How to Start a Restaurant

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Image of a Restaurant

A Quick Overview of Starting and Running A Restaurant

Busy consumers don’t have the time or inclination to cook.

They want the flavor of fresh bread without the hassle of baking.

They want tasty, nutritious meals without dishes to wash. In fact, the rise in popularity of to-go operations underscores some clear trends in the food-service industry.

More and more singles, working parents and elderly people are demanding greater convenience when it comes to buying their meals. And most importantly like people like to go out not just for the food but for a good time.

Though the future looks bright for this industry overall, there are no guarantees for success. Even the most successful will tell you this isn’t a “get rich quick” industry.

It’s more like a “work hard and make a living” industry. In order to be successful, you need to have stellar skills. The hard reality is that many fail during their first year, frequently due to a lack of planning.

Skill Set:
  • Excellent people skills
  • Ability to create great food
  • Ability to create a theme and to make customers comfortable
  • General upkeep of the building
  • Staying in compliance with your state and federal requirements
  • List of Common Business Skills
Employee & Job Consideration During The Start-Up Phase Or In The Future:
Approximate Daily Hours Needed:

Depending on your location, hours vary, 6:00 Am to 2:00 AM, some are open 24 hours.

Equipment, Supplies, & Services During Start-up OR In The Future:
  • Refrigerators
  • Commercial frying equipment
  • Ovens
  • Food prep supplies
  • Preparation tables
  • Beverage and ice machines
  • Mixers
  • Dishes (for cooking and serving)
  • Utensils (for cooking and serving)
  • Tables and chairs
  • Menus
  • Food supplies
  • Bar supplies
  • List of Essential office Equipment
Monthly Expenses To Consider:

List of Common Monthly Expenses

Licenses:

You must fully comply with licensing requirements. You need a business license, a food license or permit, and a liquor license if you want to serve alcohol. You also need to pass inspections by fire, safety, and health commissions. Contact your state to get more information on the specifics.

See Our Page on Licenses and Permits

Approximate Minimum Startup Cost:

Bare essential – The financial investment for starting is high. You can get funding from banks, private investors, your own savings, etc. You need to rent or purchase a building with adequate facilities. You need to set up equipment, which will cost tens of thousands of dollars, and you need to make sure the building is ready for customers.

You could buy a franchise, but this is also expensive. A McDonald’s franchise, for example, you’ll need costs about $250,000 in cash. An Applebee’s franchise costs $1 million. Maybe the least expensive route to take is to purchase an existing restaurant whose owners want to sell the building and all the equipment.

Opening a restaurant is very expensive, but it can also be very rewarding. If you are committed to opening, look at existing one for sale complete with equipment. Also, start researching different funding options. It will take a lot of hard work and dedication.

Tips and Considerations:
  • Plan your menu early in the game. Kitchen layout and equipment purchases depend on it. Reduce your equipment costs either by purchasing used equipment or leasing new.
  • Keep the kitchen layout focused on efficient, safe food preparation. Ensure that there is sufficient light and ventilation, as well as enough space so that cooks, servers, and dishwashers are not bumping into one another at the busiest times.
  • Cleanliness is a major factor in any food industry make sure yours is spotless, it only takes a few customers to spread the word about a dirty place.
  • No single food-service operation has universal appeal. This is a fact that many newer entrepreneurs have trouble accepting, but the reality is that you will never capture 100 percent of the market. When you try to please everyone, you end up pleasing no one. Focus on pleasing the 5 or 10 percent of the market that you can get, and forget about the rest.
  • Do research to determine the types of food that are popular in your area.
Pros and Cons:

The Pros:

  • Potential for big income
  • A lot of choices for specialization
  • Great market
  • Big labor market

The Cons:

  • Fierce competition
  • The market could be saturated
  • Long hours
  • Hard work
  • High startup costs
  • High overhead
  • A lot of regulations and laws to comply with
Statistics:

Americans are eating out in record numbers. The National Restaurant Association reports that sales reached about $537 billion in 2007. With 935,000 food service outlets and 12.8 million employees, this industry is the country’s number one employer.

Resources:

Courses:

Education Portal

Equipment and Supplies:

The Webstaurant Store

InstaWares

How to choose Restaurant Furniture

The Restaurant Furniture Buying Guide

Franchises:

Franchise Directory

Associations:

National Restaurant Association