Restaurants are now hotter than ever. The National Restaurant Association estimates that today there are more than one million restaurant locations in the United States. People in the US now spend more on dining out than they do in grocery stores. The Atlantic is calling this the golden age for restaurants, while also pointing out that it’s a fiercely competitive industry.
If you’re considering a business move by opening a restaurant, we offer this two-part blog series as your go-to guide to setting up for success.
1. Choose your concept and location
Are you going for a franchise, venturing into the rapidly scaling trend of fast-casual eateries, or perhaps you’re a talented chef developing your own concept. According to research in Nation’s Restaurant News, independent restaurants are the toast of the town: They are expected to see their annual revenue grow four to five percent, compared to just two to three percent for chains.
As you conceptualize and visualize your business, do your research. Determine your target audience and conduct surveys or focus groups with them.
Your location is just as vitally important: What is the parking like? What is the pedestrian traffic like—and is this a neighborhood that works for your target audience? Continue your demographic profiling by checking in with your local Small Business Association office as well as city and county offices to make sure your concept works with projected growth.
2. Show me the money
You may be a cunning investor, in which case, this won’t be an issue and read on to #3. But for many small business owners, unless you plan to bankroll your store from your own hefty bank account or are able to take out a second mortgage, you probably are going to need a loan. Often friends and family are the best first stop since they will have more appealing terms, but be prepared to offer them a stake that makes it worth their while. Your next best source is a local bank that can provide a small business loan. Be prepared with a sharp business plan and answers to tough questions to earn their confidence.
3. Get legal
Even once you have a loan, your paperwork is just beginning. Your restaurant will need a number of licenses and permits to be legit. Check with your city, county, and state to make sure you have covered everything that’s required for your locale. Some to think about (and budget for) include:
- Business license
- Resale permit to allow for sales tax collection, if applicable
- Health permit for both the location and your employees
- City and fire permits to make sure you comply with applicable codes
- Liquor license
4. Create your menu
The best (as in, most profitable) menus aren’t necessarily as straightforward as they look so make sure you use some common menu design tricks to wring out maximum profit. Here are four easy ideas:
- Put your “specials” front and center, maybe in a call-out box, so they are easy to spot.
- Make sure you emphasize special offerings, like vegetarian, healthy or gluten-free items. Many patrons are looking for that info and often will reject a restaurant that doesn’t make it easy to identify.
- Use descriptive language. One study found that using a descriptor like “succulent Italian seafood filet” increased sales 27 percent over the more utilitarian “fish filet.”
- Use an iPad menu set up to amp up the “wow” factor. It makes it easier for guests to find out exactly what’s in each dish and ensures you’ll get the order right.
Don’t forget that technology can play a big role in making it easy to track best sellers and stock inventory accordingly.
5. Design the interior and exterior
People shouldn’t judge a book by its cover, but they do. Customers have become veritable camera crews with today’s tech, so you need to look good. Make sure your restaurant looks as appealing as possible to attract street traffic. Pay special attention to the exterior, with freshly painted signs and accents, as well as enticing with awnings or other welcoming design features. Attract walk-in groups with a sign with specials and even a sample menu.
Inside, consider decorating to suit your theme and make sure that the chairs and table set up are well-spaced, with private nooks as appropriate. If it’s a carry-out format, design a waiting room that looks comfortable rather than cramped. Ambient lighting, artwork and inviting décor can all enhance the dining experience.
Next up: Part 2 of Ready to Launch
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