How to Write a Sandwich Shop Business Plan

Opening a restaurant can be a risky proposition, even if you have a lot of food industry experience. Even as restaurant sales soar to pre-pandemic heights, the startup costs, inflation-fueled operation costs, and competition make starting any restaurant extremely challenging.

Sandwich shops that offer counter or deli service are usually less expensive to open than full-service restaurants, which cost at least $175,000 to start. More than likely, the total cost will be more in line with the opening costs of a cafe, which is anywhere from $80,000 to $300,000.

Regardless of how much it costs, you’ll feel the pressure to make your sandwich shop profitable quickly, which is why it’s crucial to have a great business plan. A business plan will help you manage startup and operating costs and streamline running your sandwich shop from the grand opening.

In this article, you will learn how to write a sandwich shop business plan that will attract investment and help you operate your shop profitably.

Why you need a sandwich shop business plan

Virtually every big and small business in every industry starts with a business plan. As the name suggests, a business plan is a formal document that states the goals of the business, the methods of attaining those goals, and the time frame in which you plan to achieve those goals. It’s a guiding document that helps a business recover startup costs and become profitable as soon as possible.

In the restaurant industry, a business plan is especially crucial given the competition and small profit margins (the average restaurant operates on just a 3 - 5 percent margin). Starting with your business idea, writing your business plan will help you develop a business model, identify your target customers, find a niche, and understand your costs and sales forecast. Not only will this guide your decision-making when launching and operating your restaurant, but it can also even help attract potential investment, potentially lowering your financial burden.

Elements of a sandwich shop business plan

A restaurant business plan will look different than business plans for other industries. Similarly, a sandwich shop business plan will look different than a coffee shop or French bistro business plan. Here’s what to consider in your sandwich shop business plan.

Executive summary

The broad strokes of your sandwich shop business plan, the executive summary should briefly explain your business, the market gap you’re looking to fill, and provide key financial projections like potential costs and sales forecasts. You may recall the term “grabber” from your high school English class. That’s basically what this opener is designed to do — grab a reader’s attention.

Your executive summary should include your sandwich shop’s mission statement, explain the business’s core values, and give a brief outline of the shop concept that will make it stand out in the market.

Company overview

For most small businesses, the company overview is fairly straightforward. Generally, this portion of the business plan explains the ownership structure and type of restaurant you want to open. It’s a good place to go into more detail about your business ideas to differentiate your sandwich shop from the rest of the market. That should include details about the shop location, the variety of sandwiches you want to sell, and the expertise of your management/ownership team.

Team and management

Once you’ve introduced the key leaders for your business (which may just be you!), you should discuss your sandwich shop’s most important asset: labor. Describe what kind of staffing your sandwich shop will need, and how you plan to hire for different positions, with specific breakdowns for back-of-house and front-of-house hiring if applicable.

It’s also useful to include a sample staff schedule to help you envision how a day’s shifts will play out.

Sample menu

If you’re starting a sandwich shop, you probably have some pretty awesome ideas for sandwiches. This is where you get to have a little fun. Even if you don’t know how to make a restaurant menu, you do know what sounds good between a couple of slices of bread.

You don’t need a complete, ready-to-launch menu in your business plan, but a sample menu is a great way to showcase the kinds of deli meats you’ll feature and the variety of sandwiches you’ll offer. The menu can also provide insight into your target market and the demographics you expect to attract. Are you running more of a Jewish deli, an Italian market, a Mexican torta shop, a Vietnamese banh mi store, or something else entirely?

Market analysis

No business plan is complete without a competitive market analysis. In the restaurant industry, market analysis is even more crucial given how competitive the food industry is.

Target market

The people you expect to patronize your sandwich shop are your target market. In most industries, businesses create personas of target customers, using identifying characteristics to understand who they’re catering their product or service to. For instance, an athletic footwear company may have personas of 30 to 40-year-old males and females with high disposable incomes, gym memberships, and no kids.

A sandwich shop’s target market will be pretty broad. Who doesn’t like sandwiches? Still, it’s important to understand the demographics around your shop to inform your menu selections and your marketing strategy. An aggressive Instagram and TikTok social media strategy might not resonate in an older community, for instance.

Location analysis

Of course, a restaurant’s target market is largely dictated by location. Are you targeting the people working in the office buildings nearby? Shoppers and people running errands in the local commercial district? Will delivery be a significant part of your sales strategy? 

Your business plan should explain how your shop’s location will play into your overall business strategy.

Competitive analysis

Finally, you must understand your local competitors. A competitive analysis takes into consideration the local businesses and national chains alike that are competing for a finite market share. You’re probably not going to grow as big as Subway, but a competitive analysis will help you explain how you plan to offer something different — and better — to local customers.

Marketing and publicity

Any new business needs a cogent marketing plan, but it’s even more crucial for businesses with such small margins as restaurants. Your business plan is the best place to explain to potential investors and other stakeholders how you plan to build excitement for your sandwich shop.

Your market analysis will inform your marketing and publicity strategy. Understanding the local demographic and competitors will help you identify ways to make your sandwich shop offer something new and different that’s nonetheless interesting to new customers. 

Ad in the local paper? Paid and organic social media advertising? A catchy sign out front while you prep for launch day? Free finger sandwiches at a soft opening? They all could be good ideas!

Business operations

This section of the business plan describes the practical day-to-day needs of your sandwich shop. Your business operations are crucial to keeping costs down and profits high.

Systems

Technology goes a long way in today’s restaurant industry. Systems like point of sale, inventory, payroll, scheduling, and HR can help you reduce costs, streamline operations, and make working at your sandwich shop a more enjoyable experience.

When choosing specific systems, determine what’s most important to you and your business. Is it more important for customers to have a remote checkout option or a better team management system? Identify your top priorities, determine your budget, and figure out which systems are essential for your business, which you’d like to have, and which you can forgo until you’re more profitable.

Suppliers

We’ve mentioned that restaurants have narrow profit margins. Your suppliers are one of the biggest factors in determining the margins you get. Put simply, the more you pay for ingredients and materials, the more you’ll have to charge, and the bigger the risk you take that customers won’t pay high prices for a new sandwich shop.

Of course, you want to have the best available ingredients for your sandwich shop. That’s why it’s essential to analyze the marketplace to find the best suppliers at the best price for your business. The suppliers you choose should make it into your business plan and factor into your financial analysis.

Sales forecasts and operating expenses

You’ll touch on the overall potential of your business in the market analysis section of your business plan, but this section is where you’ll get down to brass tacks. Of course, it’s impossible to say exactly how much your sandwich shop will make, but it’s important to perform a financial analysis to understand how your business will need to perform to meet certain benchmarks and avoid going under.

P&L

A profit and loss statement (P&L) is a financial statement that summarizes the revenues, costs, and expenses incurred by a business during a specific time period. Also referred to as an income statement, the P&L helps you understand net profit or loss and itemizes profits and costs so you can identify areas that are contributing or detracting from the bottom line.

You won’t be able to fill this out before opening, but you can provide a sample in your business plan to get a picture of what you’ll spend money on and what your highest-margin items may be.

Break-even analysis

The break-even point for a business is the number at which the business’s profits have equaled the costs during a specific time period. While 78% of restaurants check their financial metrics every day, your business plan’s break-even analysis will show the profit at which you’ll offset initial startup costs.

To calculate the break-even point in dollars use the formula:

Break-Even Point (dollars) = Fixed Costs ÷ Contribution Margin

You may also want to perform this analysis for a sample week or month to paint a picture of how much you’ll need to sell each month to stay afloat.

Expected cash flow

All of your sale and expense forecastings will help you create a range of sample restaurant financial statements that can project your expected cash flow. More cash flow means greater flexibility to invest in better systems, add new menu items, improve ingredients, hire more staff, make renovations, or do anything else out of the ordinary day-to-day operations. 

Financing and loans

While it’s possible to open a restaurant with no money, it’s certainly not easy. If you have very little access to capital, you’ll need to find financing and loans. There are many conventional loan options available to aspiring small business owners, as well as restaurant-specific options like incubators.

You’ve spent a lot of time performing financial projections in your business plan, it’s all moot if you don’t have a plan to get financing in place. Your business plan should state any loans or investments you already have in place, how much of your own money you plan to commit, and how you plan to fund each element of the sandwich shop.

How to present a sandwich shop business plan

One of the primary aims of a sandwich shop business plan is to find investment. Loan officers and potential investors will use your business plan to determine if your sandwich shop is really viable. Private equity has long had a significant stake in franchise restaurants, but your options for an individual sandwich shop will likely be more limited.

As such, write your business plan with a local focus and present it to local angel investors and banks. These stakeholders are far more likely to invest in community-focused businesses than an international banking giant would be. Your business plan should identify an opportunity to provide a benefit to the community through delicious, delicious sandwiches.

A great business plan will stand on its own merit, but you can give it an extra boost by giving it that local focus, including as much quantitative data as you can in your financial analysis, and going into specific operating detail that demonstrates your restaurant industry expertise. Investors often go on gut rather than sense, but in a landscape as competitive as sandwiches, it’s vital to show you’ve thought through the competitive analysis and understand how to make an impact in the local restaurant scene.

Stack your sandwich shop up for success

Every new business should have a business plan. If you’re working on your dream sandwich shop, your business plan will help you clarify your vision, project the financial opportunity, and attract interest from investors. It’s one of the best ways to flesh out your business idea and it’s absolutely vital to getting your sandwich shop off and running from the grand opening.