How to start a restaurant: Complete Guide

The idea of opening a restaurant business is great. However, it is not as easy a task as it seems and requires a lot of work to make it successful and attractive to people. We have gathered the steps and strategies to open your restaurant. 

1. Decide The Concept Of Your Restaurant

The first thing and important thing you need to consider when you are going to open your restaurant is deciding the theme of your restaurant. It is always recommended to conduct extensive research to decide the theme of your restaurant. Take into consideration the choice of your target audience and what is more appealing to them. It might also require a lot of money but remember that it is an investment for your successful business.

The theme you decide will depict the food of your restaurant and it is important that the interior matches the theme of your restaurant. After that, you should develop the restaurant's business plan, as it will help you in planning further business development.

2. Investment To Finance Restaurant Business

Most people's dreams of opening their own restaurant shatter just because of lack of investment. It is important that you work on gathering the investment you require for opening the business. First, depending on the duration of your restaurant's operation, you need to figure out how much capital you need to open a restaurant. Once the numbers are up, you can go around and discover means to collect it and there are three ways by which you can collect investment for your restaurant 

  • Self-financing: If you have enough money in the bank, then congratulations, you have passed the first barrier to open a restaurant. It will reduce the risks of business operational problems in the future.

  • Loan:  You might also figure out a way to get the loan. Loans can be acquired by friends and family or from banks.

  • VC / Angel funding: It is to get investors on board. It can be difficult, especially if you are starting the business from scratch. Investors tend to look for the potential for your company's growth, quality, and expansion of your business model. The results of the first stores are considered into account before they agree to make investment and business.

3. Evaluate Costs For The Entire Restaurant

Restaurant expenses are an integral part of restaurant management and should be carefully evaluated and planned. The most important expenses to start a restaurant business are listed below:

  • Cost of food: It is the total cost of all materials used to prepare delicious dishes. The ideal food price will be about 30% of the menu price. We recommend that you confirm your suppliers of raw materials in advance to ensure continuous operation of delivery items to the restaurant

  • Labour costs:  These include all the costs of the manpower you are using to run your restaurant. You need to include expenses for managing services to the salary you pay to the cleaning man.

  • Overhead costs: Overhead costs are the other costs that are not related to food or work. They include the following: 

1)  Rent: The rental fee makes up a significant portion of the costs, and is highly dependent on the location of the restaurant. But the rent should never exceed 10% of your total income. 

2)  Interior Setup:  It is the cost that will come on setting up the restaurant building. You must decide the concept of your restaurant beforehand and work on the interior according to the theme and your budget. 

3)  Kitchen equipment: Buying proper quality equipment may seem like a heavy burden to shove in but they always make up their compensation costs in the long run.

  • The license agreement: Getting your restaurant is a great expense to make but it is also important to run a successful business in the long run. Customers tend to choose licensed franchises more.

  • POS:  POS can boost your restaurant businesses to the next level. The price of a POS is based on its features and functions, which should be selected based on the restaurant's income.

  • Online marketing: You need to spend between 1% and 2% of your revenue on the marketing of your company. There must be a balance of offline and online marketing efforts. Word of mouth marketing and digital marketing can work wonders for your company.

4. Decide the Perfect Location Of Your Restaurant 

Deciding the location of your restaurant is one of the most important factors when you are going to open your restaurant. The chances of the success of your business also depend on the location. When you choose your location, it's a good idea to identify your opponent in that area and measure their progress and get an idea of what their business model is. The competition should be evaluated not only in terms of the food you must also evaluate which exceptional services they offer their customers. Assess the market and understand the customer base. All this information will help you run a successful restaurant business.

5. Achieve all the licenses required for the restaurant

A license of authenticity is required from the Government to run the restaurant.  The price of getting this license varies upon the size of your restaurant. It is advised to contact the authority beforehand because it may take a very long time to get approved.

  • From FSSAI: Restaurant owners must get a license from the Food Safety and Standards Authority to conduct restaurant business. It is important to achieve this license to run your business without any problems and it will surely attract more customers to your restaurant too.

  • License from municipal corporations: Its price varies, depending on the size of the restaurant. But the license is only valid for a year and needs to be renewed after that to continue your work. 

  • Registering for GST: Restaurants are required to register. The GST registration process depends on a particular state, so if your restaurant has different branches in different countries, then you may need to register separately for each state. You will need to find more information about GST registration for restaurants according to the rules of your state.

  • For a professional tax license: You need a professional tax license to hire employees. It has monthly dues depending on the size of your restaurant and how large is your operation.

  • Get a liquor license: It is the most difficult license to get and also very expensive. It is advised to apply for an alcohol license at the initial stage because this also takes a long time.

  • Company registration: You need to register the business as a corporate company or Pvt Ltd firm. You are required to do an annual report and you may expect audits every now and then.  You may need a professional aspect to review and monitor the finances of your business.

There are many other licenses that you may require, for example, a fire safety certificate, environmental pollution control certificate, licensing, etc. Please gather all the information about all the necessary licenses that may be required to open a restaurant here to run a successful restaurant.

  1. Get The Labour Force For Your Business

Having the necessary skills and also retaining them is one of the biggest challenges in manufacturing the restaurant business as well as. Referral to work is a very good strategy, taking into account the existing staff, with a link to their friends and family. Aspiring restaurant owners can hire them in the traditional way: by typing an ad in the newspaper, putting up posters "We hire" or by hiring them from an agency. You might also find various platforms on Facebook and LinkedIn that offer the opportunity to find staff. There are three types of staff members you might require for your restaurant.

  • Kitchen Staff: It is the most important staff that is required for the kitchen The staff consists of cooks who are engaged in cooking menu items
  • Service staff: This includes waiters, cleaners, assistants, etc. They are hired to interact with customers, they must communicate well and must be trained accordingly.
  • Management Staff: Your restaurant manager, office manager, cashier, store manager, etc. are from the administrative staff and they need to be trained and experienced.

Having the right chef is very important for your restaurants, as the food is what attracts the customers you need. In addition to the chef, your manager prepares you a menu tailored to the active ingredients available and also guides staff on the preparation and presentation of the dish. Therefore, experienced chefs and managers are the core of your restaurant. It is important that you ensure that all your staff is well trained and know their job well to run a successful business.

Here are all on the successful opening of a restaurant business. Follow this guide and we ensure that chances of your restaurant being successful will increase to a great extent.