Opening a restaurant is a daunting task. Preparation and planning can take a long time, but the end result is often worth the headache.
As the pandemic settles and we return to the “new normal”, the restaurant industry has opened up. Before the pandemic, to open a successful restaurant, you had to offer either take out or dine-in. That’s just not the case anymore. The restaurant industry has completely opened up, providing restaurateurs with tons of options, including:
- Ghost kitchens
- Food trucks
- Pop-ups
If you’ve been dreaming of opening your own restaurant, now’s the time!
To learn more about what it takes to open a restaurant and the steps you’ll need to follow to make your dream a reality, keep reading.
1. Choose a Concept
Before you can open a restaurant, you need to have a concept or an idea. Your restaurant’s concept should stem from your passion. Are you a lover of Italian cuisine or a voracious baker? Running a restaurant requires you to throw your entire life into your business, so choose something you truly love.
Not only will you have to choose the type of food you’ll be serving, but the format in which you’ll be serving it. There are many different types of restaurants, including:
- Quick service or fast food
- Casual dining
- Fine dining or upscale
- Bars and lounges
- Cafes and bakeries
- Food trucks
- Pop-ups
It’s also important to do market research into the area you plan on opening your restaurant. What concepts are missing? What’s oversaturated in the area? You need to think about what customers will want on top of what you’re passionate about.
A great restaurant concept will not only suit your passions, but it will draw in a crowd. By looking at your budget, your passions, your target audience, and the holes in the market where you live, you should be able to decide on a concept that you love.
2. Write a Business Plan
Once you have your concept locked down, it’s time to start on the nitty-gritty planning. You’ll need to write out a business plan to show potential investors and banks that your business has what it takes to succeed. Here’s everything you should include within your plan.
Executive Summary
The executive summary should outline everything that you plan on talking about throughout the entirety of your business plan. While it should be listed first in your document, you may want to write it last so you can easily sum up your plan.
Restaurant Overview
In this section, you should include the following about your restaurant:
- Concept and/or theme
- Service style
- Size and seating capacity
- Operating hours
- Type of cuisine served
- Other options, like takeout and delivery
- Any unique selling points
Sample Menu
To show investors what food you plan on serving, include a sample menu. Work with your chef to create an appetizing and delicious menu with evocative descriptions and realistic prices. This doesn’t have to be the exact menu you plan on using when your restaurant opens, but it should have the same general vibe. If you’re strapped for time or design expertise, try using a menu template or simple menu design to present this sample menu. We’ll touch more on creating professional menus later on.
Market Analysis
After analyzing your target market, you should document your findings. Include the following information about your target customers:
- Where they live
- Their age range
- Their income range
- How they dine (do they hate long waits or do they prefer takeout?)
- How often they go out to dinner
- Any other information you find about your customers
There are many resources available for conducting market research, but here are some good places to start:
- Google Trends
- Make My Persona
- Statista
- Tableau
Marketing Plans
Your investors will want to know how you plan on marketing your restaurant. After all, without a marketing strategy, your restaurant likely won’t find success. In this section, address whether or not you’ll be handling marketing in-house or outsourcing to a marketing company. Include basic marketing plans if you plan on handling marketing in-house.
You should also start to outline the basics, like whether or not you’re planning on developing a website or landing page, using QR codes, or partnering up with delivery services like UberEats and DoorDash.
Management Structure
In this section, you’ll want to outline the key players on your team. Attach the resumes of managers, chefs, and other essential parties that will be helping to run the restaurant.
Employee Needs
It’s also important to note how many people you plan on hiring and what you intend to pay them. You don’t need to have your entire team selected at this point, but by providing the resumes of a few individuals you’ve hired, you’ll be able to showcase the amount of experience your team has.
Make sure to include your future hiring plans as well, and outline how many people you plan to bring onto the team in each area.
Potential Location
Where your restaurant is located plays a huge part in sales, marketing, and more. While you may not have a location selected at this time, include a few potential areas you’re considering and why you’re considering those specific areas.
Financial Analysis
At the end of your business plan comes the most crucial part, the financial analysis. To ensure that the information is correct, hire a trained accountant. This section should cover all financial aspects, including estimations for funding and revenue.
Plan to include information such as:
- How much you’ll be spending on food orders and equipment
- How much you’ll be paying your staff in total
- How much your menu items will be and how much revenue you expect to generate
- Any other costs you may incur
3. Fund Your Dream
Once you’ve written your business plan and developed your concept, it’s time to start thinking about funding. There are various funding options out there for future restaurant owners, including:
- Commercial loans
- A business line of credit
- Small business loans
- Investors
- Crowdfunding
- Personal savings
Most businesses opt for a small business loan, which requires working with a bank (usually the U.S. Small Business Administration). These types of loans require collateral and can take a while to approve. For this reason, some turn to other options like traditional loans and credit cards.
You can also set up crowdfunding at websites like Kickstarter, Indigogo, GoFundMe, or FoodStart, allowing people to help fund your dream. It’s also a good idea to have some of your own money set aside to get started. However, if you don’t have any personal savings, you can rely on other methods.
Choose a Location that Fits Your Needs
When choosing a location for your restaurant, you’ll want to keep in mind the following:
- How visible is it from the street? Will people see it when they’re driving/walking by?
- Is it easily accessible? Is the parking lot easy to get to?
- Who lives in this area? Do the local demographics match your target audience?
- How much does it cost to lease a space in this area? What is the cost of living? How much are employees paid in this area?
- Is there a lot of local competition in this area? Are their restaurants with a similar concept nearby?
You can buy, build, or lease a location. However, leasing is the best option for new business owners. Leasing is generally cheaper (when it comes to startup costs) and it’s easier to expand, change locations, or switch to a new location if needed. If you choose to build or buy, you’ll be locked into that location.
4. Make Sure You Have All the Right Licenses and Permits
When starting a new restaurant, you need to ensure that you have the proper licenses and permits. To operate a restaurant, you’ll need to have:
- A business license
- Employee identification number
- Foodservice license
- Liquor license (if you’re planning to serve alcohol—which you should, as they’re one of the highest-margin items in restaurants)
It’s important to get started on these applications early, as getting approved can take some time. Without these licenses, you won’t be able to run your business properly or legally. For example, without an employee identification number, you can’t hire employees or set up payroll. Without a foodservice license, you can’t serve food.
5. Find a Reliable Food and Equipment Supplier
All kitchens require the same basic equipment, like refrigerators, freezers, and cooking supplies. Discuss with your chef and kitchen manager to brainstorm what your kitchen will need specifically.
Find a reliable food supplier to work with that you can order from regularly. When looking for a food supplier, you should look for someone who seels high-quality food within your budget. If you’re opening an organic restaurant or a vegan restaurant, you’ll obviously want to work with suppliers within those categories.
On top of that, it’s important to keep up on inventory to make sure you’re ordering items before you run out. Having to 96 something within the first week isn’t a great look, so it’s best to be prepared.
6. Create Your Menus
There are still a few steps you need to take before your restaurant officially opens. If you haven’t already, it’s time to design your menus.
Think about your restaurant’s ambiance, theme, and general vibe. Brainstorm ideas for what you may want your menus to look like, and then work with a designer to make them a reality.
Hiring a designer can be expensive, and there are other options available for menu design. Creating a menu from a template is one great way to save money while still getting an excellent menu design.
Other than dine-in menus, you also may need the following marketing materials for your restaurant:
- Takeout menus
- Cocktail menus
- Dessert menus
- Kids menus
- Digital menus
- Flyers
- Business cards
- Social media posts
Creating these design elements with the same designer or software will create a cohesive theme that lends well to your marketing strategy.
7. Create a Marketing Strategy
During this time, you should build on the marketing strategy you outlined in your business plan. It’s also time to begin putting that plan into action. You should develop your website and set up social media accounts for your restaurant during this time.
You should also ensure that your Google My Business homepage is set up alongside your Yelp, TripAdvisor, and OpenTable accounts. These accounts will help people find your restaurant through search.
Before your restaurant opens, you should begin to post on social media and create a buzz surrounding the opening of your restaurant. Set a date for your grand opening and advertise it on social media and through exterior signage.
8. Hire a Great Team
If you haven’t already, it’s time to finish hiring your team. Make a list of all the positions you’ll need to fill and post the openings on job boards and social media. For a full-service restaurant, you’ll need to hire:
- A management team including a general manager, kitchen manager, and front-of-house manager
- Kitchen staff including your head chef, sous chef, prep cooks, line cooks, dishwashers, and runners
- Front-of-house staff including servers, hosts, bussers, bartenders, barbacks, and cocktail servers
- Behind the scenes employees like a marketing professional, accountant, and PR
Before your restaurant opens, make sure you dedicate enough time to training your staff. Good service is vital to the success of your restaurant.
Time to Open Your Restaurant
Now that you’ve done all of that hard work, it’s time to finally open your restaurant! Of course, the hard work isn’t behind you, and there’s much more to be done. To kick things off, you may want to consider hosting a soft opening to make sure everything goes as planned. During a soft opening, offer a limited menu for a limited time. Ask for feedback from customers and take notes on how everything goes throughout the night.
After that, you should be ready to host your form grand opening. Don’t forget to keep marketing, changing up your menu, and fixing any issues that arise throughout the life of your restaurant. But most importantly, pat yourself on the back because you did it! You opened a restaurant.
Megan Prevost is a marketing content writer for MustHaveMenus. She’s been a content writer for four years, and her work has appeared in The Daily Fandom and FanSided.
Restaurant stock photo by Alemon cz/Shutterstock
