Opening a new restaurant without a hitch
Are you wondering how to open a restaurant? If you are, there are many things to consider from the costs associated to what type of restaurant to open, so an “open a restaurant” checklist is a great place to start. Let’s take a closer look at all the things you need to consider before starting this endeavor.
Research the market
You have likely asked yourself how to start a restaurant and no doubt have a million ideas flying around your head. Before getting too far ahead of yourself, it is important to do some market analysis to find out what is trending, a crucial part of any business plan and suggested by Entrepreneur.com.
Choose a niche
Choosing your niche is also vital and can be broken down into three components: target market, service style, and food concept. Instead of trying to please everyone with an expansive menu, it is better to focus on one area that you will be known for. For example, your niche could be cheeseburgers, coffee, steaks, Chinese food, sushi, or healthy pitas. Once you decide, you can build your menu with the main items in focus.
Choosing a location
Choosing a location is your next key step and will play a large role in the cost to open a restaurant. There are a number of factors to consider here. Entrepreneur.com suggests you look into the following when comparing locations.
- Will sales volume be affected by the location?
- Can customers get to your business easily enough based on its location?
- Will your business rely on foot traffic? If so, is the location in a zone for high foot traffic numbers?
- Are there other businesses near your location? Will they play a role in customers coming to your restaurant? For example, a rival restaurant can affect numbers negatively while a nearby business with 100 staff could lead to busy lunch times.
- How much rent will you pay?
- One aspect that is often overlooked – is there parking for you customers near your preferred location?
- Why is the previous tenant no longer at the site? Was it a restaurant? Did it go under?
- And finally, your lease details and developments in the coming years.
Calculate the costs to open a restaurant
The cost to open a restaurant is, of course, an important factor. Experienced restaurateur and owner of the Lime franchise in Florida, John Kunkel, shared these words of advice on what costs you can expect:
- Rent and operating costs (including security deposit, rent for the first month, utility bills for the first month)
- Premises improvement costs (customized kitchen, fittings and furniture, utensils, cutlery, crockery, kitchen and bar equipment, food and beverages for the first month)
- Marketing expenses (signage, printing of menus, advertising, PR services)
- Miscellaneous expenses (insurance, licenses, permits, ordering technology, payment technology and accounting costs).
Writing a business plan
It is also crucial to write a business plan for your new restaurant. This way you can form a cohesive plan and view of your restaurant which includes what it is and where you want it to go.
This should consist of three parts according to Balance.com: an executive summary, a description of your company, as well as a market analysis (which you would have performed earlier as described above). Then your business is further broken down in subsequent sections of the plan.
For help in drawing up a simple business plan, follow the model suggested by Rapidadvance.com.
Get your funding
Now onto one of the most important parts– the funding. Without enough startup capital, your restaurant can’t get started.
Here are a few ways that you can sort out this capital.
Online business loans are a great way to secure money within a matter of days and in some cases, even hours. Often, they are very easy to apply for with fewer strict requirements when compared to loans from other financial institutions.
They are particularly useful for small business owners. In fact, a study by the Harvard Business School shows that as little as a third of banks now offer loans for small businesses. At the same time, there has been a massive growth spike in online loans. For more information about online business loans, click here.
Family and friends
Another way to raise money is to approach family and friends and ask them to become financial backers for your restaurant. If you are considering this, know who to approach and who to leave well alone. Remember to draw up a contract when money is given, as people might think they are entitled to rights in your successful restaurant.
Taking on a business partner is another excellent way to find half of the capital needed to start your restaurant. Again, the crunch comes in finding the right partner.
Grants and government programs
Certain grants and government programs are an option as well. These can help you raise a portion of the capital you need.
Your own assets
Lastly, if you have assets of your own, you could invest them into your new restaurant and draw them out once it is established.
Purchase your building and setup shop
Now comes the time to purchase the building or sign the rental contract and finally set up your restaurant. You will need to purchase all of your equipment, decor, food, tables, etc. and get ready for business.
Comply with safety regulations
Being that you are serving food, there are many health and safety regulations you must adhere to. Be sure that you are in compliance to avoid any problems.
Of course, without the right employees, your restaurant will not run. You may need to hire the following: managers, chefs, line cooks, servers, hostesses and bussers.
Once you have a staff, it is important to keep them happy. Remember, happy staff are far more productive than those that have a problem with their job or even their boss. There are many ways to ensure your staff enjoy their jobs and remain happy including making them feel valued, taking their opinions into account, and recognizing excellence.
Market your restaurant
Finally, it is time to market your restaurant. Building up a return customer base is key. If you have an excellent offering in terms of ambiance and food, you only need to get people in the door once, they will return if they enjoyed themselves. There are numerous cost-effective ways to market your restaurant including using social media, making use of signage, clever use of email marketing and finally, the use of regular promotions.
Here you have the basics you need to know in order to open your own restaurant. There are many things you will have to get aligned, but once you do, the money can start rolling in. Whether your dream consists of a coffee shop, a pizza joint, or a fine dining establishment, you can make it a reality by following this “open a restaurant” checklist.