The restaurant business can be both exciting and lucrative, no matter what type of eatery you own. The success of your business will depend on several factors including your dedication, hard work, knowledge, investment, and even a little bit of luck (among other things).
Before jumping straight into opening a new restaurant, it’s crucial to be reminded of the costs and the challenges that come with it.
Here is everything you need to consider before starting your own business:
1. Your restaurant concept
Before you begin any business planning, it’s important to decide on your restaurant concept. A restaurant’s concept will help you determine your type of cuisine, location, decor, and more. With so many restaurants opening up in ever-expanding neighbourhoods, it’s becoming harder to make your restaurant stand out from the competition. Here are some popular restaurant concepts and models:
- Pop-up restaurants. It’s a low-cost way to test a new restaurant concept, audience, cuisine and attract investors without the expense of investing in a long-term lease.
- Partner with local businesses (brewery, artists, local farms, etc.). This concept attracts a diverse crowd and is aligned with your partner’s brand. For example, Messorem Brewery in Montreal partnered with Mitch Deli to offer the best-fried chicken and beer in town.
- Launch a restaurant incubator. A restaurant incubator allows emerging chefs to experiment with their menu, offering guests a different experience every time they visit.
There are endless restaurant concepts, but with so much competition, how do you stand out from the competition and take advantage of a lucrative industry?
The key to success is to understand what drives customers and create a concept that appeals to them.
- Trending restaurant types: Quick-service and fast-casual, take out, café, ghost kitchen
- Cuisine: Today, consumers are concerned about the food quality and whether it’s local, organic and artisanal. If you plan to serve food with local ingredients, make sure to mention it on your menu.
- The theme: Much like your menu and concept, the theme will inspire your business plan. Make sure to consider key elements like lighting, music, decor and a clean environment.
- The name: It’s probably the first impression your customers will have of your restaurant and brand. Because of this, it’s important that you choose a restaurant name that resonates with you.
2. Menu
The ideal restaurant menu is a balanced combination of unique dishes and old favourites. It should also be easy to replicate so that kitchen staff can reproduce it during lunch or dinner rushes. Each dish on your menu must also be carefully costed to ensure profits.
Here are some tips to create a winning restaurant menu:
- Easy to read: Organize your menu by categories so menu items are easy to locate, and use readable font type and size to make sure your menu is readable from a distance.
- Control food waste: Minimize food waste by conducting inventory frequently and changing the menu to minimize the quantity of leftovers.
- Create shareable meals to give customers the ability to customize their experience, allowing them to choose what they like, and to try as much as they want.
- Offer discounts: The right deals have the potential to attract a lot of customers, so make sure to create compelling offers while ensuring each item is profitable.
3. Restaurant business plan and funding
A restaurant business plan is vital for the success of your business as well as obtaining funding from investors or banks. It can provide you with a clear direction to reach your goals.
Without a business plan, you might struggle to maintain profits and scale in the future.
Here is what to include in an effective business plan:
- Executive summary: A brief introduction into key aspects of your business such as the concept, operation and labour costs, and return on investment.
- Overview and description: A full description of your restaurant including but not limited to location, your experience, short and long-term goals, market studies, and why your business will succeed in this industry.
- Market analysis: An explanation of the industry, the competition you will be facing and how you will attract customers.
- Management and ownership: Include resumes and a brief description of the management team.
- Marketing strategies: Detail how you will introduce your restaurant to the public and keep it relevant to consumers.
- Financial projections: This section should include all things monetary such as sale forecast, costs, profit & loss and expected cash flow.
Whether you’re writing a business plan for investors or simply for yourself and the team, you need to make sure that the document is comprehensive. If you’re struggling to create a restaurant business plan, centers like CDER in Montreal can assist you with every step of your restaurant opening.
4. Choose the right location
The right restaurant location isn’t always easy to identify but is typically crucial to the success of your business.
Here are some questions you should be asking yourself:
- Is the location appropriate for my concept?
- Do I have enough visibility?
- Is there enough space to accommodate kitchen equipment, seating or storage?
- How much will the restaurant space cost?
- Is the restaurant too close to the competition?
Choosing the restaurant location is one of the first steps in opening a restaurant. The success of the restaurant heavily depends on a well-chosen location and space.
5. Invest in the right restaurant POS
5. Invest in the right restaurant POS
If the pandemic taught us anything about restaurants, it’s that customers want and need delivery options. In order to provide takeout or delivery service, the right technology not only enables this but can make the entire customer experience seamless.
Tools that should be considered:
- A restaurant Point-Of-Sale system
- An online ordering platform
- Kitchen display screens (iPads) for each cooking station
- Contactless payment terminals
- Accounting software that integrates with your POS System
Depending on the type of restaurant, you might need extra features such as:
- Phone ordering system to take orders by phone
- A mobile POS to take orders in line-ups
- Integration with popular food delivery apps such as Uber Eats, SkipTheDishes and DoorDash
- Multi-location or franchise panel if you have more than one restaurant
While there are many POS options available for restaurants of every style, size and budget, choosing a POS can be a daunting task.
Having a POS system that slows down your operations is the last thing you want. With the right technology, you can stay efficient and increase your revenue.
6. Hire staff
Without a motivated and well-trained staff, your chances of running a successful restaurant are slim. The restaurant industry is, however, notorious for extremely high turnover, especially in the quick-serve sector. With that in mind, note that hiring the right team will be a challenge, but should be a top priority.
Your staff requirements will vary depending on the needs of your restaurant. Making a list of staff you need to hire for your front and back of house will help you in the process.
Here are the most common positions:
- Management team (general manager)
- Kitchen staff (dishwashers, cooks)
- Front of house staff (cashiers, servers, baristas)
The number of employees you need to run a smooth ship isn’t always obvious at first. To make sure you don’t spend too much on labour costs, consider setting up an employee tracking system to help you compare your sales versus your labour costs by the hour.
7. Market your restaurant
Before opening your restaurant, it’s important to have a marketing plan so you can increase awareness, attract customers, and get them to spread the word.
A few best practices to keep in mind:
- Establish a strong social media presence. Create Instagram and Facebook accounts to share high-quality pictures, videos and news about your restaurant. Be sure to include the address and opening hours.
- Build your website so customers can find your menu and any information they might need (contact info, location, news, etc). If you have an online ordering system, you can integrate it into your website.
- Create Google My Business, Yelp, OpenTable, Zomato, TripAdvisor accounts – Any directory listing can lead a new customer to find your restaurant online.
- Offer discounts or items to new customers. Depending on the type of restaurant, a discount or free item is a great way to attract more customers.
Before opening your restaurant, it’s important to have a marketing plan so you can increase awareness, attract customers, and get them to spread the word.
A few best practices to keep in mind:
- Establish a strong social media presence. Create Instagram and Facebook accounts to share high-quality pictures, videos and news about your restaurant. Be sure to include the address and opening hours.
- Build your website so customers can find your menu and any information they might need (contact info, location, news, etc). If you have an online ordering system, you can integrate it into your website.
- Create Google My Business, Yelp, OpenTable, Zomato, TripAdvisor accounts – Any directory listing can lead a new customer to find your restaurant online.
- Offer discounts or items to new customers. Depending on the type of restaurant, a discount or free item is a great way to attract more customers.
8. Soft opening
Now that you’ve probably encountered the main challenges that come with opening a restaurant, you will need to create the buzz for the official launch. While there are many ways to host a restaurant opening, restaurants can usually choose from a soft opening or a grand opening.
What’s the difference between a soft opening and a grand opening?
A soft opening is when the restaurant opens for a limited number of people (usually friends and family) to test services. It also lets you test and fine-tune your operations before the grand opening.
Unlike a soft launch, a grand opening is an event to introduce your new restaurant to the public. This event usually means more guests and grand opening promotions.
Here are some ideas to create the perfect restaurant opening:
Soft opening ideas
- Create a “Trial menu”
- Send family and friends a digital invite
- Invite your community (neighbouring businesses and local media)
Grand opening ideas
- Advertise your grand opening with social media ads, signs, and other forms of advertising
- Offer samples inside or outside your restaurant
- Promote your grand opening with the help of social media influencers
Ultimately, a restaurant can only succeed if there is shrewd planning and careful execution. The knowledge of the location and its residents, current food trends, and the right partners are all part of the recipe for success. Tech tools can also help streamline operations and create a smoother workflow.
In the process of opening a new restaurant business? Book a demo to see how MYR POS can work for your restaurant.
