October 18th, 2009 by Bruce

The very first thing you should know about starting a new restaurant business is that most people with similar ambitions don’t quite realize the amount of work and preparation that goes into becoming a success.

Owning and running a restaurant involves way more than simply having a few tasty recipes in mind or a good way with people, although both of these will definitely come in handy, so it’s imperative to have a full understanding of the industry and how it generally operates in order to stay afloat in this ever changing and competitive market.

There are actually a few different ways of launching a new restaurant business, each of which having their own potential pros and cons to thoroughly consider. Buying out a restaurant that has recently experienced some financial difficulties or filed for bankruptcy is one way of starting your business, and while this may be the least expensive method, it doesn’t come without its drawbacks, such as the ongoing reason for the lack of business or sales.

Or, there’s always the option of taking over an existing lease from the landlord and becoming the new proprietor while making renovations or changes that will increase business.

Starting a new restaurant business from the ground up is yet another option to consider and generally entails leasing or buying an empty space and transforming it into the restaurant you’ve always envisioned. As one might expect, this method of opening up a new restaurant will warrant substantial finances for the renovations, marketing expenses, supplies, and employee salaries, not to mention taxes, licenses, and any other zoning or regulatory fees that may be required.

Finding the money needed to start a new restaurant business is one of the first and most monumental obstacles faced by those interested in the prospect. Besides borrowing from banks, financing companies, credit unions, or similar lenders, you may be able to obtain a loan from the U.S. Small Business Administration, or use your credit cards, sell some of your equity, or even acquire help from outside investors if necessary.

If you already have a location in mind for your new restaurant business, make sure to do plenty of research before sealing the deal as most of your success will be dependent upon your location and whether or not it’s suitable for the type of cuisine you will be offering.

Conducting market research early on in the game is perhaps the best way of protecting your business in the future from becoming another dire statistic. Checking with your local Chamber of Commerce and doing some online research may be excellent starting points for determining the type of restaurants and businesses that are already in operation near you.

Next you will want to familiarize yourself with the equipment and inventory you will need in order to begin thinking about being ready for hungry customers. There are several types of suppliers you’ll soon be doing business with ranging from wholesale grocers to fresh produce suppliers to food service equipment dealers.

While the process of starting a new restaurant business is most often an arduous one filled with an incredible number of important details to tend to, the rewards of being a successful business owner far outweigh the initial work involved. Consider these aspects before you open a restaurant.

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October 17th, 2009 by Bruce

Having a thorough and all inclusive restaurant business plan is the first step toward increasing your chances of success in this rather competitive industry. As soon as you’ve decided to open a new restaurant, your next course of action should be writing a restaurant business plan, which is basically a document that you compile based on research you’ve done regarding the restaurant industry.

A restaurant business plan is an absolute must have if you foresee needing a loan or the help of an investor or partner any time in the future as all of them will want to know beforehand if your venture is worthy with potential.

The first section of any professional restaurant business plan is the “Executive Summary” which should describe your personal background as well as the reasons you have for starting your own company.

Next is the “Mission Statement” where you will list what it is you hope to achieve with your restaurant and your vision for success. You should also mention your company’s values and basic philosophies regarding customer service as well as employee matters. Brand yourself as a part of the community and also as a business that has the potential to be an asset to the surrounding merchants.

The third section of your restaurant business plan should be entitled “Goals” in which you would list in greater detail than in the mission statement about how you plan on progressing and succeeding in the business.

The goals don’t have to be grandiose or even long term but specific enough so that the reader is able to discern how successful you see the restaurant in a set time frame. For instance, write if you intend on doubling the number of customers in six months, or maybe the number of employees, or even your revenue over all, and be sure to cover the next three years.

After the goals you have outlined for your restaurant, your business plan should have a section devoted to “Ownership and Management” where you will describe who owns the business and at what percentage, if applicable, and list a basic structure for hiring new employees as the restaurant, hopefully, gets busier and busier.

“Start-up Costs” are another vital section of a restaurant business plan and this section should list all of the expenses you need to get the restaurant fully running and able to accommodate paying customers. Remember to allow for the inevitable unexpected costs that are sure to arise for a startup restaurant.

Next you should discuss “Funding,” detailing how you plan on funding the start-up phase of business, followed by “Location,” giving reasons as to why one particular area may be more profitable than another.

Other sections to consider putting in your restaurant business plan include “Competitive Analysis,” listing information about all of the other restaurants in the surrounding areas and how you plan on staying competitive, and “Marketing Plan” where you will outline how you intend on advertising and growing the business, and a “Financial Analysis” section with a spreadsheet detailing your expected monthly income as well as expenses.

Of course you can always structure or tailor your business plan to your exact liking, omitting or adding sections as needed, but the basic premise is to include all of the details necessary for an “outsider” to ascertain the owner’s intentions for the business as well as its expected potential.

An effective restaurant business plan can definitely help you to open a restaurant on the right foot and keep you on the path to success, allowing you to possibly achieve your goals even sooner than anticipated.

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October 16th, 2009 by Bruce

Choosing a menu for your new restaurant business is one of the most important aspects of the entire industry and helps to set the foundation for a successful establishment.

Pricing, in terms of printing and production costs, is one of the biggest factors to consider carefully when it comes to choosing a menu that will not only be appealing, but one that will also help to realize a decent profit at the same time.

When determining a fair price to pay for new menus, keep in mind that restaurant menus should be functional as well as attractive. If your establishment will be dimly lit you would want to have bigger text with readable colors while a menu with multiple items in each category might need to have smaller print to accommodate everything.

Menu Pricing

The price you intend to charge for the items you’ll be offering customers is yet another important factor involved with choosing a menu for a restaurant. Of course you will want to consider the type of clientele you intend on catering to in order to keep your prices both competitive and reasonable, which will also help to dictate the how much you’ll be able to charge for each item such as beverages, entrées, specials-of-the-day, and side orders or appetizers.

And although you might want to offer your prize winning stew to customers, first consider the ingredients needed as well as the preparation time when deciding if it would be a cost effective choice when you plan to open a restaurant.

There are a few different formats to follow when it comes to choosing a menu and its pricing structure, however, the most simplest is determining the exact price of making one serving of each item and then tripling that number to allow for overhead costs such as wages and operating fees.

Menu Formats

Most people prefer menus that are designed in easy to discern sections, allowing them to quickly scan what’s available and place their orders without having to weed through too much confusion. Although you’ll definitely want to have enough variety to keep diners happy and interested, having too many choices can be overkill leaving customers bewildered.

Many menus begin with a section devoted to appetizers followed sometimes by beverages with a separate section for alcoholic drinks, both of which are usually the first items ordered, while some might continue on to the main entrée section followed by separations for seafood, pasta dishes, or other similar groups.

If families and children are a part of your customer base, be sure to have a section with smaller portions and choices that would appeal to the younger set.

Doing some research to learn what trends are doing the best is always a smart idea when it comes to choosing a menu, especially for a startup restaurant.

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