What to Consider When Starting a Restaurant

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Restaurants are one of the most popular types of businesses for aspiring entrepreneurs. However, only a small number of restaurants stand the test of time, so it is vital to plan, plan and plan some more before you take your first steps into the food industry.

You may love cooking and entertaining and have a flair for entrepreneurialism, but you will need more than this to run a successful restaurant business. For example, you must be comfortable with leading a team of chefs, waiters and bartenders. Your workforce will rely on you to provide clear instructions, so you should always be one step ahead of the game.

Also, running a restaurant is not a 9-5 job. You will need to be available in the evenings, at weekends and on significant days such as New Years Eve and Valentines Day. Bear in mind that you might miss special events like a partners birthday or your childs school play, so if you dont go into a restaurant business with full support from your family and friends, your personal life could suffer.

Being your own boss has its benefits, but there are a number of things to factor into the equation. Are you prepared to buy your own health insurance? And can you survive a few months without being paid if the going gets tough?

If your dream of owning your own restaurant outweighs the drawbacks, youre ready to start planning your business.

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Becoming A Restaurant Owner

First of all, youll need to review your financial health. If you cant quite afford to pay rent on expensive restaurant premises and fit out your kitchen with decent equipment, you could consider a different way into the food industry. You could become an events caterer, buy and run a food van business or even start a street food stall.

If you do have the money to open a restaurant, work out whether you have enough savings to cover the period between quitting your current job up and opening your restaurant. Profit in the opening months may be minimal or non-existent so be sure that you and your staff can survive until the profits start rolling in.

If youre certain you can afford to launch a restaurant, there are several steps to tick off your checklist before you can get started:

Eye up the competition. You can improve your own business plan by taking note of the strengths and weaknesses of your would-be competitors. What makes them successful and how could you differentiate yourself from them?

Establish a clear restaurant concept. Talk to any restauranteur and they will tell you that a good concept is the basis for a successful restaurant. Consider the type of restaurant you would like to open is it a small, caf-style restaurant, a pub, a steakhouse, an international food restaurant or a retro American diner? Will you offer casual food or fine dining? You can maximise profits by tailoring your choice to your preferred location; for example, a hipster restaurant selling green juice in mason jars and deconstructed quinoa salad served in a plant pot is likely to see more success near a university campus or in a city centre than in a business park or a quieter residential area. Once youve chosen your concept, choose furniture, dcor, a menu design, a staff dress code and background music to match.

Decide on your location. Select a site in a busy area that has high visibility. A car park will also encourage customers who live further afield to try your restaurant. Find out whether the neighbouring businesses are happy in that location and whether businesses frequently start up and shut down shortly after. Before you think about signing a contract, find out how long it lasts and who is responsible for building repairs or renovations. Also, create a detailed floorplan to establish how many customers you can cater for at one time. The site may look spacious, but remember that you must install a kitchen, walk-in refrigerators, toilets and a bar. In the dining area, make sure to allow enough space between tables. It might be tempting to cram as many tables as possible into the space, but customers will not return if they struggle to have a private conversation and feel claustrophobic.

Write your menu. Most restaurants benefit from an interesting menu with twists on classic dishes innovation cannot be overrated. Of course, some standard meal options should be available in order to avoid alienating customers who could feel out of their comfort zone. After a few months of operation, you should consider changing the menu to introduce new dishes for regular customers to enjoy and eliminate any menu items that arent selling. In terms of the physical menu, make sure it is descriptive and easy to read. Use a clear but attractive font and high-quality card.

Create a business plan. Although a business plan can be helpful in itself, you will need one in order to secure funding. Get an idea of the costs involved in opening your restaurant by carrying out research into the industry and competitors. Establish why you think your business will flourish in the location and address any potential issues and how you will solve them.

Secure licenses and implement safety procedures. To run a restaurant, you will need to obtain authorisation. This includes licences to sell alcohol and place furniture or advertising signs on the pavement. You should also consider tax laws, workers compensation and health and safety codes. Bear in mind that licences can take months to be approved, so be sure to submit them well in advance of your intended restaurant launch date.

Buy equipment. Money can be saved by purchasing used equipment that is still in good working order. A Point of Sale (POS) system is also a good investment as it can help to manage sales, menu items and reservations.

Hire a workforce. Many waiters will be working temporarily to save money before getting a permanent job, so there will be a quicker staff turnover than in other businesses. However, you should work with potential chefs to ensure that they can cook your menu items well and handle instructions and constructive feedback professionally.

Organise a grand opening. This is a chance to encourage customers to try your food. Consider offering free samples and discounts and organising live music.

Sort your marketing scheme. Invest in a visually-appealing website and tailor promotional material to its target audience; will your customers be more likely to be scrolling through social media or listening to the radio and reading newspapers? Consider setting up branded stalls at local events and reward new and/or loyal customers with discounts or gifts.

Be patient. Finally, persevere and dont give up. It takes time to build up a customer base and experience consistent trade. If you have put in the time and effort, you should see success in the long run.

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