Interested in being your own boss? Here is the right guide for you.
If you're interested in being your own boss, opening a restaurant is a great choice. Research indicates that the foodservice business is on the upswing and will reach $4.2 trillion by 2024, growing at 3.6% CAGR during 2019 – 2024.
Many people, in the beginning, assume that it's an easy task to launch a restaurant business, while in fact, it is much more difficult. Getting started in business has a lot of important business skills. But, for opening a successful restaurant business, you couldn't compromise on careful planning.
Having years of experience in restaurants, bars, kitchen management, products production, distribution, and branding, Ermanno Lelli has shared the following restaurant startup checklist with you to get started. So, if you're wondering how to open a successful restaurant, you must first follow the following steps:
1. Develop A Formidable Business Plan
As with any new business, starting a restaurant requires a strong business plan. Before making any investment, it is imperative to undertake detailed research on the type of restaurant, cuisine type, target customers, service style, competitors, and the latest food and beverage industry trends. Then start writing the business plan. Below are a few of the steps you'll need to take while creating a business plan.
● Specify Your Budget For The Business
The business budget is a core component of any business plan, specifically if you are seeking funding. A business budget will look at all the costs associated with starting your business, the funds required to manage the business once it is up and running, and a matter how long your business will generate revenue and how much revenue you plan to generate.
Among the costs you'll incur and factors to consider when beginning a restaurant business are the following:
○ Which type of restaurant business are you launching?
○ Expenses of staff and senior management
○ Equipment
○ Initial food product investment
○ Design for a physical space
○ Property investment
● Competitors Analysis
As you're getting your business strategy together, you should begin researching and evaluating your competitors. The business is a highly competitive industry, with many markets saturated. So before you start your small restaurant business, you should familiarise yourself with who else is out there and what they are doing.
While identifying competitors, keep an eye out for their strengths and weaknesses. This will identify any gaps in the market that your business can fill. This is also an excellent opportunity to examine business costs and estimate your profitability at this time.
● Identify The Market Gap
Finding a gap in the market is the optimal strategy for beginning a restaurant business. Where is there a lack of customer desire that competitors are not meeting? And just because no one is doing it doesn't imply there isn't a customer desire—to make a profit, buyers must want it and be prepared to buy it.
Identifying a gap in the market will assist you in determining your target market, your USP( unique selling point), and the type of restaurant you wish to open.
● Define Your Restaurant Style
Are you interested in starting a bakery, quick-service, coffee shop, fast-casual or full-service restaurant? All of these depend upon the market research you have done, so make sure you spend a few weeks (or even months) getting a deeper understanding of all these aspects.
● Specify Your Food Type/Menu Items
Choose a menu that best suits your meal offerings. You'll be more prepared if you do this early in the process. Keep tabs on what the latest restaurant trends are and customize your services to your target market.
● Define Your Restaurant Brand
Your branding — from your logo and graphics, the design of your menu, the music you play, and even the uniforms worn by your workers – defines your business and its values. It establishes the mission/theme for your establishment and informs guests of what to expect. So consider carefully how you wish to position yourself and the identity you want to project.
Once you have a business plan, go out and test it. First, find a few of your target clients and ask for their feedback and impressions. This can range from a quick street poll to a comprehensive market research study.
2. Look For Financing Options
The next stage in starting your restaurant is to secure financing. Most of us don't have enough capital on hand to cover the cost of opening a restaurant without financial assistance. Obtaining funding from outside sources will determine if you can make your dream of restaurant ownership a reality.
Here are a few ways to secure funding for your new restaurant:
● Contact family/friends
● Get a business loan
● Find outside investors or bring in a partner
● Obtain government assistance
● Use crowdfunding
Remember that profits need time to be earned, and it won't be easy initially to make money. And as you're thinking about how to start, keep in mind that you can always scale up if you want to. So think about choosing your business partners carefully because they're here for the long term.
3. Choose Restaurant Location
While choosing your restaurant location, the following factors are among the most important:
● Visibility And Accessibility
Select a location with good visibility that receives plenty of vehicle and foot traffic. Consider parking availability and ease of access for cars and pedestrians.
● Cost
Labor costs vary by location. It costs more to live in more expensive places; thus, your wages have to be more significant in order to compete.
● Demographics
Your restaurant's target market should coincide with the area's demographics.
● Local Competition
Looking at the competition in your area can teach you a lot. The goal is to avoid a neighborhood overrun with eateries that directly compete with your brand.
● Future Plans
Consider the area in 2, 5, or 10 years and any significant new development projects that may alter the local landscape.
4. Restaurant Licenses And Permit
You will need to secure different federal, provincial, and local licenses and permits to open a new restaurant. Every country and city is different, so it's better to visit your local regulatory office and consider getting legal counsel to make sure you adhere to all of your local health & safety codes and food regulations. The licensing procedure may take several months to complete, so be sure to begin it well in advance of opening day.
5. Design The Layout And Space
When you have found a venue, you should begin working on designing and setting up your layout. While this will vary depending on the sort of establishment, restaurants typically devote 45-60% of available space to the eating area, 35% to the kitchen, and the remaining to storage and offices.
Contemplate your cooking and dining areas and plan how they should flow with one another. Ensuring your cooks have adequate prep space is just as important, so be sure to provide plenty of areas for them to plate, garnish, and design their dishes. Also, consider dry and cold storage, meal cooking, and ware washing. When designing your dining room layout, take care of Seating Capacity, Ambiance & Decor, Dining Room Furniture, and Cleanability.
6. Choose The Equipment And Food Suppliers
When you become a restaurateur, you will be working with various suppliers, including kitchen appliances, tableware, POS systems, bar equipment, and of course, food. So make a wish list of the projects you'd like to work on, look into your long-term and short-term budgets, and find potential collaborators. Keep in mind, though, that although you want to maintain the highest possible quality when procuring supplies, too many expensive providers can bring your business to the ground. So make careful to haggle, to make sure of your terms.
But where to begin? Try wholesalers, farmer's markets, F&B conventions, asking fellow restaurateurs for recommendations, or just a simple Google search.
You'll want a supplier with a proven track record of excellent items and successful partnerships. Inquire about food suppliers' delivery timetables and food safety management policies. And buy local for fresher foods.
7. Hire Your Restaurant Staff
The hiring stage of opening a successful restaurant business is very crucial and needs proper consideration. First, make a list of all the restaurant positions you'll need to fill in order to operate your restaurant on a daily basis. Some examples of staff you might need may include: HR managers, purchasing experts, marketing and sales managers, accountants, chefs and sommeliers, waiters, hosts, bartenders, and cleaning and dishwashing staff. Look for people with considerable experience and a record of success who are adept at multitasking and have exceptional time-management skills. All of your workers must work under pressure, and front-facing staff should be very social.
8. Advertise Your Restaurant
You must advertise and attract new clients when you are opening a restaurant. Advertising informs prospective customers about your restaurant's location and menu. Effective advertising should also generate excitement for your brand. Here are some restaurant marketing ideas:
● Build A Website
Keep the content straightforward and simple so that the site is easy to use, with everything included, such as openings hours, menu, a booking engine, and whether or not you cater to specific requests.
● Offer Promotions To New Guests
Offer a promotion for first-time guests. A free beverage, dessert, or discount on their first bill is an enticing way to attract customers.
● Use Social Media
Have Facebook, Twitter, Linkedin, and Instagram profiles, and use them to generate and post information about your restaurant, including more detailed explanations of your preparations leading up to opening day.
● Host A Soft Opening
In a soft opening, you can rehearse ahead of the grand opening to be prepared for it. Invite only a select group of people to the soft opening, usually the employees' family and friends. In addition, by employing this method, you can work out any kinks in your service.
● Host A Grand Opening
Create buzz around your new restaurant by hosting a grand opening. Other special events like wine tastings, live music, or cooking classes are great ways to attract attention.
- Final Thoughts -
Start your own restaurant business the right way with these eight steps. When you take the time to thoroughly plan out your business and obtain all the required licenses, you put yourself in a favorable position for your restaurant to expand. There you have it. Now polish that menu and prepare to serve the crowds. There's nothing you can't accomplish if you just work hard enough and plan your strategy.
And so is our parting advice: stay determined, never give up, and always be ready to take a risk. Initiating any new endeavour will be difficult, but the results are sweeter when the work is completed successfully.