“How to open a restaurant? My own restaurant!” is the question every waiter, manager, and chef are asking themselves!
Be careful what you wish for!
I have opened a few restaurants in my life for big companies and I can tell you it is a real challenge even for a company with the know-how and trained workforce in place.
But this has never stopped people from trying so, let’s get to the point.
Here I will share what I find most important to know and follow while opening a new restaurant and I will give you links (see the bottom) to many good sites that will help you with the practical side of the challenge!
The first and most important thing for a successful restaurant is its Location!!! When you choosing the location of your restaurant make sure you chose wisely because the second most important factor for success is …location again, and not only that but the third factor is also location!
Opening a restaurant is one of the hardest things a man can do, but running a restaurant and making it successful is even harder!
Choosing the right location will make this process 10 times easier!
Let’s assume you have chosen a great location that will bring a lot of traffic to your door! You have bought the equipment, you have hired the staff and you are ready to open it!
One thing you should never forget about the restaurant business is that no restaurant can survive and be profitable without loyal guests that keep coming and coming and coming!
How long do you think it will take you to build this base of loyal guests and do you have the financial security to survive long enough until you build it?
And even more important question: Do you know what it takes to build this loyal base?
I am not trying to scare you off and not open your restaurant! I am the first man to tell you to follow your dreams and take the risk and do it!
I just want you to be prepared for what is ahead of you!
Six major points to concider – how to open a restaurant:
- Location – when you are choosing the location for your restaurant you should know that every single meter matters! I will tell you a quick story. I opened a game club in one of the craziest and busiest summer resorts on the PLanet – Sunny Beach, Bulgaria! So many young people in one place and everyone is looking for fun. I looked for the perfect location and I found it on a busy corner where the traffic was heavy from the morning to just before sunrise on the next day! I rented the space inside the hotel and my front door was 10 meters away and looking directly toward the crossing! I put the billiards, the Sony PS’s and everything else inside and I put a boxing bag in front of the club knowing that all those crowds with young drunk people love to show their muscles and punch those bags to dead! Everything was ready when suddenly right in front of my club and just on the sidewalks people started building plastic huts for fast food and t-shirts shops and on top of this, a man brought his boxing bag and put it right there on the sidewalk 6 meters in front of mine!
Do I need to explain to you how painful this summer turned out to be for me? I will just tell you that while this guy’s boxing machine was making close to 1000 dollars a day mine was making barely 30$!
I couldn’t break even and I lost tens of thousands of dollars on rent and salaries!
So that is why I am telling you that location is the single most important factor for success!’
2. Finance – don’t try to open a restaurant without money! A great location cost usually a lot of money! Make sure that you have calculated all the cost, the revenue, and the profits and the math comes right!
If the price is too high, even a great location is worthless! A restaurant can be only so much profitable! Plus, be prepared to work with a loss for the first 6 months to a year! 60% of the new restaurants close within a year and 90% close within 5 years because they started underfunded or some other reason! You should have money on the side to pay rent, salaries, and suppliers for at least 6 months!
3. Concept, Cuisine, and Type of restaurant – don’t open a restaurant with your favorite food! This is a recipe for disaster! Research the public at your location and make sure to check the competition! Fast food, casual dining, fine dining it all matters! This location could be great for a fine dining restaurant and a terrible for a fast food restaurant based on the crowds that hang around! How is your competition doing? What type of cuisine could be interesting for the public? Chinese restaurant could do great and Italian might go broke in a year or vice versus! Create an amazing menu and you will have an amazing success.
4. Staff – having a great chef who shares your vision and passion is a crucial factor for success but having the right waiters is even more important! The waiters are the face of the establishment and the only persons who can influence your guest’s decision-making process! The profitability of your restaurant may very well hang on the ability of your waiters to sell, upsell, and cross-sell! On their skills of handling guest’s complaints and their service skills! Train your waiters well!
-Rental cost not more than 15% of the projected revenue
-Marketing cost – 5% of revenue – be creative
-Food cost – not more than 30% of the selling price
-Labor cost – keep it under 30%
-Utilities, unexpected expenses, insurance…etc.
Did you count how much of a profit a restaurant makes already? Not much! If you and your family are working in the restaurant you should count their salaries as well, don’t overlook that! It may turn out that if you close the restaurant and start working for someone else you will make more money in salary than from your restaurant!
-forget 9 hours a day work
We work when all others celebrate and relax! Your commitment to your new business has to be unquestionable! Your family’s commitment as well! If they don’t work in the restaurant you won’t see them much!
All this said, there are countless successful restaurants all over the world! Those are people who are dedicated to their job and their guests!
If you are one of them, don’t waste a minute and start the process! If you have even a small doubt in your mind it may be better if you don’t make this next step!
If you have worked hard and you have saved your money, the last thing you want to see is this money disappears in a year and leaves you broke and in debt! There are countless cases like that too!
Whatever your decision is, you have to remember that if you do what makes you happy the chances to succeed are much higher than if you make something so you can earn more money!
Best of luck and let me know if you are going to open your restaurant! I would love to help with anything I can and of course, I always love a nice meal!
Links on how to open a restaurant:
https://www.webstaurantstore.com/restaurant-equipment.html – check equipment cost
https://www.inc.com/jeff-haden/how-to-start-your-own-restaurant-10-proven-real-world-tips.html – very different angle on how to open a restaurant
https://www.youtube.com/channel/UCJV7Qy0bakHCGnsx4tK7iaw – free tips and advice on how to open a restaurant
https://www.7shifts.com/home?utm_expid=.5-QTRvCtSt2K_1UvLOUkIw.1&utm_referrer=https%3A%2F%2Fwww.7shifts.com%2Fhome – great site for information on how to open a restaurant and how to run a successful restaurant.