of sold menu dishes) are being met.

There is no right food cost percentage, however, restaurant owners and operators should keep it from 28% to 35% of their total revenue . Keep in mind that the same numbers won’t apply to every restaurant — the exact percentage will depend on the type of food being served and operating expenses. 

Restaurant expense #2: Labor expenses

Labor is also one of the largest and most significant expenses of any restaurant business. Examples of labor costs mostly include employee-related costs, like:

• Salaries , 
• Benefits, 
• Payroll taxes, 
• Service commissions,
• Health care,
• Retirement plans , 
• Time off (sick and vacation days),
• Training, 
• Work uniforms, etc.

How to calculate labor expenses?

Calculating your labor expenses helps you determine the labor cost percentage — the ratio between your total revenue and labor costs.

The labor cost percentage can be calculated as:

• A percentage of sales — For instance, your gross sales are $800,000 and the total labor cost is $240,000. Divide the labor cost by gross sales and multiply by 100. 

$240,000 / $800,000 x 100 = 30%

The final number (30%) is your labor cost percentage (the total amount of money spent on labor costs against the total revenue).

• A percentage of total operating costs — Represent the ongoing costs related to the operation of the restaurant. If your labor costs are $12,000 per month and total operating cost is $19,000 per month, you need to divide labor cost by total operating costs.

$12,000 / $19,000 x 100 = 63%

You can also calculate labor costs by hours worked . This method lets you separate employees into different operational groups (servers, bartenders, cooks, etc.). The goal is to measure the cost per hour for each group. For example, if you have 7 cooks each working 40 hours per week and their average hourly wage is $15, here’s how to calculate cost by hours worked. You first calculate weekly hours worked by group:

Number of workers x number of hours worked = weekly hours worked by group

7 cooks x 40 hours each = 280 weekly hours worked by group

Next, you take weekly hours worked by group and multiply the number by an average hourly wage:

280 hrs/week x $15 average hourly wage = $4,200

Finally, to get an average cost per hour worked, you take total wages per week and divide the number by 52 weeks in a year:

$4,200 total wages per week / 52 weeks = $80.8

Restaurant expense #3: Rent expenses

Rent is a fixed expense that any restaurant owner must pay for the commercial space in which they’re operating their business. 

How much you’ll pay per month for your commercial space will vary based on:

• The location (the total cost of renting a space may vary largely between cities, areas within cities, and industries),
• The condition of your space, and 
• How much square footage you lease. 

Bear in mind that the total occupancy costs are not limited to base rent only but also include expense reimbursements such as:

• Common area maintenance (CAM) fees, 
• Real estate taxes, 
• Personal property taxes, 
• Insurance on building and contents,
• Depreciation, and 
• Amortization.

According to statistics, the total occupancy cost should be anywhere from 6% to 10% of your gross sales . However, the exact numbers will depend on your unique business situation.

How to calculate rent expenses?

Determining the right rent fee for your restaurant is important for business success. 

So, if the price per square foot is $15 and the total square footage of the unit is 2,500 square feet, you can calculate the annual gross rent costs like this:

Rentable square feet x Each unit of usable square feet available

$15 x 2,500 = $37,500

Next, to calculate the monthly rent costs, you simply divide the annual gross rent costs by 12:

Annual gross rent /12 months

$37,500 / 12 = $3,125

💡 Clockify Pro Tip

If you’re looking for a more accurate way to calculate your paycheck, it’s time to understand the difference between gross pay and net pay first:

• Gross pay vs. net pay — Definition, calculation, key differences 

Why is establishing a precise restaurant budget important?

The answer is pretty straightforward — you need a restaurant budget because it serves as your guiding roadmap in spending money wisely, being aware of how your business is operating, and making sure you meet your financial goals. If you don’t have a restaurant budget plan, you have no control over your business, and you’re more than likely to fail. 

Here are the top benefits of establishing a restaurant budget.

Benefit #1: Restaurant budgeting helps you keep track of income and expenses 

Monitoring your income and expenses will help you make informed decisions about how to allocate your resources . Moreover, measuring your sales against your costs will help you determine how much money your restaurant is making. 

Having a clearly defined budget will help you figure out whether your restaurant costs are higher than your earnings. If that’s the case, you might need to increase the prices on your menu or find alternative marketing strategies to attract customers. 

All in all, tracking your income and expenses will make sure you stay on top of your finances.

Benefit #2: Restaurant budgeting allows you to make proactive decisions about growing your restaurant

To retain competitive advantage and be successful, managers need to quickly adapt to change in this rapidly changing business environment. 

With restaurant budgeting, you’re becoming a manager who proactively anticipates challenges and takes the necessary steps to prevent them from arising in the first place. 

Moreover, proactive restaurant managers take account of the future, rather than focusing on the current business situation. This includes making proactive decisions about: 

• Menu updates,
• Marketing campaigns,
• Customer trends, and
• Technology.

Benefit #3: Restaurant budgeting stops you from overspending 

Budgeting gives restaurant owners a clearer picture of the costs that may arise during business operations. Moreover, budgeting also helps them plan and prioritize expenditures. 

A proper restaurant budget plan will eliminate overspending on expenses like:

• Janitorial supplies, or
• Marketing campaigns. 

For example, it might seem very tempting to overspend on marketing, especially if you don’t know a lot about it. In the urge to drive more profit for your business, you might even hire a costly marketing agency or pay for expensive ads. 

However, it’s important to know that there are other low-cost marketing methods you can try to drive traffic in the long run (organic reach, low-cost social media ads, blog posts, or flyers). This way, you will save money for primary restaurant costs, such as food and labor.

How do you budget for a restaurant?  

As stated above, creating a restaurant budget is crucial in order to stay on top of your finances and keep the business running smoothly. There are a few steps to creating a restaurant budget that will work for your business. Let’s dive deeper into each of the steps for creating a realistic budget for your restaurant. 

Step #1: Start with the cost of rent

Starting a restaurant is a challenging task because it requires a great deal of effort and resources. 

And it all starts with determining the real costs of operating a restaurant — first and foremost, the cost of rent.

We reached out to Izzy Kharasch — a president at Hospitality Works and a restaurant consultant with over 30 years in the field of food service management in the US and Europe — to tell us more about how the cost of rent dictates the amount the restaurant should earn to be profitable:

“ I like to build the first draft based on the rent/mortgage. I have found that successful businesses have a rent of 6% to 8%. Using our 4,000 sq. as an example, if the rent is $7,000 per month then the business must generate $1,200,000 to be profitable.”

If you’ve been operating your restaurant for a certain period of time, you can use data from previous years to help you project the numbers for the next year.

Step #2: Keep a detailed inventory of all current expenses and revenue streams

As we already mentioned, plenty of costs associated with running a restaurant business are already fixed, which means they can be easily predicted — because they stay the same every month (e.g., rent or insurance).

However, regarding restaurant expenses, you will also have to deal with:

• Variable costs (food or repairs), and
• Semi-variable costs (employee salaries or utilities).

These types of costs are harder to predict thus making the budgeting process even more difficult.

Luckily, you don’t need a financial background to monitor these expenses — keep books of what you spend on a daily, weekly, or monthly basis. For example, recording all your expenditures and income in a spreadsheet can help you calculate the total costs for the current month and see how much profit you have earned in a given time period.

Tracking your expenses doesn’t need to be hard. Here’s how to do it:

• How to keep track of expenses

Step #3: Analyze and compare your sales and costs

Comparing your monthly expenses and sales will give you a clearer picture of your business’s financial position. 

It will also help you determine:

• The general profitability of your business, and 
• The profitability of specific menu items or specific days of the week. 

Tracking the cost vs. sales ratio is very important, especially in today’s volatile environment because it gives you greater control in running your business successfully.  

When analyzing your cost and sales figures, you will easily notice if the costs surpass the sales and whether you need to make adjustments. 

Additional tips for creating a restaurant budget 

If you are looking for more tips on creating a restaurant budget, here are a few pointers. The following tips will ensure a smooth operation of your restaurant business.

Tip #1: Revise the numbers and analyze your performance 

Operating a profitable restaurant can be a daunting task. In fact, it takes a sheer amount of work to drive profit. 

As your restaurant business grows, it’s becoming crucial to reevaluate its performance and subsequently decide how to proceed in order to achieve profitability. One way to analyze your restaurant’s performance is to look at existing company reports. This will give you an idea of how and where to start and which areas to focus on. 

Making the time to regularly evaluate your business performance can help you spot anomalies along the way, and is valuable to your bottom line. You can’t always be sure how your business is doing until you analyze your actual results (budget and expenses) against your estimated results (estimated budget or expenses).

Izzy Kharasch shares two quick examples about creating a restaurant budget using the same $1.2 million (the amount we have to generate to keep the business profitable).

“Let’s take the $1.2 million and divide that by 52 weeks ($1.200,000/52=$23.076). Thus, we must bring in $23,000 per week. If we are a fine dining restaurant with a check average of $70 per guest then we must bring in 330 guests per week ($23,076/$70=329.65). If we are a casual restaurant with a check average of $40 per guest then we must bring in 576 guests per week ($23,076/$40=576). The key to success is running the numbers and really analyzing your position.”

So, you will need to record important business metrics, including: 

• The number of guests, 
• Number of weeks, 
• Check average per guest, and 
• Price per square foot.

You can organize all these numbers (related to your costs and profits) into spreadsheets or a specialized accounting software for more accurate tracking.

Tip #2: Make adjustments as necessary if costs surpass sales

Unfortunately, many restaurant operators realize that they are losing money late because they’re not paying enough attention to the operating costs, such as:

• Salary and employee benefits, 
• Rent or property purchase, 
• Advertising and marketing,
• Property taxes,
• Facility or equipment maintenance, and
• Accounting and legal fees.

Therefore, it pays off to get a deep understanding of how your costs are doing to see how they’re affecting your business profitability. 

To run a successful restaurant business, it takes constant monitoring and adjusting whenever operating costs exceed the amount of money your business is making. After all, your restaurant needs to be making profit, not losing money.

If your operating expenses surpass the sales figures, it’s more than clear that you must make changes to your restaurant budgeting plan, thus, you can either choose to:

• Increase your sales (acquire new customers, boost the number of existing customers, or increase menu prices),
• Reduce your costs (find more affordable food or beverage suppliers, reduce the staff, save on utility bills, or track your employees’ hours ), or
• Combine both strategies .

Regardless of which strategy you choose, it’s important to be consistent. 

Tip #3: Use restaurant budgeting software to help with financial tracking

When you are running a restaurant business, there are a lot of day-to-day processes you need to look for, including: 

• Accounting , 
• Budgeting, 
• Inventory management, 
• Order management,
• Payroll planning, 
• Employee attendance,
• Cost analysis, and 
• Employee scheduling .

But, luckily, restaurant management software like Clockify can help you stay on top of all restaurant operations. 

Clockify has a time clock option for mobile or desktop devices. Each restaurant employee can log in and clock their working hours via a timer. They can clock in (enter) the time when their shift begins and clock out once they are finished with work. 

Moreover, having all employee’s hours properly tracked in one single dashboard allows you to better calculate employee payroll. This, in turn, ensures an uninterrupted workflow in the restaurant because employees will be accurately compensated for working specific days or times.

You can also see who’s available and who’s busy, which will help you delegate any additional tasks that may appear during shifts.

Tip #4: Use a restaurant budgeting template

Creating a restaurant budgeting template from scratch can feel stressful, especially for new restaurant owners. 

This is where our free downloadable template comes in handy. 

We’ve created a restaurant budgeting template that you can download and use anytime you need. This template will give you a basic, visual plan of the potential and actual income and expenses, so that you can keep updated with the financial situation of your restaurant.

⏬ Download a free restaurant budget template 

The template includes separate calculations for your actual income versus your forecasted income (plus the difference between the two) in an easy-to-use Google Sheet. You will also find sections for different types of operating expenses including: 

• Labor, 
• Food, 
• Rent, 
• Utilities, 
• Marketing, 
• Repairs and maintenance, 
• Technology, and others.

All in all, Clockify restaurant budgeting template will help you:

• Keep track of your restaurant expenses,
• Compare your budget against your expenses, 
• Determine whether you’re budgeting correctly,
• Set financial goals for the future,
• Improve your spending habits, and
• Maximize your profits.

How to forecast restaurant sales? 

Restaurant budgeting and sales forecasting guide business owners in running a successful restaurant. 

In fact, smart sales forecasting can help you find the right balance between your restaurant’s sales and costs. A combination of both methods powers you to determine possible cost leaks and eliminate them before it’s too late.

Overall, restaurant sales forecasting helps you with:

• Optimizing inventory management, 
• Informed planning about staffing, hiring, and marketing,
• Profit projections for the upcoming period of time, and
• Goal setting based on the predicted profits and costs.

So, how do you conduct a restaurant sales forecast for an existing restaurant? We’ll explain in the following lines.

Learn how to estimate future sales revenue to see whether you’ll hit the expected target by using the following forecasting models:

• 11 Types of forecasting models

Tip #1: Calculate your restaurant’s daily capacity 

We’ll try to estimate the number of customers per day by using an example. Let’s say that your restaurant has 12 tables suitable for sitting 4 people each. 

In an ideal situation, all of these 12 tables would be full during a certain hour (if it takes about an hour to have lunch), so we can estimate 48 (12 tables × 4 people ) daily lunch servings on average. So, you can predict that the kitchen will be serving 48 customers.

If each table serves 2 parties (a group of restaurant guests) each day, this means that an entire lunch time service would bring in 96 customers. 

4 customers x 12 tables x 2 turns = 96 customers

If the average lunch price is $30 per person, your restaurant’s sales forecast for a busy afternoon can be calculated like this:

Sales forecast = table count x seat allotment x average lunch price x table turn

12 tables x 4 guests per table x $30 per guest x 2 turns per night = $2,880

So, at full capacity , your restaurant would expect food sales of $2,880. However, your business won’t always be operating at full capacity. By implementing the same process, you will be able to estimate the sales for less busier days, half capacity, or any time period you like.

Tip #2: Monitor past sales data 

Analyzing past sales performance will help you in identifying fluctuations in different time periods and determining the number of sales during a given year. 

To make sales forecasting easier, you can use predetermined metrics from your point-of-sale system (or POS, a software that helps your restaurant accept payments from customers and manage sales transactions), which will give you an idea of your restaurant’s sales history. 

Some POS systems even have inventory management software which allows you to see:

• What’s left in stock, 
• Which orders are coming in, and 
• When to order more items. 

Furthermore, by looking at past data, you can better understand your restaurant’s sales trends, including:

• What meals your customers like the most at your restaurant, 
• What days of the week are usually the busiest, and
• What dish is the most ordered.

Then, you can forecast future sales based on these trends and prepare for the upcoming period.

Tip #3: Pay attention to external factors that may impact your restaurant profit

Many external factors can influence your restaurant business, including: 

• Social (e.g., changes in consumer preferences or behavior that might influence restaurant sales),
• Economic (e.g., changes in tax rates, unemployment, interest rates, or inflation),
• Political (e.g., new legislation that affects businesses’ rights such as consumer, employment, or intellectual property laws), 
• Technological (e.g., advancements in automation, e-commerce, and digital media), and 
• Competitive factors (e.g., the influence of the competition from changes in price, product, or business strategy).

All of these factors can shape the business environment in which the restaurant operates and affect how it plans and performs.

Even though you can’t control their impact, you should know that they can still have an influence on your sales. Thus, to get a more accurate sales forecast, it’s important to analyze the ongoing situation. For example, you can monitor your competitors’ performance and strategies to see how they’re doing in the industry. 

In times of economic uncertainty, restaurant owners should also get ready for significant economic changes that can hit their future sales. This means closely monitoring: 

• Past or current price fluctuations, 
• Rising inflation, and
• Minimum wage changes.

All of this information will help you make data-driven business decisions. 

However, take in mind that you’ll need to revisit your forecast at least once a month and make adjustments if necessary. For example, if you notice that your competitors are selling food at significantly higher prices, you may want to revise your pricing strategy to reflect a higher unit cost. 

Final words: Restaurant budgeting is the key to business success

Creating a solid restaurant budget can be a daunting task, but it’s always critical for business success. 

With restaurant budgeting, restaurant owners and managers will be able to:

• Establish an outline of how the finances will be spent, 
• Make better spending decisions, 
• Create a cost effective food and beverage item price list, and most importantly,
• Yield the highest profits to grow the business. 

Moreover, restaurant software is also an essential tool that helps owners and managers create a restaurant budget. Implementing it in your day-to-day operations will help you be more efficient and organized, boost customer loyalty, and lower costs.

Restaurant owners, regardless of whether they’re new in the business industry or have been around for a while, need to secure a well-planned and documented restaurant budget plan that will guide their financial strategies and decisions.

✉️ Have you ever created a restaurant budget? Or maybe you’ve done an effective restaurant sales forecast? Feel free to share with us some tips for creating a restaurant budget by writing to us at [email protected] for a chance to be featured in this or one of our upcoming articles. Also, if you liked this article, share it with someone who might find it useful.

Aleksandra J. Churlinov is a productivity author and researcher at Clockify. With the ability to work remotely for the past couple of years, she’s able to create a flexible schedule and take care of work and personal responsibilities. In her previous career, she explored various writing topics, from real estate to health and lifestyle. Fueled by her passion to understand every aspect of time management and productivity, she’s always eager to build her knowledge and stay tuned with the latest time management trends and techniques to help you organize your day and prioritize tasks in order to improve your work-life balance.

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10 Low Budget Small Restaurant Design Examples

Are you a restaurant owner looking for ways to design your restaurant on a low budget?

If so, you will want to check out these ten small restaurant design examples.

While the food you serve is the most important element in your restaurant’s success, the importance of well-chosen restaurant decor is not to be underestimated.

An inviting and elegant ambiance will make your restaurant memorable. A memorable restaurant attracts repeat customers, which is crucial for a small restaurant to succeed in the longer term.

If you are designing a small restaurant on a budget, you can still achieve a beautiful restaurant interior – you’ll just need to be a bit more creative with your restaurant decor ideas.

You may not be able to get fancy furniture and expensive decorations, but if you know what you’re doing with the layout, lighting, walls, and seating, you’re halfway there to create a beautiful and functional space.

So, whether you are just starting out or looking for some new ideas, be sure to look at these inspiring examples.

1. Be Smart With Your Restaurant Layout

The restaurant layout is the single most important factor in your low budget small restaurant design.

Many small restaurant owners try to maximize a small space by using all available space, which can result in a crammed layout that’s uncomfortable for the diners and waiters alike.

Avoid the temptation to put in as many tables as you can. Instead, let the layout breathe a little, leaving at least five feet between tables.

You also may want to reconsider the traditional row-by-row layout. Instead, try to utilize as much of the space along walls as you can.

The easiest way to achieve this is by lining the perimeter of your restaurant with booths or tables, then placing the remaining tables inside a square space in the center of your restaurant.

This will leave corridors for staff and diners to move in and out of the kitchens and restrooms.

Alternatively, consider placing one large communal table at the center of the restaurant and smaller tables along the walls.

This is a small restaurant layout used in some European restaurants and is surprisingly effective in smaller spaces.

Think of it this way: because you aren’t spacing out multiple tables, you are covering less floor space but are still able to sit the same number of people.

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2. Pay Attention to the Lighting

Well-positioned lighting can make or break your low budget small restaurant design, and that’s the truth.

While there’s nothing wrong with functional spotlights, you can create a more exciting atmosphere with pendant lighting, wall sconces, or individual table lamps.

Or combine all three to create pockets of light throughout your restaurant for an elegant effect. Vintage table lamps with fabric shades can be bought at local antique stores and markets.

Or, if you prefer to keep it simple, you can just add individual tealights to each table. It’s a tiny touch that diners everywhere like for the instant intimate effect it conjures up.

2. Think Beyond Plain Walls

Small space restaurant interior advice often recommends a minimalist design with white walls. However, this approach can actually make your restaurant look and feel even smaller.

Plain white or beige walls tend to look great in large, tall-ceilinged spaces. If you are trying to create an elegant and inviting atmosphere in a small space, consider painting the walls a darker color for a cozy or dramatic look.

Charcoal, dark red, teal, or dark blue can work very well in small restaurant spaces. Pair with velvet or leather furniture in complementary colors for a cozy, luxurious vibe.

Consider going bold in a small space if your restaurant serves unusual dishes and/or world cuisine.

A vibrant emerald green tends to work well in restaurant interior design, and red, orange and yellow are appetite stimulants.

Just make sure to avoid using an overly bright shade of red or yellow, as these are perceived to be aggressive colors by many people.

Finally, if you like white walls, consider enhancing them with bold prints. You can hang one colorful print per wall if you are on a tight budget or create a gallery wall with many prints of different sizes. Vintage prints can be bought very cheaply at antique stores and local markets.

3. Use Mirrors to Make the Space Appear Larger

Mirrors are a restaurant designer’s best friend. We all know that lining a wall with a mirror can make a space appear larger.

However, in a restaurant, a few well-positioned medium-sized mirrors typically work better than floor-to-ceiling ones that can be distracting for diners and difficult to clean.

If you really want to experiment with a large mirror, dedicate one wall for it and ensure that the wall doesn’t have any tables beside it.

To reduce any glare from overhead lighting, consider a textured mirror, a mirror with a sprayed-on color coating, or an antique mirror. The imperfections will add to the character of your restaurant and help create a softer look.

4. Add Character With Vintage Furniture

Speaking of character: don’t be afraid to add personality to your small restaurant design with vintage furniture.

Not only is it much cheaper to buy than brand-new furniture, but it’s also an easy way to create a restaurant space that’s completely unique and memorable.

Vintage furniture can be bought in bulk from eBay or from local markets and vintage sellers, although you may even have luck at a local yard sale or market.

Our top tip: If you can, always choose wood furniture rather than metal or plastic. Wood is more elegant and creates a warm, family-run atmosphere in a restaurant.

Just make sure to check all tables and chairs for steadiness. Discard and replace any chairs that wobble and/or creak, as diners tend to dislike them.

5. Enhance Your Low Budget Small Restaurant Design with Unique Decorations

While a specific cuisine or restaurant theme will make it easier to pick out decorations, only your imagination is the limit to what you can use to decorate the space.

Start with quirky salt and pepper shakers that can be bought cheaply at vintage stores. Then add a few interesting objects that match the overall color scheme and decor of your restaurant.

This can be something as simple as a few decorative ceramic plates on the walls, a large vase, or something more unusual if you serve contemporary food.

Trust us: if your diners remember your restaurant thanks to a fun and unique decorative scheme, they are more likely to return.

6. Invest in Quality Tableware

This a major point for restaurant design of any type and size: get the best quality tableware and linens you can get.

This includes plates, cutlery, and napkins. Even if you are running a tiny pizza restaurant, you will be amazed by how much diners appreciate using a real cloth napkin and a nice porcelain plate.

Although napkins will require a higher initial spend than disposable ones, they will last a long time. You will, of course, need access to a washer and dryer and will need to use bleach to keep your napkins and/or tablecloths clean.

Good-quality tableware can be got cheaply at major retailers and at Amazon Business .

A top tip: if you are serving wine in your restaurant, invest in wine glasses if possible. While some diners don’t mind drinking wine from water tumblers, many still prefer traditional wine glasses and appreciate when the wine is served in them.

Contrary to popular belief, wine glasses don’t have to cost much more than regular glasses, especially if you’re buying in bulk.

7. Restaurant Wall Design – Get Creative with Art and Window Treatments

If you are running low on funds after investing in your tableware and still haven’t settled on the design for the rest of your restaurant, consider commissioning a local artist to paint you a wall mural.

Murals and wall art are memorable and one-of-a-kind works of art; you will not need to pay much for one. Plus, you will be supporting a local artist.

If a mural doesn’t fit with your restaurant theme, you can add colorful curtains or drapes to the windows to create a character look.

A heavier fabric will harmonize with darker furniture, while a lighter, gauzy curtain will work if your restaurant is light and bright.

The best way to buy curtains if you are on a budget is by contacting a local textile seller or curtain maker and having them made for you.

8. Draw on the Power of Plants

Potted plants add a homely charm to small restaurant designs and don’t cost much at all. Of course, if you buy specimen plants like mature olive trees you will need to make a bit more of an investment, but young tropical plants and cacti can be bought cheaply and will grow into larger plants over time.

Line the windows with them for a cheerful, natural look, or place some on tables if you’re going for a botanical restaurant theme.

You will need to remember to water the plants and ensure they get enough light – wilting and dry plants are not a good look for your restaurant.

Cacti and succulents may be your best bet if you think you won’t have time to maintain your plants, as they generally are very low maintenance and can go weeks without water.

Indoor plants can be bought at your local garden center or plant nursery. Avoid buying your plants from supermarkets as they won’t be as healthy and will be sold with a markup.

9. Sensory Branding With Good Sound and Scents

Sound and scent may not seem like obvious components of low-budget small restaurant design, but sensory branding can add substantially to restaurant’s ambiance.

Use both carefully, as they can enhance or disrupt the dining experience depending on how you use them.

Light background music can enhance the atmosphere in a small restaurant, but overly loud music will hinder conversation and make diners uncomfortable.

In fact, listening to music while dining has been shown to increase people’s food consumption and meal duration. ( Source ).

To begin with, you may find it helpful to ask your customers whether they like the music levels. Position speakers carefully, ideally avoiding the spaces right above the dining tables.

If you want to attract a bigger crowd on Fridays and weekends and have even a small corner to spare, consider hiring a local musician to create an inviting soundscape.

An instrumental band or a jazz singer may work better than a loud band. If yours is a restaurant with a specific world cuisine, then adding live music that matches the cuisine will create an authentic atmosphere diners will love and want to come back for.

A pleasant fragrance can enhance the dining experience, and according to a study, people stay as much as 44% longer in businesses that smell good. (Source).

But be wary of very strong scents that jar with the flavors of the food you are serving.

A nice essential oil diffuser can work, but avoid oils that smell too medicinal. Instead, go for light floral or fruity scents.

World-themed restaurants can consider burning incense, traditionally used in many Asian restaurants, but less is more here, too: just one stick of a light incense blend will be enough.

10. Add Fresh Flowers to the Tables

Finally, don’t underestimate the joy fresh flowers bring to a small restaurant’s interior design.

You don’t have to spend a huge amount of money on expensive bouquets: simply placing a single fresh flower on each dining table shows your diners that you care about them and your restaurant.

Consider commissioning a floral centerpiece from a local florist if you want to add a bit more flair to your restaurant design.

They’ll be able to put together a display that uses seasonal fresh flowers and plants that will last several weeks without needing a replacement.

Your restaurant menu, logo, and signage can all be incorporated in the overall design of your restaurant interior design. For more inspiration see the following posts:

• 55 Examples of Restaurant Menu Designs for Inspiration
• How to Design a Restaurant Floor Plan (+ Layout Examples)
• 35 Creative Restaurant Branding & Design Examples

Key Restaurant Interior Design Takeaways

These simple low-budget small restaurant design ideas will help you achieve the small restaurant space of your dreams.

Start with the layout, the seating and lighting, and the walls. Then, add some simple but quality tableware and individual decorative touches to your restaurant scheme.

You will be pleasantly surprised by how big a difference these easy additions will make to your business, delighting your customers, who will want to come back again and again.

Related Posts:

• 34 Best Restaurant Marketing Ideas & Promotions
• SEO for Restaurants: Simple Tips to Get Found on Google
• 35 Creative Restaurant Branding & Design Examples

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Low Budget Marketing Ideas for Your Restaurant

Competition in the food service industry is fierce and even more so in this economy. Much like in most businesses, restaurants are not very forgiving towards failure. As a small business/restaurant start-up owner, you have dreams and ambitions for success but may currently lack the finances for expensive advertisement, unlike your competitors who have been operational a lot longer. To compete on the same level but on a lower budget, you will have to market smarter which requires extensive research on low budget marketing costs for small businesses along with a small restaurant business plan.

Prioritizing Your Goals

There are myriads of restaurant marketing ideas to use and execute but you need to find an approach that works best for your business. In efforts to attract new customers and increase your cash flow, the first thing you may think to do is to send out emails or hire a consultant. While these restaurant marketing ideas may be good and effective, your competitors are already using them and these concepts can be very pricey. You may struggle to find investors at the moment but you can rest assure that there are budget friendly restaurant marketing ideas that will work in your favor to help fill for your bar area as well as bar stools and restaurant booths for your dining room. Ensuring consistent daily sales should be your primary focus because they will determine your weekly, monthly and annually average profits.

Determining the Average Restaurant Marketing Budget

If you weren’t driven by competition to succeed, you would have never considered working in the restaurant business. As it is with most industries, competition in the restaurant business is fierce. Even if you are a novice restaurateur, you can lead the pack and remain relevant in the digital centric world we live in with a well thought-out marketing and advertisement plan. If your budget allows, you can recruit a reputable digital agency partner to help you with your restaurant promotions and sales. But if you don’t have the budget to spend on advertisement right now, you need to know how much you can spend on restaurant marketing and where.

There is no one size fits all when it comes to the cost of marketing budget. While a restaurant marketing budget typical covers the cost of advertisement, public relations and sales promotions, expenses vary based on the size of the restaurant, its annual sales and how much and often your competitors are advertising. If you are just beginning to open up your very first restaurant, you may need to devote your budget to marketing. Many new businesses invest between 20 to 30 percent of their finances in marketing during the first two years. If you are purchasing a well-established existing business, however, you may only need to allocate 7 to 10 percent of your revenue to marketing. This budget should be split between brand development costs and promotion costs .

Calculating Percentage of Sales to Draw a Business Plan

The percentage of sales earned is the most common method to base your marketing budget on. You can base your calculations on sales units, past sales, or projections for future sales. The advantage of this method has for your business is that your marketing budget will decline in response to a slow quarter. While it is recommended to allocate 5 to 7 percent of your sales to advertisement, you should consider using a more precise calculation. You would first need to calculate 10 to 12 percent of your annual projected sales and then multiply each number by your gross markup percentage – the ratio of your product costs to your selling price. Once you have made those calculations, you can next deduct your rent or mortgage payment from each number. The remaining balance represents the amount of cash you should set aside for your restaurant marketing budget.

Once you’ve already established a budget, all you have left to do is to develop a small restaurant business plan. In fact, your marketing budget should be an integral component of your business plan; outlining costs of accomplishing marketing goals within a certain timeframe. A business plan and budget does not need to be fixed or inflexible. At times, you may find yourself having to throw in an unplanned campaign or event. Subsequently, knowing whether your spending is helping you fulfill your goals outranks in importance to sticking to your budget. The purpose of a business plan is to measure your spending as well as the impact sales activities have on your bottom line. A plan enables you to compare tactics and analyze seasonal effects on restaurant sales. Marketing plans should be maintained on an annual basis at minimum and reviewed as well as updated when launching a new menu item or when the landscape changes.

Knowing What Your Objectives Are

You may be a restaurant brand entering the market for the first time or a veteran looking to increase your restaurant’s bottom-line. But one thing is certain though. You can’t chart a marketing budget, or plan for that matter, without having goals. Such hopes, desires and objectives can be:

• Generating awareness of your restaurant brand .
• Increase foot traffic including repeat visits.
• Entice first time visits to your restaurant.
• Promote new menu items.
• Encourage customers to order online.
• Get diners to subscribe to your restaurant email marketing list
• Win a James Beard Award .

While you might be overwhelmed by the broad list of goals you feel are crucial to your restaurant marketing, perhaps you should prioritize with the first 3 objectives in that list. Don’t bite off more than you can chew and make sure to address the entire list from the start. Hence, clarifying your restaurant’s objectives can make your marketing efforts profitable.

Getting Active on Social Media

If you are not actively promoting your restaurant’s website and business online, you may want to reconsider. Social media is thought to give small/independent businesses a louder voice. In other words, it’s nearly impossible for you as a small restaurant owner to successfully compete with other restaurants without a strong social media presence . There are a range of social media platforms to choose from but you are not required to use all of them. Facebook , Twitter , Pinterest , and Instagram tend to be effective online marketing tools which many restaurants use but ultimately you should find a network that best suits your brand.

With social media, you can quickly get to know the kind of audience your brand caters to, learn more about your industry, and discover a social marketing technique that works best for you. But the only way to differentiate your restaurant from your competitors is only share relevant information on these social channels. Your relevance is appraised by the quality of content you generate and share on these networks. Visual content is especially in high demand and restaurants with a strong social media presence as part of their restaurant marketing plan are the ones that are most prosperous. And with social media marketing strategies being the driving force of sales and traffic in today’s world, discounting social media would be suicidal for your business as the competition in the food industry continues to intensify.

Engaging with Food Bloggers

When you are a new restaurant, generating reviews and hype about your business on your own may be difficult enough. Approaching a food blogger to help you bring media attention to your restaurant seems very daunting. Inviting bloggers to dine at your restaurant for a free meal or appetizer and have them critique their experience is a great way to get online press. Some bloggers may be unwilling to accept your offer but the more persistent (without being aggressive) you are the better chances you will have of receiving positive feedback and piquing more interest from viewers online.

Many prominent food bloggers have big followings and grabbing their attention can have a tremendous impact on your restaurant. Although you can’t outright ask them for a positive review as that would be dishonest, it’s perfectly fine to ask them for their objective input of your restaurant. Even just a small write up or the mere mention from a celebrity blogger can be advantageous for your promotional efforts.

How to Start a Restaurant Business at Low Budget?

People with good culinary skills tend to tell a story through the dish they are serving, and stories tend to charm people. If you are a hobbyist chef willing to improve and monetize your skills at a minimal budget, then you have landed in the right place.

Here, we will tell you everything you need to know about the process of how to start a restaurant business at a low budget.

So dive in to make the best out of your marketing, finance, logistics, human resources, and risk management strategies through an easy approach.

Why Should You Start a Restaurant Business?

Every restaurant owner, at some point before starting their business, has asked themselves this one question. Surprisingly, all of them conclude to different answers.

Over time consumers have grown busier and busier. Today everybody loves a delicious chicken meal without having to skin and cook the chicken. The hype for prepared food has skyrocketed and turned into a necessity among most.

Here are some of the reasons shown by restaurant owners who started on a small scale.

• Given that you have the proper set of skills, a carefully selected niche, and a unique menu style to offer, this is your perfect place to leech profits off of your talent.
• Sales and consumption in the food business are comparatively much larger than most other products combined.
• Production of food products and dishes of a common niche is comparatively easier than most products, although this does not apply to high-end restaurants.
• Revenue maximization becomes easier gradually yet exponentially.
• Necessary pieces of equipment and ingredients for restaurant startup are going to be easier for you to acquire and manage.
• Food services such as catering require a low startup cost and bring in significantly more profit per order.

And this brings us to our next big question.

How Much Money Do We Need to Start Our Restaurant Business?

Despite being one of the widely asked questions by entrepreneurs, it has no one right answer as valuation is variable upon various factors. The amount becomes entirely subjective to your resources. The proper way to project the money you will be spending is to calculate the cost per square foot.

The elements of cost calculation are renovation, rent, décor, equipment, and build-out cost, most importantly, the cost of food items being served.

Setting a target before stepping into the game is important. Analyze your potential growth in terms of the competition and probable obstacles you’ll be facing as soon as you open your restaurant.

Here we have compiled for you some tweaks in restaurant business policies that are modified to adjust and support the low budget.

Business Plan Factors That Influence a Cost-Efficient Restaurant Startup:

Let’s go over the factors that are important for a cost-efficient restaurant startup.

Finding a Suitable Location

Your starting location doesn’t have to be a commercial kitchen. It may be the one from your home. But if you have enough capital, then go for ‘renting and renovating’ instead of ‘buying and building’ an empty place because it’s significantly expensive.

Inquire about the history of the location. Focus on the traffic and facilities it provides. Getting a good traffic location with a low budget is difficult, so choose accordingly. Do not spend all of your money trying to get that one location that everyone says to be hot and booming.

If you are going for a commercial kitchen, study the layout of the production and dining area thoroughly. Start at the bottom and gradually work your way upwards.

Cutting down the Equipment Cost and Reduce Inventory Spoilage

Buying new equipment for your new startup may sound exciting. A cost-efficient alternative to this is purchasing second-hand kitchen equipment at auction or leasing.

Most of your inventory and ingredients have a shelf life. Ask your vendor to make multiple deliveries to ensure freshness and reduce spoilage. 

Compensating for Your Budget through Unique Concepts

Develop unique and smart sales policies. Setting the right theme and niche is crucial for attracting potential long term customers. Your concept of service must be unique for your restaurant to flourish rapidly.

Remember that you are not the only one trying to start a restaurant in a cost-efficient way, so bring something new to the game.

Calculating the Cost of Goods Sold and Professional Fees

The ‘cost of goods sold’ (COGS) is the direct cost of producing that product. In your case, the product may be anything from a breakfast dish to a pack of cookies . COGS includes the cost of materials and labor as well. Ideally, that amount is 15-30 percent of the selling price in profitable businesses.

This means your food should be lucrative and exciting enough so that you can charge at least 3 times of what your actual cost was.

Start with a substantial selling price. That way, when you grow, you don’t have to suddenly raise the prices just because the costing has gone up. A sudden rise causes lots of customers to fall off. Avoid making this mistake at all costs.

If you are thinking of hiring a waiter, a chef, or an extra hand to take care of your accounts, calculate the fees you are going to be spending there before budgeting.

Capital Collection Tips

The capital collection is one of the most vital aspects of starting a restaurant. Let’s know about it.

Self Funding

If you have the capability, funding your own venture is one of the most feasible methods of capital collection. This way, you won’t have to worry about meeting other’s expectations.

Some of the examples to consider if you’re planning to fund yourself are:

• Using your personal savings and resources
• Selling your personal property, such as motor vehicles, bonds, real estate, stocks, etc.
• Using credit cards of companies that have a reasonable interest rate
• Taking personal bank loans
• Or by cashing in your retirement account funds, keeping in mind the drawbacks of an early withdrawal

Self-funding entrepreneurs are not answerable to others for their endeavors. As a result, they are more likely to grow independently. On the contrary, they are also the only person to sustain a loss if things don’t go as planned.

Friends and Family

Borrowing your capital from friends and family is an easy option as you won’t need a solid business pitch to convince them. They are often more than willing to lend you the funds because they want to support you.

But keep in mind that there exists a risk of complicating your relationships. Don’t involve your friends and family unless you need to.

Banks and Organizations

Several banks and organizations have programs that lend money for small scale startups. Grants and microcredit loan-outs are also viable options.

Although you will need a convincing business plan and a guarantor to apply for loans from such organizations.

Partnerships

Finding a partner may be crucial, not only for investment but also for skill-sharing and better management.

Your best friend may not be your best business partner. Remember that partners share financial risks as well. Look for a partner that you are comfortable discussing ideas with.

Wealthy Individuals

When you are seeking capital from wealthy investors, also known as angel investors, do not expect them to just give their money away to you. The reason they have enough money to invest in others is that they are experienced enough to know where to invest.

So think out of the box and, more importantly, focus on proving why your background, resources, strategies are different from others. Always be prepared to answer why they should invest in you and not the other guy who has been asking for the same capital for say his/her woodworking business.

Finding Your Niche through Consumer Analysis

Carefully study the market segmentation and consumer preference before opening up and offering a menu. If you go through a detailed market analysis of your preferable region, you will find a wide variety of small food business opportunities.

Even though they have a limited product offering and curbed revenue system, here are some exemplary easy buildup opportunities for you at a very low budget. 

• Ramen and noodle joints
• Food trucks
• Delivery only restaurants
• Vegetarian restaurants

These options are seemingly popular because of the following reasons:

• The required investment is lower
• The required skill is the bare minimum to run this sort of restaurant
• Setup and launch is easy
• Significantly less or no labor issues
• Delivery-only restaurants only require you to focus on production and distribution, without the hassle of infrastructure management.
• A vegetarian restaurant requires significantly low investment in raw products and ingredients

Sort Your Menu According to Your Niche

Your menu should be balanced yet creative. Even if you are offering a very generic menu, remember to keep at least a handful of items that the customers aren’t used to seeing in other restaurants.

The menu is the first thing that is handed to your customers when they walk into your restaurant. Therefore, it plays a huge role in setting the first impressions about the place. A menu with pictures of the food is always better than one without.

Don’t hesitate to brag about your food, special ingredients, and the process it goes through. Including a little text about how your salmon is roasted in a wood oven with care, can make a big impact on their appetite.

Do a SWOT Analysis of Your Plan

SWOT analysis refers to the strength, weakness, opportunity, and threat analysis of your business plan. This is required to understand if the plan you have in mind is viable and potentially profitable for your restaurant or not.

When you conduct this analysis on your plan after running a pilot project, you will have a clear idea of your qualities. You will be able to move forward by showcasing those qualities, and it will allow you to eradicate identified weaknesses as well.

Restaurant owners who performed the SWOT analysis to evaluate were able to manage the blow of area-based threats such as political unrest and global threats such as the Coronavirus pandemic.

Focus on Bringing Variation

By their definition of the Small Business Administration (SBA), an organization that has fewer than 500 employees, is considered a small business. There are 30.7 million small businesses in the U.S., which account for about 99 percent of all U.S. businesses, according to the SBA.

So if you want your small restaurant business to boom in no time, you will have to stand out from the crowd. Keep in mind that expensive promotional campaigns are not going to be affordable in your budget. Therefore, setting a unique niche and service style is going to take you far.

Even though people want diversity in their daily food, with diversity comes a greater risk of cost management.

Low Budget Marketing Strategies

While bringing in diversity, use your market taste analysis report as the frame of reference.

Advertising

Advertising is important yet expensive, so it’s often avoided. For cost-efficient advertising, use social media as your advertisement medium. An online presence can be crucial for your food business.

Since you will have to work on holidays and weekends, make the perfect use of it by giving out promotional offers and discounts on those occasions.

Spend on low-cost promotions on Facebook and Instagram. Set up your restaurant’s social media profile and go about following the people from your town so that people can also find you organically.

Word of Mouth and Menu Items

Try to focus on the spread of word of mouth, even if it takes time.

Think out of the box with your menu items. Do not spend excessively on fancy packaging. Ensure proper hygiene and cleanliness of your restaurant for adding value and earning a good reputation. Consider low budget home delivery options for your neighborhood.

Provide discounts and promotional offers on occasions.

Catering Services

When you are just starting, offer catering services for weddings, birthdays, and other social gatherings to build your reputation.

Crucial Tips for Starting a Restaurant on a Low Budget

Here are some actionable tips for you that you should follow.

Go for Piloting Projects First

The most important tip is to start with a pilot project to understand consumer behavior.

Try to not jump into business with all of the money you got. After you have written a solid business plan, start your restaurant on a very small scale for experimental purposes. Conduct the SWOT analysis you learned and scrutinize your progress and setbacks.  

When you feel assured of the viability of your plan, that is when you should start full-on with whatever small capital you have managed to achieve. Review and alter your plan according to need.

Communication Is Key

Since you are starting a restaurant with fewer capital resources, therefore it’s going to be easier for you to be involved in the field. Take advantage of this and communicate more with your customers by walking up to their tables and asking if they like the new item on the menu.

Small steps like this can make big differences.

Avoid Risky Events

Stand clear of involvement in political biases, scandals, and other risky incidents. The phrase ‘all publicity is good publicity’ is not exactly applicable to the food business.

A tarnished reputation is hard to rebuild. Do not risk your restaurant’s reputation against personal opinions or biases.

Observe Your Cash Flow

Do not ignore the subtle changes in your cash flow. Every little change happens for a reason, carefully scrutinize why and where your cash flow is taking a bump. Troubleshoot the cause as smoothly as possible.

Avoid over-spending. While working with a minimal budget, it might seem that there isn’t a lot of space for overspending, but that’s not true. This mistake is likely to happen at any budget range as it is a result of miscalculations and bad decisions.

Risk Management

Entrepreneurs who ignore risk analysis are bound to land on the red. Risk management is going to be crucial for you because your term of the day is ‘low budget’.

Potential Risks for Small Scale Restaurants

• 42 percent of the respondents stated that the most important problem for small businesses was that the market didn’t feel them needed any more
• While 29 percent because they ran out of cash
• 23 percent complained about not having the right team
• (CNBC, 2019)

All of these problems are avoidable through the proper ‘planning before execution’ we have been discussing all along,

Prepare for the Unexpected

Most small restaurant businesses require a capital reserve for emergency purposes. Be it a small amount of a few hundred only, an emergency fund is always crucial to stopping a small business from going bankrupt.

Remember that the more variation you bring in the food items you are trying to serve, the more costly and daunting it’s going to be. Consider the actual food cost vs. the ideal food cost for profit maximization.

Manage Your Legal Sectors

If your restaurant service is starting to pay off, then consider getting registered. This is a big step towards quick growth.

Since you are starting a low budget restaurant business so it may be necessary for you to get licensed according to the state you live in. Do your share of research to find out what the requirements are before you can legally sell food from your kitchen.

Look up the cottage food laws if you are starting off cooking for your restaurant from your home kitchen. Inquire about your state’s zoning permit before starting to sell your food.

Plan and Launch Your Restaurant Business on a Low Budget in No Time!

Not just restaurant businesses, it takes time for every sort of small business to rise. Do not expect to get rich by the end of your first year of business since the process is gradual.

With the right set of skills and proper management of resources, you will be able to scale-up higher than you expect.

Every business is potentially profitable. You either earn experience or experience and money both.

If opening your own restaurant has been your dream, but you are not willing to invest a lot in the project financially, then it’s alright.

This in-depth guide will substantially help you work around the obstacles of large-sized investment and help you climb towards success starting today.

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• 69 culinary hotspots in the very first MICHELIN Guide Moscow !

9 MICHELIN-starred restaurants in the first edition of the MICHELIN Guide dedicated to the capital of Russia ; 3 MICHELIN Green Stars awarded to local Chefs paving the way for sustainable gastronomy.

Russia Michelin Star Revelation

The long-awaited arrival of the MICHELIN Guide marks a recognition of the rapid development in gastronomic culture in Russia over the past 30 years. The unique history and traditions of the region, formed by the variety of high-quality local products from the Far East, the Altai Republic, the Black Sea and the north-west of Russia, inspire talented chefs to create exquisite culinary masterpieces that cannot be found anywhere else. The first ever Moscow MICHELIN Star ceremony took place tonight, at the Zaryadye Concert Hall, in the heart of the Russian capital. The festive evening, organized with all necessary security measures, was attended by more than 500 guests. “ The MICHELIN Guide and Moscow are sharing a historical moment with the unveiling of the MICHELIN Guide Moscow 2022 selection . Inspectors have been particularly seduced by the high-quality local produce. Russia is a wonderfully wide-ranging expression of nature: from sea coasts to wild forests, from aromatic herbs to first-class seafood… There are lots of discoveries to make ” says Gwendal Poullennec, MICHELIN Guide International Director. “ Moreover, thanks to cultural exchanges throughout history between Russia and Europe, Central Asia and the Middle East, gourmets will experience unforgettable authentic meals full of flavor .”

Restaurants were celebrated through the announcement of the MICHELIN Guide selection, with the reveal of Bib Gourmand (for restaurants offering particularly interesting value for money, where you can enjoy a delicious meal under RUB2000), MICHELIN Stars (for restaurants serving high-quality cuisine), and MICHELIN Green Stars (for restaurants that are pioneering in their sustainable approach). As for all its other selections, the MICHELIN Guide has used the same historical methodology. The team of independent and anonymous inspectors from the Guide has been in the field for its traditional table-tests, during which they evaluate the meal they experience via 5 assessment criteria  :

- The quality of the produce used - The mastery of cooking techniques - The mastery of flavors - The chef’s personality in his/her cuisine - The consistency between visits Thanks to the seriousness and depth of their methodology, inspectors were able to collectively build this first MICHELIN Guide Moscow selection.

2 Two MICHELIN Star restaurants

7 one michelin star restaurants.

Beluga – located at the National Hotel, near the Red Square, Beluga offers one of the finest selections of caviar and vodka in the whole of Russia. While experiencing the authentic soul of this historical place, gourmets can discover and enjoy the elegant and delicate cuisine of chef Evgeny Vikentiev. Biologie - Chef Ekaterina Alehina offers her guests a journey through a personal cuisine, with a strong accent on sustainability, focusing on organic products. You can also find the chef’s artistic personality in the restaurant itself, which is decorated with her own paintings and furniture she made herself. Grand Cru – “Bienvenue” to this establishment, with a cozy atmosphere, proposing first class modernized classic French cuisine and one of the best wine lists in Moscow. The Alsatian chef David Hemmerle brings an enjoyable piece of French finesse to Moscow. Sakhalin – Located on the 22nd floor of an imposing building, Alexey Kogay’s cuisine has a pleasant selection of first-class seafood from Russia, including products caught off the namesake island. This elegant and trendy restaurant offers also an impressive view of the city. Savva – Chef Andrei Shmakov knows how to mix classical techniques and modernism to offer a subtle Russian cuisine. The elegance of the restaurant and the high-quality service makes it a not-to-be missed spot for Muscovite gourmets.

Selfie – Chef Anatoly Kazakov is a fine chef at the forefront of modern gastronomy. This restaurant proposes creative dishes, where the main stars are the ingredients, uplifted to their best by the chef’s techniques. White Rabbit – Chef Vladimir Mukhin’s cooking is as impressive as the wonderful view offered by the panoramic glass roof. This young chef makes you enjoy a cuisine as modern as personal, that knows how to enhance local products. An experience between discovery and nostalgy.

3 MICHELIN Green Star restaurants

15 Bib Gourmand restaurants have also been highlighted, allowing foodies to discover skillful chefs and gourmet offers for less than RUB 2000, such as Hibiki , a little gem led by chef and owner Sang Keun Oh, who proposes beautifully inspired cuisine with dishes of tremendous quality, or Eva , which celebrates Greek cuisine with fresh ingredients, while capturing incredible flavors.

The first MICHELIN Young Chef Award , sponsored by Blancpain, was awarded : Nikita Poderyagin , chef of the Björn restaurant since 2016 knows how to mix perfectionism and emotions in the service of gourmets, and his evolution is to be followed carefully in the future.

Foodies discovered the MICHELIN Service Award , sponsored by San Pellegrino, awarded to the service team of the Twins Garden restaurant, led by Vitaly Filonov. Thanks to the strong commitment of these professionals, foodies are transported on a wonderful journey in the Berezutsky brothers’ culinary universe.

Moscow has become the 35th gastronomic destination chosen by the MICHELIN Guide, along with Singapore, the Nordic countries, Beijing, and California. This international highlight will allow foodies from all over the world to easily find a reason for an unforgettable trip to the Russian capital city and will also create an impetus for the further development of the restaurant business, both in Moscow and other Russian cities.

In total, the MICHELIN Guide Moscow 2022 selection includes: 69 restaurants ; 2 restaurants with 2 MICHELIN Stars ; 7 restaurants with 1 MICHELIN Star ; 3 MICHELIN Green Star restaurants ; 15 Bib Gourmand restaurants. Find the full selection of the MICHELIN Guide Moscow 2022, on the official MICHELIN Guide website and on the App, available for free on iOS.

Hero Image: Restaurant Sakhalin

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MICHELIN Guide 2023 Vienna and Salzburg selections are online

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4 New Stars In The MICHELIN Guide Shanghai 2023

The latest selection recognises one new Two-MICHELIN-Star and 3 new One-Michelin-Star restaurants, while the Bib Gourmand selection expands with 7 new restaurants. The MICHELIN Sommelier Award also makes its debut in Shanghai amid wider recognition of hospitality talents.

2022 California MICHELIN Stars

18 new MICHELIN Stars are joining the California guide, including a 3 Star restaurant in San Diego and two MICHELIN Green Stars

2022 California MICHELIN Bib Gourmands

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MICHELIN Guide California 2022: Meet the New Stars LIVE!

On Monday, 5 December at 7:30 pm PST, MICHELIN Guide California will reveal the 2022 selection. Follow the event live!

422 restaurants, including 2 new Two Starred establishments, spotlighted in the MICHELIN Guide Tokyo 2023

Myojaku and SÉZANNE receive Two MICHELIN Stars, and 16 new restaurants are distinguished One MICHELIN Star, while the Bib Gourmand celebrates 38 new restaurants which have been rated as best value-for-money by MICHELIN inspectors.

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Moscow Restaurants 2024

Top 20 restaurants you should definitelly visit on your next trip to Moscow.

We have compiled a list of the top locations you should definitely visit during your stay in Moscow.

While most other web sites focus mainly on historic attractions, we decided to add some activities that are actually popular among locals.

From exploring skyscrapers in the modern Moscow City district to trying the Kamchatka crab dishes at Depo Food Mall are some of our favorite things to do in Moscow.

1 . Pushkin Restaurant

Pushkin restaurant is located in a 19th century mansion in the heart of the city. One of the best places to experience Russian cuisine. During summer they open summer verandah located on top of the restaurant's building and overlooks Pushkin Boulevard.

2 . Erwin Restaurant

Erwin is a seafood restaurant that occupies 2 floors of the building located at the bank of the Moscow River in close proximity to the Radisson Royal Hotel. Erwin's menu features an extensive selection of crabs that includes king crab, snow crab, frog crab, blue king crab, spiky crab and hairy crab.

3 . Dr Zhivago Restaurant

Dr. Zhivago is located in the heart of Moscow, just one block away from the Red Square and Kremlin. It occupies the ground floor of the legendary Hotel National built in 1902. The restaurant carries the name of the legendary novel, as well as creates its own intriguing story line.

4 . White Rabbit Restaurant

In October of 2021 White Rabbit received it's Michelin star. The restaurant represents the so called “new Russian cuisine”. At White Rabbit they use local products to cook traditional Russian dishes with a modern touch.

5 . Sixty Restaurant

The Sixty restaurant, located on the Federation Tower's 62nd floor, offers stunning panoramic views and stands as one of Europe's highest dining spots.

6 . Novikov Restaurant & Bar

Novikov Restaurant & Bar is located on the first floor of the Ritz-Carlton hotel on the central Tverskaya street. The menu is focused mostly on PanAsian dishes.

7 . Gvidon Restaurant

Gvidon restaurant is located in a restored mansion of the pre-revolutionary era. The historic building with large windows resembles old Moscow architecture. The extensive multi-page menu is divided into 3 sections that include seasonal dishes, raw bar, and main menu.

8 . Savva Restaurant

Savva restaurant is located inside the famous 5 star Metropole hotel right across from the Bolshoi Theater and TSUM department store.

Savva’s menu was compiled by chef Andrey Shmakov with a primary focus on Russian cuisine. Although you’ll find some French and Italian items in the menu as well. The menu also includes Raw Bar.

9 . Pino Restaurant

Pino is an Italian restaurant located in the heart of the trendy Patriarch Ponds area in the central part of Moscow. Pino’s extensive international menu has a dedicated section with dishes that can be shared among all guests at the table. Checkout their breakfasts served daily from 8:00 to 12:00.

10 . Bolshoi Restaurant

Bolshoi restaurant is located in the heart of Moscow next to the world famous Bolshoi Theater and TSUM department store. Local menu includes culinary classics from around the world. There are items from traditional Russian and Soviet era cuisine that are mixed with select Italian and French dishes.

11 . Sakhalin Restaurant

The Sakhalin restaurant is located on the 22nd floor of the AZIMUT City Hotel Smolenskaya that offers a 360-degree panoramic views of Moscow.

The restaurant’s menu features one of the best selection of seafood dishes in the city including crabs, shrimps, a variety of shells and fish brought directly from the Far East of Russia.

12 . Butcher Restaurant

Butcher on Tsvetnoy Boulevard is a premium steak house located on the first floor of the modern business center minutes away from the TSUM department store. Butcher specializes in premium meat from Argentina, Uruguay and Russia, so its a good place to have one of the classic steaks.

13 . La Bottega Siciliana

La Bottega Siciliana is a premium Italian restaurant located in the same building as the Four Seasons Hotel. The menu at La Bottega Siciliana listed on many pages is huge. It has all varieties of Italian dishes as well as some original items compiled by the chef Claudio Pirovano.

14 . Turandot Restaurant

Turandot is a premium pan-Asian restaurant located on Tverskoy Boulevard in the center of Moscow. The restaurant was created by the same restaurateur who created Pushkin restaurant located in the same building.

15 . Ivanka Restaurant

The Ivanka restaurant is located in the Neva Towers skyscraper in the Moscow City district. The main menu reflects the personal view of chef Ivan Negutarov on Mediterranean gastronomy with a primary focus on Italy. Checkout the menu’s dedicated “Carpaccio”, “Tartare”, “Crudo”, “On Ice” and “Caviar” sections!

16 . Le Pigeon Restaurant

Le Pigeon is a restaurant that specializes in Parisian cuisine where traditional French dishes are served with some creative modern twists. For those that are just starting their acquaintance with French cuisine, the chefs recommend trying some snails in white wine.

17 . Boston Seafood & Bar

Boston Seafood & Bar has 2 major advantages that make it stand out among other restaurants in Moscow also serving seafood. The first advantage is pricing policy that is extremely attractive considering high quality of their food.

18 . Aist Restaurant

Aist restaurant is located in the trendy Patriarch Ponds area in the center of Moscow. The restaurant is mainly focused on European cuisine but also has some signature Asian dishes. The restaurant is located in its own 3 story building and has one of the best summer verandahs in Moscow.

19 . Loro Restaurant

Loro was originally opened in the winter of 2019 and became famous for its fresh Moscow take on Italian classics. The menu consists of just one sheet and six sections. There is a raw section that has oysters, sea urchins, several kinds of carpaccio and tartare. The desert menu has all Italian classics like Tiramisu, Pistachio ice cream and Crème Brûlée.

20 . Yug 22 Restaurant

Yug 22 restaurant’s name is translated from Russian as “south” and the number refers to the building’s address. The restaurant is located on Bolshaya Nikitskaya street, famous for its restaurant scene and pedestrian area.

The front door of the restaurant is decorated with yellowish tones. You will definitely like the restaurant’s floor to ceiling windows that they open during warm summer months.

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Moscow Restaurants: Best Cafe & Restaurants in Moscow on Any Budget

Home / Russia Travel Tips & Essential Advice / Moscow Restaurants: Best Cafe & Restaurants in Moscow on Any Budget

Moscow’s restaurant scene is booming with Russian dishes that are to die for. A city in the midst of a foodie revolution where almost anything goes, there is perhaps no dining scene in Europe as dynamic, exciting and adventurous as Moscow’s. 

At long last, Moscow is being recognised as an international culinary destination. New eateries are popping up at an astounding rate, and first-time visitors can expect to feel a little overwhelmed when it comes to places to eat in Moscow.

This guide to eating out in Moscow covers some of the top restaurants in Moscow for any budget, from the top end of town to some of the city’s tastiest cheap eats. There are plenty of excellent options here whether you’re looking for breakfast, lunch or dinner in Moscow. We’ve focused mainly on Moscow restaurants serving Russian food but thrown in some best-in-class representations of other cuisines for some added variety. In this list, you’ll find some of the most famous restaurants in Moscow, a few lesser-known gems and a few totally unique institutions which have become Moscow tourist attractions in their own right. Moscow’s food prices vary wildly. It’s easy to spend big in this town, but it’s also easy to find extremely affordable eats if you know where to look. One thing is for sure though – no matter what your tastes or budget, in Moscow, you’ll never go hungry for long.

Table of Contents

Fine Dining Restaurants in Moscow

Café pushkin.

A Moscow institute is known for its impeccable fine dining Russian and French cuisine, the palatial Café Pushkin opened in 1999 and immediately attracted a loyal following among high society folk. Elaborately decorated to recreate the feel of a 19th-century aristocrat’s manor, Pushkin has become equally popular with tourists keen to soak up the stately atmosphere of pre-Revolution Russia. The menu features sophisticated interpretations of definitive Russian cuisine, with a nod to classical French techniques. The kitchen’s insistence on high-quality ingredients lifts well-known favourites to another level of complexity and refinement. The signature beef stroganoff consistently receives rave reviews, while the roasted rack of lamb is the ultimate in rich, meaty indulgence. Of course, a restaurant of this standing serves several varieties of caviar a selection of top-shelf vodkas fit for an emperor.

Despite its rather formal appearance, the Café Pushkin experience is utterly charming. The waiters dress like 19th-century servants and diners are treated like royalty, but not without a sense of fun and theatrics. Bookings well advance are recommended.

_________________

Price Range: 3-course dinner at approx. 3,500-4,000 RUB plus drinks (US $60-80) Hours: Open 24 hours for breakfast, lunch, dinner and drinks Address: 26A Tverskoy Boulevard Nearest Metro Station: Tverskaya Contact Details: cafe-pushkin.ru, +7 495 739-00-33 Facebook

White Rabbit

Consistently ranking in Restaurant Magazine’s prestigious annual World 50 Best Restaurants list, White Rabbit is the first restaurant in Russia to receive such international acclaim. Its success (it secured 15 th place on the list in 2018) is a sure sign of Moscow’s ascendance as a global gastronomy destination.

White Rabbit’s whimsical and immersive interiors are designed to evoke a sense of fantasy and wonder, with rabbits everywhere and antique rococo furniture straight out of a Wonderland tea party. On the 16 th floor of the Smolenskiy Passazh shopping centre, White Rabbit’s glass dome captures mesmerising 360-degree views, showcasing the awe-inspiring scale of the Russian capital.

Chef Vladimir Mukhin has dreamt up an inventive European menu employing seasonal ingredients from across Russia. Standout dishes from this luxury Moscow restaurant include rabbit and cabbage rolls with potato crisps and truffle, roast suckling pig and Black Sea oysters.

Price Range: ‘Russian Evolution’ tasting menu – 10,000 RUB per person Hours: Mon-Wed and Sun 12pm – 12am; Thur-Sat 12pm – 2am Address: 3 Smolenskaya Square, Smolensky Passazh Shopping Centre, 16th floor Nearest Metro Station: Smolenskaya Contact Details: whiterabbitmoscow.ru ,   +7 495 782-62-62

One of the best and most luxurious restaurants in Moscow.  The Estate is designed in style of baroque, classicism and renaissance. The refine painting, jewel porcelain vases, moulding, genuine Gobelene tapestries, ancient clocks and fireplaces. Two workshops of wood engravers, painters, sculptors had been manufacturing the interior’s details for six years. All here including carved lumps of modern authors’ work is of museum importance.

The menu includes dishes from Japan, European, Chinese cuisines, and fusion cuisine, as well. Alan Yao, the only chief cook who is awarded with two stars of Mishlen, is responsible here for Asian food. The music corresponds to the institution: instrumental music (harp, violin, violoncello) sounds here every evening.

Price Range: Average check with no drinks RUB 4,000 (US $70) Hours: Monday to Sunday 12 pm – 12 am Address: 26/5 Tverskoi Bulvar Nearest Metro Station: Tverskaya, Chekhovskaya Contact Details: turandot-palace.ru ,+7 (495) 739-0011

This Siberian restaurant is dark and traditional. The tables are lit by small lamps with tassels, while chandeliers contribute more to mood than illumination. Mournful music plays softly, the sound absorbed by the heavy tablecloths and all the soft furnishings. The menu is a treat for the adventurous. You might start with pate of polar partridge, then go for the sweet grilled meat of Altay yak with tomato and mustard sauce; or the gamey richness of minced meat of Sayan bear with cream-cowberry sauce and buckwheat.

Price Range: Average check RUB 4,500 (US $80) Hours: Monday to Sunday 12 pm – 12 am Address: 25 Gogolevsky Boulevard Nearest Metro Station: Arbatskaya, Kropotninskaya Contact Details: chemodan-msk.ru Ph +7 (495) 695-38-19

Grand Café Dr. Zhivago

This ornate brasserie across from the Kremlin is Russian kitsch, with oversized statues, bright red chairs, white walls and colorful ceilings. It feels anachronistic, yet it’s the creation of a modern restaurateur, Alexander Rappoport.

There’s a lightness of touch in the dishes on a long menu celebrating Russian favorites from dumplings and pickled cabbage through to goose stew with cowberry. It’s especially good for breakfast, which includes more than 20 egg dishes and about a dozen types of porridge.

Price Range: Average check RUB 2,000-2,500 (US $40) Hours: Monday to Sunday 12 pm – 12 am Address: 15/1 Mokhovaya Street Nearest Metro Station: Teatralnaya Contact Details: drzhivago.ru

Erwin RekaMoreOkean

Another project of Aleksandr Rappoport, a restaurant with a phenomenal variety of fish and seafood at the most reasonable prices. Ninety percent of the fish in the restaurant is caught in Russia (from 25 rivers and seas). The restaurant features a caviar and oyster bar. Slices of frozen nelma (Siberian white salmon) and sterlet, thaw in the mouth with a natural, revealing taste of fish. Here, you can try the legendary Sagudai (raw fish slices) of muksun is the traditional Russian version of the ceviche. The restaurant also offers a large variety of crabs and shrimps: king crab, snow crab, frog crab, blue king crab, spiky crab, hairy crab, Argentinian shrimp from the warm waters of the Atlantic ocean; Dock shrimp from the cold waters of the northern seas and others.

A branch of this restaurant – “Erwin Reka”, is located directly on the board of the luxury yacht of the “Radisson Royal, Moscow” flotilla which daily cruises the Moscow River. The restaurant is open from noon to 1:00 am, and twice a day, at a scheduled time, travels along the Moscow river. The yacht-icebreaker leaves from the “Hotel Ukraine” pier regardless of the season and the weather: twice a day on weekdays (3.30pm and 8.00pm) and three times a day on weekends (12.00pm, 3.30pm, 8.00pm). Guests can enjoy not only the first-class fish and seafood dishes during a river cruise, but also relish picturesque views of the capital main sights: the famous high-rise hotel “Ukraine”, the House of Government of the Russian Federation, the Novodevichy Monastery, the Moscow State University complex, the Luzhniki Stadium, Gorky Park, the Central House of Artists, the giant Monument to Peter the Great, the legendary House on the embankment, the gold-domed Cathedral of Christ the Savior, the Moscow Kremlin and the gingerbread-like St. Basil’s Cathedral, the skyscraper on the Kotelnicheskaya embankment and the Zaryadye Park.

Price Range: Main dishes from RUB 960 to 5800 ($20-100), sets – from RUB 5100 to 21000 ($90-$350) Hours: Monday to Sunday 12 pm – 12 am Address: 2/1 Kutuzovsky Prospekt, Bldg. 2 Nearest Metro Station: Contact Details: rekamoreokean.ru , +7-495-785-02-22

Wine & Crab

This fun restaurant is on the main pedestrianized shopping street linking Red Square and Lubyanka. You can see the crabs as you enter. There are about 10 varieties, including Kamchatka king crab and Horsehair crab.

Price Range: Monday Party set, RUB 6,150 ($95) for 1.5 kilos of crab and 1.5 liters or Prosecco. Hours: Monday to Sunday 12 pm – 12 am Address: 19-21 Nikolskaya Street Nearest Metro Station: Lubyanka, Teatralnaya, Ploschad Revolutsii Contact Details: winecrab.ru, +7 495 621-73-29

If you want to dine with the oligarchs and the politicians, Beluga is a great place. It’s on the second floor of the Hotel National, which opened in 1903 and the restaurant’s large windows have views of the Kremlin. (Grand Cafe Dr. Zhivago is downstairs.) This is one of Moscow’s most famous luxury restaurants and just the place to invite your favorite big shot. Take your pick from two dozen varieties of caviar, washed down with a variety of vodkas as big as your pockets. It would be a shame to miss the Champagne, too.

Price Range: Average check RUB 3,500 (US $55) Hours: Monday to Sunday 12 pm – 12 am Address: 15/1 Mokhovaya Street Nearest Metro Station: Teatralnaya, Ploschad Revolutsii Contact Details: belugamoscow.ru , +7 (495) 901-03-36

Mid-Range Restaurants in Moscow

Sapiens est kitchen & bar.

The founding concept of this new gastronomic venue is companionship, which you can go there for at any time. In the morning Sapiens prepares fabulous breakfasts, in the afternoon a-la carte lunches, and in the evening guests can enjoy signature cocktails and musical rhythms from top DJs. The menu includes modern European dishes and the best examples of Pan-Asian cuisine.

Price Range: Average check RUB 1,200-1,700 (US $18-$25) Hours: Mon-Thur, Sun 12pm–12am; Fri-Sat 12pm–6am Address: Pushechnaya St, 4, building 1 Nearest Metro Station: Kuzneysky Most, Lubyanka Contact Details: sapiens-est.ru , +7 925 229-94-45

Lavka-Lavka Farm to Table

Located within walking distance from the Bolshoi Theatre, Farm Restaurant Lavka-Lavka is the place of a new Russian cuisine. All the ingredients are delivered from local farmers and the dishes are cooked in a simple yet sophisticated way. The menu is an interesting twist on traditional Russian food: you can try such unique specialties as meat tartar and deer heart. 

The restaurant itself is beautifully decorated, the staff is really nice and there is also a nice feature: a menu lists the name of the farmer who supplied the ingredients for the dishes. Each guest has a chance not only to try delicious meals with an original recipe but also to reconnect with the great tradition of Russian cuisine.

Price Range: Average check USD $30-$40 Hours: Mon 6pm–12am; Tue-Sun 12pm–12am Address: Petrovka St, 21, building 2 Nearest Metro Station: Chekhovskaya, Tverskaya, Trubnaya Contact Details: lavkalavka.rest , +7 495 621 20 36

The exquisite interior of 1956, picturesque views, author’s kitchen – the team of the restaurant Ottepel is inviting you to appreciate design of the reconstructed historical pavilion and enjoy ingenious dishes.

Staff wear Mondrian-inspired aprons and the menu is innovative — the restaurant specializes in upgrading well-known, simple Soviet dishes into high-end cuisine. Traditional Russian cabbage soup “shchi” (420 rubles) counts calamari among its ingredients while the ubiquitous cold soup “okroshka” (360 rubles) features salty pastrami. Another trending item is the  “koryushka” served with potatoes (380 rubles). The smelt fish originates from the Baltic sea and is immensely popular in St. Petersburg. If you seek a filling meal, try chicken in Georgian “satsivi” sauce with fried polenta and cheese (610 rubles).

It’s an innovative throwback to the Soviet era, and perfectly at home in the ramblingly grandiose exhibition park of VDNH.

Price Range: Average check USD $30-$40 Hours: 12pm–10pm Address: Mira St, 119, building 311 Nearest Metro Station: VDNH, Botanichesky Sad Contact Details: ottepel-restoran.ru , +7 495 748-61-02

Homey dining room for traditional Russian delicacies, decorated with standard lamps, bookcases and old photos on the wall. Its traditional Russian living room decoration and some Russian old school music playing in the background really gives you this “lovely Russian babushka” vibe which is part of the fun.

Portions are quite big and the price is reasonable. The menu itself is really interesting for tourists. Try out these traditional soviet Russian dishes: homemade cakes, borscht, Bird’s milk dessert. This is the right place to enjoy the delicious authentic meal, attentive service, and excellent ambiance! A great bonus for cat lovers: A resident cat Benjamin will stroll around now and then.

Price Range: Average check USD $25-$30 Hours: 10am–10:30pm Address: Spiridonievsky st 10A, level 1 Nearest Metro Station: Pushkinskaya, Tverskaya Contact Details: marivanna.ru/msk , +7 495 650-65-00

The word  uhvat  refers to a long-handled wooden utensil used to slide food in and out of a pechka, a wood-fired oven found in many Russian houses until the late 19th century. Uhvat is one of the restaurants leading the resurgence in traditional Slavic cooking, with slow-cooked dishes such as pumpkin  kashas  (a type of porridge) with honey and linden dressing (£3.50), baked roe with pickled bramble (£14)  schchi  soups with fermented cabbage and  chichelindas , an old recipe for pate, here made with ox tail (£5). Don’t leave without tasting  toplyonoe moloko , a thick creamy dessert made by baking milk for several hours. The pechka oven features in many Russian fairytales – the Baba Yaga witch shoves children into ovens – and takes the centre stage at Uhvat. Daily rituals, such as using goose feathers to dust out the ashes, enhance the magical atmosphere.

Price Range: Average check USD $30-$40 Hours: 12pm–12am Address: Rodchelskaya St 15, building 41 Nearest Metro Station: Krasnopresnenskaya Contact Details: uhvat.restaurant , +7 977 125-51-77

Art Rukav ( Rukav means sleeve) is a big platform where the free spirit of art and creativity reigns. There are art workshops, a gallery and a restaurant under the same roof. Rukav was named after the surname of the Russian sculptor Alexander Rukavishnikov.

Immersion in the world of art begins from the very first entrance through the massive decorated door. In the cloakroom you get checks in the form of drops, bright red ladders harmonize with dark sofas… There is even a pipe-shaped slide! The place is really unique and is dramatically different from the usual places to eat. During lunches you will surely be attracted by the details in decorating: to the stylized ware, for example, or an unusual sculpture next to your chair.

Price Range: Average check USD $30-$40 Hours: 12pm–12am Address: 59 Zemlyanoy Val, Building 2 Nearest Metro Station: Taganskaya, Chkalovskaya Contact Details: art-rukav.ru , +7 (499) 271 88 74

Megobari Wine Bar & Restaurant

Megobari comes from Georgian and means as much as friend . This place brings the authentic Georgian dinning experience directly to Moscow and offers an eclectic variety of Georgian dishes including hand-made baked goods, meat stews, kebabs platters, as well as a wide variety of wines from the mountains of Georgia.

Price Range: average check USD $20-$35 Hours: Mon-Thur, Sun 12pm-11pm, Fri-Sat 12pm-12am Address: Maroseika 15 Nearest Metro Station: Kitay-Gorod Contact Details: megobari.wine , +7 (905) 700-40-07

Quick bites and budget restaurants in Moscow

Lepim i varim.

Lepim i Varim is legendary for boasting some of the most incredible pelmeni in town. These beautiful, hand-sculpted parcels of deliciousness consist of an outer pocket of unleavened dough, wrapped around a filling of ground meat, boiled and served piping hot. Lepim i Varim make everything from scratch and you can watch the pelmeni masters at work in the open kitchen while you queue up at the counter.

Traditional Siberian pelmeni are stuffed with mildly spiced pork and beef. In addition to the classics, Lepim’s have invented several original pelmeni creations. There’s an extravagant Kamchatka king crab, an Italian inspired chicken, parmesan and basil, and several vegetarian options including mashed potato and fried onion.

Price Range: Classic pelmeni 270 RUB (standard serve), 350 RUB (large serve), US $6-$10 Hours: Monday to Sunday 11am – 12am Address: Stoleshnikov Ln, 9, Buidling 1 Nearest Metro Station: Teatralnaya or Okhotny Ryad Contact Details: lepimivarim.ru, +7 499 399-31-23

Stolovaya No. 57

You might not expect to find an economy-priced cafeteria inside the stately walls of GUM, an enormous shopping centre on the Red Square specialising in luxury brands. But it seems no Muscovite (wealthy fashionistas and penny-pinching students alike) can resist cheap, simple and delicious Russian comfort fare, dished out in a quaint, Soviet-style “stolovaya” (a self-service, canteen-style eatery).

Stolovaya No. 57 serves the Russian equivalent of a home-cooked meal in a standard Russian family. Salads are super-popular here, including the mayonnaise-heavy Oliver salad and shuba (“Herring in a Fur Coat”) a layered salad of pickled herring, eggs, beets, carrots and potatoes in a creamy dressing. Also on the menu are beef stroganoff, chicken kiev and chebureki (a deep-fried, meat-filled pastry turnover).

Price Range: Mains 150 – 400 RUB, US $3-$10 Hours: Sunday to Saturday 10am – 10pm Address: Krasnaya Sq., 3 | Inside GUM, level 3  Nearest Metro Station: Teatralnaya or Okhotny Ryad Contact Details: gum.ru/cafe/stolovaya-57 , +7 495 620-31-29

The newly opened vegan restaurant run by gastro-enthusiasts who have collected a minimalistic menu from a variety of cuisines, self-described as “smart casual.” You can see everything being cooked right in front of you in the open kitchen.

Price Range: Mains 450-600 RUB Hours: Sunday to Saturday 10am – 10pm Address: 15/1 Tsvetnoy Blvd | “Tsvetnoy” Shopping Centre, 5th floor Nearest Metro Station: Tsvetnoy Bulvar, Trubnaya Contact Details: 5plus2cafe.ru , +7 995 301-64-48

Grechka Lab

The 1914 building — home of Moscow merchant Ivan Mikhailovich Korovin, and thereafter a bakery — was converted into a bright and airy café, contemporary bakery and brunch spot in the nation’s cosmopolitan capital. Flowers placed around the windows are a nod to wheat fields (‘ grechka ’ translates to buckwheat), whilst considered seating and textured walls evoke a sense of nostalgia.

Enjoy healthy soups, mains and salads, and try tasty éclairs,  “syrniki”  and cheesecakes.

Price Range: Average check 450-600 RUB, US $6-$8 Hours: Sunday to Saturday 8am – 11pm Address: Pushechnaya St 7/5c2 Nearest Metro Station: Kuznetsky Most, Lubyanka, Teatralnaya Contact Details: grechkalab.ru, +7 495 921-02-01

If you’re looking for a place that offers quick, cost-effective and flavoursome meals and snacks near Tretyakov Gallery, check out Vai Me!, a Georgian cafe chain with a fast-casual dining style. It has a self-service format with buzzers to let you know when your food is ready, so you don’t need to wait for your food at the checkout.

Despite the low prices, there are a variety of amazingly authentic Georgian dishes on offer. Muscovites love Georgian cuisine, and here they serve Moscow favourites like  khinkali  (Georgian dumplings), k hachapuri  (cheese-filled bread) and  satsivi  (chicken in walnut sauce).

Price Range: Average check RUB 350-600, US $5-$8 Hours: Monday to Sunday 10:00am – 11:00pm Address: 8 Pyatniskiy St, Section 1 Nearest Metro Station: Novokuznetskaya Contact Details: vaimecafe.com , +7 499 646 02 20

This Canadian restaurant and juice bar is on a mission to prove that vegetarian dining can be filling, exciting and varied and does not necessarily need to involve stereotypical joss sticks, Indian tapestries and variations on the lentil. Interior-wise it’s as fresh as they come, all clean minimalist lines, favouring industrial materials and rough edges over cuddly pictures of ethnic tribes. On the food front, Fresh gets full marks for providing an experience that both vegetarians and meat-eaters can salivate over – huge wraps bursting with scrumptious goodies and noodles bowls brimming with both delicate and fiery Asian flavours are just some of the long list of hits.

Price Range: Average check RUB 1,500, US $20 Hours: Monday to Sunday 10:00am – 11:00pm Address: Bolshaya Dmitrovka 11, building 1A Nearest Metro Station: Okhotny Ryad, Teatralnaya, Pushkinskaya Contact Details: freshrestaurant.ru , +7 965 278-90-89, +7 495 641-89-81

Marketplace

Part fresh produce market, part restaurant, Marketplace’s chic, minimalist design, open kitchen and well-priced, vegetarian-friendly international menu keep the atmosphere buzzingly energetic.

You can be sure the ingredients are fresh and everything is cooked in front of you while you wait. Once your meal arrives, retreat to the bright, stylish dining room or kick back with a beer in a courtyard full of potted plants and colourful metal chairs. There are sandwiches and shashlik for a substantial snack or salads for the health-conscious (minus the typical heavy Russian dressing). Also on offer are Asian wok stir-fries and a variety of pasta. For a sweet snack, pastries are baked on-site, ready to pair with a cappuccino or milkshake.

Price Range: Sandwiches approx. 220 RUB, mains approx. 300-500 RUB Hours: Sun-Thur 8am – 11pm, Fri-Sat 8am – 1am Address: 13 Myasnitskaya ST Nearest Metro Station: Chiste Prudy or Lubyanka Contact Details: market-place.me , +7 929 577-73-77

Shuk Food Mall

You find yourself in a lively, happy crowd, tucking into huge portions of fantastic Israeli food, and nothing can convince that you’re not actually in the middle of a Tel Aviv shuk. Tucked into a cozy side street in central Moscow, this place is fantastic. The atmosphere is simply delightful – and so is the food.

Price Range: Average check 700 RUB Hours: Every day 8am – 11pm Address: 7 Veskovskiy Ln Nearest Metro Station: Novoslobodskaya, Mendeleevskaya Contact Details: +7 495 966-25-01

DEPO Food Mall

Depo (which means ‘ depot ’ in Russian) food mall opened in Moscow in February 2019 on the premises of a former tram depot. Built between 1874 and 1910 in the industrial neo-Gothic style, the red-brick Miussky tram depot is considered an important architectural monument.

Depo houses a small farmer’s market, with fruit, vegetables, cheese and meat, as well as the largest food court in Moscow (and, allegedly, in the whole of Europe) with more than 70 stalls, where one can sample food from all over the world – from China to Thailand and from Mexico to Morocco. The food mall also regularly hosts live concerts, DJ sets, workshops and public lectures.

Apart from the main building, which contains the market and the food mall, there are several proper restaurants on the premises of the former depot, including Kraby Kutaby (Crabs and Qutabs) by one of Moscow’s leading restaurateurs, Alexander Rappaport.

Price Range: vide range Hours: Mon-Thu, Sun 10am – 11pm; Fri-Sat 10am-2am Address: 20 Lesnaya, Building 3 Nearest Metro Station: Novoslobodskaya, Mendeleevskaya, Belorusskaya Contact Details: depomoscow.ru , +7 495 788-88-10, +7 495 788-88-33

If these sound like music to your ears (or more fittingly, tickles your tastebuds) then check out some of our guided Russia tours for a one-stop ticket to discovering even more about the Moscow food scene. Check out the video below to see some delicious food you could find in Moscow:

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After a 7-decade run, this Hawaii favorite for ono local dishes plans to call it quits

HONOLULU (HawaiiNewsNow) - Hawaii’s restaurant industry is getting hit with sad news after more longtime eateries are announcing plans to close their doors.

One major loss: The owner of Hailiʻs Hawaiian Food, Lorraine Haili Alo, says her restaurant will shut down on June 30 when the lease is up.

Haili’s Hawaiian Food is a favorite for many families and known for its ono local dishes like “Da Big Kahuna” plate. Squid luau and lau lau are also popular sellers.

Alo, 72, says the restaurant had a good run.

It was established in 1950 in the Ward Farmers Market area by her parents Rachel and Peter Haili. The restaurant moved to its current location in Kapahulu in 2006.

“I just felt it was time to bring closure to this part of our lives,” said Alo.

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“I just thought that this would be a good time to just say mahalo,” she added.

Alo says the ending lease solidified her decision after the strain of the pandemic, rising costs, and the $14-an-hour minimum wage, which jumped $4 over two years.

She shortened her hours and let go of some employees, but doing business in Hawaii was too hard.

“It’s not supportive of small business and it seems like the small business owners just keep working and working and the profit margins just get smaller,” said Alo.

Another major departure: Shokudo Japanese on Kapiolani Boulevard announced it’s closing on March 31 after 19 years and downsizing after the pandemic.

Known for its honey toast, its Kaimuki and Waikiki locations will stay open.

“It feels like recently with the three Outbacks closing, Buca Di Beppo closing and now Haili’s closing, it’s so sad,” said Sheryl Matsuoka, executive director of the Hawaii Restaurant Association.

She says an ending lease is often a decision point for struggling restaurants and she says the loss takes a bite out of many businesses.

“Every time a restaurant closes their door, now that farmer lost a customer, now the person who sells take out containers lost a customer,” said Matsuoka.

“You imagine the ripple effects through the whole food service industry every time a restaurant closes their door,” she added.

As for Haili’s, Alo says the word is already getting out so she’s assuring her customers that any orders and catering business made before June 30 will be fulfilled.

Copyright 2024 Hawaii News Now. All rights reserved.

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FACT SHEET: The President’s Budget for Fiscal Year   2025

Budget Details Vision to Protect Progress, Lower Costs, Protect and Strengthen Social Security and Medicare, Invest in America and the American People, and Reduce the Deficit

From Day One of this Administration, President Biden has tackled challenges head-on while delivering long-lasting results. Over the past three years, he has overseen a strong economic recovery, amassed one of the most successful legislative records in generations, grown the economy from the middle out and bottom up, and delivered important progress for the American people.

Since the President and Vice President took office, the economy has added about 15 million jobs, the unemployment rate has remained below 4 percent for two years in a row—a more than 50-year record—while inflation has fallen by two-thirds. Our strong labor market has meant higher paychecks for working Americans, with inflation-adjusted wages and wealth higher now than before the pandemic. The President’s top economic priority remains lowering costs for hardworking Americans. Under his leadership, the Administration is working to bring down prescription drug costs, health insurance premiums, utility bills, and costs for everyday goods and services—all while taking on junk fees that some banks, airlines, and other big corporations use to rip off Americans. At the same time, he has also restored U.S. leadership on the world stage while keeping Americans safe and promoting democracy at home and abroad.

The President has delivered this progress while fulfilling his commitment to fiscal responsibility. The deficit is over $1 trillion lower than when President Biden took office, thanks in large part to the strength of our economic recovery. In addition, the President has also enacted another roughly $1 trillion in savings over the next decade through the Fiscal Responsibility Act, and through Inflation Reduction Act provisions that empower Medicare to negotiate lower prescription drug prices, cap insulin at $35 per month for seniors, and make our tax system fairer by making billion-dollar corporations pay a minimum tax and enabling the IRS to crack down on wealthy and corporate tax cheats.

The Budget details the President’s vision to protect and build on his Administration’s progress by continuing to lower costs for working families, protect and strengthen Social Security and Medicare, invest in America and the American people to make sure the middle class has a fair shot and we leave no one behind, and reduce the deficit by cracking down on fraud, cutting wasteful spending, and making the wealthy and corporations pay their fair share. Building on the President’s record of fiscal responsibility, his Budget reduces the deficit by $3 trillion over the next 10 years—on top of paying for new investments.

The President’s vision of progress, possibilities, and resilience is in stark contrast to Congressional Republicans, who have repeatedly fought to slash critical programs the American people count on and increase the deficit by hundreds of billions of dollars, including by attempting to repeal the parts of the Inflation Reduction Act that take on special interests like Big Pharma, big corporations, and wealthy tax cheats. The President’s Budget:

Lowers Costs for the American People

The President has made lowering costs for hardworking families his top domestic priority. Under his leadership we have seen significant progress bringing down inflation. Inflation is down by more than two-thirds, and costs have fallen for key household purchases from a gallon of gas to a gallon of milk. While Congressional Republicans have consistently taken actions that would raise costs for working families, the President’s Budget would continue lowering costs for families.

Lowers Drug Prices and Expands Access to Prescription Drugs. Thanks to action taken by the Administration, millions of seniors and people with disabilities are saving money on their drug costs, and the Administration announced the first ten drugs for which prices will be negotiated as it continues implementation of the Inflation Reduction Act. The Budget builds on this success by significantly increasing the pace of negotiation, bringing more drugs into negotiation sooner after they launch, expanding the Inflation Reduction Act’s inflation rebates and $2,000 out-of-pocket prescription drug cost cap beyond Medicare and into the commercial market, and other steps to build on the Inflation Reduction Act drug provisions. In addition, the Budget extends the $35 cost-sharing cap for a month’s supply of insulin to the commercial market. The Budget also includes proposals to ensure Medicaid and the Children’s Health Insurance Program (CHIP) are prudent purchasers of prescription drugs and limits Medicare Part D cost-sharing for high-value generic drugs, such as those used to treat hypertension and hyperlipidemia, to no more than $2 per month for Medicare beneficiaries. These reforms will not only cut costs for the Federal government by $200 billion; they will also save billions of dollars for seniors.

Cuts Taxes for Families with Children and American Workers. President Biden’s tax cuts cut child poverty in half in 2021 and are saving millions of people an average of about $800 per year in health insurance premiums today. Going forward, in addition to honoring his pledge not to raise taxes on anyone earning less than $400,000 annually, President Biden’s tax plan would cut taxes for middle- and low-income Americans by $765 billion over 10 years. The Budget restores the full Child Tax Credit enacted in the American Rescue Plan, which helped cut child poverty nearly in half in 2021 to its lowest level in history and narrowed racial disparities in access to the credit. The President’s Budget would restore the expanded Child Tax Credit, lifting 3 million children out of poverty and cutting taxes by an average of $2,600 for 39 million low- and middle-income families that include 66 million children. This includes 18 million children in low-income families who would be newly eligible for the full credit, and 2 million children living with a caregiver who is at least 60 years old. It would also provide breathing room for day-to-day expenses by allowing families to receive their tax credit through monthly payments. And by strengthening the Earned Income Tax Credit for low-paid workers who aren’t raising a child in their home, the President’s Budget would cut taxes by an average of $800 for 19 million working individuals or couples. That includes 2 million older workers age 65 and older and 5 million young adults age 18 to 24 who would be newly eligible for the credit.

Lowers Child Care Costs for Hard-Working Families. The President is committed to providing relief to hard-working families. His Budget creates a historic new program under which working families with incomes up to $200,000 per year would be guaranteed affordable, high-quality child care from birth until kindergarten, with most families paying no more than $10 a day, and the lowest income families paying nothing—providing a lifeline to the parents of more than 16 million children. The Budget also includes $8.5 billion for the Child Care and Development Block Grant (CCDBG) which will help states expand child care assistance to serve over 2 million low-income children.

Increases Affordable Housing Supply to Reduce Housing Costs. The President believes that all Americans should be able to afford a quality home, which is why the Budget includes a historic investment of more than $258 billion that would build or preserve over 2 million units. The Budget builds on previous investments and actions by this Administration to boost housing supply and lower housing costs, particularly for lower- and middle-income households. The Budget expands the existing Low-Income Housing Tax Credit and proposes a new Neighborhood Homes Tax Credit. To further address the critical shortage of affordable housing in communities throughout the Nation, the Budget provides $20 billion in mandatory funding for a new Innovation Fund for Housing Expansion. The Budget invests $1.3 billion in the HOME Investment Partnerships Program (HOME) to construct and rehabilitate affordable rental housing and provide homeownership opportunities. The Budget also provides $7.5 billion in mandatory funding for new Project-Based Rental Assistance contracts to incentivize the development of new climate-resilient affordable housing. Together these proposals would expand the supply of safe and affordable housing, bring new units to market, and ultimately help curb cost growth across the broader rental market.

Expands Access to Homeownership and Affordable Rent and Reduces Down Payments for First-Time and First-Generation Homebuyers. The Budget proposes a new Mortgage Relief Credit to help increase access to affordable housing. The proposal includes a new tax credit for middle-class first-time homebuyers of up to $10,000 over two years to ease affordability challenges. In addition, to unlock starter home inventory and allow middle-class families to move up the housing ladder and empty nesters to right size, the President is calling on Congress to provide a one-year tax credit of up to $10,000 to middle-class families who sell their starter home. The Budget also provides $10 billion in mandatory funding for a new First-Generation Down Payment Assistance program to address homeownership and wealth gaps. For renters, the Budget proposes $32.8 billion in discretionary funding for the Housing Choice Voucher Program to maintain and protect critical services for all currently assisted families and support an additional 20,000 households. The Budget also provides $9 billion to establish a housing voucher program for all 20,000 youth aging out of foster care annually, and provides $13 billion to incrementally expand rental assistance for 400,000 extremely low-income veteran families, paving a path to guaranteed assistance for all who have served the Nation and are in need.

Reduces the Cost of College and Lifts the Burden of Student Debt. From Day One of his Administration, President Biden vowed to fix the student loan system and make sure higher education is a pathway to the middle class—not a barrier to opportunity. Already, the President has cancelled more student debt than any President in history, approving debt cancellation for nearly 4 million borrowers through more than two dozen executive actions. The Budget includes a $12 billion mandatory Reducing the Costs of College Fund that will fund strategies to lower college costs for students, including a new Classroom to Career Fund that will enable students to more affordably obtain postsecondary degrees by increasing access to career-connected dual enrollment opportunities. The Budget also builds on the President’s historic actions to reduce student debt and the cost of college by eliminating the origination fees charged to borrowers on every new federal student loan, which costs families billions. In addition, to help low- and middle-income students overcome financial barriers to postsecondary education, the Budget proposes to increase the discretionary maximum Pell Grant by $100 and thereby expand the reach of the program to help over 7.2 million students attend a public or non-profit college. The Budget builds on successful bipartisan efforts to increase the maximum Pell Grant award by $900 over the past two years—the largest increase in more than 10 years. The Budget also expands free community college through a Federal-State partnership and provides two years of subsidized tuition for students from families earning less than $125,000 enrolled in a four-year Historically Black College and University (HBCU), Tribally Controlled College and University (TCCU), or Minority-Serving Institution (MSI). 

Lowers Health Care Costs. The President believes that healthcare is a right, not a privilege. With enrollment in Marketplace coverage at an all-time high, the Budget builds on the incredible success of the Affordable Care Act by making permanent the expanded premium tax credits that the Inflation Reduction Act extended, and providing Medicaid-like coverage to individuals in States that have not adopted Medicaid expansion, paired with financial incentives to ensure States maintain their existing expansions. For Medicaid and CHIP, the Budget allows States to extend the existing 12-month continuous eligibility for all children to 36 months, and allows States to provide continuous eligibility for children from birth until they turn age 6. Further, the Budget prohibits enrollment fees and premiums in CHIP.

Reduces Home Energy and Water Costs. The Budget provides $4.1 billion for the Low Income Home Energy Assistance Program (LIHEAP), helping families access home energy and weatherization assistance—vital tools for protecting families from extreme weather and climate change. In addition, the Budget proposes to allow States the option to use a portion of their LIHEAP funds to provide water bill assistance to low-income households.

Protects and Strengthens Social Security and Medicare

Social Security and Medicare are more than government programs, they’re a promise—a rock-solid guarantee that generations of Americans have counted on—that after a life of hard work, you will be able to retire with dignity and security. As the President has made clear, he will reject any efforts to cut or undermine the Medicare or Social Security benefits that seniors and people with disabilities have earned and paid into their entire working lives. The Budget honors that ironclad commitment by firmly opposing benefit cuts to either program and by embracing reforms that would protect and strengthen these programs. The President remains committed to working with the Congress to protect and strengthen Medicare and Social Security for this and future generations and strongly rejects Congressional Republicans’ attempts to cut benefits for hardworking Americans.

Protects and Strengthens Medicare. The Budget strengthens Medicare by extending the solvency of the Medicare Hospital Insurance (HI) trust fund indefinitely by modestly increasing the Medicare tax rate on incomes above $400,000, closing loopholes in existing Medicare taxes, and directing revenue from the Net Investment Income Tax into the HI trust fund as was originally intended. The Budget closes the loophole that allows certain business owners to avoid paying Medicare taxes on these profits and raises Medicare tax rates on earned and unearned income from 3.8 percent to 5 percent for those with incomes over $400,000. In addition, the Budget directs an amount equivalent to the savings from the proposed Medicare drug reforms into the HI trust fund.

Protects the Social Security Benefits that Americans Have Earned. The Administration is committed to protecting and strengthening Social Security. In particular, the Administration looks forward to working with Congress to responsibly strengthen Social Security in a way that ensures no benefit cuts; extends solvency by asking the highest-income Americans to pay their fair share; and improves financial security for seniors and people with disabilities, especially those who face the greatest challenges making ends meet.

Ensures That Americans Can Access the Benefits They’ve Earned. The Budget also invests in staff, information technology, and other improvements at the Social Security Administration (SSA), which will improve customer service at SSA’s field offices, State disability determination services, and teleservice centers for retirees, individuals with disabilities, and their families.

Cuts the Deficit by Promoting Tax Fairness

The President has demonstrated that we can invest in America while achieving meaningful deficit reduction. The deficit is over $1 trillion lower than when President Biden took office, and the President has enacted roughly $1 trillion in additional deficit reduction, including through provisions that empower Medicare to negotiate lower prescription drug prices, cap insulin at $35 per month for seniors and people with disabilities, and establish a minimum tax for large corporations. The Administration looks forward to building on this progress with responsible investments that continue to grow America’s economy from the middle out and bottom up while improving the long-term budget outlook. The Budget proposes another roughly $3 trillion in savings over the next 10 years by making the wealthy and large corporations pay their fair share and closing tax loopholes and cutting wasteful spending on Big Pharma, Big Oil, corporate jets and other special interests, and cracking down on wealthy tax cheats. The President’s proposals to reduce the deficit are in sharp contrast to Congressional Republicans plans for tax giveaways skewed to wealthy and big corporations.

Requires Billionaires to Pay at Least 25 Percent of Income in Taxes. Billionaires make their money in ways that are often taxed at lower rates than ordinary wage income, or sometimes not taxed at all, thanks to giant loopholes and tax preferences that disproportionately benefit the wealthiest taxpayers. As a result, many of these wealthy Americans are able to pay an average income tax rate of just 8 percent on their full incomes—a lower rate than many firefighters or teachers. To finally address this glaring inequity, the President’s Budget includes a 25 percent minimum tax on the wealthiest 0.01 percent, those with wealth of more than $100 million.

Raises Tax Rates for Large Corporations. Corporations received an enormous tax break in 2017. While their profits soared, their investment in their workers and the economy did not. Their shareholders and top executives reaped the benefits, without the promised trickle down to workers, consumers, or communities. The President’s Budget would set the corporate tax rate at 28 percent, still well below the 35 percent rate that prevailed prior to the 2017 tax law. In addition, the Budget would raise the Inflation Reduction Act’s corporate minimum tax rate on billion-dollar corporations that the President signed into law from 15 percent to 21 percent, ensuring the biggest corporations pay more of their fair share. These policies are complemented by other proposals to incentivize job creation and investment in the United States to help ensure broadly shared prosperity.

Cracks Down on Tax Avoidance by Large Multinationals and Big Pharma. For decades, countries have competed for multinational business by slashing tax rates, at the expense of having adequate revenues to finance core services. Thanks in part to the Administration’s leadership, more than 130 nations signed on to a global tax framework to finally address this race to the bottom in 2021. Many of our international partners, including many of the world’s largest economies, have implemented or will soon implement this transformational agreement. The President’s Budget proposes to do the same by reforming the international tax system to reduce the incentives to book profits in low-tax jurisdictions, stopping corporate inversions to tax havens, and raising the tax rate on U.S. multinationals’ foreign earnings from 10.5 percent to 21 percent. These reforms would ensure that profitable multinational corporations, including Big Pharma pay their fair share.

Denies Corporations Deductions for All Compensation Over $1 Million Per Employee. Executive pay has skyrocketed in recent decades, with CEO pay averaging more than 300 times that of a typical worker in 2022. The 2017 tax law’s corporate tax cuts only made this problem worse, producing massive boosts to executive compensation while doing nothing for low- and middle-income workers. While corporations can choose to give huge pay packages to their executives, President Biden believes that they don’t deserve a tax break when they do. His Budget proposes new policy to deny deductions for all compensation over $1 million paid to any employee of a C corporation, which would discourage companies from giving their executives massive pay packages and help level the playing field across C corporations.

Ends Capital Income Tax Breaks and Other Loopholes for the Very Wealthy.  The President’s Budget will end one of the most unfair aspects of our tax system—the fact that the tax rate the wealthy pay on capital gains and dividends is less than the tax rate that many middle-class families pay on their wages. Households making over $1 million—the top 0.3 percent of all households—will pay the same 39.6 percent marginal rate on their income just like a high-paid worker pays on their wages. Moreover, the Budget eliminates the loophole that allows the wealthiest Americans to entirely escape paying taxes on their wealth by passing it down to heirs.

Ensures That the IRS Can Continue to Collect Taxes Owed by Wealthy Tax Cheats. The Inflation Reduction Act addressed long-standing IRS funding deficiencies by providing stable, multi-year funding to improve tax compliance by finally cracking down on high-income individuals and corporations who too often avoided paying their lawfully owed taxes, and to improve service for the millions of Americans that do pay their taxes. Already, the IRS is using these resources to crack down on tax evasion by the wealthy and big businesses. It has collected more than $500 million in unpaid taxes from fewer than 2,000 delinquent millionaires, is recouping taxes from thousands of millionaires who did not fulfill their basic civic duty by filing a tax return, and is cracking down on high-end tax evasion like deducting personal use of corporate jets as a business expense. At the same time, the IRS is improving customer service and modernizing IT infrastructure. The President’s Budget would restore the full Inflation Reduction Act investment and provide new funding over the long-term to continue cutting the deficit by making sure that wealthy Americans and big corporations pay the taxes they owe through tax compliance initiatives and to continue improving service for taxpayers who are just trying to pay what they owe.

Invests in America and the American People

Expands and Protects Access to Health Care

Supports Family Planning Services, Maternal Health, and Health Equity. Americans deserve access to the healthcare they need, including maternal healthcare, contraception, and family planning services, which are essential to ensuring control over personal decisions about their own health, lives, and families. The Budget includes $390 million for the Title X Family Planning program to increase the number of patients served to 3.6 million. The Budget also builds on a nearly 200 percent funding increase for key programs that address maternal mortality over the course of the Administration, including $376 million to support the ongoing implementation of the White House Blueprint for Addressing the Maternal Health Crisis to reduce maternal mortality and morbidity rates, and address the highest rates of perinatal health disparities.

Saves Lives by Advancing Behavioral Healthcare. In 2022, almost a quarter of adults had a mental illness, 13 percent of adolescents had serious thoughts of suicide, and overdose deaths continued near record highs. As a core pillar of his Unity Agenda, the President released a national strategy to transform how we understand and address mental health in America—and the Budget makes progress on this agenda by improving access to care for individuals and communities. The Budget requires all health plans to cover mental health and substance use disorder benefits, ensures that plans have an adequate network of behavioral health providers, and improves the Department of Labor’s (DOL) ability to enforce the law. The Budget builds on historic investments to improve access to mental health services, and makes significant investments in expanding the 988 Suicide and Crisis Lifeline that is projected to respond to 7.5 million contacts from individuals in distress in 2025 alone and expands mental health care and support services in schools. Additionally, the Administration has made historic advances in expanding access to treatment for opioid use disorder, including signing into law a bipartisan provision to expand the number of medical providers who can initiate treatment for opioid use disorder from 129,000 to nearly 2 million. The Budget increases funding for the State Opioid Response grant program, which has provided treatment services to over 1.2 million people and enabled States to reverse more than 500,000 overdoses with over 9 million purchased overdose reversal medication kits.

Drives Healthcare Innovation to Discover New Treatments and Improve Health Outcomes. Investing in health care innovation and new treatments is a direct investment in the American people. The President’s Budget advances progress toward Biden Cancer Moonshot Goals and the White House Initiative on Women’s Health Research, enhances biodefense and public health infrastructure, and directly invests in treatment and prevention of infectious diseases. The Budget makes significant investments to work toward the President and First Lady’s signature Cancer Moonshot goals of reducing the cancer death rate by at least 50 percent over 25 years and improving the experience of people and families who are living with or who have survived cancer. The President and the First Lady launched the first-ever White House Initiative on Women’s Health Research, recognizing that women have been understudied and underrepresented in health research for far too long. The Administration proposes to transform the way the government funds women’s health research at the National Institutes of Health (NIH), including by increasing interdisciplinary research at NIH and creating a new nationwide network of centers of excellence and innovation in women’s health—and the Budget would double existing funding for the Office of Research on Women’s Health at NIH, to improve women’s health outcomes. Additionally, over the past three years, substantial progress has been made toward developing and implementing transformational capabilities to increase the Nation’s ability to respond to and prepare for emerging health threats. Building upon this progress, the Budget invests $9.8 billion to bolster public health capacity that will enable the Centers for Disease Control and Prevention to better serve and protect the American public. The Budget also invests in the treatment and prevention of infectious diseases, including Hepatitis C, HIV, and vaccine-preventable diseases.

Expands Healthcare, Benefits, and Services for Environmental Exposures. The Honoring our PACT Act of 2022 (PACT Act) represents the most significant expansion of veterans’ healthcare and disability compensation benefits for veterans exposed to toxins and other environmental exposures, including burn pits and Agent Orange, in 30 years. As part of the PACT Act, Congress authorized the Cost of War Toxic Exposures Fund (TEF) to fund increased costs above 2021 funding levels for healthcare and benefits delivery for veterans exposed to certain environmental hazards—and ensure there is sufficient funding available to cover these costs without shortchanging other elements of veteran medical care and benefits delivery. The Budget continues this commitment and includes $24.5 billion for the TEF in 2025, through funds appropriated by the Fiscal Responsibility Act, which is $19.5 billion above the 2023 enacted level.

Prioritizes Veterans’ Mental Health Services and Suicide Prevention for Veterans and Military Servicemembers. The Budget invests $135 million within the Department of Veterans Affairs (VA) research programs, together with $17 billion within the VA Medical Care program, to increase access to quality mental healthcare, with the goal of helping veterans take charge of their treatment and live full, meaningful lives. In addition, the Budget provides funding to further advance the Administration’s veteran suicide prevention initiatives and to support the Department of Defense’s efforts on Suicide Prevention and Response.

Supports America’s Workforce and Prepares America’s Economy for 21 st Century Challenges

Continues Implementation of the President’s Investing in America Agenda. The Budget provides a total of $78.4 billion for highway, highway safety, and transit formula programs, supporting the amounts authorized for year four of the Bipartisan Infrastructure Law. The Budget also reflects an additional $9.5 billion in advance appropriations provided by the Bipartisan Infrastructure Law for bridge replacement and rehabilitation, electric vehicle charging infrastructure, and other programs to improve the safety, sustainability, and resilience of America’s transportation network.

Provides National, Comprehensive Paid Family and Medical Leave and Calls for Paid Sick Days. The Budget proposes a national, comprehensive paid family and medical leave program, providing up to 12 weeks of leave to allow eligible workers to take time off to care for and bond with a new child; care for a seriously ill loved one; heal from their own serious illness; address circumstances arising from a loved one’s military deployment; or find safety from domestic violence, sexual assault, or stalking. The President also calls on Congress to require employers to provide seven job-protected paid sick days each year to all workers.

Empowers, Protects, and Invests in Workers. Workers power America’s economic prosperity, building the economy from the middle out and bottom up. To ensure workers are treated with dignity and respect in the workplace and are paid the wages they’re owed, the Budget invests $2 billion in the Department of Labor’s worker protection agencies. The Budget also proposes funding for the Equal Employment Opportunity Commission to support implementation and enforcement of the Pregnant Workers Fairness Act and advancement of pay equity through the collection and analysis of employer pay data. Additionally, the Budget includes funding to strengthen the National Labor Relations Board’s capacity to enforce workers’ rights to organize and collectively bargain for better wages and working conditions.

Confronts the Climate Crisis While Spurring Clean Energy Innovation, Increasing Resilience, and Protecting Natural Resources

Lowers Energy Costs and Catalyzes Clean Energy and Economic Growth in Rural Communities. The Budget builds on the President’s historic Inflation Reduction Act to reduce energy bills for families, expand clean energy, transform rural power production, and create thousands of good-paying jobs for people across rural America. The Budget provides funding for loan guarantees for renewable energy systems and energy efficiency improvements for farmers and rural small businesses, and authority for rural electric loans to support additional clean energy, energy storage, and transmission projects that would create good-paying jobs.

Invests in Clean Air and Reduces Health and Environmental Hazards for At-Risk Communities. The Budget provides a total of $1.5 billion for the Environmental Protection Agency’s Office of Air and Radiation to continue the development of national programs, policies, and regulations that control air pollution and radiation exposure. The Budget provides $8.2 billion for the Department of Energy (DOE) to address legacy waste and contamination in communities, as well as funding for EPA’s Toxic Substances Control Act enforcement. The Administration will ensure the investments for the management of toxic chemicals, including per-and polyfluoroalkyl substances, cleanup of legacy pollution, and long-term stewardship of these sites align with the Justice40 Initiative to benefit disadvantaged communities.

Creates Jobs by Building Clean Energy Infrastructure. The Budget invests $1.6 billion through the DOE to support clean energy workforce and infrastructure projects across the Nation, including funding to weatherize and retrofit homes of low-income Americans, create good jobs and ensure reliable supply chains by manufacturing clean energy components here at home, electrify Tribal homes and transition Tribal colleges and universities to renewable energy, and support utilities and State and local governments in building a grid that is more secure, reliable, resilient, and able to integrate electricity from clean energy sources. These investments, which complement and bolster the historic funding in the Bipartisan Infrastructure Law and Inflation Reduction Act, will create good-paying jobs and revitalize American manufacturing while driving progress toward the Administration’s climate goals, including 100% carbon pollution-free electricity by 2035.

Strengthens Climate Resilience in Communities and Ecosystems. Building on the National Climate Resilience Framework, the Budget invests $23 billion in climate adaptation and resilience across the federal government to address the increasing severity of flood, wildfire, drought, and other extreme weather events fueled by climate change, including funding to support the wildland firefighting workforce through permanent and comprehensive pay reform. The Budget also provides funding to help farmers, ranchers, and forestland owners meet production goals in the face of a changing climate while conserving, maintaining, and restoring natural resources on their lands. The Budget complements the historic Bipartisan Infrastructure Law and the Inflation Reduction Act, which dedicate more than $50 billion across the Federal government to advance climate resilience strategies in every community in America.

Supports and Expands the American Climate Corps. Last year, the Administration announced the launch of the American Climate Corps (ACC) to mobilize a new, diverse generation of more than 20,000 clean energy, conservation, and climate resilience workers, and this year, the first cohort of ACC members will begin their service. The Budget would provide mandatory funding to expand the ACC over the next decade by supporting an additional 50,000 ACC members annually by 2031. The ACC will provide job training and service opportunities on a wide range of projects that tackle climate change in communities around the country.

Doubles Down on America’s Global Climate Leadership . Beyond leading by example through domestic investments, the Budget provides a path to achieving the President’s $11 billion commitment for international climate finance. The Budget also supports $3 billion contribution through mandatory funding to finance the Green Climate Fund. The Budget builds on historic international climate finance progress made over the course of this Administration, in which estimated 2023 levels of $9.5 billion represent a near-sixfold increase from 2021.

Invests in America’s Families

Supports a Strong Nutrition Safety Net. The Budget provides $8.5 billion for critical nutrition programs, including $7.7 billion to fully fund the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to serve all eligible participants, which is critical to the health of pregnant women, new mothers, infants, and young children. By investing in outreach and modernization, WIC would reach 800,000 more women, infants, and children each month, providing vital nutrition assistance to nearly 7 million individuals, up from 6.2 million in 2021. In addition, the Budget includes an emergency contingency fund that would provide additional resources when there are unanticipated cost pressures.

Builds a Strong Foundation for Families with Universal Pre-K and Head Start. The Budget funds voluntary, universal, free preschool for all four million of America’s four-year-olds and charts a path to expand preschool to three-year-olds. High-quality preschool would be offered in the setting of the parent’s choice—from public schools to child care providers to Head Start. The Budget also increases Head Start funding by $544 million to support the Administration’s goal to reach pay parity between Head Start staff and public elementary school teachers with similar qualifications over time. Together these proposals would support healthy child development, help children enter kindergarten ready to learn, and support families by reducing their costs prior to school entry and allowing parents to work.

Expands Opportunity and Advances Equity

Advances Efforts to End Homelessness. The Budget provides $4.1 billion for Homeless Assistance Grants to continue supporting approximately 1.2 million people experiencing homelessness each year and to expand assistance to approximately 25,000 additional households, specifically survivors of domestic violence and homeless youth. These new resources build on Administration efforts that have expanded assistance to roughly 140,000 additional households experiencing homelessness since the President took office. The Budget further reflects the Administration’s commitment to make progress toward ending homelessness by providing $8 billion in mandatory funding for the acquisition, construction, or operation of housing to expand housing options for people experiencing or at-risk of homelessness, as well as $3 billion in mandatory funding for grants to provide counseling and emergency rental assistance to older adult renters at-risk of homelessness.

Honors Commitments to Support Tribal Communities. Incorporating feedback from Tribal consultations, the Budget continues to provide robust support for Tribal Nations and Native communities in keeping with our federal trust and treaty responsibilities. For example, the Budget invests $4.6 billion for the Department of Interior’s (DOI) Tribal programs. This investment in DOI’s Tribal programs build on historic investments in Indian Country under the American Rescue Plan, Inflation Reduction Act, and Bipartisan Infrastructure Law and promote long-term success by addressing critical infrastructure and climate adaptation needs in Native communities.

Expands Access to Capital for Small Businesses . Building on the historic growth in small business applications under the President and Vice President’s leadership, the Budget supports historic lending levels across the Small Business Administration’s (SBA) business lending programs. The over $58 billion in lending provided in the Budget would address the need for greater access to affordable capital, particularly in underserved communities. The Budget proposes a new direct 7(a) lending program, which would further enable SBA to address gaps in access to small dollar lending.

Promotes Equity in Education and Builds a Diverse, Capable STEM Workforce. The Budget increases institutional capacity at HBCUs, TCCUs, MSIs, and under-resourced institutions, including community colleges, and doubles funding by providing $100 million for four-year HBCUs, TCCUs, and MSIs to expand research and development infrastructure. In support of the CHIPS and Science Act’s priority of building a diverse, STEM-capable workforce, the Budget provides $1.4 billion for STEM education and workforce development programs at the National Science Foundation that have an emphasis on diversity, equity, inclusion, and accessibility. The Budget also includes funding for programs focused on increasing the participation of groups historically underrepresented in science and engineering fields, including women and girls and people of color.

Protects Americans at Home and Abroad

From taking action to combat hate in America’s communities, tackle gun violence, and strengthen trust in the Nation’s democratic institutions, to defending freedom around the globe, and rebuilding key alliances, the Administration has taken decisive action to strengthen America at home and abroad, all with the goal of keeping Americans safe. The Budget builds on this progress with proposals to continue investing in State, local, Tribal, and Federal law enforcement, reducing gun violence and crime, securing the border and strengthening the immigration system, and revitalizing U.S. alliances and partnerships while confronting global threats and strengthening America’s military.

Secures the Border and Strengthens the Immigration System. In October 2023, the Administration transmitted an emergency supplemental request for managing the southwest border and migration totaling $13.6 billion. The Budget includes, and therefore reiterates the need for, the unmet needs from the October supplemental request. The Budget includes investments to build longer-term capacity in the areas of border security, immigration enforcement, and countering illicit fentanyl. This amount includes funding to hire 1,300 additional Border Patrol Agents to secure the border, 1,000 additional Customs and Border Protection Officers to stop illicit fentanyl and other contraband from entering the U.S., an additional 1,600 Asylum Officers and support staff to facilitate timely immigration dispositions, as well as $849 million for cutting-edge detection technology at ports of entry. The Budget also reiterates the ask for funding to hire 375 new immigration judge teams to help reduce the immigration case backlog. Taken together, these long-term capacity building investments equip the Nation’s border security and immigration system to more effectively respond to challenges present along the border.

Tackles Crime, Reduces Gun Violence, and Makes America’s Communities Safer. The Budget makes significant investments to bolster Federal law enforcement capacity to strengthen public safety and it also pursues new mandatory investments to combat violent crime and support victims. The Budget includes $17.7 billion for Department of Justice law enforcement, including $2 billion, an increase of over 30 percent since 2021, for the Bureau of Alcohol, Tobacco, Firearms, and Explosives to effectively investigate and prosecute gun crimes. To support state, local, and Tribal law enforcement efforts, the Budget proposes $31.8 billion in mandatory funding to support President Biden’s Safer America Plan, and complements this plan with proposed discretionary investments of $270 million for the COPS Hiring Program and $100 million for community violence intervention and prevention. The Budget also builds upon the Safer America Plan by investing an additional $1.2 billion over five years to launch a new Violent Crime Reduction and Prevention Fund to give law enforcement the support they need to focus on violent crime, including support to hire 4,700 detectives to help drive down the high rate of unsolved violent crimes. In support of victims of crime, the Budget also requests $7.3 billion to replenish and reform the Crime Victims Fund to ensure a stable and predictable source of funding is available to support critical victim service and compensation programs over the next decade.

Prioritizes Efforts to End Gender-Based Violence. The Administration has prioritized funding for programs under the Violence Against Women Act of 1994 (VAWA). These programs have seen funding increased by over 35 percent since 2021 and the Budget proposes further expansion to $800 million for programs under VAWA, including key investments in sexual assault services, transitional housing, and legal assistance for survivors. The Budget also makes clear the Administration’s priority to strongly support underserved and Tribal communities by providing $15 million for culturally-specific services, $5 million for underserved populations, $25 million to assist enforcement of Tribal special domestic violence jurisdiction under VAWA 2022’s expansions, $3 million to support Tribal Special Assistant U.S. Attorneys, and $10 million for a new special initiative to address Missing and Murdered Indigenous People (MMIP).

Combats Narcotics Trafficking. The Budget provides $3.3 billion to the Drug Enforcement Administration (DEA) to combat drug trafficking, including $1.2 billion to combat opioid trafficking, save lives, and make our communities safer. The Budget invests an additional $18 million in Domestic Counter-Fentanyl Threat Targeting Teams at the Drug Enforcement Administration to enhance America’s fight against the transnational criminal networks pushing deadly illicit fentanyl in America’s communities. The Budget also provides $494 million in grants supporting efforts to address substance use. The Budget includes funding to disrupt the international synthetic drug trade which would counter the worldwide flow of fentanyl and other synthetics that endanger public safety and health, and contribute to tens of thousands of drug-overdose deaths in the United States annually.

Reiterates the Administration’s Request for Immediate Funding for Urgent National Security Priorities Related to Ukraine, Israel, and the Indo-Pacific. In October 2023, the Administration transmitted an emergency supplemental request totaling $92 billion to Congress for urgent national security needs. This request included funding to support Ukraine as it continues to defend itself against Russian aggression, Israel’s defense against terrorism, the Indo-Pacific’s regional security, life-saving humanitarian assistance, including for the Palestinian people, and other national security priorities. The request would also make significant and much needed investments in the American defense industrial base, benefitting U.S. military readiness and helping to create and sustain jobs in dozens of states across America. Absent congressional action on this emergency request, the United States will not be able to continue to provide support to Ukraine to meet their battlefield needs as they defend against Russian attacks every day, provide urgently needed military support to allies and partners, make critical DIB investments, or sustain life-saving assistance and development in some of the world’s most vulnerable areas. The Administration appreciates the bipartisan supplemental legislation that passed the Senate, which would address these urgent needs and advance our own national security.

Supports Ukraine, European Allies, and Partners. The Budget continues critical support for Ukraine, the North Atlantic Treaty Organization (NATO) allies, and other European partner states by prioritizing funding to enhance the capabilities and readiness of U.S., allied, and partner forces in the face of continued Russian aggression. However, this Budget cannot address the critical support to Ukraine that requires congressional action on the Administration’s October 2023 National Security Supplemental request.

Promotes Integrated Deterrence in the Indo-Pacific and Globally . To sustain and strengthen deterrence, the Budget prioritizes China as America’s pacing challenge in line with the 2022 National Defense Strategy. The Department of Defense’s 2025 Pacific Deterrence Initiative highlights some of the key investments the Federal government is making, focuses on strengthening deterrence in the region, and demonstrates the Administration’s long-term commitment to the Indo-Pacific. DOD is building the concepts, capabilities, and posture necessary to meet these challenges, working to integrate deterrence efforts across the U.S. Government and with U.S. allies and partners.

Ensures Readiness Across America’s Armed Forces. The Budget continues to ensure that U.S. Soldiers, Sailors, Airmen, Marines, Coast Guardsmen, and Guardians remain the best trained and equipped fighting forces in the world. The Budget places additional emphasis on foundational investments to sustain current weapon systems and support increased training across DOD.

Invests in the Submarine Industrial Base.  DOD conducted the 2025 Submarine Industrial Base (SIB) study to determine how to complete the once-in-a-generation recapitalization of the Submarine Force needed to increase the United States’ ability to build and sustain attack submarines to meet U.S. military requirements. These investments will also support the Administration’s commitments under AUKUS, the first major deliverable of which was the historic decision to support Australia acquiring conventionally-armed, nuclear-powered submarines. In line with the results on this study, the Budget includes $3.4 billion for the SIB in 2025.

Provides Life-Saving Humanitarian Assistance and Combats Global Food Insecurity. The Budget provides $10.3 billion in life-saving humanitarian and refugee assistance to support more than 330 million people in need in more than 70 countries in addition to the emergency supplemental request of $10 billion to address unprecedented global humanitarian needs, including the dire humanitarian situation facing Palestinians in Gaza. The Department of State and the United States Agency for International Development will have to reduce life-saving assistance around the globe without the additional $10 billion in humanitarian assistance requested in the Administration’s October 2023 National Security Supplemental Request.

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Details and Analysis of President Biden’s Fiscal Year 2025 Budget Proposal

Latest updates.

• Updated with new analysis via the Tax Foundation General Equilibrium Model.
• Updated to reflect the latest details in President Biden's FY 2025 budget.
• Originally published following President Biden's 2024 State of the Union Address.

President Biden’s State of the Union address presented a vision of higher taxes for American businesses and high earners combined with carveouts, credits, and more complex rules for taxpayers at all income levels. Soon after, the president released his FY 2025 budget outlining how the White House would implement the president’s tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. vision, indicating a gross tax hike of about $5.3 trillion from 2024 to 2034.

On a gross basis, we estimate Biden’s FY 2025 budget would increase taxes by about $4.4 trillion over that period. After taking various credits into account, the increase would be about $3.4 trillion. The tax increases would substantially increase marginal tax rates on investment, saving, and work, reducing economic output by 2.2 percent in the long run, wages by 1.6 percent, and employment by 788,000 full-time equivalent jobs.

The tax changes Biden proposes fall under three main categories: additional taxes on high earners, higher taxes on U.S. businesses—including increasing taxes that Biden enacted with the Inflation Inflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “ hidden tax ,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. Reduction Act ( IRA )—and more tax credits for a variety of taxpayers and activities. The combination of policies would move the tax code further away from simplicity, transparency, and neutrality, while making the U.S. economy less competitive. The increase in the corporate tax rate and the additional taxes on top earners would result in U.S. top marginal tax rates on income that are among the highest in the developed world.

Long-Run Economic Effects of President Biden’s FY 2025 Budget

We estimate the tax changes in the president’s budget would reduce long-run GDP by 2.2 percent, the capital stock by 3.8 percent, wages by 1.6 percent, and employment by about 788,000 full-time equivalent jobs. The budget would decrease American incomes (as measured by gross national product, or GNP) by 1.9 percent in the long run, reflecting offsetting effects of increased taxes and reduced deficits, as debt reduction reduces interest payments to foreign owners of the national debt.

Raising the corporate income tax A corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses , with income reportable under the individual income tax . rate to 28 percent is the largest driver of the negative effects, reducing long-run GDP by 0.9 percent, the capital stock by 1.7 percent, wages by 0.8 percent, and full-time equivalent jobs by 192,000.

Our economic estimates likely understate the effects of the budget since they exclude two novel and highly uncertain yet large tax increases on high earners and multinational corporations, namely a new minimum tax on unrealized capital gains and an undertaxed profits rule (UTPR) consistent with the OECD/G20 global minimum tax model rules. Nor do we include the budget’s unspecified research and development (R&D) incentives that would replace the lower tax rate on foreign-derived intangible income (FDII).

The budget would include the following major changes, beginning in 2025, unless otherwise noted.

Major business provisions modeled:

• Increase the corporate income tax rate from 21 percent to 28 percent (effective 2024)
• Increase the corporate alternative minimum tax introduced in the Inflation Reduction Act from 15 percent to 21 percent (effective 2024)
• Quadruple the stock buyback tax implemented in the Inflation Reduction Act from 1 percent to 4 percent (effective 2024)
• Make permanent the excess business loss limitation for pass-through businesses
• Further limit the deductibility of employee compensation under Section 162(m)
• Increase the global intangible low-taxed income (GILTI) tax rate from 10.5 percent to 21 percent, calculate the tax on a jurisdiction-by-jurisdiction basis, and revise related rules (some provisions effective 2024)
• Repeal the reduced tax rate on foreign-derived intangible income (FDII)

Major individual, capital gains, and estate tax An estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits , at the time of death. The tax is paid by the estate itself before assets are distributed to heirs. provisions modeled:

• Expand the base of the net investment income tax (NIIT) to include nonpassive business income and increase the rates for the NIIT and the additional Medicare tax to reach 5 percent on income above $400,000 (effective 2024)
• Increase top individual income tax An individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment . Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. rate to 39.6 percent on income above $400,000 for single filers and $450,000 for joint filers (effective 2024)
• Tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income Taxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. above $1 million and tax unrealized capital gains at death above a $5 million exemption ($10 million for joint filers)
• Limit retirement account contributions for high-income taxpayers with large individual retirement account (IRA) balances
• Tighten rules related to the estate tax
• Tax carried interest as ordinary income for people earning more than $400,000
• Limit 1031 like-kind exchanges to $500,000 in gains

Major tax credit A tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. provisions modeled:

• Extend the American Rescue Plan Act (ARPA) child tax credit (CTC) through 2025 and make the CTC fully refundable on a permanent basis (effective 2024)
• Permanently extend the ARPA earned income tax credit (EITC) expansion for workers without qualifying children (effective 2024)

We also modeled various miscellaneous provisions for corporations, pass-through businesses, and individuals, including several energy-related tax hikes largely pertaining to fossil fuel production. While the budget improperly characterizes fossil fuel provisions as subsidies, many are deductions for costs (or approximations of costs) incurred.

Major provisions not modeled:

• Repeal the base erosion and anti-abuse tax (BEAT) and replace it with an undertaxed profits rule (UTPR) consistent with the OECD/G20 global minimum tax model rules
• Replace FDII with unspecified R&D incentives
• Create a 25 percent “billionaire minimum tax” to tax unrealized capital gains of high-net-worth taxpayers
• Permanently extend the ARPA premium tax credits (PTCs) expansion (we do include PTCs in our distributional analysis)
• Expand federal rules on drug pricing provisions
• Spending program changes
• Provide additional Internal Revenue Service (IRS) funding

Revenue Effects of President Biden’s FY 2025 Budget

The budget covers the 10-year period from 2025 through 2034, but also proposes tax increases and credits starting in 2024. As such, we present a revenue table below that includes the revenue change over the traditional 10-year budget window and the full 11-year period including 2024. We refer to the score over the full 11-year period throughout.

Across the major provisions modeled by Tax Foundation, we estimate the budget raises $2.2 trillion of tax revenue from corporations and $1.4 trillion from individuals from 2024 through 2034. We relied on estimates from the White House Office of Management and Budget (OMB) for provisions we did not model, including the billionaire minimum tax, UTPR, various international tax changes for oil and gas companies, smaller international tax changes, improvements to tax compliance and administration, and unspecified R&D incentives to replace FDII.

In total, accounting for all provisions, including those estimated by OMB, we estimate the budget raises nearly $4.4 trillion in gross revenue from tax changes over the 11-year budget window.

Expanded tax credits and the unspecified incentive to replace FDII reduce the gross revenue by $876 billion and $118 billion, resulting in a net tax increase of $3.4 trillion.

Outside of tax changes, the budget includes additional spending increases and cost savings including expanding the drug pricing provisions passed in the Inflation Reduction Act for a net increase in spending of $1.2 trillion, summarized in Table 3.

After accounting for all changes in revenue and spending, we estimate the net effect of the budget would be to reduce the deficit by nearly $2.2 trillion through 2034 on a conventional basis. On a dynamic basis, factoring in reduced tax revenues resulting from the smaller economy, the deficit reduction drops to $1.4 trillion.

However, the projected decrease in budget deficits is highly uncertain. About $742 billion of the increased revenue comes from untested sources—the 25 percent minimum tax on high earners and the UTPR.

The 25 percent minimum tax on unrealized capital gains has several novel features and would for the first time attempt to collect tax on a broad set of assets on a mark-to-market basis or on imputed returns, i.e., without a clear market transaction to firmly establish any capital gain or loss. It would apply to taxpayers with wealth greater than $100 million, requiring a new annual wealth reporting system.

It is unclear how many taxpayers would be subject to the reporting requirements and liable for the tax, or how taxpayers would react to such a regime. Based on the OMB estimate (converted to calendar years), the minimum tax would raise about $517 billion, though it is unclear what OMB assumed regarding avoidance behavior, valuation disputes, and other factors that could dramatically change this result.

Another highly uncertain minimum tax proposed in the budget is a UTPR and other provisions intended to align with the OECD/G20 global minimum tax model rules applicable to corporate profits earned internationally. Several countries are in the process of implementing global minimum tax rules including a UTPR, though our analysis and that of the Joint Committee on Taxation (JCT) indicate a great deal of uncertainty in forecasting how the rules will ultimately evolve across the globe.

Additionally, the JCT finds much uncertainty in estimating revenue effects of a potential UTPR in the U.S., ranging from a loss of $57 billion over a decade to a gain of $237 billion, depending on how other countries implement their rules. The OMB estimates the UTPR would raise about $140 billion over the budget window, which is about a quarter of what was predicted in last year’s budget. OMB estimates another $85 billion would come from disallowing foreign tax credits for oil and gas companies and other sundry tax increases.

The budget discusses additional policies that would significantly reduce revenue, such as extending tax changes from the Tax Cuts and Jobs Act (TCJA) for people making below $400,000 after 2025 when they otherwise expire. The budget does not, however, factor in the cost of such an extension. Similarly, the budget extends the larger CTC through 2025, but further extending the policy would cost more than $130 billion per year, adding more than $1 trillion to the deficit by 2033. Continuing both of the policies past 2025 would wipe out most, if not all , of the budget’s projected deficit savings.

Distributional Effects of President Biden’s FY 2025 Budget

The budget would raise marginal income tax rates faced by higher earners and corporations while expanding tax credits for lower-income households. Our modeling of the distributional effects on after-tax income After-tax income is the net amount of income available to invest, save, or consume after federal, state, and withholding taxes have been applied—your disposable income. Companies and, to a lesser extent, individuals, make economic decisions in light of how they can best maximize after-tax income. does not include the impact of drug pricing provisions, the 25 percent billionaire minimum tax, the undertaxed profits rule, miscellaneous tax credits, IRS enforcement, or spending program changes.

The budget would redistribute income from high earners to low earners. The bottom 60 percent of earners would see increases in after-tax income in 2025, while the top 40 percent of earners would see decreases. After-tax income for the bottom quintile would increase by 16.1 percent, largely from expanded tax credits. In contrast, the top 1 percent of earners would experience a 8.7 percent decrease in after-tax income.

After the expanded CTC expires, the bottom quintile would see a smaller 5.8 percent increase in after-tax income in 2034 on a conventional basis while the top three quintiles would see decreases in their after-tax incomes. The top 1 percent would see a 6.5 percent decrease in after-tax income.

On a long-term dynamic basis, the smaller economy reduces after-tax incomes relative to the conventional analysis. On average, tax filers in the top four quintiles would experience a drop in after-tax incomes, while the bottom quintile would still see an increase, albeit reduced to 3.7 percent, driven by the permanent changes to the CTC, EITC, and PTC.

Top Tax Rates Under President Biden’s FY 2025 Budget

President Biden’s budget proposals would raise top tax rates on corporate income, capital gains income, and individual income to levels that are out of step with the rest of the world.

Raising the corporate income tax rates from 21 percent to 28 percent, a policy Biden has pushed for since the 2020 campaign, would significantly worsen the competitive position of U.S. businesses and reduce prospects for business investment and workers. Including the average of state rates, the top combined marginal rate on corporate income under current law is 25.6 percent, and Biden’s proposal would increase it to 32.2 percent—the second highest corporate tax rate in the OECD (behind Colombia at 35 percent).

The corporate income tax is the most harmful tax for economic growth and its many problems have led countries around the world to reduce corporate tax rates considerably over the last 40 years to an average of about 23 percent as of 2023. The U.S. had the highest corporate tax rate in the OECD prior to the TCJA, which lowered the U.S. corporate tax rate to be roughly average among OECD countries. Recent studies have determined that lowering the corporate tax rate significantly boosted investment in the United States , a long-term process that continues to yield economic benefits, including gains in workers’ wages.

On top of a higher statutory corporate tax rate, Biden has proposed increasing the rate of the new corporate alternative minimum tax on book income Book income is the amount of income corporations publicly report on their financial statements to shareholders. This measure is useful for assessing the financial health of a business but often does not reflect economic reality and can result in a firm appearing profitable while paying little or no income tax. from 15 percent to 21 percent. The tax was enacted in August 2022 as part of the IRA and scheduled to go into effect starting in 2023, but the IRS postponed its implementation because of the complexity of enforcing it . Taxpayers are still awaiting guidance on several significant questions related to the CAMT, and it remains questionable whether the tax is even feasible. It has certainly failed thus far as an effective minimum tax.

Biden also proposes quadrupling the IRA’s 1 percent excise tax An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda , gasoline , insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. on stock buybacks. Stock buybacks are one of the ways businesses return value to their shareholders. Companies can return earnings to shareholders by issuing dividends (namely cash payments) or with stock buybacks (purchasing shares of their own company). As much as 95 percent of the money returned to shareholders from stock buybacks subsequently gets reinvested in other public companies. Quadrupling the tax rate would likely discourage firms from pursuing stock buybacks, potentially tilting toward more dividend issuances instead, and could discourage investment.

On personal income taxes, too, the Biden budget proposals would further push up marginal tax rates. Under current law, the top combined marginal tax rate The marginal tax rate is the amount of additional tax paid for every additional dollar earned as income. The average tax rate is the total tax paid divided by total income earned. A 10 percent marginal tax rate means that 10 cents of every next dollar earned would be taken as tax. on individual income is 42.5 percent, consisting of the top federal rate (37 percent) and the average of state and local income tax rates. Biden’s proposal would raise it to 45.1 percent by increasing the top rate from 37 percent to 39.6 percent. The rate ignores the 5 percent additional Medicare tax, half of which falls on the employer, in order to make comparisons to the personal income tax regimes in the OECD database. Including the employee-side portion of this tax would raise the top rate to 47.6 percent.

In the case of capital gains taxes in particular, the changes would push the United States beyond international norms. The top combined marginal tax rate on capital gains income under current law is 29.1 percent, consisting of the 20 percent capital gains tax A capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. rate, the 3.8 percent net investment income tax (NIIT), and the average of state and local income tax rates on capital gains. By taxing high earners’ capitals gains as ordinary income and raising the NIIT to 5 percent, Biden’s proposals would raise the top tax rate on capital gains to 49.9 percent—the highest in the OECD.

Aiming to address Medicare’s growing budgetary shortfalls , the president would raise the hospital insurance (HI) payroll tax A payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue. for people earning more than $400,000 from 0.9 percent to 2.1 percent, expand the base of the NIIT to include active business income, and raise the NIIT to 5 percent for high earners. The changes would raise top tax rates on labor, investment, and business income while not doing enough to put entitlements on a path toward solvency.

The combined integrated rate on corporate income reflects the two layers of tax corporate income faces: first at the entity level through corporate taxes and again at the shareholder level through capital gains and dividends taxes. Under current law, the top combined integrated tax rate on corporate income distributed as capital gains is 47.2 percent. Under Biden’s proposals, it would rise to a jaw-dropping 66 percent—the highest in the OECD.

Biden’s FY 2025 budget would yield combined top marginal rates on individual income in excess of 50 percent in five states and D.C.: New York (54.4 percent), Oregon (53.5 percent), California (52.9 percent), New Jersey (51.4 percent), Hawaii (50.4 percent), and D.C. (50.4 percent).

Additionally, President Biden reintroduced his proposal to raise the effective tax rates paid by households with net worth over $100 million. The proposal requires high net worth households to pay a 25 percent minimum tax rate on an expanded definition of income that includes unrealized capital gains. Under the minimum tax, households would pay tax on capital gains even if the underlying asset has not yet been sold, operating as a prepayment for future capital gains tax liability.

The billionaire minimum tax, as it is commonly known, would increase the complexity of the tax code by using a non-traditional and difficult-to-measure definition of income. It would require formulaic rules for valuing different types of assets, payment periods that vary by asset type, and a separate tax system to deal with illiquid assets. This tax design goes well beyond international norms, where capital gains are taxed when realized and at lower rates than the U.S. in many cases.

Biden would also expand the disallowance of deductions for employee compensation above $1 million (Section 162m) to cover all employees of C corporations. The cap currently applies to the CEO, CFO, and the next three highest-paid employees of a corporation, and due to ARPA is already scheduled to expand to the next five additional highest-paid employees beginning after 2026.

Expanding the disallowance makes it costlier for corporations to attract and retain top talent. It would mean both the corporate and individual top tax rates would apply to wages, resulting in top tax rates of 70 percent or more including state taxes. If the $1 million threshold is not indexed to inflation, over time the tax would hit more than just the C-suite.

Other Provisions

Seeking to address the very real problem of housing affordability, Biden has called for several proposals to subsidize home purchases and boost the low-income housing tax credit, including a tax credit worth $5,000 per year for two years for middle-class, first-time homebuyers. The president would also offer a one-year tax credit worth up to $10,000 for middle-class households who sell a starter home to help improve starter home availability. Finally, the president proposes to provide up to $25,000 in down payment assistance for first-generation homebuyers.

Boosting demand through subsidies is likely to cause housing prices to increase further. What is needed is a greater supply of housing, which would be best accomplished at the state and local level by reforming zoning rules and at the federal level by reforming tax depreciation Depreciation is a measurement of the “useful life” of a business asset, such as machinery or a factory, to determine the multiyear period over which the cost of that asset can be deducted from taxable income . Instead of allowing businesses to deduct the cost of investments immediately (i.e., full expensing ), depreciation requires deductions to be taken over time, reducing their value and discouraging investment. rules for residential structures .

For developers, the president would expand the low-income housing tax credit (LIHTC) and create a new neighborhood homes tax credit to build or renovate affordable houses. This approach would be an inefficient way to build new homes as the existing LIHTC is expensive for the homes produced, with much of the credit value going to developers and financing agencies .

President Biden would renew the expanded child tax credit from the 2021 American Rescue Plan Act, which would raise the CTC value from $2,000 to a maximum value of $3,600 while removing work and income requirements. This CTC expansion would have major fiscal costs totaling over $1 trillion over 10 years above the current-policy CTC. If we include the underlying CTC expansion from the Tax Cuts and Jobs Act that expires at the end of 2025 , the cost approaches $2 trillion over 10 years.

In addition to the CTC expansion, the president would expand the EITC and make permanent the expanded Affordable Care Act (ACA) premium tax credits that are scheduled to expire at the end of 2025.

President Biden also committed to preserving and extending the additional funding appropriated to the IRS as part of the Inflation Reduction Act. Biden argues this would help raise revenue from higher earners who evade taxes and would also improve taxpayer services. Much of this new revenue may take time to appear as the IRS trains new staff and spends time identifying evasion and enforcing the tax law. However, the other components of Biden’s tax plan will push the code in a more complex direction, making the job of the IRS to enforce the law more difficult.

Finally, the president recommitted to not raising taxes on people earning under $400,000, arguing that he would fully pay for expiring TCJA individual tax changes with “ additional reforms ” that would further raise taxes on high earners and businesses. The unspecified reforms would need to total at least $1.4 trillion to cover TCJA extension for people earning under $400,000.

The president’s tax policy proposals as outlined in the State of the Union address would make the tax code more complicated, unstable, and anti-growth, while also expanding the amount of spending in the tax code for a variety of policy goals not related to revenue collection.

We estimate the proposed budget would reduce deficits by $1.4 trillion on a dynamic basis through 2034 compared to the White House estimate of $3.2 trillion. However, neither estimate includes the cost of the intended extension of the TCJA tax cuts for people earning less than $400,000 or for the proposed expanded CTC post-2025, which would wipe out most of the touted deficit reduction.

The budget also assumes an unrealistically high rate of growth in the economy, especially considering the large tax increases proposed on businesses and high earners that will slow growth. The budget assumes real GDP will grow at 2.2 percent annually in the last five years of the budget window, while the CBO assumes real GDP will grow about 1.9 percent annually over this period. By raising marginal tax rates on investment, saving, and work, we find Biden’s FY 2025 budget would reduce long-run economic output by 2.2 percent, wages by 1.6 percent, and employment by 788,000 full-time equivalent jobs.

In sum, President Biden is proposing extraordinarily large tax hikes on businesses and the top 1 percent of earners that would put the U.S. in a distinctly uncompetitive international position and threaten the health of the U.S. economy. The budget ignores or makes unrealistic assumptions about the fiscal cost of major proposals as well as economic growth under higher marginal tax rates on work and investment, concealing what is likely to be a substantial cost borne by American workers and taxpayers.

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Modeling Notes

We use the Tax Foundation General Equilibrium Tax Model to estimate the impact of tax policies, including recent updates allowing detailed modeling of U.S. multinational enterprises . The model produces conventional and dynamic revenue and distributional estimates of tax policy. Conventional estimates hold the size of the economy constant and attempt to estimate potential behavioral effects of tax policy. Dynamic revenue estimates consider both behavioral and macroeconomic effects of tax policy on revenue. The model also produces estimates of how policies impact measures of economic performance such as GDP, GNP, wages, employment, capital stock, investment, consumption, saving, and the trade deficit.

Note, however, our conventional and dynamic estimates for the stock buyback tax do not account for behavioral shifting from buybacks to dividends, which would also shift the individual income tax base The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. from capital gains to dividends.

Regarding the budget’s proposed changes to the GILTI regime, we modeled most of the major changes including the 75 percent GILTI inclusion rate, country-by-country application, the reduction in the foreign tax credit (FTC) haircut to 5 percent, elimination of the qualified business asset investment (QBAI) exemption, and elimination of the FOGEI exclusion. We did not model the changes allowing carryforward of GILTI FTCs and losses, repeal of the high- tax exemption A tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service ( IRS ), preventing them from having to pay income tax. for subpart F, or the tax increases on dual capacity taxpayers.

Timeline of Activity