Restaurants are a popular option for entrepreneurs wanting to start their own business, with restaurant workers making up about 10% of the United States workforce but there are some key things that you will need to do to improve your chances of success.
Getting Started
First, decide what type of restaurant you wish to run. Is there a particular cuisine or style of cooking that you really identify with and are passionate about? Are there already similar businesses operating in your area and if so, do you feel you can compete with them? It’s worth considering whether your location is suitable for the type of restaurant that you want to run.
If you plan to seek a bank loan or other form of VC investment, you will need to write a business plan. This critical document shows that you have thoroughly considered and planned for every aspect of running the business to improve the likelihood of it being successful and profitable.
Because up to 60% of food businesses fail in their first year, your business plan needs to be robust in order to support your application for funding.
It must include as a minimum your vision, an executive summary, a description of the company, analysis of the environment and competition, your plan for marketing the business, how you intend to manage the business, your proposed legal structure and your financial analysis and projections.
You will need to locate suitable premises if you do not already own an appropriate building which can be converted. It would be unwise though to make firm arrangements to secure the premises until such time as funding is available and you are ready to launch the business.
Next Steps
Once you have secured funding and a location, there is still much to do before you can open.
You must apply to the IRS for a tax identification number as well as registering the business for local and state taxes. You will have to pay income and employment taxes and some states have additional requirements. These vary so it’s important to check which business tax information specifically relates to your location and to adhere to it.
You will need to engage with your local health department to secure licenses, permits and appropriate insurance for your restaurant. You must demonstrate your plans for safely handling, storing, and serving food and get a liquor license if you plan to serve alcohol.
You will need to prove that appropriate safety measures are in place, such as fire safety and evacuation routes, maximum occupancy, appropriate ventilation and hygienic food preparation areas. To comply with the Americans with Disabilities Act, you will need to demonstrate that your restaurant can safely accommodate those living with disabilities.
You would be wise to hire an accountant as running a business will entail a great amount of paperwork. You will generate considerable amounts of financial information and this will be required for filing your taxes, applying for additional business financing if required, and to ensure that your income, outgoings, turnover and profit are correctly accounted for and that your business is operating profitably.
Almost There
Once you have your premises, funding, and are signed off as legally compliant, you are nearly ready to open! There are just a few final things that you will need to do before you can welcome customers and start making money.
You need to hire and train staff. Your business plan will have identified how many people you need and what their roles will be. This information will form the basis of your recruitment campaign.
You will need appropriate tools and software to run the business – for example a point of sales system and a stock inventory/management system.
You will need to publicize your business before it opens. This requires signage (some types of signage are more effective than others and you may consider writing a digital signs business plan to enable you to run cost-benefit analyses and identify the most appropriate type for your business), a website, and you would be wise to distribute flyers and advertise in local media and on social media feeds to generate interest in the business before you open the doors for the first time.
And Finally
Good luck! Running a successful business that you are passionate about is hugely exciting and rewarding. Ensure you’re not too busy working to enjoy the success that you have built!
For more quick guides, read our 10-step guide to success in opening a restaurant and of course, how to take food photo for your business.
Ella Marcotte
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