How To Start A Restaurant - The Ultimate Guide

A guide to starting your very own restaurant

 
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It seems like everyone has a dream to open their restaurant. With approximately 1 million restaurant establishments in the U.S., the thought of owning a restaurant sounds exciting. But is this industry profitable? Well, more than 195 million U.S. consumers visited a sit-down restaurant, and food and drink sales of the U.S. restaurant industry amounted to approximately 766 billion U.S. dollars in 2016. In the growing F&B sector, food-service operations have skyrocketed and will continue to grow in the future.

Starting a restaurant from scratch is not easy. However, if you’re unfazed by the hardships and are more than willing to take on the challenges of starting a restaurant, that is half the battle won! There is no secret to having a successful restaurant, but there are several things you need to know before you get started, and that is why we have created this ultimate guide on how to start a restaurant business.

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What You Need to Open a Restaurant

So, you’re ready to start your restaurant? Great! We can help you take your first step. Before we begin, it’s important to note that many factors come into play when opening your restaurant, such as the restaurant concept, choosing the right location and how you plan to market your business. Be sure to follow along as we compiled steps to opening a restaurant.

1. Restaurant Business Plan

First things first, you need a restaurant business plan. It helps you estimate the costs of opening a restaurant and chart the growth of your brand. Having a restaurant business plan shows potential investors the feasibility of your business. You’ll also be able to learn about your competitors and the prospects of the industry you’re about to dive into. Business plans also give you a clear direction of your restaurant’s branding and what your concept is going to be. Do ensure that you have the 8 Must-Haves in Your Business Plan when you're crafting it!

2. A Niche

Once you’ve understood the concept business plan, choosing a niche comes next as this will help quicken the process when deciding on other factors like your target market or menu. Your personality and preferences should be taken into consideration when crafting a niche in the F&B market that fits you like a glove.

3. Target Market

Next, it’s time to think of who you’ll be selling your food to. Your target market has to be in line with your niche. We know that there is an urge to satisfy everyone, but the reality is, you will not be able to capture 100 percent of the market. When you try to please everyone, chances are, you end up pleasing no one. Hence, you should focus on a segment of the market that you are targeting, and leave the rest for now.

4. Location

Of course, food and services are essential to the success of a restaurant, but its location is just as crucial. If your restaurant is in an unfavourable position, you would not be able to attract enough customers to stay in business. There are many factors to consider, like visibility and competition, when looking for a location for your restaurant.

5. Menu

Did you know that something as simple as sprucing up your menu with these 3 tips can help boost your sales? Make sure you’re up to date with the latest food trends in the F&B industry and incorporate them into your list of product offerings. Consider factors such as the different types of dietary requirements (vegan, vegetarian, low sodium, etc.) too. Also, ensure that your menu descriptions sound appealing enough to make customers salivate! 

 
 

6. Marketing & Promotions

Establish a strong social media presence to get to know and engage your customers. You can even obtain their email addresses and send them newsletters of upcoming menu items and promotions. You can also hand out flyers or print posters to plaster them outside your store. Our friends at PosterMyWall offer an extremely affordable and user-friendly platform that you can use to create marketing content on a slim budget. Utilized by thousands of restaurants, PosterMyWall provides an extensive selection of professionally designed templates for posters, menus and even videos. Check out their complete collection of Restaurant Flyer Templates here!

 
  Images are taken from  PosterMyWall .

Images are taken from PosterMyWall.

 

The bottom line is, don’t ever stop promoting your restaurant because the competition is fierce and you need to compete for your customers’ attention (and their money).   

7. Human Resources

Next, you need to hire employees for your business - full time or part time. Finding the right hourly employees to staff your restaurant can be challenging. Here's a helpful resource to help you define what strategies you can use and where to look online and offline: How to Find Hourly Employees: The Definitive Guide.

Develop a comprehensive job description that outlines the jobs’ duties and responsibilities and any special requirements. Once that is done, you will have to consider the salary rates. Find out what the rates are like in your area or your line of business. Establish a minimum and maximum wage for each position you’re offering.  

8. Restaurant Startup Costs

Now that you’ve got the whole idea of your restaurant, you need to invest some money to make your dream into reality. However, how much exactly would it cost? Unfortunately, there is no specific answer to the amount you will spend as the costs vary depending on many factors. However, we have prepared an article which discusses a curated list of the startup costs restaurants typically face and what they usually overspend on. Find out what they are and be sure to follow our tips to minimize your spending!

 

How to Manage a Restaurant

You’ve got all the fundamentals on how to start your restaurant, but you’re probably wondering how you should go about managing it. Managing your restaurant requires a lot of serious planning and energy, but when done right, it will bring you one step closer to successful restaurant management.

So, how to run a restaurant? Look:

1. Manage finances

OK, I know what you’re thinking… Financing is one big headache businesses face all the time. Well, making sure you have contingency funds or loans to help you get started will not sustain your restaurant in the long run. It is essential to know where and how to spend your money. If it is a must-have, learn to evaluate different alternatives and opt for the cost-saving route.

Here’s a clue: You’ll be surprised by how having an online ordering system helps cut costs for your business!

2. Market your restaurant

Continually generating restaurant marketing ideas keeps you on the radar. If you do not reach out to your customers, how will they know what you’re up to? Even established restaurants and F&B businesses never lay down low on their marketing. Take Starbucks for example - they’re always coming up with new flavours to attract potential customers and retain existing ones.  

 
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Regularly update your social media handles and check your restaurant’s website to make sure it is running smoothly. Organizing special events or having promotions during festive seasons is also an excellent way to bring in the crowd and encourage word of mouth.

It’s all about enticing your customers and convincing them to revisit you.

3. Maintain restaurant menu

It’s not as simple as merely scribbling food descriptions down, throwing some random pictures in and stating the prices. Your menu is the face of your restaurant. It should be able to showcase your restaurants brand personality and of course, showcase your food in the most appetizing way possible.

It’s good to update your menu every once in awhile with a new design or new items as it shows your customers that you are continually improving and crafting dishes that best suit their preferences, while still keeping your branding in check.

Want to know more about menu engineering? Here’s how: 3 Must-Know Menu Tips To Lift Your Sales

4. Manage employees

When you start your restaurant, you will have at least one employee. However, that number will only grow as you progress and expand. How do you effectively manage all your employees? You need an employee schedule.

Planning and communicating the employee schedule can be a major challenge initially. Restaurant scheduling software like ZoomShift can help you create the schedule quickly and easily, track employee time, improve employee accountability, efficiently use labour, and reduce errors. 

Also, make sure that all your staff knows what their tasks and responsibilities are. Be as detailed as you can when listing down their job scopes. Lay down the ground rules and make sure no one breaks them. Motivating and inspiring your employees will bring out the best in them, which will reflect in their work attitude.

5. Customer service

In an industry where hospitality plays a huge role in everyday operations, customer experience can make or break your business. But excellent customer service doesn’t just stop at a smile. It comes in other forms like customer loyalty programs and promotions such as happy hour and one-for-one deals.

While good food attracts your customers to step into the restaurant, excellent restaurant service will increase customer loyalty and keep them coming back for more.

 

Restaurant Marketing Plan

We have discussed that marketing is extremely crucial in growing your brand - but how do you go about doing so? Many businesses lack the marketing expertise but feel pressured to market themselves to their customers, so they dive in head first without a proper strategy. First, let’s establish that achieving a sweet spot would involve having a restaurant marketing plan that achieves a balance of online and offline tactics.

With so many restaurant businesses vying for your customers’ attention, how do you set your restaurant apart from the rest? Here are a few ways:

Online Marketing Tactics

Technology is taking the world by storm and changing the way we operate. Whipping out your smartphone to scroll through the endless updates on Facebook has become such a fundamental part of our everyday lives. Well, because of this, you see businesses using social media and going digital to reach out to their customers. Popular establishments, such as Tacobell, have taken to Twitter to engage with their customers.

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Likewise, you can utilize popular social media platforms or even run your very own blog to increase your brand awareness. Check out our complete guide to online restaurant marketing strategies for a crash course on how to apply tried and tested marketing tactics for your F&B brand.

Offline Marketing Tactics

Digital marketing is not the only way to get results. Completely disregarding offline marketing would be a mistake. Even though the world has gone digital, it’s okay to take a step back and do it the traditional way. Traditional marketing offers your customers something tangible and gives them the first-hand experience that online methods might not be able to.

Here are some tips for offline marketing tactics that will give your business a boost: 

1. Press

PR can give exponential restaurant word-of-mouth, which is one of the most influential marketing tactics. The general public trusts the media, so when your restaurant lands in the papers with a good review, your restaurant is going to have a favourable image. One way to create buzz for your restaurant is to organize an opening launch and invite the press to come down.

2. Events

By hosting events at your restaurant, you give your existing customers new experiences every time they come back. It doesn’t have to be a big event like a wedding; it can be as simple as a small birthday party for one of your regulars. You can even hold contests occasionally to reveal the fun, interactive side of your business and incentivize your customers to follow your brand!

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3. Loyalty Programs

For startup restaurants, complex loyalty programs like point systems or online loyalty cards can be too much of an investment at an early stage. You can use the most basic method, stamp cards, to encourage customers to revisit. Sometimes a simple stamp card is enough to keep your customers coming back for more. It is also a more cost-efficient way to test the waters and find out if your customers are receptive to the idea of a loyalty program.

4. In-House Marketing

Did you know that you can carry out in-venue marketing right in your restaurant itself? Start by designing coasters and table tents to promote any offers you have at the moment. Classic menu boards or chalkboards are also an excellent way to advertise daily specials. Have a board outside your store to let passersby know what you’re selling.

 
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Returns on Investment

With so many ways to market your restaurant, both online and offline, where should you spend your money to ensure that it gives you the highest Returns on Investment (ROI)?

It’s critical to have a clear picture of your budget, which may include printing of marketing collaterals, website building, advertisements and so on. By doing so, you will be able to calculate and track where you’ve spent most of your dollars and what drives the highest (or lowest) ROI.

Marketing activities have differing goals; it is not easy to calculate the ROI of all your initiatives. However, there are a few metrics to keep track of your marketing initiatives, such as a growth in sales and an increase in the number of customers. Spending a lot of money on marketing your restaurant might not give you maximum ROI; you don’t necessarily need a large budget to get a high ROI. It is essential to decide the best strategy for your business so that you can make better marketing decisions!

 

Conclusion

Starting a restaurant may be overwhelming. Immense effort and endless amount of time go into crafting the right strategies for your restaurant. But your job doesn’t end once your restaurant has opened its doors. Learning how to sustain your restaurant plays a part in the success of your restaurant!

With 1 million restaurant establishments, there are no signs of the F&B industry slowing down in the years to come. Follow our ultimate guide to get started with your very own restaurant today! Hopefully, you’ll be glad you did!

  Image is taken from  GIPHY .

Image is taken from GIPHY.

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