How to Start a Restaurant
Do you want to start a restaurant? Many entrepreneurs have taken the plunge and started their own restaurants. The question is, how to go about making these dreams into a reality?
If you are finding yourself asking how to start a restaurant of your own, you have come to the right place. This article will tell you what you might want to consider when starting a restaurant. Read on to discover more.
Plan Your Finances
Opening a restaurant is a dream many people have. More so for those who love to create and inspire through food. However there a lot of things to consider before getting started.
One of the first things you should consider is a plan for your finances. Starting a business is always daunting, especially if you are a first-time business owner.
Considering how to acquire and fund your business is a must. Many people opt to start small by running a food stand in a farmer's market or city-wide event. Others choose to buy a struggling small business in hopes of turning things around. Some people start their business from scratch.
The main deciding point for the start of your restaurant is your funds and finances. Talk to the right people, may it be your trusted bank or a financial advisor. If you are in a partnership, it will help to get the opinion of your colleagues.
Without capital, your business will not even exist. Knowing how much you can allocate, your expenses, and what you need to go above breaking even is important. You should also consider ways on how you can avoid going bankrupt.
Countermeasures, such as business insurance in case of unforeseen events, are also important. A successful business can last generations, and this is what you want to plan for. It is not only about the now, but about the future as well.
Brainstorm and Innovate
Do not jump into the business with only a rough idea of what you want. The last thing you want is a failed business. If you are looking into how to start a restaurant, you need a solid business strategy.
In this case, it is a complete concept of your restaurant. Know what you are going for and how to get there. The restaurant industry can be cutthroat.
You have to compete with what is already established. You also have to consider the various franchise chains around you. This is why it is vital to brainstorm and innovate to add style to the boring and staple, making it unique for your customers.
This is not only for the type of food you will be serving but also for your interior design and ambiance. You might have a limited space to work with; if so, you need to make the most out of it. Try to find great deals for décor and get creative with how to best use the space.
If you are doing it by yourself, enlist friends and family for their input and help. Depending on your finances, it is also possible to hire contractors and specialists. Create a SWOT (strengths, weaknesses, opportunities, and threats) analysis to uncover things you may not have thought of before.
Location Is Key
A business' location can make or break it. It is one of the most important factors when starting a business. Finding an ideal location is imperative when starting a business.
It is a deciding factor for your potential customers, supply chains, and security. Starting a business where there is little to no foot traffic should be a no-go. If you find a hole-in-a-wall, at least make sure it is somewhere busy, otherwise it could take a while to become established and have a regular cadence of customers.
Another thing to consider for location is the current establishments around you. It might be worth the risk to open something new in an area dominated by "the norm," but it is not always the case. Your potential customers and what they like are crucial, more so if you are opening in a small town.
Some of the best places to open a business are next to or within major establishments. Offices, universities or schools, and high-density residential places typically have good potential.
These locations can help you build a name and reputation. It could help ensure a steady stream of loyal customers by setting up shop in populated areas.
Check Local Codes, Laws, and By-Laws
A crucial part of knowing how to start a restaurant is knowing an area's codes, laws, and by-laws. Once you have determined where to open your restaurant, this is your next step. Check with a professional on what may be required for your business.
Permits, certifications, and what you can serve are dependent on your local ordinance. It is important to familiarize yourself with regulations and ensure your business meets the requirements set by local and state governments. If you are serving alcohol, then make sure you have a permit for it.
Restaurants also have specific health and sanitation codes. Being in the restaurant business means you are handling other peoples' food. You would not want anyone getting sick and later getting sued or shut down. You also do not want to face any penalties for breaking any regulations. This is why it is important to follow and keep track of health codes and protocols.
Additionally, knowing when and how to dispose of food waste is important. Organic food wastes, bottles, cans, glass containers, and grease all may have disposal regulations. Staying informed about these issues could prevent you from receiving major fines.
Streamline a Menu
Now that you have everything in check, it is time to know what you will be dishing out. A streamlined and coherent menu is key to a restaurant's success. Have two or three specialty entrees, some appetizers, and a couple of desserts and drinks.
If possible, you may also want to add one or two vegan, vegetarian, and gluten-free options. Try to have a wide menu without it being too disconnected. You would not want to confuse your guests with a menu that has a large variety of cuisines.
Too much will overwhelm your kitchen as well as your staff. Narrowing down your menu will also give you an idea of what you should have in your restaurant at all times. Not only that, but it also could help to ensure that the food made in your kitchen is fresh and high-quality.
If you are looking to expand your menu, it is best to offer daily or weekend specials. It gives your customers something new to look forward to, without a drastic change in the menu. If it is within the budget, you can also hire a food specialist to put a menu together.
This removes the guessing and error from the equation. You will also know that you have dishes that go well together without being out of place.
Find a Dependable Supply Chain
Once you have your menu set, you need to find and partner with a good supply chain. Many cafes and restaurants often use "sourced locally" as a marketing strategy. In many ways, choosing local is actually beneficial to you and your community.
To know how to start a restaurant means to know where to get your produce. Sourcing within your area could guarantee your ingredients' freshness and quality. It also could cut down on the work you need to put in for importing and doing quality control.
So not only is it a selling point, but it is a great way to keep your restaurant well-stocked. There will always be busier days for a restaurant, and you are likely to run out of something. Going local means your supplier is one call or drive away.
Contact the nearby fruits and veggies cornerstone or the local butcher. Ask them to be your supplier – they will be more than happy to accommodate you.
Employment Training and Management
If you have the luxury to employ staff, then ensure that you train your staff well. Training is crucial; you want everyone on the same page. The last thing you want is a restaurant whose service crumbles on a shift change.
It happens more often than you think, and it is the customers and your reputation at stake. Apart from this, you also need to decide on whether your restaurant follows a tipping system. This is crucial in managing your employees' payrolls.
Having a tipping system may affect their overall wages and take-home pay. Be careful not to have your employees over-reliant on tips. A living wage can make for good employees and even better service.
This makes for a win-win situation for everyone - you, your staff, and your customers. When you have employee training covered, then it is time to look into payroll software and databases. Payroll software is known for handlings wages and earnings, especially for a small business. Not only does it keep your finances in check, but it also can ensure that everyone gets paychecks on time and adequate pay.
Take into account potential tax breaks and liabilities for yourself and your employees. Doing so allows for a smooth transition during the new normal and afterward.
Marketing to Your Community
Engage the local community and establish yourself as a local cornerstone. Do not rely on customers to only hear about you by chance - advertise! Make sure everyone knows who and where you are.
This is especially important for your opening day. Let everyone know what promotions and specials you run. This includes catering to a niche market like vegan or gluten-free.
Publicity is key, and you have to keep hustling all the time. Keep advertising your restaurant and find good ways to leave a lasting impression.
Local events, charities, and fundraisers can help spread the word that your business cares about its community. Do not focus only on traditional advertising via signs, radio ads, and newspapers. If you can find ways to engage your community on a deeper level, they will be far more likely to support you as patrons. Most important of all, it can feel good to give back to your community and to help others.
Online Presence Is a Must
While old-school advertising is still around, nothing beats having an online presence. Having active social media is every modern-day business's lifeblood.
It is great for reaching a wider audience, including young professionals and teenagers. There is also the rise of major food delivery companies. People today are more inclined than ever to check out food online.
This is why it is important to appeal to this online market base as well. Not only does it help entice people to dine and try your food, but it also helps with better customer service. When you interact with your customer base, they are more likely to trust and patronize your business.
Insurance is crucial to the life of any thriving and sustainable business. Running a restaurant can be a rewarding experience, but it also comes with many risks. Business insurance can help to protect not only you and your restaurant but also your employees.
We offer Business Owners Policy (or BOP) coverage that can help protect restaurants from several incidents. It could cover food spoilage, business income loss from theft or a fire, and equipment breakdown.
PolicySweet® also offers Workers’ Compensation to protect and support your employees. This coverage could help with an employees' medical bills in case they suffer from work-related illnesses or injuries.
How to Start a Restaurant with the Perfect Plan
There are a lot of factors to consider when first looking at how to start a restaurant. Make sure you cover all your bases - whether financial, legal, or organizational. Establish your reputation and position within your area and even further.
One of the financial and legal aspects often overlooked is business insurance. If you are looking for even more tips on making your business ready, check out the PolicySweet blog. You can also contact us today with any restaurant insurance questions you may have or take the next steps to get your business insured.