Who doesn’t want to open up a business and be their own boss?. When considering starting a small business, a lot of people first turn towards opening up a restaurant. After all, you only need a love of food to start your own restaurant - right? Well, it turns out that it’s a bit more complicated than that.
There are a lot of pieces to running a restaurant, and even getting it operational is something that requires you to complete many steps. If opening a small restaurant is something that you’re interested in, then here’s where you can start your journey as a food service entrepreneur.
Create a Specialized Menu
It might sound obvious, but most people underestimate the importance of deciding what food they are going to offer at their future restaurant. If you love pizza and people enjoy eating your homemade pizza, then it might make sense to open up a pizzeria. But making this choice requires looking at several different factors first:
These are all questions that you need the answers to before you decide on the cuisine you’ll specialize in at your future establishment.
Next, you can work on picking and choosing individual items to include on your menu. But make sure not to include too many dishes, since bloated menus can do major harm to an up-and-coming restaurant.
Using longer and more detailed menu descriptions can result in a sales boost of up to 30%. Increase your food sales by reading our post on how to write menu copy that sells.
Determine Your Role in the Restaurant
Thinking you can have a very involved role in your restaurant and still maintain an active social life is a big restaurant owner myth that many people find out too late is false. So before you open your doors to the public, you need to figure out what kind of role you are going to play.
Are you going to be the sole kitchen manager who works every shift? Are you going to be a hands-off owner who hires a full team to keep their operations running smoothly? If you’re leaning towards the second option, then that’s going to require a lot of hiring. And not just hiring anyone, but hiring the right people whom you can trust to maintain the integrity and quality of your restaurant, even when you’re not around. But if you’ve decided to save some money by playing the role of the entire management team, then you need to be prepared to spend the next few months stuck in the store for at least 10-12 hours per day.
Come Up With a Budget
The worst thing you can do is start purchasing equipment or making big business moves without first working out a detailed budget. Only once you find out exactly how much money you have available to fund your new restaurant, will you be able to break down the costs into the various categories (ingredients, appliances, employee wages, utilities, rent, marketing, etc.).
Your detailed budget will tell you if purchasing a $5,000 pizza oven is a smart move, or if you need to downgrade and look at the smaller, more basic $2,000 model instead. Even though you might have your heart set on the more deluxe appliance models, it’s not worth it if it makes your business one of the 52% of restaurants that struggle with high operating costs in the long run.
“When I opened my restaurant, my dad sat me down and told me to think about what I needed to get the doors open, not what I wanted. This let us open the place for $19,000 instead of $50,000.” - Andrew McElderry, Andrew’s Pizza
Once you have your budget in place, you’ll need to figure out what funding option is best for you. Here are the most common funding options for restaurants:
Decide What Services You Will Offer
You know that you want to open a restaurant, but what type of restaurant? Will it be a full-service restaurant where customers can be seated and served a nice dinner, a quick-service restaurant that only offers delivery and takeout, or some combination? This will have a major impact on the rest of your decisions.
For example, running a full-service location requires getting a larger space capable of seating dozens of customers at once. Whereas, a solely takeout and delivery-based restaurant will really only need enough space to fit a kitchen and a small FOH area. But when takeout and delivery are your only services, you will need to have an established delivery platform in place, whether this is third-party or in-house.
Whether or not you offer delivery is also going to impact things you might not have considered, such as the type of food you offer. Certain dishes are going to travel much better than others.
While pizza, chicken wings, pasta, and burgers can retain their quality quite nicely within the 15 to 20 minutes it takes to travel from the kitchen to the customer’s door, other dishes like steaks, poutine, and nachos, will begin to drop in quality after only a few minutes. That doesn’t mean you can’t offer these dishes on your menu if you offer takeout and delivery. You just might want to create a separate takeout/delivery menu that doesn’t include certain items from your complete dine-in menu.
Research What Permits Are Required
You need far more than just a business license to start a restaurant. So before you go flipping the switch on that open sign, you’ll need to do a bit of research into the various licenses and permits needed for a restaurant in your area.
Here are some of the common permits required to open a restaurant:
Once you have sat down to create a budget, come up with a menu concept, and researched the proper permits, you will be ready to move on to the more exciting steps such as finding a location, purchasing kitchen equipment, and hiring employees. When you’ve completed all of these beginning steps, make sure to watch our webinar on how to hire, train, and retain good restaurant employees, so that you’re fully prepared for a successful grand opening.
