If you had plans to start a restaurant business, then this might be the right time to get together a plan to start. Here’s a straightforward starter guide to ensure you have all the tools required to confidently start a restaurant business.
The thought of starting your new business could bring much adrenaline to your veins, like someone watching a suspense-filled movie, watching a football game between two top sides, comparing NHL odds, or waiting to meet a long-lost lover. However, starting a restaurant business is time-consuming and could be challenging.
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Essential Things to Know Before Starting a Restaurant
Statistics show that about three-fifth of restaurants fail in their first year. Wait, don’t fret or fidget. That’s just to show you that you need to invest some critical time and money when you want to start a successful restaurant business. Let’s get to the list of things to know before starting a restaurant business.
1. Get a Solid Business Plan
The first thing to do before investing any money is to research properly. Spend a few weeks or months getting a broader knowledge of the restaurant industry, taking note of the latest trends, competition, and the target clientele. Then, you want to start scribbling down a business plan for your investors.
First, define your target market. Who is your target clientele? Gen Z, X, seniors, or people in a particular career? Immediately you’ve ascertained your target clientele, ensure you understand what makes them tick and their motivation for buying the things they purchase.
Then, you want to define your brand’s style. What restaurant style are you opening? Is it a coffee shop, fast-casual, or full-service dining restaurant? Each of these styles has unique approaches to planning and operations, so you want to select one that suits you as a person.
Next, you’d define your branding, from your logo and the imagery you choose to your menu design, or even the music at the shop and the dress of your staff. Doing that sets the tone for your restaurant and lets your customers know what’s obtainable.
Immediately you have your business plan in place, get out there to test it. Locate some of your target clientele and ask them about their thoughts, impressions, and possible suggestions. Using a poll is an easy way to go about that.
2. Secure the Financing
Then, you want to sort out the finances. There are different ways to find funding for your new venture, including:
- Getting government aid
- Using crowdfunding
- Turning to family/friends
- Getting a business loan
- Finding outside investors or bringing in a partner.
Know that you could take years before you make your first profit, and getting finances could be challenging initially. So you might want to start small initially, possibly scale up afterward, and select your business partner wisely. Do you know why it’s important to choose your business partners wisely? They’ll be around you for a long time in the business.
3. Find a Right Location
While many people think that location is one of the most important things determining how successful a business is, that isn’t necessarily the situation.
The location you select for your establishment could depend on some factors. You don’t necessarily have to situate your restaurant in the best retail location in the community. Also, situating your restaurant close to a high-brow area might not be compulsory unless you depend heavily on foot traffic.
You want to consider the following factors before selecting the right location when starting a restaurant business.
Accessibility to potential clientele: How close are you to potential customers who may come to your shop? How soon could they come to your restaurant on foot, by private automobile, or by public transport?
Cost: Depending on your profit and sales expectations, how much could you afford on rent? The amount you can afford on rent tells where or where not you may choose to cite your restaurant.
Nearness to other businesses: Other businesses and the competition can affect the traffic that comes to your business. So you want to examine what happens around your potential business site and check how it could impact its performance.
Restrictive regulations: Yes, some locations have severe noise restrictions that could affect when your suppliers could supply items to you or when you can host customers.
4. Select Your Suppliers Carefully
Another vital thing to do before starting a restaurant business is to select your suppliers carefully. As a restaurateur or chef, you could work with different suppliers, ranging from POS systems to kitchen equipment, furnishings, and the meals themselves. Plan out your short and long-term plan, and get out there to hunt for the right suppliers to work with.
However, remember that while you don’t want to reduce the quality of supplies that come to your restaurant, over-priced suppliers can negatively impact your business or even bring it to liquidate the business. It’s helpful to negotiate hard when searching for suppliers to work with.
One of the places to search for the right suppliers is in wholesale retailers, local farmer’s markets, etc., or just a plain Google search. You could also search for a reliable supplier with a history of delivering quality products and who has worked with successful partners. Ensure that food suppliers have the right food safety management practices and delivery schedules.
5. Get the Licenses and Permits Right
Every city, state, or country has its regulations when it comes to the restaurant industry. However, ensure you check with the local regulatory office and consider hiring an attorney to guide you in adhering to local health and safety regulations.
Additionally, remember that some licenses could take months before you acquire them, so ensure you start this licensing process before the launching day.
6. Start Hiring Your Staff
First, consider what employees you want to employ in your restaurant. Depending on the scale of your café, it could mean that you’d hire HR managers, purchasing experts, chefs, waiters, bartenders, dish-washing staff, accountants, etc. Ensure you hire adequate staff for each job and anticipate staff shifts in case someone falls ill or goes on vacation.
Search for potential staff with enough experience and track record that can multi-task and are efficient at what they do. You want to employ individuals that can work under pressure and have outstanding social skills. Remember, you can’t be too careful when hiring staff, so you want to do your due diligence. Ensure to execute your background checks, do several personal interviews and speak with their referees.
7. Marketing is Key
Before starting your restaurant business, it’d help to execute a modest amount of marketing to inform the local community (and possibly the global community) about your restaurant’s services.
Meanwhile, while word-of-mouth marketing is still the most effective advertising mode, here are some other ways you might want to market your business:
Set up an excellent website: Ensure your website is user-friendly, mobile-friendly, and has all the necessary information, such as opening and closing hours and menu. Also, include a button for online orders (if you allow them) and information on how you cater to special orders.
Plan on how to maximize social media: You want to create social media accounts for your restaurant on Facebook, Instagram, Twitter, Linkedin, etc. Give information about relevant events, post high-quality images of your restaurant, and upload kitchen images that show you preparing for the work day.
Plan to host a soft opening: This is an excellent way of starting your day. Hosting a soft opening for family and friends could assist in creating some flair for your restaurant in the community.
Plan about offering promos to new visitors: How about offering a free cup of tea or dessert for the first set of 50 customers? They’ll remember you for your hospitality as virtually everyone responds positively to freebies.
8. Work Hard on the Job
Here’s the last tip to hold onto before starting a restaurant business. Work hard at planning and setting up the early stages of your restaurant business.
Starting any new venture, including a restaurant, will be challenging. However, with the right tips and information, victory, in the end, is sweeter than all the toil.
The Bottom Line
Why do many restaurants fail? Improper planning. You want to figure out every detail of your restaurant before dishing a customer your brand’s first dinner.
Everything from the planning stage, from kitchen appliances to menus and floor plans, could make or break your restaurant. That’s why we’ve put together the tips above for starting a restaurant business, from which we hope you’ve learned a thing or two to help get you started on a strong foot.