Anne-Marie Saint-John, Alva, Long Island City, NY >
Before you rush into your life’s dream of opening a restaurant, you need to consider a few things. Whether you’re a chef sharing your unique culinary creations with the world or an aspiring entrepreneur, here’s what experts say you need to do before you open your restaurant.
Before you get to showcase your creative culinary skills, there are some integral business matters to tend to. The tips below provide some helpful information to consider when you take your first steps into the restaurant industry. A checklist for opening a restaurant makes your job much easier, so to help you get started, here are 11 tips for starting a new restaurant business.
#1 Preparation is key
In essentially the same way that you prepare food in the kitchen, business preparation is critical for any future restaurant’s success. It doesn’t matter whether that restaurant takes the form of a mobile food truck, a pop-up place in the city, or a formal sit-down restaurant, you need to invest your time in the preparation to ensure everything is set up as it needs to be.
#2 Know your audience and your area
Before you start to look at available units or mobile food truck opportunities, you need to do extensive market research to uncover key customer demographics. Some restaurants will naturally work better in certain areas than others. Having a clear picture of your target market helps you better plan for success. Demographic targets include income, age, and lifestyle; it’s also important to look at nearby amenities and businesses.
Knowing these things can help you to meet customers’ needs, and it also helps you to know what is most important to them, which will, in turn, assist with marketing your business.
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#3 Know your competition
During your early research phases, make sure you visit any local competition. Eat their food; look at their prices, menu, drinks, website, social media channels, and reservations process; and evaluate their service. Not only will knowing what the competition is doing support your research and your business plan, but it will also help you differentiate yourself, which is going to be key if you really want to make an impact.
While you’re at it, sign up to their email list and take a look at their offers, discounts, and communications.
#4 Financing a small business
There are lots of options on the table, but only some of them may be relevant to your individual situation. Making sure you write up a business plan is a great way to get a head start if you think you might need to get financing for your restaurant. The preparations we discussed in point one could also include business planning. Some of the key expenses you will need to review are those for your equipment; read more about buying equipment for a new restaurant here.
If you want to stand any chance of securing a loan for your business venture, then you need to know your numbers and your target market inside out.
#5 Choosing the right location
Location really makes a difference when you’re starting a new restaurant. In point two, we covered the importance of knowing your area and your target audience. Well, now that you have that information and you’ve looked into the financing for your restaurant, it’s time to decide where you want to be based.
Research undertaken by CNBC states that up to 60% of restaurants fail in their initial year of business purely because of their location.
Your business’s location can dictate the type of clientele you attract and how much foot traffic it gets; it will also determine your prices to some extent. If you opt for a busier street, you can expect to pay more money, but you will likely get more attention there than if you are tucked away off the beaten path.
#6 Create a compelling concept
This is another key differentiator that can set you aside from the competition. It can really boost your appeal and show off a little of your own personality with some unique traits or offerings. Research what other restaurants in your chosen niche do to stand out internationally; you might be able to replicate a quirky element of their offerings or use it to inspire something completely new.
#7 Make a mouth-watering menu
People ultimately visit restaurants to try new food or enjoy their favorite dishes without having to cook and clean for themselves. You might already have a concept menu in mind, but now things are starting to get serious; you need to prepare a real menu, one that delights the taste buds and captures the attention of your target demographic.
Make sure you use a food costs calculator to ensure you are fully aware of the full cost of everything on your menu, and try to highlight the most profitable menu items, aka menu engineering.
#8 Get your licenses in order
Every restaurant, even food trucks, needs some type of license to be able to operate. These will differ among states, so always check what you need, and give yourself plenty of time and money to get the necessary paperwork in order. You will likely need to consider local and state licenses, health and safety, a liquor license, restaurant liability coverage, and a business license.
#9 Hire great people to serve your customers
While it’s true that you are going to be the face of your business, your front-of-house staff will be serving a similar role. Even those team members working behind the scenes will become advocates for your business. Consider that your customers’ main interactions are going to be with these team members, and make sure you hire well.
Starting a new business in any sector is challenging, but in the restaurant business, you need to make sure that from the outset, you have a clear understanding of what you want to do, where you want to do it, who your competition is, and how you’re going to differentiate yourself. As with all business matters, starting out with a solid business plan is key: Make a strategy, have a clear goal and vision for how to achieve it, and stick to it.
As a final note, this restaurant opening checklist is a great resource to print out and keep in mind as you go through the steps to open a restaurant.