No matter how you look at it, starting any new business is hard work. Opening a restaurant is a challenge even when you know what you’re doing since it’s so easy to miss something amongst all the excitement and activity. The odds of making a mistake go down when you’re working through a checklist that covers all the necessary steps. If you need to know how to open a restaurant, here’s the basic checklist.
Do market research
Before you plan on opening a restaurant, compare the demand and competition in the market. For example, if you wanted to open a classic BBQ joint, it’s unlikely you’ll succeed if there are already a number of barbecue restaurants in the area unless you find a way to really differentiate yourself. While there may not be another restaurant serving what you’d like to offer, verify that there is actually a demand for it.
Calculate the costs
Take the time to calculate the costs of running the restaurant. Tally big expenses like the interior design of a new restaurant or renovating an existing restaurant to reflect your vision. For example, you’ll need to buy restaurant dining chairs, tables, and other items when you’re starting from the ground up. Even if you buy used, that is an up-front cost you need to consider.
Be reasonable when estimating rent, salaries, benefits, food, and supplies. Be realistic in what you could earn from the restaurant as well. If you don’t want to be at the restaurant all of the time, factor the cost of a manager’s salary into your budget.
Do some initial research on the outside services you’ll need to employ on occasion. You might need snow removed from the parking lot, windows cleaned, restaurant equipment fixed, for instance. You’ll also need a point of sale system to process payments from your customers. Remember to factor in the cost of this equipment, and you’ll need to train your employees in how to use the point of sale system.
Take care of the legal matters
Consider setting up your restaurant as a limited liability corporation to protect your personal assets in case the business is sued, whether by a customer or an employee. You’ll need to obtain all the necessary permits and licenses before your business opens. You should have the necessary insurance, and worker’s compensation insurance is only the start.
Create all the necessary schedules
Before you open your business, you need to set up an ordering and delivery system. Determine how often you’ll place orders so you don’t run out. You’re also going to need to set schedules for your people. You’ll need to hire cooks, servers, and others, but schedule them in a way to minimize labor costs while not cutting service short.
Another item you need to plan is your advertising. Plan what types of advertising you’re going to promote the restaurant. You’ll also want to maintain an advertising schedule to keep people coming in. For example, many newspapers and coupon magazines have cut off dates for placing ads, so you have to submit your ad by a certain date to show up in every monthly issue. You could arrange for advertising to be on a continuous basis or “till forbid”.
If you follow this basic checklist for opening a restaurant, you’ll have all the critical pieces in place. You can tailor the checklist based on your particular project and your needs.