How to Start a Restaurant Business – What to do and what not to do while starting a restaurant business

In today’s world, starting a restaurant business is as much difficult as opening an entire engineering faculty. This is not because the business is complex to establish, rather it is complex to sustain in today’s market. Catering business is highly profitable and sustainable if your restaurant is at a perfect place and offers food which is unique and tasty.

            In this regard, many of our fellow citizens are thinking about starting their own restaurant business. In the article we will try to answer questions about how to open your own restaurant, cafe or bar, where to start, what steps you need to go through to achieve this goal and what the pitfalls of opening a restaurant are.

Restaurants by Type

I want to open a restaurant but I do not know where to start? It is worth determining what type of institution (at least approximately) you are going to open:

By Format: A bar, a dining room, fast food, a family cafe, a fashionable restaurant, an institution "for their own" - the choice is wide. As practice shows, novice businessmen most often “succeed” in classic city cafes, without the difficulties and features inherent in all target institutions.

By price level: This criterion is often, but not always, dependent on the previous one. Usually one of the significant limitations here is the budgets of a novice restaurateur; the higher the level of the establishment, the higher the cost of opening it. Experts do not recommend starting a restaurant business with expensive dishes. The public is very demanding, the investments and risks are too high when you have limited dishes which are extremely costly. The best solution would be to open a democratic casual institution.

By type of cuisine: Usually, the interior and the desired location of the restaurant depend on the type of kitchen. Japanese, Russian, Italian, Georgian or maybe exotic Peruvian? Here, experts recommend not to complicate your task and choose the one that you understand: for beginners, concepts of Italian and Simple European cuisine are good.

By the maximum number of guests: The cost of arranging an institution is directly proportional to the number of seats. No matter how great the temptation to open a large restaurant at once, it is better to limit yourself to a room for 30–80 guests, in the beginning.

Which restaurant to open? Defining the concept

So, you were not afraid of the risks and decided to open your own enterprise. But, How to start a restaurant business successfully? First of all, you should decide on the concept of the restaurant - which category of the price range the institution will belong to and what direction the kitchen will be as we have mentioned before. This may be an elite restaurant with a couple of dozen seats, with exotic cuisine and 200 types of wines, or a casual restaurant that offers many American favorites, business lunches and banquet menus. Or it can be traditional restaurants with a diverse menu, but of various levels - from luxury to the simplest home-made dishes. The most profitable and most sold are considered restaurants of casual cuisine (casual restaurants) or inexpensive cafes, provided that the latter are open in places with high traffic. Only after choosing a concept can you proceed to the development of a business plan - already taking into account all the features of a particular type of institution.

Points to Consider of Utmost Importance

1. Blindness to competitors

Competition in the field of restaurants over the globe is really high. Hence, it is necessary for you to consider the following points to avoid getting drowned in competition:

·         Identify the main market participants, study where they are located in order to choose a suitable place;

·         Estimate the demand and level of competition in your segment;

·         Visit your competitors’ restaurants to investigate the situation and find out how others are doing business. Examine the menu - this will help evaluate the offer on the market and develop your own, unique menu.

·         Learn trends and concepts in the overseas market. It is necessary to fashion your restaurant as per the dishes you offer in your space. There you can peek at fresh concepts - and become a pioneer in the area you are opening the restaurant in.

2. Location of the Restaurant

Finding a suitable area for a restaurant can take a lot of time, so it’s best to take care of this in advance. When choosing, it is worth considering two key parameters: the location and the condition of the room.

The place for the future restaurant is selected based on the concept. For example, it is better to place a youth cafe near educational institutions and entertainment centers; expensive restaurant - in the city center, and a family cafe - in a residential area.

Wrong location can leave the restaurant without visitors. Firstly, if you are placed in a place with low pedestrian traffic, then deprive yourself of a powerful advertising tool. How can people guess that there is a wonderful cafe around the corner? Secondly, you need to be located where your target audience is concentrated. Otherwise, people passing by will not be interested in your offer. Thirdly, the location of the restaurant affects business reputation. Most likely, a cafe on the outskirts of the city, overlooking the industrial zone, is unlikely to inspire confidence in visitors. Fourth, the location should have convenient transport accessibility and parking. Fifth, you must evaluate your location in terms of competition. 

Equipment and furniture: cold design or luxury

The acquisition of high-quality kitchen equipment is one of the key stages in opening a restaurant. The production capacities of the kitchen, the organization of the work process, and even the taste of dishes depend on the quality of equipment and tools. That is why you need to responsibly approach the choice. Read in advance the experience of other restaurateurs and their reviews on this technique. Explore the various commercial offers of kitchen equipment suppliers. Pick a few options and compare value for money. Excessive savings are useless, however, the purchase of the most expensive equipment is not a guarantee of success.

Pay special attention to such a parameter as warranty service, and from what point it is calculated. If from the moment of sale, then you risk losing those few warranty months when the equipment is actually idle, while you are solving paper issues and delaying the opening. Naturally, such equipment will fail just after the expiration of the free repair period.

Mistakes in the procurement policy

One of the preparatory stages is the search for suppliers of raw materials. The main requirement for suppliers is the supply of high-quality and fresh products on time according to an agreed schedule. Disruptions in supplies can disrupt the restaurant, because the lack of many dishes from the menu is unlikely to please visitors. Therefore, it is so important that fresh ingredients are always present in the kitchen.

Conclusion

If you are going to open a restaurant business, make sure that the concept you have chosen pays off in 1.5–2 years (otherwise the idea can be considered unprofitable). Many people prefer to start with franchises of famous brands of fast food or coffee houses, but this is also not always a good option. After all, this format restricts you from choosing not only a general concept, but even small things - from the uniform of waiters to the color of serving dishes. Therefore, it may be worth thinking about a middle-class cafe, but in its own, unique style. Who knows, maybe it’s your idea that will “shoot”, like Starbucks or Subway!