Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your deli or sandwich shop, you will need to prepare a solid business plan.
In this article we go through, step-by-step, all the different sections you need in the business plan of your deli. Use this template to create a complete, clear and solid business plan that get you funded.
For more information on delis, make sure to read our guides below: How To Open a Deli In 10 Steps: Complete Guide How Much Does It Cost To Open a Deli?
1. Executive Summary
The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.
If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.
Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.
Why do you need a business plan for a deli?
The purpose of a business plan is to secure funding through one of the following channels:
- Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
- Obtain private investments from investment funds, angel investors, etc.
- Obtain a public or a private grant
How to write an executive summary for a deli?
Provide a precise and high-level summary of every section that you have included in the business plan of your deli. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.
Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.
The executive summary usually consists of 5 major sub-sections:
- Business overview: start by introducing your deli, where it is located, the products you will sell, and the pricing strategy you want to implement. Mention what sets you apart from other businesses. For example, you may focus on recipes of the Pacific Northwest cuisine that no other deli in the area offers.
- Market analysis: summarize the market where you will operate and provide a brief about your target market, target audience, spending capability, etc. Also give certain data points about the deli / sandwich shop industry in the area where you want to operate (size and growth), as well as an overview of the main competitors, etc.
- People: introduce your deli’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, mention how the company will be structured (management roles and reporting lines)
- Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit)
- Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?
2. Deli Business Overview
In this segment of the business plan, you will provide details about the deli.
You must answer here some important questions that potential investors and lenders often ask about your business and operations. Here are some examples of questions you must answer:
- What is the rationale behind your opening a deli today?
- Where will you open your deli and why did you select that location?
- What type of food products will you sell through your deli?
- Will you specialize in a specific type of cuisine and offer different recipes?
- What will be your pricing strategy and why?
- What will be the legal structure of your company?
a) History of the Project
Any business overview must start with explaining the history of the project. There are 2 components here:
- Passion & experience of the business owner
- Rationale behind starting a deli today
Passion & experience
You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have worked as a chef in a popular kosher deli for 5 years and now you want to open your own deli.
Is there a certain problem (or perhaps, a set of problems) that your deli will try to solve when it comes into existence? For example, there may be an increasing Jewish population in your area and not a single deli offers kosher cuisine. Your deli will serve those people and all others interested in kosher cuisine.
But that’s not all! The market must be suitable for a business to exist and thrive. For instance, if you are trying to open a kosher deli in a location where the Jewish population is only 10% of the entire population, it might not be a very good idea, especially if the rest of the population is not interested in kosher cuisine.
Similarly, may open a deli with regular offerings like fast cold or hot sandwiches & salads along with a few specific recipes of a certain type of cuisine to cover three types of markets:
- Businesses requiring food for business meetings
- Workers in the downtown area looking for walk-in good food
- People looking for take-out food to enjoy with families
b) Business Model
This section of the Business Overview should explain the model you want to adopt for your deli. For example:
- Will you buy an existing deli and remodel it, or will you start a new one from scratch?
- Where will your deli be located, and which markets or target audience will you capture?
- What type of deli will you open (sit-in, takeout, truck, etc.)?
- What type of foods will you focus on?
- How will you price your food items and why?
What are the different formats of deli & sandwich shops?
Delis can have different formats. If you are focusing on a specific format or if you want to combine multiple formats in one, describe that. Here is a quick list of usual formats for Deli:
- Strictly Takeout: These delis do not have any sitting arrangement. People come and order at the counter and take the food and leave. They enjoy the food somewhere else.
- Sit-in Delis: These delis have sitting arrangements and people can come and enjoy breakfast or lunch. They may even order food to enjoy somewhere else (such as, with family).
- Trucks: These are essentially food trucks offering sandwiches, burgers, etc.
The food products you want to sell through your Deli will depend on what you want to sell. For example, if you want to open a kosher deli, you will possibly be selling food that conforms to Jewish dietary laws. There are many types of foods that you can sell such as:
- Cold cut meats
- Pickled vegetables, etc.
- Pre-packaged cold drinks
- Shrimp, tuna, etc.
- Sliced cheese
- Tea & coffee
You may sell a lot of different food items. You don’t need to mention everything. Just name a few important ones and the specialties, if any.
d) Pricing Strategy
This is where you will provide an overview of your pricing strategy. For instance, you may charge higher than your competitors because you may be using exotic ingredients sourced from certain countries.
Similarly, you may decide to charge lower for certain items than your competitors because you may be sourcing raw materials in bulk at a lower price because of your scale of operations. This discounted pricing allows you to offer a lower price for the end products.
While it may not be possible to provide a proper pricing table for all products that you will offer, it is still a great idea to provide a table that gives an overview of your pricing structure.
You can provide an average price based on categories. For instance, you can do something like this:
- Sausages: $2.00 to $4.80
- Cold cut meat: $3.25 to $17.25
Pricing will always depend on the type of product (for example, beet, chicken, pork, turkey, etc., will all be of different prices), the complexity of the preparation, quantity, and more factors.
However, don’t go into extreme details because potential investors are not interested in the nitty-gritty of your pricing. They just need the big picture to assess the profitability, because they will tie your pricing strategy with your financial projections later on.
e) Company Legal Structure
Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own?
3. Deli Market Overview
A complete understanding of the market where you want to operate is important for the success of your business. That’s also something you must showcase in your business plan.
For example, if you intend to sell non-vegetarian food items in a location with a very high percentage of vegetarians, you will not make enough profits. Similarly, if you are trying to sell expensive food to people in a location where average income is rather low, that won’t work.
Therefore, you must cover here 3 important areas:
- Industry Size & Growth: how big is the deli industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
- Competition Overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
- Customer Analysis: who is your target audience? What type of food products will you sell? Do they prefer delis that are operational 24 hours? What is their average bill size per visit? How frequently do they visit a deli?
a) Deli Industry Size & Growth
How big is the deli industry in the US?
According to GlobeNewswire, the market size of chilled & deli food in the US was $40 billion in 2021, and is estimated to reach $108 billion by 2026 with a CAGR of 22%.
How big is the deli industry in your area?
After getting a clear picture of the deli industry in the US as a whole, narrow down to your location. It’s very likely that you won’t find the number anywhere (at least not for free).
In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business. Here is an example of how to do it:
Assuming that there were 100,000 deli shops in the US in 2021 that collectively made $40 billion, the average annual turnover of each shop was $400,000. Therefore, if the location where you will operate has a total of 40 deli shops, the deli industry in the area is worth about $16 million.
How fast is the deli industry growing in your area?
What about the location where you want to open your deli shop? US national averages can be a great addition to your business plan, yet they don’t necessarily help to assess the deli industry where you want to open your store.
For example, the industry might be growing in the US, but declining in your region for a number of reasons (businesses shutting down due to losses, etc.).
As you likely won’t find this information online, you can instead rely on the number of delis in the location to calculate the average growth rate of the industry in your area.
For example, if the region had only 33 delis in 2020 and 40 in 2021, you can assume that the average annual growth rate of the deli industry in the area is 21%, in line with the estimated US national average.
b) Deli Competition Overview
Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their business model, the products they sell, their marketing strategies, etc., will allow you to provide a better service.
If your competitors are offering nearly the same products, then what is their market share and how do they market their products & services to attract new customers?
It is always a good idea to do some research (if necessary, you may consider physically visiting your competitors without revealing your business intentions) and create a comparative table summarizing their service offerings, marketing strategies, target audience, etc.
Here is a sample table that you can use:
|Competitor #1||Competitor #2||Competitor #3|
|Business model||Takeout Deli (prepares food)||Takeout & Sit-in Deli (prepares food)||Takeout & Truck (prepares food)|
|Store Size||900 sq. ft.||1,400 sq. ft.||1,100 sq. ft. (and a food trailer)|
Deli SWOT analysis
SWOT stands for Strength, Weakness, Opportunities, and Threats. This analysis will help lenders and investors better understand how you compare vs. competitors as well as the overall risk and reward profile of your business.
Here is a sample that you can use as a reference:
- Strengths: 5 years of experience as a chef in a popular kosher deli in New York
- Weaknesses: Startup cost, no initial brand reputation
- Opportunities: Increasing working class population who have no time to cook and prefer to buy prepared food; businesses opting for phone-in lunch during office/business meetings
- Threats: Popular brands like Canter’s Deli, Stopsky’s Delicatessen, Zingerman’s, etc. are opening shops rapidly
c) Customer Analysis
This is the sub-section where you will provide a detailed analysis of your target audience.
Some important points that you must include in your customer analysis include:
- Do they prefer prepared or unprepared food?
- How much do they spend at a deli shop per month?
- What is their average order size per visit?
- Do they prefer sit-in or takeout delis?
- What types of food do they generally want to eat at a deli?
You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.
4. Sales & Marketing Strategy
This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:
- What is your Unique Selling Proposition (USP)?
- What are the different marketing strategies you will use?
- How do you intend to track the success of your marketing strategy?
- What is your CAC or customer acquisition cost?
- What is your marketing budget?
- What introductory promos and offers do you intend to provide for attracting new customers?
What marketing channels do deli businesses use?
A few marketing channels that deli businesses typically use are:
- Social media content
- Flyers & pamphlets
It is not necessary to use all channels. Instead, you can start by focusing on a few of them, and include other marketing strategies later.
What is your Unique Selling Proposition (USP)?
In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.
A few examples of USPs are:
- Authentic: you may offer an authentic kosher deli and not a kosher-style deli
- Meat variety: you may offer more types of cured and uncured meat (pork, beef, turkey, ostrich, chicken, etc.) vs. competitors
- Pricing: you may have cheaper products vs. competitors
- Location: your store may be located on a busy street or next to a corporate center or a school for example
5. Management & People
You must address two things here:
- The management team and their experience/track record
- The organizational structure: different team members and who reports to whom?
Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your deli business.
Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.
It is also important that you explain how their experiences and qualifications help you in implementing the deli you are proposing. If they have specialized training and experience (such as a professional culinary degree, years of experience as head chef, etc.), add that information.
Even if you haven’t already hired a deli clerk, cooks, serving staff, manager/shift leader, and other relevant staff members, you must provide a flowchart of the organizational structure defining hierarchy and reporting lines.
6. Financial Plan
The financial plan is perhaps, with the executive summary, the most important section of any business plan for a deli.
Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your sandwich shop is an attractive investment.
There should be 2 sections to your financial plan section:
- The startup costs of your project (if you plan to start a new store, add a new location to your deli / sandwich shop chain, etc.)
- The 5-year financial projections of your deli / sandwich shop
a) Startup Costs
Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a deli, startup costs are all the expenses you incur before you start making sales. These expenses typically are:
- The acquisition of the real estate (if you buy)
- The lease deposit (if you rent)
- The renovation and equipment costs
- License & permits, business insurance, etc.
Of course, the startup costs depend on a number of factors, like the number of stores you plan to open, their size, the quality of the design and equipment, etc.
For example, it costs anywhere from $54,500 – $141,500 to start a standard 1,000 sq. ft. deli with 4 full time employees.
Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a deli, read our article here.
|Lease security deposit or loan down payment||$11,000 (lease) – $50,000 (buy)|
|Interior Design & Renovation||$20,000 – $40,000|
|Kitchen equipment||$15,000 – $25,000|
|License, Permits & Certifications||$1,500|
|Point-of-Sale system (POS)||$2,000 – $5,000|
|Initial inventory||$5,000 – $20,000|
|Total||$54,500 – $141,500|
b) Financial Projections
In addition to startup costs, you will also need to build a solid 5-year financial model in the business plan of your deli or sandwich shop.
Note that your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.
As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.
Your financial projections should answer at least the following questions:
- How much revenue do you expect to generate over the next 5 years?
- When do you expect to break even?
- How much cash will you burn until you get there?
- What’s the impact of a change in pricing (say 10%) on your margins?
- What is your average customer acquisition cost?
You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:
- The number of customers / orders over time ;
- Your expected revenue ;
- Operating costs to run the business ;
- Capex (cost to renovate / build your store, furniture and equipment, etc.)
When projecting your financials, make sure to sensitize sales volume (customers), pricing as well as the expenses (inventory, salaries, etc.). Indeed, a small change in these assumptions may have a significant impact on your revenues, and most importantly, your profits.
7. Use of Funds
This is the last section of the business plan of your deli or sandwich. Now that we have explained what your business model is, your menu and the products you sell, how you attract new customers, etc., this section must now answer the following questions:
- How much funding do you need?
- What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
- How long will this funding last?
- Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)
If you raise debt:
- What percentage of the total funding the loan represents?
- What is the corresponding Debt Service Coverage Ratio?
If you raise equity
- What percentage ownership are you selling as part of this funding round?
- What is the corresponding valuation of your business?
Use of Funds
Any business plan for a deli or sandwich shop should include a clear use of funds section. This is where you explain how the money will be spent.
Will you spend most of the loan / investment in paying your employees’ salaries and the COGS (inventory)? Or will it cover mostly the cost for acquiring the real estate and renovations?
For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.