If food is your passion, there’s a chance you’ve thought about how to start a restaurant business. Food is an excellent concept for a business: though certain trends come and go, the desire to have great food and share it with other people is a timeless human tradition. Many Americans don’t have the time or inclination to cook, and in pre-pandemic times, they averaged dining out 5.9 times a week.
While it’s a popular option to eat out, being on the other side of the counter can seem a daunting venture. A restaurant business comes with intensive work and razor-thin margins. You have to be strategic from the outset to ensure it becomes successful.
There’s no single path to a profitable restaurant business, but there are some guidelines that every budding restaurateur can follow for success. We’ve put together a restaurant start-up guide featuring the fundamentals of how to start a restaurant.
Before you go into the finer details of how to open a restaurant, make sure you decide what type of restaurant works for you and your chosen cuisine.
A clear concept will influence everything from the food you serve to the ambiance of your eatery. Before you dive into the details, consider high-level restaurant concepts, including the following:
Fast food is a familiar restaurant concept to most people. Fast food restaurants can be storefronts, stands or kiosks. The essentials for this style are speed, convenience, and cheap prices. Food can also be served in takeaway packages.
This concept features special design, unique decoration, and high-quality food. Because the food, ambiance, and service at a fine dining restaurant is expected to be a cut above styles like casual dining, this type of restaurant requires more investment and attention than most.
If you’re open to sharing your space with other vendors, a food hall is a great idea for you. A food hall is a communal dining area where different kitchens serve different cuisines. Some food halls even feature rotating vendors who use the kitchen space on different days. Not only does this concept save money, but it also ensures constant traffic because of the variety.
Mobile kitchens are a great way to promote your restaurant to a wide audience. Originally started as supper clubs in the golden ’60s, pop-up restaurants have seen a comeback with a growing group of people who prefer to eat out. As their name implies, pop-ups occur in different places for a limited time, often taking advantage of seasonal foods and trends. The advantage to these is that they can be opened in different locations to several audiences, they can even be held in collaboration with already-existing restaurants, bars, arcades, and even in homes.
Modern technology brought about numerous convenient options for those wondering how to open up a restaurant without having a business premise such as a dining space. With this style, one can simply register restaurant meals on food delivery apps and have food delivered to the customer’s residential address or business.
Consider these fundamentals when you explore how to start a small restaurant:
Securing a space is one of the first steps to getting a restaurant up and running. Before you can start on the construction of your space, you have to ensure you have a downpayment and lease security deposit in place. You should expect to pay between 15% to 35% of the total space cost for the down payment, while a lease security deposit is usually three to six months’ worth of rent.
Once your restaurant location is secured, the next step is to start building your dream space. Your restaurant style will heavily influence the look and feel. Maintenance usually includes building improvements, setting up a kitchen, dining area, and bathrooms.
Having the right equipment in your restaurant from the get-go is essential, especially in the kitchen. Kitchen equipment includes appliances like ovens, stoves, and refrigeration; cooking equipment, workspaces, and bar and service equipment.
Restaurant owners today have the help of technology to run their establishments. The right technology greatly improves efficiency by automating processes that would otherwise be labor-intensive and prone to human error. Restaurant POS systems, reservation tools, and kitchen display systems are some of the essentials for any size and type of restaurant.
Aside from the specificities of a food-handling business, there are also several business licenses and permits that every restaurateur needs before they can open their doors. This can include a business license, music license, live entertainment license, resale permit, seller’s permit, and dumpster placement permit. These requirements vary from state to state and even across cities.
Finding and establishing a reliable supply of both equipment and food ingredients is imperative if you want to run a reliable kitchen. Go for wholesale ingredient suppliers if you can as they are cheaper, and make sure your equipment supplier is available in emergencies.
Consider all the roles that you will need help within your restaurant. Your staff can make or break your kitchen and your reputation. Look for people who can provide good food with friendly, efficient service. It is important to seek out the best people to fill these positions.
In most cases, it’s not enough to rely on word of mouth. A business needs to have a marketing strategy to apply in the early days and beyond. You’ll want to spread the word of your existence with good signage and advertising, which includes everything from branding and design to mounting.
Once you’ve decided to start, you’ll most be eager to get the ball rolling. But the road to opening your doors should be approached with diligence. Experienced restaurateurs note the following about how to start a restaurant and run it effectively:
Finances form a critical part of how to manage a food business because there is not much room for error. There are a lot of costs involved with starting a restaurant and you don’t want to set yourself back before you even start with items you can do without. Even the smallest cost-cutting efforts can make a difference to the bottom line. However, do not compromise on quality or customer comfort.
Overqualified people tend to get restless early and move on to other restaurants, while under-qualified staff can be a burden more than an asset. Choose your staff carefully with this in mind.
It might be tempting to prioritize business profits over customer experience, but customer service and satisfaction should be of the highest priority in every restaurant. Collecting customer feedback is one of the best ways to find out what the customer wants.
Every item on your menu should be well made. After all, the food is what will have customers coming back and is the best way to make the customer feel like they are getting value for money.
Small touches that set your brand apart fosters loyalty and helps with brand recall. Start restaurant traditions like gifting to kids, offering special desserts on-the-house for diners celebrating a special occasion, and more.
Celebrating the big wins like awards and profits is easy, but most restaurant managers and owners forget that it is the small wins that add up to them. Acknowledging things like good reviews, launching a new menu, successfully serving an event, and more goes a long way towards motivating you and your staff.
Investing in technology for your business is one of the best things you can do as a restaurant owner. Not only does it make your business more efficient and save costs, but innovating can make the difference between whether your business survives or not. In the highly competitive world of restaurants you need to leverage every advantage you can.
Revel's modern iPad POS system can be the heart of any restaurant. It automates otherwise labor-intensive processes such as processing transactions and tracking inventory, along with managing staff members and providing analytics. Additionally, Revel's team is an extension of your own, ready and willing to provide support, off-set POS administration, and troubleshoot when needed.
The dynamics of how to build a restaurant can be intimidating. Hopefully, this guide gives a clearer path on how to start your restaurant development. Revel Systems understands your unique needs and our tools can greatly simplify day to day tasks. Contact us to get a free demo today and learn how we can help your business thrive.