Starting a business is everyone’s dream and opening a restaurant is perhaps one of the most common business aspirations. There is no denying that opening a restaurant is a thrilling endeavor, leading to a profitable journey. However, it is also one of the most difficult businesses to get off the ground. The reality of managing a restaurant can be daunting, with the possibility of customer complaints, mounting expenses, and unexpected snags ready to bring you down. Statistics suggest that nearly 60% of restaurants fail within the first year of operation.
Though these stats might sound intimidating, you do not need to drop your plans and walk away. At the end of the day, any business success depends on the owner’s willingness to get down and dirty and tackle the problems head-on. We have put together a guide that will help you kickstart your restaurant like a pro:
1. Figure Out The Concept
Establish a core theme for your restaurant. What do you wish to accomplish? What kind of experience do you want to give your customers? What sets your restaurant apart? How are you going to create a lasting impression on your customers?
Then there are ethical and moral questions about sustainability and sourcing local produce. Is it important to you? When making a decision, these questions will serve as the starting point. Identify your strengths and potential areas of growth. The food industry is very competitive, and you must be unique to make a splash.
2. Staff Up
A fair proportion of first-time restaurant owners ignore the significance of hiring the right employees or getting some necessary entrepreneurial know-how for themselves. Upskilling your expertise in management and, more significantly, financial accounting with an online MBA in accounting program can go a long way in helping you oversee the business side of your culinary enterprise.
The first thing you need to do when building a thorough HR program is to figure out exactly what tasks you want different people to carry out. The job description does not necessarily have to be formal, but it must clearly define the duties and obligations associated with the position.
For example, if you are looking for someone to take up financial responsibilities, you should add the required qualification and skills in the job description. Following that, you should set a pay scale. It would be best to narrow each role’s starting and ending pay rates. According to a well-documented report, the yearly employee turnover rate in the restaurant industry is an alarming 73%. So you should devise a solid strategy to hire skillful individuals.
Ask every candidate to fill out an application. You cannot dismiss someone for lying on their résumé, but you can fire an employee if they lie on their application, backed by an affidavit.
3. Lay Down A Menu
The next important step is creating a suitable menu. If you are a foodie, you will have a lot of fun deciding what to put on your menu. However, you need to think carefully and avoid adding items haphazardly. It is because your menu will determine many things, including the type of equipment you will require, the expertise you should search for in potential employees, and the kind of clientele you attract.
For instance, if you want to serve French pastries on the dessert menu, you will need a pastry chef, preferably one with a pastry arts degree, and other resources. When making pizzas, you will need proofers, pizza dough mixers, and chefs who know how to work with dough.
Since the success of your restaurant heavily hinges upon this critical feature, stick to the following checklist to create the finest menu:
- Divide items into categories: Make a list of all the items and place them in the respective category. General categories are entree, appetizer, main course, dessert, drinks, and so on. The next step is to determine which menu items you want to display prominently on the menu. As a rule of thumb, you should slot the top position for the most profitable dishes.
- Pay attention to the menu size: Avoid overloading your menu with too many items. Otherwise, you be overstocking and throwing away a substantial amount of food at the end of the night. Also, customers get confused when they see too many options on the menu. We recommend having no more than seven or eight dishes in each category.
- Put the right price: For-profit margins and customer satisfaction, each item on your restaurant’s menu has a realistic price. You can do that only if you know how much a particular dish costs. To attract maximum customers, you should balance high and low-cost food items.
4. Find The Right Location
The location of your restaurant can have a significant impact on its overall success. There is a direct correlation between location and rental costs. So if you opt for a sought-after location, you will likely pay more. Similarly, less popular areas offer an economical option, but you might have to spend relatively more on its marketing. Also, consider the legal conditions of the chosen location, as some states require servers to acquire a food handler certification.
Apart from budget, you must consider the target market while hunting for the location. For instance, a fast-food restaurant that caters to children might do well in a suburban location because of the high concentration of families in those areas. Executives and business professionals are more likely to hold luncheon meetings in dining areas with top-tier restaurant furniture. On the other hand, mainstream nightlife areas could be an ideal location for a pizza slice store targeting the young population.
5. Purchase the Restaurant Equipment
Opening a restaurant also requires buying all of the necessary appliances and equipment. It’s crucial to purchase the right restaurant equipment for your business. You can keep costs under control, uphold health and safety standards, and avoid accidents in your kitchen with the correct tools. Your kitchen will run more smoothly with the right equipment, and your staff will perform better every day. Making proper investments in restaurant equipment will enable you to grow your company and make a good name for yourself in the industry.
Making sure you purchase relevant equipment for the food you want to serve is important, a sous vide machine is no good if you’re planning on serving things cooked on a grill! If you’re starting a restaurant serving any kind of fried food, a Commercial Deep Fryer would be a sensible investment, along with drinks machines to curb a customer’s thirst!
6. Invest In Technology
Without technology, it is almost impossible to run a modern-day restaurant. Technology automates numerous mundane activities and enables restaurant owners and marketing teams to make better decisions. In the early stage, your restaurant’s technology stack should include at least a restaurant reservation system, a point-of-sale (POS) system, and an online ordering platform. Experts predict that online ordering will grow by 20% by 2030. So ignoring this potentially viable revenue source will be a bad decision.
7. Come Up With A Sound Business Plan
You will need a well-thought-out business plan to help you navigate your way to success. It acts as a living document you frequently consult to assist you in planning for expansion and evaluating your current level of success. To compile a business plan, you should conduct market research, evaluate your competitors, learn about your target audience, and develop a detailed marketing strategy.
8. Choose A Business Structure
Restaurant owners need to choose a business entity type like other businesses. Your company’s legal structure will determine how you file state and federal taxes for your company, how you will be held liable if someone files a legal claim against your company, etc. Most restaurants fall under the business structures such as sole proprietorship, partnership, C-corporation, S-corporation, and LLC. Since your business structure might have a long-term impact, you should consult a business attorney before making this decision.
Conclusion
If you love food and want to operate a restaurant, you have probably tried to garner some insights and noted points about the look and feel of your business. Restaurants are extremely popular for Americans to break into the business world. Though opening a restaurant is easier said than done, sticking to the above steps will do the job for you.
However, the key points of success after planning, organizing, and opening a restaurant are your willingness to become deeply involved in its day-to-day running and your willingness to tackle the backend chores that keep a business going.
