Are you considering to open your own restaurant business? It's a big decision, and there are a lot of things to consider before starting out in the restaurant industry. Find all the answers to 'how to open a restaurant' in this guide.
21. June 2022 • 9 minute read
This guide will walk you through everything you need to know about the restaurant industry and how to open a restaurant. From choosing a location, to hiring staff and setting your prices. We'll also give you tips on how to write a business plan and what the costs of opening your restaurant will be. So whether you're just getting started or are already in the planning stages, this guide is for you!
Things to consider when opening a restaurant
There are numerous things to think about when you start the process of opening a restaurant. The first step is to come up with an idea for your restaurant. What type of food will you serve? Will it be casual or fine dining? Once you have an idea of the concept, you'll need to choose a location. This is one of the most important decisions restaurant owners will have to make, as it will affect everything from your rent to your clientele.
Once you've found a location, you'll need to start working on the details like menu development, design, and hiring staff. And of course, you'll also need to think about how much it's going to cost to get your restaurant up and running.
There are a lot of moving parts to start a restaurant, but don't let that discourage you! With proper planning and execution, you can make your dream of owning a restaurant a reality. So what are you waiting for? Get started today!
Lots of restaurants don't make it
Starting a successful restaurant is no easy feat. In fact, according to some estimates, as many as 60% of restaurants fail within the first year. There are a number of reasons why, but some of the most common include poor location, bad concept, poor management, and insufficient funding.
One of the main reasons restaurants do not make it is because they don't have a clear concept. Before you open your restaurant, you need to decide what type of restaurant you're going to be. Are you going to be a casual eatery or a fine dining establishment? Once you've decided on your concept, you need to make sure that all of your marketing and branding reflect that concept. restaurants also fail because they're not able to generate enough revenue to cover their costs. This is why it's so important to create a realistic budget and make sure that you're generating enough revenue to cover your expenses.
Finally, some restaurants fail because they're not able to attract and retain customers. In order to succeed, you need to make sure that all of your marketing and branding reflect that concept.
Wondering how you can make sure your restaurant will not be one of the 60% that fail? Start with writing a kick ass business plan.
Creating your restaurant business plan
Before you start a restaurant business, you need to write a solid business plan. This document will outline your restaurant's concept, menu, target market, marketing strategy, and financial projections. It's important to have a clear and concise business plan before you start any new business, and the restaurant industry is no exception.
How to write a restaurant business plan
Your restaurant business plan should include:
- Your restaurant's concept
- Your target market
- Your competition
- Your restaurant's location
- Your financial projections
- Your marketing strategy
A great way to assess the quality of your business plan is to talk with many restaurants that have been in your shoes.
Defining your restaurant concept
The first step in writing your business plan is to define your restaurant concept. What type of food will you serve? Will it be a casual or fine dining restaurant? Once you have an idea of the concept, you can start to flesh out the details like menu development, design, and hiring staff.
Defining your target market
Your target market is the group of people who you expect to eat at your restaurant. To choose your target market, you need to think about who will be most interested in your concept. For example, if you're opening a vegan restaurant, your target market might be people who are looking for healthy dining options.
Mapping out your competition
When you're thinking about how to open a restaurant, it's important to map out your competition. This will help you identify what they're doing well and where there's an opportunity for you to differentiate your business.
To map out your competition, start by doing a search for restaurants in your area. Once you've found a few, take note of their location, price point, and type of cuisine. Then, visit their website and take a look at their menu. Finally, try to visit the restaurant in person to get a feel for the atmosphere.
Once you've done your research, it's time to start thinking about how you can stand out from the competition. This may mean offering a unique cuisine, providing a more upscale experience, or having a lower price point. Whatever it is, make sure you choose something that you can realistically execute and that will appeal to your target market.
How to decide what food to serve in your restaurant
One of the first decisions you'll need to make when starting a restaurant is what type of food you'll serve. This will depend on a number of factors, like your budget, your location, and your target market. For example, if you're opening a restaurant in a small town, you might want to focus on local cuisine. But if you're in a big city, you'll have more options. You could serve traditional Greek food, Italian food, Chinese food, or anything else that your customers might be craving.
Once you've decided on the type of food you want to serve, you'll need to start thinking about your menu. What dishes will you offer? Will you have a prix fixe menu or a la carte options? How much will your dishes cost? These are all important questions to answer before you open your restaurant.
How to compile your restaurant menu
Now that you've decided on the type of food you want to serve, it's time to start putting together your restaurant menu. The first step is to come up with a list of dishes that you want to offer. This can be anything from simple appetizers to full-course meals. Once you have a list of potential dishes, it's time to start narrowing things down.
Think about what will sell well in your restaurant. What are your customers likely to order? You'll also want to consider your budget when compiling your menu. How much can you afford to spend on ingredients? Once you've taken all of these factors into account, you should have a good idea of what dishes will be on your final menu.
How to define the prices for your restaurant
Now it's time to start thinking about pricing. This can be a tricky task, as you don't want to price yourself out of the market. But at the same time, you need to make sure that you're making enough money to cover your costs and turn a profit. A good rule of thumb is to start by looking at your competition. See what they're charging for similar dishes and use that as a starting point. From there, you can adjust your prices up or down depending on the quality of your food and the overall experience you're offering.
Choosing a location for your restaurant
The next step in starting a restaurant is finding the perfect location. Finding the right location has a big influence on your restaurant's success, and this can be a challenge, as there are a lot of factors to consider. First, you'll need to decide what type of neighborhood you want to be in. Do you want to be in the heart of the city or off the beaten path? Second, you'll need to think about your rent. How much can you afford to spend each month? Third, you'll need to consider your target market. Who are you trying to attract with your restaurant? Is it families, young professionals, or tourists? Once you've answered these questions, you'll be able to start looking for a location that meets all of your needs.
Choosing a location for your restaurant
Now it's time to start thinking about pricing. This can be a tricky task, as you don't want to price yourself out of the market. But at the same time, you need to make sure that you're making enough money to cover your costs and turn a profit. A good rule of thumb is to start by looking at your competition. See what they're charging for similar dishes and use that as a starting point. From there, you can adjust your prices up or down depending on the quality of your food and the overall experience you're offering.
Finding staff for your restaurant
Once you've found a location and started working on your menu, it's time to start thinking about staffing. You'll need to decide how many employees you'll need, what positions you'll need to fill, and how much you're willing to pay your staff.
When it comes to hiring, there are a few things to keep in mind. First, you'll want to make sure that you're hiring people who are passionate about food and service. Second, you'll want to find individuals who are a good fit for your restaurant's culture. And third, you'll want to make sure that your employees have the skills and experience necessary to do their jobs well.
If you take the time to find the right staff, you'll be setting yourself up for success.
The type of employees you need to hire for your staff varies depending on the size of your restaurant. For a small restaurant, you may only need to hire a few people to cover all the positions. But for a larger restaurant, you may need to hire dozens of employees to cover all the different stations.
Here is a list of positions that are typically found in a restaurant:
- Manager
- (Head) Chef
- Sous chef
- Line cook
- Prep cook
- Dishwasher
- Server
- Host/hostess
If you're not sure how many employees you need, a good rule of thumb is to start with one employee for every two tables. So if you have ten tables in your restaurant, you should start by hiring five employees.
You can always adjust your staffing levels as needed once you open your doors and get a better idea of how busy your restaurant is.
Training your staff
Once you've hired your staff, it's time to start training them. This is an important step in ensuring that your restaurant runs smoothly. You'll need to train your employees on how to do their job, how to interact with customers, and how to handle different situations that may come up.
You can either train your employees yourself or you can hire a professional trainer to do it for you. If you decide to train your employees yourself, there are a few things to keep in mind. First, you'll need to make sure that you're clear and concise when explaining things. Second, you'll want to give your employees plenty of opportunities to practice what they've learned. And third, you'll want to provide feedback so that your employees know how they're doing.
When it comes to training your staff, the most important thing is to make sure that they're prepared to do their job.
Once you've hired your staff, you'll need to start thinking about how you will create work schedules. This can be a challenging task, as you'll need to take into account the needs of your employees, the needs of your customers, and the needs of your business.
You'll also need to consider the type of shifts you want to offer. For example, will you have full-time employees or part-time employees? Will you offer night shifts or daytime shifts? Once you've decided on the type of shifts you want to offer, you'll need to create a schedule that meets the needs of your business and your employees.
If you're looking for a way to make employee scheduling easier, Workfeed is the way to go. With Workfeed, you can automatically create and share work schedules, track working hours, stay up to date with employee availability, and send shift reminders. You can also use Workfeed to chat with your team and to manage time-off requests.
Now that you've chosen a location, developed your menu, and hired your staff, it's time to start thinking about how much it will cost to get your restaurant up and running. The average cost of opening a restaurant can range from $50,000 to $500,000. Of course, the actual cost will depend on a number of factors, including the size of your restaurant, the location of your restaurant, and the type of cuisine you're serving.
However, there are a few costs that are universal to all restaurants. These include rent, equipment, supplies, and employee salaries.
Rent
Rent is typically one of the biggest expenses for restaurants. The average cost of rent for a restaurant in the United States is $30 per square foot. This means that if you're looking to open a 2000-square-foot restaurant, you can expect to pay $60,000 in rent each year.
Restaurant equipment
Restaurant equipment is another big expense for restaurants. Depending on the type of restaurant you're opening, you may need to purchase items like commercial ovens, dishwashers, and refrigerators. The cost of equipment can range from a few thousand dollars to tens of thousands of dollars.
Supplies
Supplies are another necessary expense for all restaurants. These include items like dishes, silverware, glassware, and linens. The cost of supplies can vary depending on the type of restaurant your opening. For example, a fine dining establishment will need to purchase higher-quality items than a casual eatery.
Software and hardware
Another cost to take into account is soft and hardware, which includes things like point-of-sale (POS) systems, credit card processors, and security systems. The cost of soft and hardware can range from a few hundred dollars to a few thousand dollars.
Finally, you'll need to think about employee salaries. Depending on the type of staff you're looking to hire, salaries can range from a few hundred dollars per month to several thousand dollars per month.
When you're thinking about how much it will cost to start your restaurant, it's important to consider all of these factors. By doing so, you'll be able to create a realistic budget and avoid any financial surprises down the road.
Once you've budgeted for your restaurant costs, you'll need to start thinking about how you're going to finance your restaurant. You may need to take out a small business loan, invest your own money, or raise restaurant funding or borrow money from friends and family.
If you are thinking about getting a small business loan, we advice you to contact your bookkeeper or local bank.
Administration
The administration side of a small business is more than just taking care of finances. You will also need to think about of other administrational tasks. This includes things like getting a business license, registering your business name, applying for a liquor license, and applying for permits and taxes.
The process of starting a restaurant can be complex, but it doesn't have to be overwhelming. However, it's no secret that most small business owners are not the biggest fan of doing their small business administration. It might therefore be a good idea to find yourself some help. There are countless companies that provide small businesses with help with their administration.
Creating a marketing strategy
Spending time and effort on marketing is key to running a successful restaurant. Your marketing strategy should be designed to reach your target market and attract them to your restaurant. There are many different marketing channels you can use, from online advertising to print ads to word-of-mouth. It's important to choose the right mix of marketing channels for your restaurant so that you can reach as many potential customers as possible.
The best marketing channels to promote your restaurant
The best channels to promote your own restaurant are to use a mix of online and offline channels.
Some effective offline marketing channels for restaurants include:
- flyers and posters in high-traffic areas
- radio ads during drive time
- print ads in local newspapers and magazines
Some effective online marketing channels for restaurants include:
- Google Ads
- Facebook Ads
- Instagram Ads
By using a mix of both online and offline marketing channels, you'll be able to reach the widest possible audience for your restaurant.
How to open a restaurant
Now that you've chosen your location, developed your menu, hired your staff, and secured financing, it's time for the grand opening of your dream restaurant! This can be an exciting and nerve-wracking time. To help make sure everything goes smoothly, there are a few things you should do:
- Create a detailed opening plan that outlines all the tasks that need to be completed before you open your doors.
- Assemble a team of trusted employees who will help you with the opening process.
- Delegate tasks and make sure everyone knows what they're responsible for.
- Order all the supplies and equipment you need.
- Create a marketing plan to promote your restaurant's grand opening.
Wrapping up
Starting a restaurant is a big undertaking, but it can be a very rewarding experience. If you take the time to plan and prepare, you'll be setting yourself up for success.
We hope this guide has been helpful in getting you started and answered all your questions on how to open a restaurant. Good luck!
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