Five Things You should Know Before Opening a Restaurant
Opening your own restaurant is the quintessential American dream for many people. The allure of good food and good company as your main occupation can be hard to resist. However, the reality of owning a restaurant will quickly dispel any illusions you may have. Like any job worth doing, being a restaurant owner requires a lot of dedication and hard work. And opening a new restaurant (or even buying an existing restaurant) is a serious financial undertaking.
While there is no secret formula to having a successful restaurant, there are plenty of things you should know before you get started like choosing a good location, deciding on a concept and seeking out financing. Read on for five things you should know before you open your own restaurant.
1. Not Everyone is Cut Out to be a Restaurant Owner
You love to cook? Great. You love to eat? Wonderful. You love to entertain? Awesome. That doesn’t automatically qualify you as restaurant owner material. Do you like working long hours? Occasionally going without a paycheck? Buying your own health insurance? Cause these are all things to consider when thinking of starting your own business (not just starting a restaurant). Now, don’t get me wrong. Being your own boss definitely has its advantages. Namely, no one to boss you around. But it also comes with a heaping load of responsibility.
2. Restaurant Location, Location, Location is Important, Important, Important
Never underestimate the power of a good location, when looking at opening a new restaurant. Conversely, never underestimate the detriment caused by a bad location. A restaurant’s location is as crucial to its success as great food and service.
If you already have a certain restaurant location in mind, don’t get too attached until you know if it has all the right requirements for a successful restaurant.
3. New Restaurants Aren’t Cheap
Depending on the size, location and theme of your new restaurant, it is going to cost you. Even a small, hole-in-the-wall pub can set you back $50,000 or more. If you are looking for a way to get into the restaurant business, without spending a small fortune, consider catering, a food truck business, or even a pop-up restaurant. Each of these restaurant concepts is significantly cheaper than a traditional brick and mortar restaurant.
4. Choose a Clear Restaurant Concept
A restaurant concept is essential because it will guide every step going forward, from the menu, to the décor, to the name you choose. While you want your restaurant to be unique and stand out (or better, above) the local competition, you also want people to know what to expect when they come to dinner. For example, Diego’s Hacienda wouldn’t be associated with fine French cuisine any more than Le Petit Fleur Bistro would be associated with burritos and refried beans.
When deciding to open a new restaurant, how do you pick the right concept? Too many times people pick a restaurant concept before finding out if it is the right fit for their location.
5. You Will Need a Business Plan
In order to gain any type of financing, whether through a bank, a small business association, or private investors, you will need a well written business plan. A business plan is especially helpful to those new to the food/restaurant industry. As you research information for your restaurant business plan, you may encounter problems you hadn’t considered previously, such as licensing, health codes and tax laws.
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