How to Start Your Own Restaurant

Are Your Ready to Open Your Own Restaurant?

Are you ready to open your own restaurant?
Are your ready to open your own restaurant?. StockSnap via Pixabay

For many people, opening their own restaurant is a dream come true. They find the right restaurant space for rent, secure financing, and devise a stellar restaurant concept. All the pieces come together. But for others, starting a new restaurant is a daunting task. How do you get a loan? What’s the best kind of restaurant to open? How big does the space need to be?  To help you get started, I’ve broken down all the big steps to opening a new restaurant; what you need to do before your open, what you need to do just before opening day, and what happens once you’re restaurant is up and running.

Why Be a Restaurant Owner

Before you go any further in the process of opening a restaurant, first ask yourself why. Why do I want to own my own restaurant? Because not everyone is cut out to be a restaurant owner. Are you looking to get away from your current job because you don’t like your boss? Do you want to be in charge? Do you love cooking? Do you love entertaining? Because while these are all valid reasons to think about opening a restaurant – not one of them on their own is enough. You need to be comfortable with the idea of being in charge- not just of a kitchen, but an entire staff, and entire business – it’s a big responsibility. As a restaurant owner you also need to be flexible and nimble; you might be cooking lunch one minute, then dealing with an unhappy customer the next, only to turn around and have to deal with a staffing issue or a late food delivery. You just never know what the day will bring – which is exactly why so many people flock to the restaurant life.

It’s also important to include your family in the decision to open a restaurant. If you are married and/or have children, keep in mind that owning a restaurant means long days and nights away from home. Are you okay with working weekends and holidays? Are you okay if you can’t make it to all of your kid’s soccer games?

Is your spouse going to support you in your endeavors? If you are planning on a family-fun restaurant, consider if your relationships are strong enough to work together and live together.

Finally, examine your personal finances and decide if the risk is worth the reward. Depending on what you are currently doing for work, opening your own restaurant might mean leaving a steady paycheck and employer benefits like health insurance and paid vacations. Are you ready to take that leap? Do you have a substantial savings cushion to help you get to opening day? If not, how are you going to make that happen? And once your restaurant is open, how much do you expect to be paid each week?

Before Opening Day

Once you’ve established why you want to open your own restaurant, it’s time to get to work. The big things you need to do before you get to opening day include the obvious: decide on why type of restaurant you want open, find a good restaurant space to rent or buy, write a comprehensive business plan, and secure financing.

Choosing a restaurant concept can be a matter of personal taste – maybe you’ve always wanted to open a café or a fine dining establishment. It can be driven by popular food trends like food trucks.

It can also be shaped by current competition; if there are already several fast casual restaurants in the area, is there room for another?

I could write a book (albeit short) on how to choose the perfect restaurant location. Big factors include the price for rent or lease, visibility, neighboring businesses, and size. Then there are considerations such as who pays for renovations – you or the landlord? How long of a lease should you sign (not a 10 year one, please). My general rule is to look for places full of other happy, busy businesses. Restaurants are typically an addition to an area, not an anchor – so if there aren’t a lot of other types of businesses where you are looking (like retail or offices), move on to another restaurant space to rent.

Writing a business plan is your homework.

It will require you to research the costs associated with opening a restaurant, analyze the competing area restaurants, and determine if there is enough potential business in the area for your restaurant. As part of a business plan you will also have to address possible problems, like short cash flow, and how you plan to deal with them. Creating a good business plan is akin to a road map – it keeps you on track and hopefully prevents you from getting lost along the way.

Along with the obvious parts of opening a new restaurant, there is the not so obvious stuff – like planning a budget that includes costs for business insurance and licenses, applying for liquor permits and whatever else your town or city requires of small businesses. And then there is the hiring and training staff, including safe liquor and food service training (AKA TIPS or SafeServe). 

Planning a Menu

One of the biggest parts of opening a new restaurant is creating the menu.  I’ve said countless times that a menu is more than just a list of food items and prices. It is your restaurant. It is why people come to eat at your establishment. Because they like the menu (and the cooking). Most likely you will have to tweak your menu following opening day – unless you do oodles of focus groups beforehand, there really isn’t a good way to test out every menu item until you open (which is a good reason to do a soft launch first). Even after opening day you should periodically update your menu to make sure your food cost is correct.  

After Opening Day

Once the hectic first few weeks smooth out, it’s time to turn your attention to marketing and customer appreciation. Even before you are open, you can start connecting with customers on social media. After opening day, you will want to keep up the momentum with an aggressive advertising campaign, to encourage as many people as possible to try your new restaurant.

Along with advertising, you can show your customers how much you appreciate their business with promotional campaigns and giveaways. Actions speak louder than words, and that is certainly true of customer appreciation. There are countless ways you can show your customers how much you appreciate their business. And it doesn’t have to cost you a lot of money (or any money in some cases). Fr example, personal attention, especially by the owner or manager can go a long way in making customers feel special. Read on for tips on how to make every customer feel like they are a VIP.

There’s a lot of work between dreaming of starting your own restaurant and opening day, including finding the right location, writing a business plan, and securing financing. Once your restaurant is up and running, the work doesn’t stop there. You’ll need to establish a marketing plan, tweak your menu, train staff and monitor your cash flow and budget carefully.