Many people harbor secretly or publicly the thought of getting into the food business. It is an evergreen business, evident by the sheer number of people eating out on any given day.
How To Start a Restaurant?
Setting up a restaurant business is no walk in the park as it requires attention to detail. However, a successful restaurant can be within reach with proper planning. If you are wondering, “How to start a restaurant business?” We have a great outline to get you started!
Choice of Food:
Running a restaurant is as creative as, say, writing a book. When deciding what cuisine to adopt, follow your passion. Making food you love will manifest itself in the result, and people will relish it.
Many restaurants are serving similar cuisine, leading to a crowded culinary scene. Don’t be afraid to adopt a different kind of cuisine for your restaurant business plan. Cook what you are good at, but with a twist.
Evaluate the Competition:
Analyze the competition to see what they are doing right. For this, an in-depth analysis is required. This step is significant if you seek to establish yourself in the vicinity or serve similar cuisine.
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Test the Menu:
Before opening the doors to the general public, a soft launch is always a good idea. Doing so helps to flesh out any issues with the menu, the kitchen, and any hiccups with the restaurant’s operations. It will also be a great way to source customer feedback, including what works on the menu and what doesn’t.
Market research is a significant part of any business, particularly in the early days. It can take many forms, from informal chats to the street to online surveys or focus groups.
Restaurant Setup Cost:
The question of setup cost raises a whole bunch of questions that can be answered only by some in-depth research.
Food Cost:Food is a significant input cost for your restaurant. And its cost can make or break your venture. Ideally, the cost of food should be 30% of the price found on the menu.
Labor Costs:Labor costs are linked to the quality of staff you hire and the experience they bring to the table. The main categories of staff when planning for a restaurant business would be:
- Kitchen Staff comprising cooks, support staff, etc.
- Service staff included servers, housekeeping, etc.
- Management staff consists of the restaurant manager, chef, cashier, and store manager.
Overheads: Overhead costs are recurring expenses not related to food or labor. These include:
- Rent – Make sure to cap it at 10% of revenue.
- Interiors – Cost is based on the decor you choose and the quality of material you use.
- Kitchen equipment – A kitchen is only as good as the equipment. Costs vary according to the nature of the restaurant.
- License: Every business needs licenses to operate. The fees vary depending on the establishment type.
- Marketing: Marketing expenses incurred should not go over 2% of the revenue.
Financing Your Restaurant:
Some of the sources of funding for your restaurant business plan to take off would be:
- Bank Loans.
- Friends and Family.