How to Start a Successful Restaurant

How to Start a Successful Restaurant

If you’ve wanted to start a restaurant for years, it might be time to sit down and draw up a plan to open your own business. To help you create a recipe for success, we’ve put together a guide to make sure you have all the ingredients you need to open your restaurant with confidence.

Starting a restaurant is exciting, but it’s also time-consuming and one of the toughest businesses to launch. In fact, 60 percent of restaurants fail in the first year.

The biggest reason for failure? Lack of planning. Before you ever make dinner for a customer, you’ll spend time figuring out every detail of your restaurant. From kitchen appliances and menus to floor plans and staff selections, the planning stage will make or break your restaurant.

To help you plan, fund, and manage your new restaurant, we’ve asked restaurant owners to share their trade secrets. Below are their tips for success.

Tips for starting a successful restaurant

1. Have the right intentions

If you want to make it as a restaurant owner, you have to love what you do. While she knew a restaurant was the right path for her, Kim Strengari had to work nights cleaning office buildings to make ends meet when she first opened her restaurant.

“I wanted the restaurant more than anything else in life, so the sacrifices were endless and I never minded making them,” she says.

To be successful, you’ll invest a lot of time and money—so make sure that starting a restaurant is your passion, not just a business venture you hope will make money. “It’s harder than you can imagine,” says Omer Orien, “but people do it all the time. It’s not at all dreamy.”

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In these early days, it’s a good idea to figure out what you want your restaurant to look like. What will be your restaurant’s aesthetic? What furniture will you need to fit the theme? How will you lay your restaurant out? Trent Furniture, a British furniture company, has a great article to help you get started.

Orien says, “A lot of it has to do with figuring out what kind of environment you want to work in, what will make you feel the way you want to feel. It also doesn’t hurt to have people in your life who have an eye for design.” Orien sat down with his co-founders and built a 3-D model to plan the layout of their first location.

2. Have a solid business plan in place

You need a detailed business plan that charts the course for your success. Consider beginning with a Lean Plan that keeps the business planning process simple. Think of your business plan as a living document that you return to regularly to help you plan for growth and measure your progress.

Orien got serious about his business plan when it was time to grow and expand to a new location.

Your business plan should include market research, a look at your competitors, information on your target audience, an outline of your marketing plan, and a financial projection. To get you started, check out templates specifically for restaurant planning, or check out LivePlan business planning software, that will walk you through the process.

Pay special attention to your marketing plan

You can only rely on word of mouth to bring in so many customers, so you’ll need a marketing plan to keep new people coming in. Here are a few ideas:

  • Participate in community events and give out food samples
  • Offer discounts to new customers
  • Join the local business association
  • Utilize social media channels

3. Location, location, location

With a restaurant, location is everything. You need a spot that draws crowds, is easily accessible, and has the potential for growth. Of course, you need a location that fits within your budget too.

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Take your time as you look for the right space. Research startup incubator spaces for restaurants that you can join to keep initial costs low and that might come with mentorship opportunities.

When Orien was ready to launch Off the Waffle, he says he only had $3,000 to get the business started. “It sounds impossible,” he says, “but we found a bunch of hacks to make it work. We found a house that was in a commercial zone, so we were able to live and work in the same place.”

Start small and test before taking a huge leap.

4. Test your menu

Approach building your menu like an experiment. Consider having a dinner party featuring your proposed menu where you ask for honest feedback.

But don’t just invite your closest friends and family members. You might love the taste of a certain dish, but if customers won’t pay for it or aren’t keen on its taste, you won’t make money. When you ask for feedback, consider using a method that allows anonymous comments so that you get people’s honest reactions. Do your market research. Visit other restaurants to get a sense of appropriate pricing.

Orien says that when Off the Waffle first launched, there were only two items on the menu: a liege waffle and a glass of milk. They tested different ideas and found success with interesting waffle toppings.

5. Hire essential help

Think through your biggest needs and hire staff accordingly. Consider doing a soft opening to see how smoothly things run with just a few essential positions.

When Orien launched his first restaurant, the only employees were family. They scaled up slowly, but now they have around 50 employees working at their three locations. He believes that hiring a manager right off the bat would be a natural progression if he opened a fourth location.

Invest in training your employees

Create job descriptions, codes of conduct, and an employee handbook. Provide training materials and document recipes for your cooks. Give your employees the necessary tools to succeed, says Lambrine Macejewski.

Be willing to fill in when needed

As the owner, you can’t have an ego. Be willing to do every job from chopping vegetables to seating customers.

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Watch your labor costs

Pay attention to hiring the right amount of staff. Avoid having too many people on the clock when you don’t have the business to support it.

6. Secure funding and manage your cash flow

Generate startup capital: Know how much money you need to get your restaurant off the ground.

You’ll need three pools of money. The first pool is for one-time costs like equipment. The second pool is to cover the restaurant expenses for at least six months, and the third pool is to cover your personal bills for at least six months. Plan to lose money for the first six months.

Plan for bumps in the road: Have extra money to cover the unexpected. Consider a business line of credit.

Watch your food cost: Track your inventory, avoid waste, and keep prices competitive.

7. Keep marketing

You can’t depend on repeat customers, so you’ll need to keep your marketing efforts up. Establish a strong social media presence, try advertising locally, participate in community events, or host non-profit gatherings at your restaurant to keep marketing your business.

Share your restaurant startup advice with us!

Running a restaurant comes with a lot of hard work. Reach out to us on Twitter and share what you’ve learned through starting a restaurant, or let us know what else you think it takes. We’d love to hear from you!

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