How to Start a Restaurant

As an increasing number of consumers want to dine out or take food prepared at home, the number of food service operations has skyrocketed from there about 40 years from 155,000 to almost 960,000 today. But there is room in the market for its food service business.


Demographic changes and changing lifestyles are the cause of the rise in food service companies. busy consumers do not have the time or inclination to cook. They want the taste of fresh bread without the hassle of cooking. They want tasty and nutritious meals without washing dishes. In fact, the rise in popularity of ongoing operations highlights some clear trends in the food industry. Every once more, working parents and the elderly require greater convenience when purchasing their meals.

Although the future looks bright for the food industry as a whole, there are no guarantees in this sector. Even the most successful traders will tell you that this is not a “get rich quick” industry. It’s more like a sector of “work hard and make a living.”

A harsh reality is that many restaurants fail in their first year, often due to lack of planning. But that does not mean your food service business should be an extremely complex operation. In fact, more agile you can do, the better your chances of success. Paul Mangiamele, president and CEO of Bennigan said:… “Although we all like, this business is very difficult It’s a wonderful business, a large company, a successful business is a very lucrative business but there are thousands of moving parts, and you have to be knowledgeable of all. ”

To begin with, we have compiled this depth, but easy to digest guide to start your own food business. Whether your dream is to open a traditional American restaurant, pizzeria New York style, a Chinese buffet, catering to the busy lunch or coffee lovers / local place to hang out, start your search here business.

target markets
No food service operation only has universal appeal. This is a fact that many new entrepreneurs are struggling to accept, but the reality is that it will never capture 100 percent of the market. When you try to please everyone, you end up pleasing nobody. To focus on 5 or 10 percent of the market that you can get, and forget the rest.

That said, it is to eat in restaurants? Here are the main categories of market customers foodservice business:

Generation Y. This generation also marked by “millennials”, the “echo” or “mini-boom” generation includes those born between 1980 and 2000. Generation Y is the generation of greater ethnic diversity and remains more than three times the size of generation X. They are a prime target for a food service company. Members of Generation Y are for items from fast food and fast service. About 25 percent of visits to restaurants to franchises hamburgers, pizza restaurant followed by 12 percent.
Generation X. Generation X is applied to those born between 1965 and 1980. This group label is known for strong family values. While previous generations have tried to do better financially than their parents, Gen Xers are more likely to focus on their relationship with their children. They are concerned about the value, and prefer the quick service restaurant operations and mid-range offering all you can eat salad bars and buffets. To attract this market group, provide a comfortable environment that emphasizes the value and the environment.
baby boom generation. Born between 1946 and 1964, baby boomers make up most of the population of the United States. Prominent in this generation are wealthy professionals who can afford to visit the upscale restaurants and spend money freely. During the 1980s, they were the largest group of high-end customers for trendy restaurants. In the 1990s, many baby boomers were two-income households with children. Today, those who are in the forefront of the baby boomer generation become grandparents, so it is an objective of restaurants offering a family atmosphere and those that offer a high level, formal dining experience.
empty nest. This group consists of people in the age range between the upper end of the baby boomers and seniors (people in the first 50 to about 64). empty nest usually grown children who no longer live at home, and their ranks continue to grow as baby boomers age and their children leave home. With more discretionary income and income highest per capita of all generations, this group usually makes high-end restaurants. They are less concerned about price and more focused on great service and outstanding food. Calling this group with an elegant and sophisticated atmosphere.
Old people. The main market covers the large group of people over 65 years old. In general, most seniors on a fixed income and can not often be able to afford high-end restaurants often, so they tend to visit the family restaurants that offer good service and reasonable prices. Older “young” is likely to be more active and have more available than the “old” elderly, whose health may be declining revenue. Older people generally appreciate the restaurants offering early bird promotions and main menus with lower prices and smaller portions, as their appetites are less generous than those of younger people.
styles Restaurant Service

The restaurants are classified into three main categories: fast service, mid-range and luxury. quick service restaurants are also known as fast-food restaurants. These establishments offer limited menus that are prepared quickly and are sold at a relatively low price. In addition to the very casual dining, usually they offer drive-thru windows and a takeaway service.

When people think of fast food restaurants often think of burgers and fries, but schools in this category also serve chicken, hot dogs, sandwiches, pizzas, seafood and ethnic food.

mid-range restaurants, as its name implies, occupy the center between quick service and upscale restaurants. They offer full meals, but prices that customers perceive as offering good value cargo. restaurants offer a wide variety of mid-range of options to complete service and Limited-. A full-service restaurant, customers place their orders, and receive at their tables; in an operation of limited service, customers order their food at the counter and then receive their food on their table. Many restaurants offer limited service salad bars and buffets.

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fancy restaurants offer full table service and do not necessarily promote their meals as offering great value; Instead, they focus on the quality of their food and the atmosphere of its facilities. food companies are at the top end of the category of high-end restaurant and pay the highest price.

Selecting a food concept
Restaurant customers want to be satisfied with their dining experience, but not necessarily want to be surprised. If you anticipate a family style steakhouse (based on the name or decoration of the establishment), but you are in a more formal setting with disconcerting – and expensive – menu tasting surprise may prevent you from enjoying the restaurant. Concepts give restorers a way for customers to know in advance what to expect and also to provide a structure for operation. Here are some of the most popular restaurant concepts:

seafood. seafood quick service restaurants typically offer a limited range of options, often limited to fried fish. Midrange and seafood restaurants offer more high-end choice, prepared mean they are not fried, such as stew, grilled. Seafood can be a risk area on which to focus, while prices are always changing, and many types of fish and shellfish are seasonal. Furthermore, the quality can vary greatly. When buying seafood, make sure that the products are fresh and meet their quality standards. If you are not satisfied with this dealer offer, you can be sure that your customers will not.
Steakhouses. Steakhouses are among the markets midrange and high end. Midrange steakhouses are usually family oriented and offer a relaxed atmosphere with meals that are perceived as good values ??environment. In terms of decor, comfort and emphasizes Western themes are popular. luxury steakhouses offer a more formal setting and can be used as large pieces of meat that are better than those served in restaurants midrange. luxury facilities also charge higher prices, and decoration can be similar to other quality restaurants, offering customers greater privacy and focus more on customers adults in families.
family style restaurants. As the name suggests, these institutions are aimed at families. As they charge reasonable prices, but also attract older people. They offer fast service that is among the places quick service and full service restaurants. Their menus offer a variety of options to appeal to the interests of a wide range of customers, from children to seniors. Price family style restaurant may be higher than those of fast food restaurants, but these establishments provide table service to compensate. The decor family style restaurant is generally comfortable with neutral tones, Whimsy, and lots of stalls and large chairs. Booster seats and highchairs are readily available.
Casual dining restaurants. These establishments used for a wide audience, ranging from members of Generation Y to Generation X Baby Boomers with the families of the elderly, and offer a variety of food, snacks and salads to main dishes and desserts. Casual dining restaurants provide a comfortable environment with mid-range prices. Many focus on a subject that is embedded in their menus and decor.
ethnic restaurants. ethnic restaurants have a significant part of the restoration of the US market. They range from fast food places limited to fancy restaurants with a wide variety of menu items selections. Their menus typically include Americanized versions of ethnic dishes and authentic food. The three most popular types of ethnic restaurants are Italian, Chinese and Mexican. Other popular types of ethnic restaurants including Indian, Thai, Caribbean, English, French, German, Japanese, Korean, Vietnamese and Mediterranean. A greater variety of ethnic restaurants can thrive in areas with a culturally diverse population, including major metropolitan areas.
Pizza shop. You have two main options when it comes from a pizzeria. This is a restaurant to go in a modest establishment with a special menu highlighted by pizza and beer, some seats and a self-service environment. The other is a pizza restaurant full service with a menu that not only offers a variety of pizzas, beer and wine, but also Italian dishes like spaghetti, ravioli and lasagna, dishes like salads (or even a salad bar) and desserts. The pizza base is of course pizza. If you do not know how to make good pizza, hire a good cook making pizza. Invests in quality ingredients and preparation methods, and for all pizza like you are eating yourself. Do this, and your customers keep coming back for more.
Sandwich Shop / Delicatessen. One of the reasons sandwich are so successful is enjoying high profit margins. sandwich shops and delis can also change their menus quickly and easily to suit current tastes. For example, with the growing interest in health and nutrition in the United States, sandwich shops and delis began offering lower-fat, healthy ingredients in their sandwiches, salads and other menu items. In addition, many sandwich shops and delis were able to keep workers who eat at your workplace by adding delivery and return of their operations to go and sit. sandwich shops and delis can be differentiated by the food they serve. Most sandwich shops serve as sandwiches, possibly with some dishes or desserts. A general delicatessen offer an extensive menu that includes sandwiches, prepared meats, smoked fish, cheeses, salads, condiments and a variety of hot dishes.
Coffee. With over 400 billion cups consumed every year, coffee is the most popular drink in the world. But beyond the drink itself, people frequenting cafes and bars espresso for a variety of reasons: to meet friends for a quick lunch and a drink to enliven the evening, or simply start each morning with a great cup of coffee to start the morning. Most cafes that are successful have heavy foot and high sales volume traffic. Most serve up to 500 customers a day and manage up to five turnovers customers during lunchtime, despite the limited space and the number of small squares. Profit margins for coffee and espresso drinks are extremely high – after all, it is a product that is more than 95 percent water. At the same time, the average amount of tickets is $ 3, if necessary in order to achieve and maintain profitability. In addition to the specialty roasted by the court, most cafes have also based espresso drinks (cappuccinos, lattes, etc.), a variety of teas, bottled water and fruit juices, with an attractive assortment of baked goods one selection of desserts and coffee beans book.
Bakery. With the emergence of shopping centers and competition from supermarkets with bakeries in stores, “bread alone” retail bakeries have almost disappeared from the United States. Bakeries offer cakes, scones, muffins and coffee drinks, and sometimes even today offer full menu including sandwiches, hot dishes, beer and wine. Consumers like fresh baked goods, but the market is extremely competitive. As you develop your bakery concept in particular you will have to find a way to differentiate itself from other bakeries in town.
Carving your niche

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Before you start planning any serious business, you must first decide what specific segment of the food service industry you want to enter. While there are many commonalities between the different types of food service companies, there are also many differences. And while there is much overlap in the knowledge and skills needed to succeed, their own personality and preferences dictate whether you decide to open a commercial bakery, buying coffee, a gourmet restaurant or other operation. Then, once you have decided what is best for your business, you must understand the place that will occupy the market.

For example, you are an early riser, or what stays up late and sleep late? If you like – or at least does not care – he rises before dawn, your niche can be a bakery or occasional transaction and breakfast buffet. Night owls will be drawn to the required hours for restaurants and bar-grill-typical, pizzerias and even gastronomic establishments.

Do they work with the public, or are you happier in the kitchen? If you are a people person, choosing a food service company that gives you plenty of opportunities to connect with customers. If you are not particularly gregarious, it is likely to lean more towards a type of business, maybe even a bakery or restaurant, where you can treat more operational issues with people.

Other questions to ask include, Do you have a passion for a particular type of cuisine? Like a predictable routine, or you prefer something different every day? Are you ready to face the responsibilities and additional obligations that come from serving alcohol?

As does self-analysis, think about your ideal day. If you could be doing exactly what I wanted, what would it be?

Once you have decided on the best place for you as an individual, it is time to determine if you can develop a niche in the market for its food service business.

Working in a restaurant
Deal gracefully with customers and feature elegant playmaker is only part of the many functions of a conservative. food service operators spend most of their time developing menus; inventory control and materials; personnel management; the creation and execution of marketing campaigns; to ensure that they operate according to a number of local, provincial and federal regulations; fill a wide range of documents; and perform other administrative tasks. Certainly, the financial possibilities are there – as are the fun aspects of the company – but starting, operating and growing a food service business is hard work.

Whatever the type of food service company you have in mind, the best way to learn the ropes is to work for a similar operation for a while before going on their own. This will give you a valuable insight into the realities and logistics company.

Successful restaurateurs agree that the best preparation for owning a restaurant is to work on someone else first. Think of it as getting paid to be educated. Certainly you should read books and take classes, but you should also plan to work in a restaurant at least for a few years to make as many different jobs as possible. And if you’re not doing the job, pay attention to the person – you may find yourself doing when your own restaurant is unexpectedly shorthanded.

Ideally, you should work in a similar to the type you want to open restaurant. You may not like the business. Or you may more suitable for a different type of operation than originally thought. Fortunately, you will discover that you have absolutely right.

“As soon as I started working in a restaurant, I realized that was my passion,” said Scott Redler, “when you have a busy restaurant, and you look at everything that happens as it should, it’s just a wonderful feeling satisfaction . “Redler has worked in several restaurants for 11 years, opened a Chinese fast food at the age of 26. This business failed within eight months, then Redler went to work for a restaurant company, where he eventually moved to the position of vice president, who oversees operations 15. But there still longed for him, so he developed the concept that became Timberline Steakhouse & Grill in Kansas (sold in 2011). He acknowledged that the rapid occasionally segment is growing, created Freddy Frozen Custard, frozen custard offering hot dogs, hamburgers, and (as expected). Frozen Custard Freddy is now a franchise operation with 60 stores in nine states.
Writing a business plan

Armed with practical experience, you are ready to set up your business plan – the most critical element of your restaurant. Card all on paper before buying the first spoon or crack the first egg.

When a written business plan should include: a clear definition of the concept; a description of the market; its menu and prices; detailed financial information, including the details of your initial capital (amount and sources) and revenue forecasts and long-term costs; a marketing plan; the hiring, training and retention programs; and detailed plans describing how it will cope with the challenges facing restorers every day. Including an exit plan your strategy is also a good idea.

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Financing your business
The amount of money you need to start depends on the type of business, the installation, the amount of equipment you need, whether you buy new or used, inventory, marketing, and capital necessary for the operation (the amount of money you need on hand to take you until your business starts generating cash). It is easy to spend hundreds of thousands of dollars from a restaurant, but not essential. For example, when the owner Borealis Breads Jim Amaral started his first bakery in Maine, he rented a space that had been a commercial bakery and came with mixers, banks, ovens and other equipment. You could start with only $ 10,000 he had borrowed from family and friends, and is used primarily for inventory.

No matter how much you need, you definitely need some money to start your food service business started. Here are some suggestions of where to go to raise funds start:

Their own resources. Make a complete inventory of your assets. People are generally more active they do, including savings accounts, retirement accounts, equity in real estate, leisure facilities, vehicles, collections and other investments. You can choose to sell assets for cash or use them as collateral for a loan. Also look at your personal credit line. Over a successful business he started with credit cards.
Family and friends. The next logical step after collection of its own resources is to approach family and friends who believe in you and want to help you succeed. Be careful with these arrangements; no matter how good you are with the person, professionally presented, put everything in writing, and be sure that people approach can afford to take the risk of investing in your business.
Partners. Using the principle of “force”, look around for someone who want to collaborate with you in your business. You can choose someone who has financial resources and wants to work closely with you in the business. Or you can find someone who has money to invest, but no interest in doing the actual work. Be sure to create a collaboration agreement in writing that clearly define their respective responsibilities and obligations. And choose your partners carefully – especially in relation to family members.
Government programs. Enjoy the abundance of local, state and federal programs to support small businesses. Make your first stop the SBA, but be sure to investigate several other programs. Women, minorities and veterans should review special financing programs designed to help them start businesses. The business section of your local library is a good place to start your search.
Selecting a location

Depending on the amount of money you have to invest in its food service business and the type of business you choose, you can spend somewhere between $ 70,000 and $ 1.5 million in a facility.

Not all food service operations must be in a place of sale, but for those who depend on retail traffic, here are some factors to consider when choosing a location:

the volume of anticipated sales. How the site contribute to your sales volume?
Accessibility to potential customers. Note how easy it is for customers to come into your business. If based on the movement of heavy pedestrian, consider whether or not business neighbors will generate foot traffic for you.
The ability to pay rent for your business. If you made a projection of sales and earnings for its first year of operation, you will know more or less the amount of income you can expect to generate, and can use this information to decide how much rent you can afford.
restraining orders. You may experience unusually restrictive ordinances that make a place very different than ideal, such as limitations on the hours of the day when trucks can upload or download legally.
traffic density. With careful consideration of the movement of food, you can determine the approximate potential sales each passing pedestrian to a particular place. Two factors are especially important in this analysis: total pedestrian traffic during work hours and the percentage of what is likely to patronize your food service business.
parking spaces for customers. The site should provide enough convenient parking and easy access for customers.
The proximity of other companies. business neighbors can influence the volume of their store, and their presence can work for you or against you.
Site History. Discover the recent history of each site in question before making a final selection. Who were the previous renters, and why are gone?
The terms of the lease. Make sure you understand all the details of the location, since it is possible that a large site may have lease terms unacceptable.
future development. Check with the local planning commission to see if anything is planned for the future that could affect your business, such as additional buildings nearby or road construction.
Layout and design are important to the success of your restaurant factors. You will have to take into account the size and design of the dining area, kitchen, storage and office space. Usually restaurants allocate 45 to 65 percent of their space for dining, about 35 percent to the kitchen area and the preparation, and the rest for storage and office space.

Dinning room. This is where you’ll do most of your money, so do not cut corners in the design of your dining room. Visit the restaurants in your area and analyze the scene. Look diners; They reacted positively to the decor? Is it comfortable or are changing people in their seats along your food? Note good and what does not work.