Setting out to open a new eatery is an exciting venture. It’s both an investment and a place to show off your creativity. You might be so enthusiastic about the prospect that you’re doing everything at once and may be unsure if you’re doing it correctly.
Starting a restaurant and need to know just what to do? Here are seven tips to help you feel confident you’ve got it all figured out!
Craft an Idea
While this may seem like a broader detail, it includes many smaller aspects for you to make decisions on. In 2018, there were over 650,000 restaurants in the United States alone. That gives people a lot of choice in where they’re going to eat! So you have to determine this — what’s going to make them come to you?
Unique ideas will always draw eyes. Maybe there are no sushi-and-froyo places around you and you want to be the first. But if you’re opening up the sixth pizza restaurant in town, do something that makes you special. Perhaps your ingredients are from entirely local sources or you offer more toppings than your competitors. Whatever it is, standing out is the first step to drawing in customers.
You could also consider coming up with a mission statement. To do this, think about questions like:
- Why did you decide to open a restaurant?
- What message do you want to send to customers?
- What kind of ideals do you want to promote?
Diving into a mission statement can help you find different ideas for your restaurant and ways to serve your community.
Create Your Menus
Menu creation when starting a restaurant has many finer points than you might initially think. Some things to plan are:
- Exactly what food and drink to offer
- Menu graphics and layout
- How you’ll write descriptions
- What kind of staff and equipment you’ll need
- Local demographic
All of these things will be a big part of how you attract patrons. If you’re looking at a space you could get a great deal on, ask yourself if what you plan to serve will do well in that area. You might want to change your menu based on location and learn about different types of beer rather than having a wine list. Beyond what you serve, how you present it and write about it will influence a potential customer’s selection.
Write Your Business Plan
After choosing your goals and menus, it’s time to write a business plan. This will help future investors or lenders visualize your restaurant and judge if it will be profitable. These plans are often very long, so they’ll help you fine-tune the details of your establishment. You’ll need to write about things like your:
- Leadership team
- Business overview
- Industry and market
- Marketing plans
- Operating model
- Costs and projected income
With a successful business plan, investors and lenders will be able to clearly see your ideas and be more apt to fund your restaurant. This will help you flesh out your budget and establish lines of credit.
Obtain Licenses, Permits and Insurance
Legally, the best thing you can do when starting a restaurant is to obtain all the proper paperwork for your state. You’ll have to apply for a food license, liquor license, food handler’s permit and a restaurant business license. Along with an employer identification number, these items will approve your legality and ensure you’re serving safely.
Additionally, you can reduce uncertainty by getting the right insurance. There are multiple options offered to restaurant owners, so you should know what types you will need. Insurance will give you a safety blanket on top of your permits and licenses.
Keep Detailed Financial Documents
With all of these things addressed, you might feel ready to jump into hiring staff and ordering decor. But before you do that, make sure you’re prepared with documents to keep track of finances. The three reports you should always maintain are:
- Balance sheet: what you own and what you owe
- Statement of cash flow: how much you’re making and spending
- Income statement: revenue and expenses
Staying on top of these documents will help you manage your money and easily file during tax season. They’ll also allow you to see where you can cut costs and when you might need to increase your revenue. If you want to feel secure that everything is being documented properly, think about hiring an accountant or bookkeeper.
Know What Taxes to Pay
Hopefully your accountant will know about small business taxes, but if you’re doing it all on your own, you must understand which taxes to pay. Doing so will help you avoid fees, loss of your business or even criminal charges. If you’re a recent entrepreneur, finding the right tax material can go overlooked. It might be hard to know where even to locate it!
Luckily, the IRS has compiled their information for small-business owners. Use their website to know how to file as self-employed, and what employment, income and estimated taxes to pay.
Plan Out All Operations
Again, this is a broad thought with many smaller parts to decide on. For all aspects of your restaurant — from equipment to employment — you have to choose how your establishment will function. How will your choice of decor affect the overall mood? What kinds of kitchen equipment will you need and how much? How will you hire employees? How will this all exemplify your mission statement?
Planning out how things will run might seem like a big topic, but there are a lot of narrower elements to consider. Getting into these nitty-gritty facets will help you budget and make everything flow smoothly.
Think About the Smaller Details When Starting a Restaurant
Restaurant entrepreneurship has a lot of moving parts to address. However, it’s much easier to manage when you break each thing down into smaller details. Use these ideas to feel prepared to start your very own restaurant!
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