So, you’ve decided to open a restaurant.
You haven’t got time to mess about, let’s get into it!
In the US alone, there are now over one million restaurant locations throughout the country currently employing around 15.3 million people (that’s roughly 10% of the United States’ total workforce).
The UK market is similarly vibrant, but, arguably, rather volatile. In 2019, the Evening Standard revealed the record levels of restaurant openings and closures that had taken place within twelve months. Empty sites were rapidly filled with 174 new independent ventures, thankfully eclipsing the 110 closures that took place during the same period.
So, clearly, you’re entering the restaurant sector at a pivotal time. You have many opportunities and challenges ahead, but consider this your guide to getting off to the best possible start.
Here’s what every new restaurant business needs to take into consideration.
The business plan (there’s no escaping it)
It’s so tempting not to bother with the business plan, isn’t it? Only, without one, you won’t get the funding you need (see our next tip), and you’ll find it difficult to put your vision into practice.
Diving straight into any business is a bad idea, because a plan focuses your mind and draws out ideas that may otherwise have been left to chance.
The good news? Business plans are relatively easy to put together, providing you include the following key elements:
- Executive summary
- Company overview
- Industry analysis (dig into your competitors, location and target diners)
- Operational plan
- Marketing plan
- Financial analysis
Capital (you can’t start without it)
Many will argue that you can now open a restaurant venture with little to no capital, but we don’t think that’s the case. Even if you’re simply starting a pop-up restaurant operation or aiming to roll into town with a food truck, you need capital.
The same goes for franchises, solo ventures and partnerships - you really can’t get by without some cash to hand from the outset.
Finding capital isn’t easy, but the best place to start is your bank. Working capital loans, lines of credit and even equipment loans might be available, so have a chat with your bank manager to find out what’s possible and what you can honestly pay back in decent time.
Oh, and remember to take that business plan with you to the meeting!
Licenses and permits
Depending on where you’re planning on opening your restaurant, there’ll be a few licenses and permits you’ll need.
From the location to the type of food you’ll be serving, your state, town or city will have governing laws you’ll need to follow.
Common licenses and permits include:
- sign permits;
- employee identifications numbers;
- certifications of occupancy;
- food service licenses;
- food business registration; and
- allergen labelling and information.
This is one area you really can’t leave to chance. Acquiring the right licenses and permits takes time and, we’re sorry to say, money (remember - you really can’t get going in this industry without some form of start-up capital).
A theme or concept
The numbers quoted at the start of this blog tell their own story; creating a restaurant experience that rests in the minds of diners is challenging with so much competition.
Standing out from the crowd is becoming increasingly difficult, but that’s ok. Far more important is the theme or concept your restaurant employs, because if you get it right, there’ll be a defined target market that will provide plenty of footfall and repeat business.
You might want to be renowned for sourcing sustainable ingredients, specialising in a particular allergen tolerance or for your open mic nights. Whatever it is that will make your restaurant special, ensure you own it and make the concept central to everything you do.
The ‘tech stack’
This term takes some getting used to, but it simply refers to the various pieces of technology your restaurant will rely on day-to-day. Forget one key element, and your team will be less efficient and customers less satisfied.
The tech you’ll need without question includes:
- a POS (point of sale) system;
- web-based accountancy software;
- Chip and Pin/contactless payments;
- purchasing and inventory; and
- a website that includes online booking.
You can go deeper than that if the budget allows. For instance, managed guest WiFi, online ordering, loyalty platforms and business intelligence systems are just some pieces of technology that will make your restaurant an incredibly efficient operation.
Your staff will be the beating heart of your restaurant. This is why you can’t afford to skimp on recruitment or retaining them once you have the best people.
The turnover rate for restaurant staff is frighteningly high in most countries (in the US alone, it stands at a whopping 73%). But that doesn’t mean you can’t find and keep an awesome team.
Take time to map out the positions you require and look to both digital (LinkedIn) and traditional (there’s nothing wrong with approaching job agencies) recruitment methods to find your future stars.
There’s of course lots more you’ll need to get your restaurant up and running, but the above list should be the cornerstone of your operation.
Running a restaurant is hard, rewarding, exciting, stressful and a huge amount of fun. Enjoy this nascent period when everything is coming together, because it’ll only happen once!