How to Start a Restaurant Business
Starting a restaurant business can seem like an overwhelming responsibility.
Many factors come into play here; from finding adequate funding and picking a suitable location to determining a restaurant name, and the tiniest details like paper napkins and crockery.
It’s, indeed, a very intimidating business to go into, for sure.
The restaurant business is understood to be one of the most time-demanding and difficult businesses to start up, with statistics showing that 60% of restaurant businesses fail in their first year.
So, does this imply that no one should venture into the restaurant business?
No, it’s definitely a doable and rewarding venture; all you need to do is draw up a proper business plan and ensure to take all the right steps to avoid falling into that 60%.
Tips for Opening a restaurant business
» Be a Foodie
Running a restaurant, as we have said, is a very demanding business. To achieve success in this field, you have to absolutely love what you do.
The profits from your business might not come in immediately and it’d be difficult for you to maintain the zeal to show up at work if you do not have a passion for cooking/eating.
Also, there is going to be a lot of food tasting; not just your foods, but competing restaurants, too.
By visiting rival businesses, you get to sample their menu with a connoisseur’s palate and have ideas on how to make your menu better.
A lover of food will have no problems whatsoever with this.
» Know Your Target Market
Before starting any business, you will have to know who you are looking to cater to. Who are your intended customers?
It could be anything from teenagers to working class, to families, to the senior class.
Knowing who you cater to will help in everything from creating your menu to designing your restaurant, to picking a name and finding a perfect location.
Find your target market and set up your restaurant in that style. A rowdy café that caters to teenagers and students is not likely to be suitable for the senior class.
Equally, a family-friendly restaurant that allows room for little kids and games will definitely not be an ideal place for upscale and classy diners.
So, know your target market and set up your restaurant with their needs in mind.
» Choose a Style
Choosing your style is essential once you know your target market. You will have to know your serving style and food concept to determine what your restaurant would specialize in.
For example, for a person who prefers morning business and would like to cater to the morning rush, a coffee shop or a diner focusing on breakfast foods.
Your food concept will also determine your service; you can either choose the fast-food service, the midscale or the upscale service.
The fast-food service is what the likes of McDonald’s and the eateries offer us, with hot dogs, burgers, and chips available.
The midscale service offers full meals at affordable prices; perfect for families or working class lunches, and the upscale service is just as it sounds- high class and fancy, with high-class prices and fancy foods, of course.
» Establish a Business Plan
Your restaurant will need an outlined, brief business plan. Your business plan should take everything into consideration;
- the cost of material
- the goal of your restaurant
- equipment and salary of staff
- a complete analysis of your competitors
- a budget plan for advertising and marketing
- and a possible fall back plan.
Consider your business plan as something you can regularly come back to as your business grows and expands.
There is software that exists to walk you through this, making it easier for you to establish a comprehensive business plan. LivePlan is a good business planning software.
» Create your Menu
Your menu is the determining factor of your restaurant’s success, and it should be in sync with your restaurant style and concept.
Your pricing should also be in correlation with your concept and target customers, make sure your menu suits their tastes and is affordable for them.
Create an extensive wine list for a more upscale restaurant or a kid’s menu for a mid-scale, family-friendly restaurant.
» Location is Key
Location, location, location. As with most businesses, location matters here- maybe even more so for a restaurant business.
You have to choose a location that will supply you with an unending stream of your target traffic, is convenient and accessible, and if you cater to the working class, your location should be in proximity to workplaces and other businesses.
The key here is to maintain a close proximity to your target customers – close to a school, for example.
Your building layout should also be considered here, think about what you will be cooking and serving before designing your kitchen area.
» Proper Funding
Get funding for your restaurant business; after you have successfully constructed your business plan, you should have an idea of how much you will need to properly start and run it.
Talking to other restaurant business owners should give you an idea of how much you will need upfront if you do not have a clear start-up cost.
There are various avenues restaurateurs can take to get funding for their restaurant; including involving family and friends in the business, benefitting from government programs or taking a loan.
» Hire Staff
Some of the challenges restaurants face is being operated by unqualified staff. Filter out your employees to be the crème de la crème of restaurant staff.
Specify what you need and the qualifications you require in your ads. Also, to find a level playing ground, research on what rival restaurant businesses are paying their staff to avoid over-spending on the payroll.
» Advertisement
Customers will definitely not just flock to your doors once you establish a business plan and create a menu and all that.
You will need a proper advertisement to direct traffic to your establishment. Place ads- according to budget- on your local newspaper, television/radio stations or on restaurant sites.
Do a survey to find out how your customers heard about you, so you can know where to direct most of your advertising.
Setting up tasting booths and organizing charity events is a budget-friendly way to spread the good word.
Owning a restaurant is definitely not for everyone. Few are cut out for the work involved in the setting up and proper maintenance of the business.
As with any other business venture, it requires determination, hard work, and consistency.
Added benefits would be quality assurance, adherence to safety regulations and, a customer-friendly management.