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How To Set Up Your Own Restaurant

If you are a foodie and you like the idea of working for yourself, setting up your own restaurant may be the perfect career choice for you. You get the choice of what kind of restaurant you want to set up, the menu and the interior and exterior design of your restaurant; you can truly create your perfect restaurant.

Choose A Restaurant Concept And Brand

Your town or city probably has a range of different restaurants. Each has its own atmosphere, quirks and reasons for patrons to go there over anywhere else. You may already have a good idea of what you want to see in your restaurant, but if you don’t you should not fret there is likely a good range of restaurants already in your town or city to take inspiration from. You can take your favourite parts of each restaurant to come up with a place that you would go to yourself. But you shouldn’t rush to any decisions without consulting your family and friends, you should also look at restaurants that are popular and successful and try to reverse engineer reasons why they are so popular.   

Another important consideration to make is the location of your restaurant, ensuring that your restaurant has enough footfall walking past to lure customers into your restaurant. Depending on where you position your restaurant the demographic of people walking past your restaurant will be different, it is important to open a restaurant that suits the main demographic of people living in that area.                                                                           

Choose Your Menu

Creating a menu can be more complicated than you may think, you need to account for the current skillet of your staff and the equipment you have in your kitchen and determine if your staff can make the items on your menu without any unnecessary difficulties or stress. If you have complicated menu options but only have a basic setup in your kitchen your kitchen staff may struggle to cook food fast enough to satisfy the demand. Your restaurant may also have to start out with more of a basic setup due to budget constraints, hopefully as you become more successful as a restaurant owner you are able to buy more specialised kitchen equipment allowing you to expand your menu.  

Choosing your menu is an important consideration to make as this will dictate the type of customers your restaurant will attract. You should also take into consideration the demographic of people living in the local area of your restaurant, if there is a high amount of people who emigrated from certain countries living in the local area it may be a good idea for you to cater to that demographic in some way. 

Write A Restaurant Business Plan

When you are starting any business you need a business plan that defines the goals of your business and how you intend to achieve them. In this document, you will explain both the obvious aspects of your business and the finer and more intricate details. This gives you a blueprint to turn to along the way when you are actually putting things in motion and setting the restaurant up, the business plan will also benefit you when your business is operating as you can have plans in place for certain events or circumstances. Below are the principal components of a food business plan: 

• Executive Summary: You should write this section of your business plan last, it is a summary of all the other parts of your business plan.

• Company Overview And Description: Within this section you should write a detailed company overview and description, providing an explanation of the type of business you are setting up, why you have chosen the cuisine and your most important ideas for your business. 

• Concept And Menu: Within this section, you should describe in detail your restaurant concept and menu, explaining why you have made the decisions you have and what you plan to do in the future such as expanding the menu once you are more comfortable with running a restaurant and potentially have better kitchen equipment.

• Management And Ownership Structure: Outlining your management and ownership structure in a legal document and getting other owners or managers to sign that they are happy with this structure, can help you avoid conflict in the future with other stakeholders. 

• Employees And Staffing Needs: For this, you may need to look at other restaurants that are a similar size and estimate how many employees you will need. Throughout your business ownership of a restaurant, employees will come and go which means that your employee levels will fluctuate fairly often. Over time you will be able to find a number of employees who work for your restaurant, without having too few or too many employees. 

• Marketing And Competitor Analysis: Within this section of your business plan you will need to conduct careful market research, you will need to provide a clear analysis of the demographic that lives near your restaurant concept and why you think that the restaurant would cater towards their needs. You should also analyse existing restaurants in the area to understand what they are doing right or wrong.

• Advertising And Marketing Strategies: Within this section, you will use the marketing analysis that you came up with during the previous step to choose the right marketing strategies for your restaurant. 

Obtain Restaurant Funding

Most people will not have adequate funding to start a restaurant, which is why securing funding is a popular option in order to cover the costs associated with setting up the restaurant in the first place. Your restaurant business plan will help your case when you seek this funding from investors and banking institutions. You need to come up with an estimate of how much money setting up your restaurant will cost. Taking into account your rent for the premises, equipment costs, building repairs and staff salaries.

Once you have all of this figured out you will have an idea of how much money you will need to borrow. One thing to consider is that it is always good to prepare for a disaster, even when things are going great. As things may happen that are beyond your control such as a commercial customer of your food business not being able to pay you on time; this could potentially put your restaurant's financials in jeopardy, to minimise this threat to your business you could look into getting credit insurance, which can provide your business with much-needed capital whilst you iron out the financial situation with your stakeholders.  

There are numerous ways of obtaining funding including: 

• Traditional Commercial Loan: This loan is obtained directly from the bank. With a traditional commercial loan, you will typically see lower interest rates and access to a greater level of capital. However commercial loans require collateral such as property or investments to be tied down, if the lender defaults on their loan the bank will take what is owed from the collateral.

• Business Line Of Credit: This is a similar concept to a credit card, you can apply for maximum credit limits. Interest rates only start to accumulate when you have spent money. However, the lending standards are higher and you may not be able to borrow as much as you could do with other types of loans. 

• Small Business Loans: Small business loans can be directly obtained from a bank or through private or public institutions, small business loan providers may have a set criteria of business types they support or have some kind of financial requirements.  


Business ownership can be an exciting thing to try and hopefully be successful at, ensuring that you have solid research that you can base your business decisions on is a must. 

Author: amy-jones