The restaurant industry is fast-paced and cutthroat, with the business space rampant like a brutal survival of the fittest game, and only the strongest avoid collapse. Opening a restaurant takes time, financial backing, and extensive industry knowledge. If you’re reading this article, the chances are you tick those boxes and you’re looking for confirmation, which is where we come in – continue reading to find out which steps you need to take when opening a restaurant.
Choose Strong Branding and Concept
The concept is the basic idea for the restaurant and will form the base for everything else. For example, will you be a ghost kitchen serving up Indian cuisine to peoples’ doorsteps or will you be a sit-in restaurant offering unique experiences?
Deciding on a concept is the easy part, your branding takes a little more thought. This is where you get the opportunity to consider your company values and how you want the public to see you. Your brand will be obvious to everyone, no matter where they interact with your business. Consider the McDonald’s “M”, and when you think about it, you know exactly what it is and what the business is above. A powerful brand will help you to assert your dominance in the scary restaurant world.
Write a Business Plan
Your head may be full of brilliant ideas, but there’s so much work to be carried out that you will need to write it all down. Codifying your business plan helps you to put order to your thoughts and will assist you when it comes to sourcing finance down the line. When you’re navigating early restaurant life, you can refer back to your business plan to keep you true.
There’s no point in having a restaurant without offering delicious food to bring guests in and keep them coming back. You should design a menu that is simple to execute but looks and tastes great. Although you will have a vision for what cuisine you want to sell, it’s worth carrying out some market research to make sure there’s a local demographic for it – not to mention a gap in the market.
Source Funding
Restaurants are expensive, especially if you’re starting from scratch and need to source all of the equipment. You can source funding in many ways, and all are worth a try:
- Small business loan. You may be eligible for a small business loan through a bank. Many banks work in tandem with the U.S Small Business Administration (SBA), which can offer the loan while protecting the business and lender.
- Traditional commercial loan. These loans are secured directly from a bank, but you will need to offer collateral.
- Investors. You may have someone in your network who is ready to invest in your cause.
- Business Line of Credit. This is an approved amount of money you can spend and works in the same way a credit card does.
Lease a Commercial Space
You will need a property to operate from, so search your target area for commercial space. Consider how visible the space is, what the local demographics are, and what the area’s labor costs are. You can keep initial costs low by leasing a property.
Design Restaurant Layout
Once you’ve secured your space, you need to design your restaurant. You need to work out your seating capacity, what restaurant furniture you will use, and what the vibe of your establishment will be. When designing your restaurant, make sure you think about how it will function, especially when it comes to cooking and cleaning.
Get Your Licenses
Restaurants need countless licenses and permits to operate as a legal business in the eyes of the law – below are the most commonly required:
- Liquor license. If you’re serving alcohol, you need to have a license. The application process can be long, so make sure you start this early on.
- Business license. In the US, restaurants need a business license to operate, and it will need to be renewed at given intervals.
- Food license. Before you can begin selling food, you will need to have a food inspection carried out, which will check your premises against all regulations.
- Employee identification number. Without this number in place, you won’t be able to hire any staff, which means you will fail.
Finer Touches
Once you’ve got your property, finance, and necessary licenses, you can start choosing suppliers and hiring staff; working with the right people will make all the difference. As well as hiring staff, you will need to market your business so that people know where you are – leave this to a professional if marketing isn’t your strong suit.
Opening a restaurant is difficult, and many new businesses fail before they learn to walk. Take your time, make sure you are compliant with the law, and be ready to make mistakes and learn.