Opening a new restaurant presents many challenges. The restaurant industry is a highly competitive space, and there are several elements to consider when learning how to open a restaurant. It’s not just a case of cooking and selling food to customers. You’ll also need to adhere to local food safety regulations, market your new business, and decide on a restaurant ordering system.
To help you get started as a new restaurant owner, we’ve compiled a step-by-step guide. So if you’re wondering how to open a restaurant, follow these tips, and you can become your own restaurant business owner in no time.
Ready to learn how to open a restaurant of your own? Follow these six simple steps to get started.
The first step is to write a comprehensive business plan. This will help you set out the blueprint for your new business.
The U.S. Small Business Administration (SBA) has a valuable guide to writing a business plan, which is an excellent place to start — just make sure you tailor yours to restaurant businesses.
Here are some extra details you should include in your restaurant business plan.
Consider the type of restaurant you want to open.
Do you want to open a fast-food or quick-service restaurant, or is the type of food you want to serve better suited to a fine-dining eatery? Would you operate with table service, or would a self-service restaurant be better? Alternatively, do you want to set up your service as a food truck?
There are various options available to you. Consider the food you plan to sell and which restaurant concept would work best.
When you’ve nailed down your concept, use it to inform what food you’ll have on your menu. It might sound obvious, but establishing what you’ll serve to diners is crucial for planning a restaurant opening. Create dishes that your customers will love, but also consider food costs and access to ingredients.
Now is also an excellent time to search for local suppliers to ensure you’ll have access to everything you need for each dish. If ingredients are hard to come by in your area, you might want to swap out some aspects of your menu.
With a clear idea of your menu items, you can estimate how much you expect to spend and recoup for each dish. You’ll need to price each dish on your menu based on the cost of ingredients and labor. Successful restaurants need to ensure they’re earning a profit on every menu item.
Finally, your business plan should include a section detailing exactly how much funding you need and where you expect to get it from.
Start by adding up your expected upfront restaurant costs and ongoing operating costs. Restaurant startup costs vary, but they will probably include the following:
Real estate
Renovations and remodeling costs
Furniture and restaurant equipment, including kitchen equipment like refrigerators, ovens, dishwashers, etc.
Fees for your business license, liquor license, and food-service license
Ongoing costs may include:
Employee salaries
Fresh and dry ingredients
Utility bills
Insurance
The exact cost of opening and running your restaurant will depend on several factors, but working out your budget and expected turnover is essential for a business plan.
You can organize your finances and source funding with a thorough business plan.
Most new restaurateurs must take out a small business loan or apply for a line of credit. You’ll need to show potential lenders your business plan to prove you’re serious about becoming a business owner and have detailed plans for how you’ll spend their investment.
If you need to take out a loan, consider looking at the SBA. It connects budding entrepreneurs and small business owners with lenders to help them find funding. The SBA can also provide essential support and information, so it could help you with other aspects of running your business.
The next step is to find the ideal setting for your restaurant.
The perfect location for your restaurant depends on the type of restaurant you plan to open. Fast-food eateries are usually best in areas with high foot traffic, but a fine-dining restaurant’s location would likely be better suited to a more exclusive area.
You’ll also want to consider the size of your commercial space. You’ll need fewer square feet for a smaller restaurant, which will cost you less than a large space. However, you must remember that it’s not just the size of the dining room that matters; you’ll need plenty of space in the commercial kitchen for kitchen equipment and food storage.
Once you’ve found the perfect premises, it’s time to decorate and furnish it appropriately. You might want to work with an interior designer to create a nice ambiance for your diners.
And don’t forget to ensure everything is up to code with your local health department. Make any changes you need to in plenty of time before your grand opening — you don’t want any nasty surprises at your first health inspection!
Hiring staff is another critical stage in opening a new restaurant business. You’ll need to hire various staff members for your restaurant, including back-of-house and front-of-house staff (also known as BOH and FOH, respectively).
You should have considered labor costs in your business plan, so you should know how much you’ll spend on staffing. Ideally, you’ll pay your staff more than the minimum wage. In this post-pandemic world, staff shortages can be a challenge for the restaurant industry, but higher wages can lead to better staff retention and performance.
Also, don’t forget to request an employer identification number through the IRS.
In addition to staff to run your restaurant, you’ll need to set up a system for accepting customer payments. You can choose a simple cash register or a point-of-sale system (POS system).
A comprehensive POS system will allow your staff to put orders through the till quickly and easily. Some systems can send orders straight to the kitchen and be set up to take cash and credit card payments. You can even get POS systems in the form of a tablet-based app if you want to keep costs down.
You could also set up self-ordering kiosks to simplify things for you and your customers. Apps like KioskBuddy let you turn your tablet into a self-service kiosk. It integrates with a Square Kiosk, which has built-in contactless and chip payment options to make payment processing quick and easy.
Don’t forget to take some time to focus on a restaurant marketing strategy to help bring customers into your new food business.
Write down a few ideas about your target market and conduct market research to discover the concept your ideal customer might prefer. You can then use this research to help you decide on elements of your restaurant’s branding, such as the restaurant's name, logo, and color scheme.
You can then use social media to spread the word about your restaurant. Instagram, Facebook, and TikTok are useful — and free! — tools for marketing a new business.
You could also run a pop-up event before your grand opening to inform potential customers about your new venture.
First-time restaurateurs have lots to think about before their restaurant opening day. From choosing your business structure to curating an appealing dining experience, you’ll certainly have your hands full with your new business.
But with these six simple steps for how to open a restaurant, you can be up and running pretty quickly.
If you’re looking for an easy way to process orders, consider a self-service kiosk app like KioskBuddy. It’s an intuitive system that lets customers place and pay for orders from a tablet.
Sign up for KioskBuddy to use in your new restaurant business today.