How to Start a Restaurant ?
If you have a passion for food and want to make money doing what you love, you can start your own restaurant business. Shifting demographics and changing lifestyles are driving the surge in food-service businesses. In 2018, the UK eating out market was worth £89.5 billion . Busy consumers don’t have the time or inclination to cook. This means opportunities for unique dining experiences are in high demand. Wondering how to start a restaurant? Find out what skills you need, the different paths you can take, important considerations to keep in mind and how to legally establish your business.
What Skills Do You Need to Start a Restaurant?
Starting a restaurant isn’t for the faint-hearted. To be successful takes money, hard work and long hours, and the reality of running a restaurant can come as a shock if you haven’t had previous catering experience. Surprisingly, there are no educational requirements to launch a restaurant business. The only restriction you may face is the need to apply for licenses if you plan to sell alcohol on your premises. But if you are serious about being successful in this industry, it’s advised to get some level of training and experience managing a restaurant first. If you can train under a high-profile and well-experienced restaurateur, this will benefit your skills and will look great on your CV.
What Kind of Restaurant?
Before you can begin any serious business planning, you must decide what specific segment of the food-service industry you want to enter. While there are many commonalities among the various types of food-service businesses, there are also many differences. Examples of the different types of restaurant businesses you can open are as follows:
- Quick-Service Restaurants — Also known as fast-food restaurants, they offer limited menus of items that are prepared quickly and sold for a relatively low price. In addition to very casual dining areas, they typically offer drive-thru windows and take-out service.
- Mid-scale Restaurants — As the name implies these food-service businesses occupy the middle ground between quick-service and upscale restaurants. They offer full meals but charge prices that customers perceive as providing good value. Mid-scale restaurants offer a range of limited and full-service options, such as buffets.
- Upscale Restaurants — They offer full table service and do not necessarily promote their meals as offering great value; instead, they focus on the quality of their cuisine and the ambience of their facilities. Fine-dining establishments are at the highest end of the upscale restaurant category and charge the highest prices.
While there is much overlap in the knowledge and skills necessary to be successful, your personality and preferences will dictate whether you choose to open a casual dining establishment, a fine-dining restaurant or another type of operation. Once you have decided what business best suits you, you must figure out the niche you’ll occupy in the marketplace.
How to Start a Restaurant Business
If you want your restaurant to be a success, you first need to create a solid business plan. If you want to get serious about launching a restaurant and make a decent income from it, here are a few things to consider before jumping in. All the areas below should be listed inside your business plan. Make sure you spend all the time you need in the planning phase as this will prevent hardships later in the execution phase.
- What is your brand name? You want your brand name to be memorable. Choose a name that isn’t already taken and one that you can get the website URL and social media handles for. This makes your brand more cohesive and easily recognisable.
- What are your unique selling points (USPs) and dining niche? Do you have a menu that people want to eat? Is it something new to the market? The eating out industry is huge, so you want your brand and food to be different or serve a need.
- Where will your restaurant be located? Getting the location right is crucial for your restaurant’s success. Not every available space is right for a restaurant. A good restaurant location is harder to find than some people think. Consider aspects like parking availability, nearby competition and the size and space you require.
- Who is your customer? When creating your business plan, come up with your target customers. Are you aiming to cater to families, your local community or customers looking for somewhere to celebrate a special occasion?
- Are there regulations you must follow? If you will be selling alcohol on your premises, you will need to obtain a premises licence . You will also need to draw up policies with regards to having under-18’s as employees and as customers.
- What are the start-up costs and expenses? Launching a restaurant can have many upfront costs, so you’ll need to consider these and how you will get the financing. Also, create a financial cushion because you may not make a lot of revenue when you first start your business.
- Who do you need to employ? Will your restaurant require a big team of wait staff and chef team? Research what this involves and put it in your business plan even if you don’t plan to hire anyone right away.
- What is your marketing plan? You need to take some time to consider how you will market your restaurant to get it seen by your target customers. Will you use social media, or will you opt for alternative advertising paths?
Owning a restaurant can only be successful if you put in the time to plan out all these details so that nothing sneaks up on you later. With millions of food businesses already on the market, you have to set yourself apart and be a step ahead of your competitors.
Ready to Form Your Restaurant?
If you are ready to start a restaurant, it’s time to form your company. You can form a limited company or go the sole-trader route. Deciding and completing your company formation can be the most challenging part of starting a business, but it’s crucial to your success.