How to Start a Restaurant and Avoid Common Mistakes
Write a business plan., Scout the right location., Keep the menu simple., Have a unique concept., Assemble a top notch crew., Develop processes for everything., Hire a good accountant., Be careful not to overspend, especially in the early going...
Step-by-Step Guide
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Step 1: Write a business plan.
Unless you’re independently wealthy, you’re going to have to get some financial backers excited about giving you money to start this thing. You can’t just walk up to potential investors with a menu and your assurance that everybody loves your cooking. You need to get all the numbers down, with realistic (meaning: well researched) projections of how much your overhead is going to be, as well as how much revenue/profit you can expect from the menu that you’ve created. -
Step 2: Scout the right location.
The importance of location to a restaurant’s success cannot be overstated.Again, you might make the tastiest food known to man, but if you’re sitting back where people can’t find you, or—worse—don’t want to travel to, then you’ve already lost.
And don’t just rely on your gut to say that a particular spot would be perfect.
A little research of the town’s or city’s records can get you a wealth of data.
Traffic studies often show the number of motorists passing by, foot traffic, and parking issues to name a few.
They can also let you know if there are any proposed changes to the nearby roads that could negatively affect you in the near future. , Don’t try to please everyone, and focus on what makes your food yours.
If you’re a taqueria, you don’t need to add burgers to your menu.
The more disparate your entrees, the bigger your ingredient list gets.
Not only does it add difficulty to keep only the freshest ingredients in rotation, it adds a layer of unpredictability to your costs.
Do what you do best and build loyalty with that.
If you want to get creative, that’s what daily specials are for. , Many would-be restaurateurs have an idea in their head that it’s the food above all else that will make or break them.
While bad food will get you nowhere, good food isn’t a guarantee of success.
It’s just as important to have something beyond a good meal that sells you over your competition.For the crudest, but most obvious, example of this in action, you don’t need to look any further than the American restaurant chain Hooters.
No one has ever gone there because the food is so good. , No job in a restaurant is so small that it can be filled by inexperience.
From the manager down to dishwashing, a restaurant is a matter of timing and execution, even in the most casual settings.
If this is the first restaurant you’re opening, you’ll want to make especially sure of the manager’s experience, as you’ll rely on her for guidance.
You did factor her salary into your business plan back in step one, right? , Henry Ford’s invention of the car wasn’t what catapulted it into the mainstream.
It was his development of the assembly line for manufacturing that cut costs low enough for people to be able to afford them.
Having systems in place at your restaurant is key for making the customer experience seamless.
A best of breed, hospitality-focused Point of Sale can help with this, by automating many of the tasks involved in getting orders from the table to the kitchen and the bar. , Robert Irvine, a chef and star of “Restaurant:
Impossible,” frequently calls out owners for their less than stellar accounting practices. "So many times on the show — when asked about food cost, labor, and P&Ls — the owners just look at me dumbfounded," he told Business Insider. .
A full-time staff accountant isn’t necessary for all situations, but when searching through consultants make sure they’ve got restaurant expertise.
You can save a little on this expense my using accounting software—this will help keep your numbers organized and make your accountant’s job easier.
If your accounting software integrates directly with your POS, so much the better.
Let the numbers do their thing, and your accountant will make sense of them. , It’s tempting to want to buy the biggest and the best equipment for your kitchen, but don’t bite off more than your customers will be chewing.
Kitchen equipment is built to last, and many deals can be had in the used market for perfectly good ovens, freezers, ranges, and the like.
Once you’re underway, it’s a good idea to regularly check in with your expenses and revenue, with an eye towards keeping your labor costs under control.
Rostering and scheduling software is a good way to run reports and find when and where you’re over-staffing. , Restaurateurs usually make a big advertising push in advance of opening, but then either forget to maintain it or don’t think it’s necessary to do so.
This is another case of the faulty assumption that your delicious food is all you need to spread the word.
Websites like Yelp can help to spread word of mouth, but it’s up to you to bring back the people who’ve already eaten at and enjoyed your place.
Independent food service consultant Brandon O’Dell stresses that the best way to do this is to collect the contact information of “everyone who walks through your door.” Again, this can be a function of your Point of Sale, tying customer names and contact info to specific orders, which can be used for effective, targeted marketing strategies aimed at bringing people back.
Add a third party loyalty app to the mix, especially one with social media features, and make sure to manage this effort as if your business depends on it.
Because it does. , Sure, it’s a nice idea that you’re the brains behind the operation, and that you can put the machine in gear and step aside to let it do its thing.
The reality is nowhere close to this assumption.
If you expect to be paid, expect to work, says Lorri Mealey at about.com You’ll see this theme echoed time and again in all the articles that exist trying to warn you of what you’re in for if you open the restaurant of your dreams. “Say goodbye to your personal life,” is a common refrain.
This isn’t necessarily a bad thing: if you love what you do, then you’ll love doing it.
But it’s a refreshing reminder that this is not an easy to business to start in, much less thrive.
Being mindful of all these steps can help you avoid some of the most common pitfalls. -
Step 3: Keep the menu simple.
-
Step 4: Have a unique concept.
-
Step 5: Assemble a top notch crew.
-
Step 6: Develop processes for everything.
-
Step 7: Hire a good accountant.
-
Step 8: Be careful not to overspend
-
Step 9: especially in the early going.
-
Step 10: Have an inside-the-walls marketing strategy.
-
Step 11: Be ready to work long hours.
Detailed Guide
Unless you’re independently wealthy, you’re going to have to get some financial backers excited about giving you money to start this thing. You can’t just walk up to potential investors with a menu and your assurance that everybody loves your cooking. You need to get all the numbers down, with realistic (meaning: well researched) projections of how much your overhead is going to be, as well as how much revenue/profit you can expect from the menu that you’ve created.
The importance of location to a restaurant’s success cannot be overstated.Again, you might make the tastiest food known to man, but if you’re sitting back where people can’t find you, or—worse—don’t want to travel to, then you’ve already lost.
And don’t just rely on your gut to say that a particular spot would be perfect.
A little research of the town’s or city’s records can get you a wealth of data.
Traffic studies often show the number of motorists passing by, foot traffic, and parking issues to name a few.
They can also let you know if there are any proposed changes to the nearby roads that could negatively affect you in the near future. , Don’t try to please everyone, and focus on what makes your food yours.
If you’re a taqueria, you don’t need to add burgers to your menu.
The more disparate your entrees, the bigger your ingredient list gets.
Not only does it add difficulty to keep only the freshest ingredients in rotation, it adds a layer of unpredictability to your costs.
Do what you do best and build loyalty with that.
If you want to get creative, that’s what daily specials are for. , Many would-be restaurateurs have an idea in their head that it’s the food above all else that will make or break them.
While bad food will get you nowhere, good food isn’t a guarantee of success.
It’s just as important to have something beyond a good meal that sells you over your competition.For the crudest, but most obvious, example of this in action, you don’t need to look any further than the American restaurant chain Hooters.
No one has ever gone there because the food is so good. , No job in a restaurant is so small that it can be filled by inexperience.
From the manager down to dishwashing, a restaurant is a matter of timing and execution, even in the most casual settings.
If this is the first restaurant you’re opening, you’ll want to make especially sure of the manager’s experience, as you’ll rely on her for guidance.
You did factor her salary into your business plan back in step one, right? , Henry Ford’s invention of the car wasn’t what catapulted it into the mainstream.
It was his development of the assembly line for manufacturing that cut costs low enough for people to be able to afford them.
Having systems in place at your restaurant is key for making the customer experience seamless.
A best of breed, hospitality-focused Point of Sale can help with this, by automating many of the tasks involved in getting orders from the table to the kitchen and the bar. , Robert Irvine, a chef and star of “Restaurant:
Impossible,” frequently calls out owners for their less than stellar accounting practices. "So many times on the show — when asked about food cost, labor, and P&Ls — the owners just look at me dumbfounded," he told Business Insider. .
A full-time staff accountant isn’t necessary for all situations, but when searching through consultants make sure they’ve got restaurant expertise.
You can save a little on this expense my using accounting software—this will help keep your numbers organized and make your accountant’s job easier.
If your accounting software integrates directly with your POS, so much the better.
Let the numbers do their thing, and your accountant will make sense of them. , It’s tempting to want to buy the biggest and the best equipment for your kitchen, but don’t bite off more than your customers will be chewing.
Kitchen equipment is built to last, and many deals can be had in the used market for perfectly good ovens, freezers, ranges, and the like.
Once you’re underway, it’s a good idea to regularly check in with your expenses and revenue, with an eye towards keeping your labor costs under control.
Rostering and scheduling software is a good way to run reports and find when and where you’re over-staffing. , Restaurateurs usually make a big advertising push in advance of opening, but then either forget to maintain it or don’t think it’s necessary to do so.
This is another case of the faulty assumption that your delicious food is all you need to spread the word.
Websites like Yelp can help to spread word of mouth, but it’s up to you to bring back the people who’ve already eaten at and enjoyed your place.
Independent food service consultant Brandon O’Dell stresses that the best way to do this is to collect the contact information of “everyone who walks through your door.” Again, this can be a function of your Point of Sale, tying customer names and contact info to specific orders, which can be used for effective, targeted marketing strategies aimed at bringing people back.
Add a third party loyalty app to the mix, especially one with social media features, and make sure to manage this effort as if your business depends on it.
Because it does. , Sure, it’s a nice idea that you’re the brains behind the operation, and that you can put the machine in gear and step aside to let it do its thing.
The reality is nowhere close to this assumption.
If you expect to be paid, expect to work, says Lorri Mealey at about.com You’ll see this theme echoed time and again in all the articles that exist trying to warn you of what you’re in for if you open the restaurant of your dreams. “Say goodbye to your personal life,” is a common refrain.
This isn’t necessarily a bad thing: if you love what you do, then you’ll love doing it.
But it’s a refreshing reminder that this is not an easy to business to start in, much less thrive.
Being mindful of all these steps can help you avoid some of the most common pitfalls.
About the Author
Doris Gordon
Experienced content creator specializing in home improvement guides and tutorials.
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