Summary: Before opening a restaurant, there are many factors to take into consideration, from the concept and business plan to having the right insurance. In this guest blog post provided by Oracle/GloridaFood, learn how to increase your chances of success by understanding the most important elements in the food service industry.
So, you’ve decided to open a restaurant. Owning a restaurant is one of the most rewarding experiences you can have as a businessperson. However, it’s also challenging and time-consuming. To help ease you through the process of opening a restaurant, we’ve created this list of things you need to consider beforehand.
10 Things You Can’t Miss When Opening a Restaurant
1. Business plan
A business plan should be top of mind when opening a restaurant because it will inform all your future decisions. Not just that, but having a solid, future-proof plan will also help you secure investors.
A comprehensive restaurant business plan should include:
- SWOT (strengths, weaknesses, opportunities, threats) analysis
- Market and industry research
- Financial analysis
- Company description and restaurant concept
- Marketing plan
- Sample menu
- Staff requirements
Not having all the capital you need to open a restaurant from scratch shouldn’t deter you from realizing your dream. There are multiple financing options you can consider, such as:
- Small Business Administration loans
- Alternative loans
- Brick-and-mortar bank loans
- Business line of credit
- Merchant Cash Advance
Before applying for financing, ensure your business plan is bulletproof and determine how much money you’ll need. This will also inform the type of loan or credit you can consider.
This could be a lengthy process depending on the type of financing you choose, so you’ll need to be patient and weigh your options carefully.
3. Permits and licenses
Expect plenty of paperwork when you’re opening a restaurant, especially permits and licenses that will allow you to conduct your business accordingly. Here are the main ones you need to obtain:
- Foodservice license
- Food handlers permit
- Business license
- Seller’s permit
- Liquor license
- Sign permit
- Employee Identification Number
However, depending on your location and services, you might also need permits and licenses for other things, such as valet parking, music, live entertainment, dumpster placement, and more. Check with your local authorities to ensure you’re not missing anything and risk hefty fines or closure.
4. Business Insurance
Insurance is a must-have when you open any business, and restaurants are no exception. If anything, restaurants present unique risks for both customers and employees.
Here are the main types of restaurant insurance
you should consider:
- Workers’ Compensation to protect you and your employees
- Businessowners Policy that can combine multiple types of insurance, such as general liability, property, and business interruption
- Commercial Package Policy that can be customized according to your needs to address special issues
- Umbrella insurance that provides additional liability limits such as property damage or protection for bodily injury
“Location, location, location” might seem like an overused phrase, but it hits the mark when it comes to the restaurant industry. A bad location can easily deter customers from visiting your restaurant and affect your profitability.
When scouting locations, consider accessibility and visibility first. Would it be easy to reach your restaurant on foot? Are there parking spaces around? Is the location on a side street, hidden from view? This will determine the efforts you need to make to increase visibility and accessibility to all customers.
If you found a location that appeals to you, pay multiple visits during the week, on the weekends, and at different time intervals to analyze traffic and identify any potential issues.
A restaurant is nothing without its staff. From the chef to the hosts, servers, bussers, and dishwashers, everyone is an integral part of the team. Depending on the size and complexity of your restaurant, you might also want to consider hiring a manager to help you with your day-to-day responsibilities.
First, determine your staff budget and research average salaries for the positions you want to hire in your area. Then, create job listings on popular job portals and share them on your website and social media to reach as many candidates as possible.
Include role responsibilities, preferred qualifications, and information about the restaurant’s culture to attract likeminded people. Prepare for the interviews by creating a list of questions to help you determine who would be the right fit for your restaurant.
7. Target audience
Before you start working on your menu and decorating your space, you need to know who you’re trying to attract. Are you catering to office workers? Add lunch bundles and promotions to the menu and use shades of red to make people hungry and encourage impulse purchases.
Do you want to attract customers that like to spend a long time in a restaurant? Focus on upselling and cross-selling and use warm earth tones that encourage people to relax.
Your restaurant menu
is what will ultimately draw customers to you. Based on your restaurant concept and the crowd you’re trying to attract, brainstorm a list of dishes and consult with your chef for specials that can make your restaurant popular.
It would be good to include a couple of vegan and vegetarian options too, and allow patrons to customize their meals with add-ons, toppings, and choices based on dietary restrictions or preferences.
Research competitors’ prices in the area before you decide on the price list and consider offering regular promotions and deals on menu items to increase their popularity.
9. Equipment and tools
Whether physical or digital, the tools you use in your restaurant will improve productivity and efficiency. Here is some basic equipment and furniture any restaurant needs:
- Tables and chairs
- Dishware, glassware, and flatware
- Commercial ovens
- Commercial refrigerators
- Storage shelves
- Food processors, blenders, and mixers
- Work tables
- Pots and pans, mixing bowls, cutting boards, utensils, and more
- Kitchen display systems
- POS system
In addition, consider digital tools that will help you grow your business and boost profits, such as:
Before you open your restaurant, you need a clear plan on how you’re going to promote it online and offline. From flyers and posters that you distribute in the neighborhood to creating social media pages for your restaurant, it’s a good idea to create anticipation before the big opening.
You can have a soft opening where you invite local influencers that can spread the word to their followers. You can also offer discounts to first-time customers to encourage them to visit your restaurant.
Add your restaurant on popular review portals and create a Google Business Profile listing to ensure you are seen by as many people as possible and encourage reviews from satisfied customers. Keep the information up to date and consistent on all platforms to avoid misunderstanding or negative reviews.
Opening a restaurant is no mean feat. It takes a lot of work and dedication, as well as good planning and tools that can make your life easier. Before you venture into this endeavor, use the list above as a blueprint for what you need.