Do you want to establish your own restaurant, but don’t know where to start? There are many people with great ideas who simply don’t know how to get started. Because of that, we’ve assembled some step-by-step recommendations to help you turn your dreams of owning your own restaurant into a reality.
1. Develop a Concept for Your Restaurant
From the kind of cuisine you plan to offer to the way you serve customers, your restaurant concept represents your blueprint for success. It’s what differentiates you from every other restaurant out there, and the reason why consumers might choose you over the place next door. The name of your restaurant, the design of your collateral, and the decor should all represent your concept.
2. Put Together a Restaurant Business Plan
The cornerstone of your operations should be laid out in your company business plan. Include an executive summary, a firm description of your concept and how you plan to materialize it, an industry analysis, a geographic analysis, a target market analysis, a food safety plan, a sample menu, a marketing plan, a management strategy, and a financial plan. If you’re not familiar with creating this kind of document, search for a business plan template online that you can download and fill in as needed.
3. Look into Different Funding Possibilities
To figure out how to fund your restaurant, figure out how much it will cost to open it as well as how much it will cost to run it from one month to the next. Until you begin turning a steady profit, you should be ready to come out of pocket for your operating expenses, including food costs, employee wages, and space rent. If you don’t have the start-up capital, consider seeking an investor or obtaining a small business loan. To acquire a better grasp of your projected cash flow and determine how quickly you might be able to repay a loan, calculate your break-even point and construct a financial that takes into account all money coming in and going out each month.
4. Register Your Company
To get your Employer Identification Number, which you’ll need to submit taxes and apply for a business license with your state, you’ll need to register your firm with the U.S. Internal Revenue Service. The process is quick and easy. For your business license, visit your state’s Division of Corporations. You may also consider trademarking your restaurant’s logo (to prevent others from imitating you and profiting from your success.
5. Obtain the Necessary Licenses, Permits and Insurance
Aside from the normal business licenses and permits, there are additional licenses you’ll need if you’re running a restaurant, potentially ranging from a liquor license to a food handler’s license, and requirements for each vary by state. Your local Chamber of Commerce is a good starting point if you’ve got questions as to what’s required of you.
While no start-up business owner likes the idea of paying up front for things they don’t immediately need, insurance coverage is one of those things you should absolutely invest in up front. Aside from general liability coverage, you’ll also want to think about getting workers comp for restaurants. This kind of insurance protects your employees if they become injured on the job by covering their medical costs. It also protects you from potential lawsuits, which could be a death blow if your restaurant is just starting out.
6. Select a Suitable Location
The location of a restaurant may make or destroy it. When selecting a commercial location, visibility and foot traffic are two crucial elements to consider. You should also consider the size and shape of the space to see whether it’s a good fit for your restaurant’s layout. A space that has previously served as a restaurant may offer big advantages over any other commercial space. For instance, it may already have the number of sinks and other kitchen elements you need.
7. Order Your Restaurant Equipment
Restaurant equipment may be costly, so you’ll want to choose wisely when purchasing or leasing it. From kitchen equipment to dining room decor, make a list of what you definitely need versus what you desire, depending on your menu. Buying gently used things might help you save money. Make judgments based on your financial analysis and budget. And remember, there is nothing wrong with starting small.
8. Hire the Best People for the Job
Make a list of how many people you’ll need to operate your front and back of house smoothly. What experience and skills should the people in each position have? Once you’ve clarified that, it’s time to hire. You should also determine if you want to process payroll yourself or use a third-party vendor or software product. Keep in mind that restaurant payroll may be complicated, especially with varied state, federal, and local wage, and tip rules and regulations.
9. Put Your Menu Front and Center
Your restaurant’s menu is the focal point, and it should reflect your idea and identity. However, it may also be used as a marketing tool to persuade consumers to give your restaurant a try. Your descriptions should be brief but engaging for your target audience. Get plenty of images to share on your website, on online restaurant listings, and even within your establishment.
10. Execute Your Marketing Strategy
Coming up with a marketing strategy should have been a part of your business plan process. Now, it’s time to carry it out to raise awareness, attract new customers, and build a devoted following. There are many ways to advertise your new restaurant, including through social media channels, tipping off your local newspaper’s lifestyle editor, taking out advertising space in local publications, and even using a sign-spinner to direct eyes towards your restaurant as cars pass by.