How to start a restaurant business

You love food, we love food and they also love food. Everybody wants to eat, so they will definitely buy from you. However, it’s not that simple.

Starting a restaurant requires some careful planning. It’s a more easy thing to do if broken down into steps. In this post, you will learn how to start a restaurant business.

Types of restaurant businesses

There are many types of restaurants, and you possibly can’t operate all types. You need to select one and Invest all your effort and capital in it. Here they are.

1. Fast food restaurants

These types of restaurants specialize in fast food preparation and casual service. Most customers don’t sit to eat there, since they just come to buy and go.

A fast food restaurant is always focused on speed and convenience. You should expect to earn a low amount of payments from each customer.

2. Fast casual restaurants

Although similar to a fast food establishment, fast casual restaurants have slight differences. There are neat spots or furniture for seating, but definitely not a full table.

Fast casual restaurants usually prepare and sell fresh foods of wholesome quality. They may also have nondisposable utensils and plates.

You can earn a slightly higher amount of money per customer in a fast-casual restaurant, than in a fast-food setting.

3. Casual dining restaurants

These types of restaurants offer full table service in a serene environment. You will be expected to provide a variety of meals at affordable prices. You can also serve alcohol, appetizers, and entrées.

You will earn more profit from each customer, no doubt. However, you will have to be more professional. You should also have one of your employees work as a host and waiter.

4. Family dining

Most of these restaurants operate in the same way as casual dining. However, they don’t usually sell alcohol to customers.

You will earn more on each sale, as some of your customers will come in groups. Many of them will purposely patronize your restaurant for breakfast, lunch, and dinner options.

5. Fine dining restaurants

A fine dining restaurant will provide customers with a more elegant and upscale dining experience.

You will earn more profit on each sale, as your customers will be paying not only for your quality food but also for the elegant dining experience you’re providing.

6. Other types

There are many other types of restaurants that don’t fit in any of the 5 types here. These includes:

• Cafe
• Bars & Pubs
• Food trucks
• Bistro
• Buffet
• Ghost restaurants
• Pop-up restaurants
• Contemporary casual and lots more.

How to start a restaurant business

Follow these steps to start a restaurant business:

1. Determine the type of restaurant you want to start

Choose a type of food business from the ones we mentioned above. Note that:

• Fast food restaurants mainly sell snacks and quick foods. Most of your customers will be office workers and students
• Fine dining restaurants target the rich and fabulous
• Casual dining restaurants are more generic. Most of your customers will be families, children, friends and the general public

2. Find an appropriate location for your restaurant business

Note that we used the word “appropriate.” This is because your choice of location will largely depend on the type of restaurant you want to open. Here are other factors to consider.

• Cost
• Surroundings
• Accessibility
• Competition

3. Draft a business plan for your prospective restaurant

Just like any other business, a restaurant needs a very strong business plan. This plan will be outlined into sections, and they will outline all the aspects of your new business.

This is to help you flesh out your aims, objectives, financial needs and many other things. A business plan will also help you to attract investors or apply for bank loans amongst other things.

You may like this: How to write a business plan

4. Research funding options for your restaurant business

The next thing to do is to get startup capital for your new business. Before doing that, you should do a calculation of how much it will cost you to run your restaurant for the first 6 months.

Now let’s talk about how to get the startup funds. It will mainly depend on the type of business structure you operate. If your restaurant business will be a sole proprietorship, then you have limited funding options.

You can use your own personal savings to kick start it, and then get some funding from rich relatives and friends.

If it’s a partnership business, then you have more opportunities to raise funds, since two (or more) heads are better than a single one.

Other Business Owners Also Read: Types of Business Structure and the Pros and Cons of Each

Your restaurant business can also be a Limited Liability Company. In this case, your personal and business assets are legally seen as two separate things, which will protect you from any legal actions.

It’s very easy to get funding for an LLC. You can approach Angel Investors, Venture Capitalists, Business Incubators and many other investment sources.

Recommended For You: The Easiest Ways to Get Funding for a New Business

5. Register your restaurant business and obtain applicable licenses and permits

Depending on the country where you’re opening your restaurant business, you must register your business with the government and also with certain regulatory bodies.

These regulatory bodies are usually those concerned with the monitoring and licensing of food and health businesses like yours.

They will give you certain standards that you must meet, such as a minimum number of employees, size of your restaurant, ventilation, hygiene, prohibited good ingredients and lots more.

If your type of restaurant business is a Pub or bar, you will also need a liquor license. Note that liquor licenses may be very time-consuming and expensive to obtain. 

6. Get your restaurant equipment

Write out everything that you need and arrange it on a list. Note that your kitchen and furniture needs will depend on the type of restaurant business you want to run.

Don’t forget that you can save some money by buying fairly used equipment and utensils. You can also buy high-grade new ones if you have a fat capital investment.

7. Hire the right employees

Depending on the type of your restaurant business, you may need to hire other people to help you with the day-to-day running activities. 

Make a list of all the restaurant positions your business will need at the start. Once you do that, you should hire them in order of how crucial they are.

Don’t forget to plan how many days your restaurant business will be open during the week and how many shifts will be needed each day.

8. Create a menu

A menu is the centrepiece of any restaurant business. While fast food restaurants may not necessarily need it, casual dining and other types of food sellers must have it.

How will your customers make reservations if you don’t have a menu? Also, you won’t be able to advertise well enough without having it.

9. Get the word out!

You should come up with a marketing plan that will drive brand awareness and brings in customers. Aside from hosting a soft or grand opening, you should also go digital.

Depending on the type of your restaurant (local or global), you should get a web presence, both on social media and on search engines.

You should list your restaurant on a much as many business listing sites and restaurant directories. You can consider the following options.

• Yelp
• Zomato
• Facebook
• OpenTable
• TripAdvisor
• Yellow Pages
• Google Business Profile

Conclusion

Despite the economic and financial challenges that many people are passing through, the restaurant industry will always be an important part of their lifestyle and culture.

Get a good location, register your business, order restaurant equipment and advertise your business. From time immemorial, restaurant businesses are always profitable, and will always be.