Step 1: Determine Which Type of Restaurant Will Fit Your Concept
The first thing you should do when you’re planning to open a restaurant is to figure out exactly what type of restaurant you want to open. You need to decide on the restaurant concept and cuisine, then use this to generate ideas on the type of restaurant you’ll run.
If you have a passion for a particular type of cuisine, that can be a great place to start. For example, upmarket French food would suit a fine-dining restaurant, so you’d want to develop a more luxurious restaurant concept. If you want to serve cheap and cheerful tacos, on the other hand, a food truck or a fast-food joint may work better.
Look carefully at successful restaurants in your area and think about them through a critical lens. What are they doing well? What could they improve on? Maybe the food is delicious, but the restaurant logo is a bit cheesy. Perhaps their customer service or their decor falls short.
Think about what qualities make up a good restaurant and figure out how you can apply them to your own restaurant concept — be inspired by others’ success stories.
Step 2: Find the Best Location to Open Your Restaurant
Once you’ve figured out what type of restaurant you want to open, you’ll want to scope out the perfect locationfor your business.
It’s important to do that after you’ve decided on your restaurant concept, as the type of place you want to open can and should impact your decision. Fast-food or casual-dining restaurants are usually better suited to places with high footfall—people are more likely to stop in on a whim if they walk right past.
On the other hand, if you’re opening a fine-dining restaurant, you’ll want to make sure that the area around your establishment has a high-class atmosphere.
It’s your job as a future restaurant owner to make these kinds of decisions.
Step 3: Create a Business Plan for Your Restaurant
Draft a thorough business plan for your restaurant. A well-written restaurant business plan is crucial if you’re going to look for outside investment.
A good business plan includes:
- An executive summary to sum up all the main points in the business plan
- A mission statement to explain your overall goal
- A company description to introduce your restaurant’s name, location, and goals
- Market analysis to explain what competitors in the area are doing well and poorly
- Analysis of your target market to show you know who you’re aiming at
- An overview of your planned restaurant marketing strategy
If you’re finding it difficult to write a restaurant business plan, start thinking about your restaurant as a business with a specific target audience. Who are you cooking for and what are they like?
Once you work out the basics, the rest should start to fall into place.
Step 4: Finance Your Restaurant
Very few restaurant owners have enough capital lying around to put up all the money themselves, so you’ll probably want to secure a restaurant loan of some kind.
Your up-front costs will be high, as there are a lot of costs involved with opening a restaurant. However, you’ll also want to ensure you’ve accounted for ongoing expenses, such as staff salaries and training, food, and overhead expenses.
There are various types of loans available to prospective restaurant owners, including small business loans and merchant cash advances. If you want to apply for a small business loan, an SBA loan is a good option. Those are loans that have been backed by the Small Business Administration to reduce risks for both lenders and borrowers.
Step 5: Obtain Licenses and Permits Needed to Open a Restaurant
One of the most important steps to take when starting up a restaurant business is making sure you have all the licenses and permits required for your restaurant.
First and foremost, register your business name. Once you’ve done that, make sure you have:
- A business license
- An employer identification number (EIN)
- A food service license
- A liquor license (if you plan to serve alcohol)
- A certificate of occupancy
- A sign permit
There are other licenses and permits you might need, too. The public health department and the FDA have specific rules and regulations that you must adhere to, so you’ll need an employee health permit. Some states require you to have a building health permit, as well.
Look up the licenses and permits required for a restaurant business in your state and make sure you follow every food safety rule to the letter.
Step 6: Invest in Equipment and Restaurant Tech
Restaurant equipment can mean anything from kitchen equipment (walk-in freezers, ovens, range tops) to customer-facing tech (self-ordering machines, contactless payment devices, touch-screen payment terminals).
When you’re buying restaurant equipment, there are several considerations you should make.
Think carefully about what your restaurant needs; if you’re not planning on deep-frying anything on your first few rounds of menus, a deep-fryer shouldn’t be a priority purchase. Ask your head chef to be involved in the decision-making process, here — they’re far more likely to know what they’ll need day to day.
You should also consider the cost of equipment (a cheaper version might save you money now, but could cost you more in the long run) and the size of the equipment. It’s got to fit in the kitchen, after all!
Other important considerations include
- Energy efficiency
Investing in high-quality tech is a good way to ensure your restaurant business has longevity. In today’s technological landscape, it’s important to invest in the right equipment. Kitchen equipment, display systems, and point-of-sale ordering technology... It’s all improving rapidly.
It's your job as a business owner to ensure that your restaurant has the best tech on the market (or as close to the best as you can afford). By doing that, you’ll make sure your processes run as smoothly as possible, cutting down on wasted time and increasing customer satisfaction.
Restaurant management software can be a great way to ensure the smooth operation of your restaurant business. From inventory management to invoicing and expense tracking, the right software can ensure you have all the details about your restaurant in one convenient location.
Step 7: Develop a Memorable Restaurant Menu and Beverage Program
One of the single most important aspects of your restaurant business is, of course, the menu. You can’t have a restaurant without food and drinks, and what you serve to your customers is the real reason they’ll come back time and time again.
Creating memorable (i.e., delicious!) food is crucial if you want to get good reviews and ensure your business is thriving.
If you’re just starting out, consider testing your recipes on friends and family. Ask for honest feedback about the taste, presentation, and overall quality of the food. Would they order it in a restaurant? How much would they pay?
Spend time making sure you get the menu design right. Remember to plan for future menu items, too. If an item isn’t performing well, get rid of it and replace it with something else.
Step 8: Hire Staff
One of the last steps to take before your grand opening is to hire staff. Post job advertisements on local or online job boards and conduct thorough in-person interviews.
Many restaurant owners want to hire staff with experience, and you’ll definitely want some safe hands on your team to keep things running smoothly. But remember, a new employee with little or even no experience can be trained more easily, while more experienced staff members may have bad habits from previous roles.
If you’re working with a small team, consider outsourcing your human resources department so that you can focus on the day-to-day running of your restaurant business.
Step 9: Create a Marketing Plan
A solid restaurant marketing strategy is essential if you want to run a successful restaurant. And this doesn’t stop after the opening day; you need to think regularly about how to market your restaurant experience and keep customers coming back for more.
Set yourself a few marketing goals and create a marketing plan with a specific strategy for each goal. Building a website and a strong social media presence are good starting points.
You’ll need high-resolution photos of the interior, and it’s a good idea to ask early customers to leave reviews for you online—give them an incentive to do so, like 10% off their next order if they leave you a review.
Whether you're opening a restaurant in New York or San Francisco (or really anywhere!), these are the nine steps you should take before your opening night.