5 Things You Need to Know Before Starting a Restaurant
Opening a restaurant is life changing. It will not only be your business but your one and only priority. When opening a restaurant, there are many factors to take into consideration. Here are five things you need to know before starting a restaurant.
Starting a restaurant is a big time commitment
It’s more than just knowing that owning a restaurant will take up most of your time, it’s also being able to handle that. Will you be good at holding yourself accountable to put in the work? Do you mind missing weekends, holidays, your children’s sporting events? Will your significant other be okay with you missing Valentine’s Day or attending most New Year’s celebrations alone? Those will likely be work days. Owning a restaurant means that your schedule is 100% based around the business. Many restaurant owners jokingly compare their restaurants to raising a child. You must take care of it, cultivate it, and nurture it, even through the hard times.
You will likely take a hit before you make a profit
Many restaurant owners assume that they can just stock a restaurant, open the doors and POOF, instant customers. But the reality of the situation is that new restaurants often take a loss before making a profit when they first open. This is something that not only needs to be expected, but also built into the budget in the business plan. Enticing new customers and offering promotions will also lower your profit margin, but it will help build a customer base that will hopefully continue to return. If losing lots of money sounds daunting, consider investing in a small endeavor like a food truck or catering business.
Location is everything
Never underestimate how important a good location is regarding opening a successful and profitable restaurant. Being close to foot traffic and heavily populated areas of town might cost more in rent but will ultimately make up for that in business. A restaurants location is just as important as how good the food is or how detailed the service is. It’s easy to choose a location with a cheaper rent, but don’t misjudge what a bad location can do to a business. If you’ve found a location you think is perfect, make sure to research the history of the building, the neighborhood demographic and see how other businesses in the area are doing. Do your research before just jumping into a location.
You will need a well-thought out business plan
Unless you have family investors, it is likely that you will need a business plan to help you get financing. To apply for any loans through a bank, association or a private investor, you will need a well-thought out business plan. A business plan is not only a way to flush out and specifically present your concept and restaurant idea, but a business plan will also help you realize what will and will not work when it comes to legalities, health codes, labor law, etc. Researching your restaurant and writing a well-thought out business plan will inevitably teach you the skills to come up with options if those original ideas fail.
You should never assume anything
If there is one thing that is to be learned from the restaurant industry it is to expect the unexpected. Owning a restaurant will teach you to never expect or assume anything. One of the most important strengths in anyone going into this business to have is physical and mental resilience to get through the unpredictable day to day. Restaurant owners deal with staff, diners, management, vendors, press and others. It will also cost more money than you will ever realize, it will take more time than you ever realize and there will be about a million things that after you finally open, you will have assumed would be easier.