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You’re taking on a big job when you decide to open a restaurant. You don’t have great profit margins, and people aren’t easy to please. That’s why an estimated 30% of new restaurants fail within the first year.
If you want to improve your chance of success, you’ll need to do some legwork to get started.
Opening a restaurant isn’t something you should do on a whim. Follow the seven steps below when starting a restaurant to do things right and make your opening a success.
1. Create a Business Plan
You have more responsibilities as a restaurant owner than you do as a chef. You don’t only have to worry about what happens in the kitchen. You need to take care of the front of the house, accounting, equipment purchases, maintenance, and much more.
Unless you have a plan for success, you won’t start a successful restaurant.
Create goals for your restaurant that you want to reach in a limited timeframe. With this information, you can create smaller milestones to accomplish.
That information will help you develop your restaurant idea, dishes, and pricing.
2. Choose Your Type of Restaurant
Once you have a business plan, you’ll need to determine what type of food to serve your customers. Think of what kind of food you enjoy and what type of chefs you have in your area.
Once you find something you enjoy, look at the demand for the type of food you want. Even if you can create great food, you need people around to eat.
If you don’t see any other restaurants in your area with similar food, you’ll need to ask the locals. Gather customer feedback to see how receptive people are to your restaurant idea.
3. Get Financing
Launching a restaurant isn’t cheap. You don’t only have significant upfront costs. You also have high operating costs because of the cooks and waiters you need to hire.
This is a little much for even people that have money. It’s smarter in most situations to get financing for your restaurant.
If you want to go the simple route, reach out to your local bank to get loan options. You’ll need to detail your current finances and business plan if you want to get money from the bank.
You can also reach out to private investors to get money. You can look for silent investors or work with someone that already has experience in the restaurant industry to get help running things.
4. Set Up Your Legal Structure
Once you have financing lined up for your restaurant, you’ll need to make things legal. For most restaurant owners, that means setting up a corporation. This legal structure will give you the means to create payroll for yourself and your employees and provide legal protection in case something bad happens on your property.
Each type of corporation has pros and cons, so research each of them to find your best option.
If you’re struggling to make this choice, it’s wise to get help from a legal expert. A lawyer can walk you through each option and help you decide the best one.
5. Buy Restaurant Equipment
You’re ready to buy your equipment for your new restaurant when you get financing lined up. You’ll need to buy several common items no matter what type of restaurant you run.
- Commercial dishwashers
- Tables and chairs
- Payment processing machines
- Dishes and silverware
- Company uniforms
Of course, you may need more things for your restaurant, depending on what you want to serve customers. Check with other restaurants in your area to see what they can use.
If you’ve already found a head chef, you can also rely on their expertise. Your cooks will be the ones using your equipment, so turn to them to learn what they need to create fantastic food.
6. Build a Reliable Team
You won’t run a successful restaurant on your own. You may have a lot of business or food knowledge, but you can’t serve the number of people you need to serve without help.
A reliable team is the most critical part of starting a business in any industry. Start with your kitchen staff. Your first goal is to find an amazing head chef that can help design your menu and create great food for your customers.
Your head chef can also help you find other cooks that help meet your demand.
Your front-of-house staff is the next essential part of your restaurant. These are the people interacting with and taking care of customers. You need to find people who know how to communicate well and offer a great customer experience.
7. Create a Marketing Plan
The restaurant industry is competitive. You won’t get traction just by opening in a convenient location. You need to make your location stand out and a more appealing choice than your competitors.
Word of mouth is one of the best ways to start this process. Travel around your local area and give people food samples. If people like your food, they’re likely to stop by your location to eat.
Another great option is getting online on Google and social media. You want to build a large presence here and convince people to try your food with great reviews and appealing content.
Now You Know What Opening a Restaurant Takes
Opening a restaurant is a big investment in both time and money, so you can’t afford to start things the wrong way. If you aren’t careful and do enough to stand out and get customers, you’ll just waste your money and close your business soon after you start. Take the steps above when starting a business restaurant to ensure you maximize your chances of success.
Do you want to read more advice that will help you successfully operate your new restaurant? Check out the blog to learn more about creating successful restaurants.