If you’ve always had the dream to open your own restaurant, then it’s time to take a seat and write-up a business plan to get started. There is a lot to consider when opening a restaurant. Here we’ve compiled a list of what you need to know to get started so that opening the doors is something you can do with calm confidence.
Opening a restaurant can be an unbelievable opportunity and will always be exciting, but it’s also a tough business to get into and takes a good amount of time and investment. A large number of restaurants will not survive the first year, but that doesn’t mean throw your dreams away, that means plan and execute your plan thoroughly. This will save you money wherever you can and save on the time investment as you won’t have much wasted energy.
“Why is the restaurant business notoriously difficult?”
As with most businesses that don’t work, not planning enough before execution is usually the culprit. From getting the funding to find a space, get appliances, train staff, and create an atmosphere with decor; the better you plan the better off your restaurant will do at opening and down the road.
Here are some tips to start your restaurant directly from the mouth of restaurant owners who have made it a successful business:
1. Know you’re opening the restaurant
If your wish is simply to accumulate wealth, your heart may be in the wrong place and you may be getting into the wrong business. Successful restaurant owners will say, “have the right intentions and do what you love”. You’ll invest a lot of time and money, so you’d better be sure that opening and running a restaurant is something you are truly passionate about. There will be struggles and issues all along the way in the beginning, so you need to know why it is your opening a restaurant in the first place. Do you love food? Do you love entertaining? Are you passionate about cuisine?
2. Plan for success
Your business plan will essentially be the foundation in which you set up your restaurant. Think of it this way, if you have cracks in the wall of a home it almost always means the wall is fine but the foundation is faulty.
- Setting up a restaurant is no different, you need to have a strong foundation that will be your business plan and model. Business plans should include things like:
- What is my initial investment out-of-pocket?
- Can I acquire the right investment or loans?
- Who is my demographic?
- What is the average plate for this sort of business?
- Will we change the menu often or have standards?
- Are we seasonal?
- What are the industry trends?
- How will I market the business?
- And so on.
3. Choosing Your Location
The location of your restaurant can make a huge difference in how much foot traffic you will get and how well you will do– finding the right place is paramount. Be in a populated area, don’t look for locations in the middle of nowhere. Do some research, where is the most foot traffic in town? If it’s a small town and everyone drives, where are the main junctions? Are there lots close to a highway junction? Where is the center of town? Location is something that is so important and can greatly affect your investment in terms of rent, so do your due diligence and find the best spot that is available in your area at the best cost. You can also negotiate the terms typically for your lease agreement.
4. Creating & Testing Your Menu
The food is why people will come to your establishment first and foremost. Atmosphere and decor come 2nd. If the food is great people will come back, it’s that simple. Are you the chef or do you have an executive chef? What sort of cuisine will you be serving? This will greatly determine the type of restaurant aesthetics you’ll want to create as well. Is it fine Italian dining? Then the dishes and decor should reflect that.
Also, test your menu by running a free staff dinner where they invite family and friends, give out rating cards for each dish and ask them to reply honestly. Do one to the open public as well with limited seating.
5. Hiring the right staff
Qualified restaurant staff cannot be overlooked. A qualified manager, experienced wait staff and bartenders, can make a huge difference. Not only about how well your restaurant runs, but also how well people feel they are being cared for, and also how much profit you pull in. Experienced bartenders and wait staff will know how to direct people towards the more profitable or better selling items on the menu, the same goes for cocktails. Recommendations cannot be overlooked when it comes to patrons making a decision. Also, this way you can save time on training and know that when the doors open your staff is the right staff.
6. Funding For 6 Months
Because there is a great investment to start a restaurant, you should be sure to secure funding for a minimum of 6 months. That means covering everything from monthly lease cost, utilities, appliances, staff salaries, food supplies, alcohol supplies, so on and so forth. This is because you should plan to lose money for the first few months (this is normal for restaurants) and that is often because of the investment but also the marketing cost.
When you open you want to get the word out faster than word of mouth and that means running ads in the local newspaper, online platforms like Facebook, and even local home mailers or radio. Offer coupons as well on these ads as well.
7. Don’t Quit!!!!
There will be bumps on the road down the road and more so in the beginning stages. But that doesn’t mean you should roll over. This is your dream! This is your passion! You’re going to make this work! You’ve done the planning, you have the investment, the location, the food, the staff and a marketing campaign. You will keep plugging away and doing everything in your power to make this work.
When the going gets tough, the tough get going!!!
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