When you begin the process of opening a restaurant, one of the earliest and most crucial steps is to write a thoroughly researched business plan that will get you through the inevitable ups and downs in the restaurant business. Your unique idea and excitement will also set you apart from the competition. Opening a restaurant successfully requires many factors, but some of the key components include:
- A solid and creative idea that will have a good customer base based on thorough market research.
- A strong restaurant business plan based on industry knowledge that includes accurate projections of profit and loss estimates.
- A strong, experienced, and collaborative team.
Essential tips for opening a restaurant
If you are a first-time restaurant owner, know that you’ll learn the most valuable insights on the job. While you should prepare for long hours and hard work, you’ll pick up tricks of the trade around implementing systems for smooth operations, supply chain logistics, customer service, and beyond.
If this isn’t your first rodeo, reflect on what you have learned. What was successful, and what mistakes do you not want to repeat? Even experienced owners and managers with many restaurant openings under their belts will need a gritty mindset as there are many unpredictable aspects of opening a restaurant.
Steps to a successful restaurant opening
After getting into the winning mindset, there are several steps to opening a new restaurant.
1. Market research
First and foremost, you must undertake detailed market research before creating a concept for your restaurant. While it is essential that your establishment stands out, you have to make sure the customer base will be there to support your business. Use this SWOT analysis template to begin.
2. Build your restaurant brand
Once you have created a restaurant concept, begin building a brand based on your restaurant’s theme. The restaurant concept can include the type of cuisine, as well as the level of formality—ranging from fast casual to fine dining.
3. Location, location, location
The next step will be thinking about location. As they say, location is everything, and this is very true in the restaurant business. Do you want your restaurant to be in the active and vibrant downtown area? If so, will your place be able to attract the appropriate customer base to justify the higher rent?
Or, would you rather choose a location that is more accessible to suburbanites as they leave their neighborhoods? Another factor is ease of access and parking. Are you aiming to attract foot traffic? Will adequate parking be available? Also, be aware of where your direct competitors are located and try not to be too close to them.
4. Pitch your business plan
Once you have developed the restaurant concept and selected a location, pull together the information that will become part of the restaurant business plan and pitch to investors. All of these steps tie together. Rather than seeing steps in a sequence, it is better to think of them as a circle which you will continuously be reviewing and revising as you gather information about operating costs, supply chain logistics, and staff.
How to create a strong business plan
When writing a restaurant business plan, address several considerations. Will you be seeking financing? If so, having a solid business plan in writing is a crucial part of your loan application. Loan officers will want to see that all overhead and operating expenses have been accounted for and that you have thoroughly researched your market, allowing for accurate projections. If you're wondering how to write a restaurant business plan, know that several items must be included.
First, include a description of the brand and concept as well as a sample menu. Second, provide information about staffing, including service staff, management staff, and other essential team members such as interior designers, accountants, and lawyers. Then, describe your target market as well as the general market conditions for your local region. This should include a marketing and publicity plan as well.
Finally, you should thoroughly outline the business structure and the financials of the business. This is where it will be helpful to bring on an accountant and lawyer to ensure your business plan makes good business sense.
Mastering the winning formula
Opening a new restaurant is a lot of work, but with the right mindset, a unique restaurant concept, and a strong business plan, you will be on the path to success. Surround yourself with the right team to support your endeavor. When you tie all of this together and do your due diligence, the result will be a solid business plan that provides the foundation for your new business.