Owning and running a restaurant is like a dream job for so many aspiring entrepreneurs. It is a dream that some may have put on hold since the pandemic had forced restaurants to seize indoor dining or perhaps even shut their doors permanently.
The adverse effects of the virus are still shaving off the restaurants’ profits across the world as the food industry struggles to get a grip. To weather this crisis, the restaurant landscape can be seen adopting some new trends or have opened up diverse revenue streams to stay profitable.
Many people believe that you can just as easily own and run a restaurant in the middle of the pandemic. We’ve compiled the perfect checklist to have you on your way to success.
1. Choosing Your Restaurant’s Brand and Concept
If you, like so many, have been dreaming of launching your own restaurant, you’ve probably given a lot of thought to its central concept. You see, choosing this concept can be a lot of fun when it comes to restaurants, and this is where you should let your imagination take the wheel.
Your concept signifies the type of restaurant you will open, the type of services you will offer, and the kind of cuisine you will serve. Your concept should also include what kind of interior design your restaurant will feature, and the following are a few examples:
- An ambient fine dining experience with traditional French cuisine
- A casual fast food restaurant with build-your-own menu items (like hotdogs, burgers, tacos, etc)
- A ghost kitchen that only delivers vegetarian comfort food
Moving further, your restaurant’s brand is a lot more specific than its concept and can be perceived as how you would like to communicate your identity and mission to the target audience.
Your restaurants’ name, logo, merchandise, menu design, and website should be in line with the brand. Also, the marketing channels you use in the near future will rely heavily on the brand identity you choose to influence your method and style.
2. Choosing Your Menu Items
Building your menu is your next creative project. Choosing which items to feature in your menu is a fun process for any food lover. However, you should make decisions carefully. Your menu dictates which kind of equipment you will need, the skills you need to hire in your staff, and the type of crowd you need to attract.
For instance, if you’re planning to have a dessert menu that features French pastries, you will need to hire a pastry chef that can match your plan. In contrast, if you’re trying to launch a pizza place, you’ll need experienced chefs, proofers, dough mixers, etc.
It is also important that you consider your demographic. If you find a great deal for leasing a property in a town with colleges, you should consider tailoring your restaurant menu to cater to college students.
However, if you can’t budge from your dream to come up with an upscale menu, you should try and settle with a location that houses median personal income diners since they will be able to better support your higher prices.
3. Write-Up a Business Plan
Like all new businesses, starting up a restaurant requires formulating an ironclad business plan. This particular step can become quite the stumbling block for restaurateurs who are unfamiliar with making business plans or how they can be written. The business plans of restaurants can be divided into sections that will describe all the aspects of the new business, from the concept of the restaurant to its financials.
The purpose of drawing up a business plan is to help iron out all the fine details and perhaps even to summarize what you have to offer to your potential investors. Also, if you plan on reaching out to financial institutions for loans, your business plan will work as proof that your venture could be very successful.
A few simple components of a restaurant’s business plan may include:
An Executive Summary
This should be the very first section of your business plan. However, it helps to write this last because it can be made as a summary of all the other sections once you are done.
Company Description and Overview
This section is used to write more detailed company descriptions as compared to what you include in your executive summary.
Menu and Concept
This section is dedicated to describing the concept of the restaurant’s menu and all the relevant details that go along with the menu.
Ownership and Management Structure
Summarize your ownership and management structure. You may also use visual aids and charts to summarize the information.
Staffing and Employee Needs
It is easy to underestimate how many staff members you might need. By planning for it and putting your findings on paper, you will better understand how many people will be on your payroll and will be required to run your restaurant smoothly.
Competitor and Marketing Analysis
This part of your business plan needs a lot of careful research. You will need to analyze your business landscape with some information about your competitors and the demographics you are targeting in a location.
Marketing and Advertising Strategies
Use a marketing analysis that you would have completed in your previous step to make all the right decisions for your marketing strategy.
Financial Summary and Projections
If you’re planning on obtaining funding for a new restaurant, this part of your business plan will be very important. Here, you should try to add a break-even analysis and sales forecast.
4. Obtain Funding For Your Restaurant
The very next step to starting a new restaurant is to finance your plans. Most restaurateurs don’t have enough capital to pay for their opening without some external financing. This is why you should plan on securing funding from an outside source, depending on how much you need to borrow.
A good place to start is to estimate the total startup cost of the restaurant as well as the cost of day-to-day operations. This information can be used to set up your budget and forecast the cumulative cost of keeping the restaurant running for the entire year.
Now that your restaurant’s budget is now accounted for, you should try and compare this cost with the capital you already have to consider how much external funding will be required. Do remember to take into account the cost of equipment, licenses, property repairs, and of course, staff salaries. The following are some common methods of how you can secure external funding for your restaurant:
Traditional Commercial Loans
This kind of loan can be acquired directly from a bank. Typically, you will see low-interest rates and have access to a larger amount of capital. However, you will have to come up with collateral and have a sufficient credit score.
Small Business Loan
Even though you can easily get a small business loan from any bank, a lot of these banks work in tandem with the U.S. Small Business Administration (SBA). The significance of this information is that you will be approved for a small business loan even if you have borderline credit because the guidelines provided by the SBA are intended to protect small business owners. The only downside here is that you will be required to come up with a collateral and the loan may take some time to be approved.
Line of Credit
Quite like credit cards, you can easily get approval for the maximum amount of credit. Here, the interest will only add up when you use the money and you will face higher lending standards. In other words, you will not be able to borrow as much money as you can from other sources of external financing.
Crowdfunding
Crowdfunding websites like FoodStart, Kickstarter, GoFundMe, and Indigogo are the perfect platforms to help raise money for a restaurant.
Investors
You can just as easily reach out to investors in your network or even sign up for websites like AngelList so you can find investors for your restaurant.
MenuCRM Benefits Both Customers and Restaurateurs
“If you cannot do great things, do small things in a great way.” - Napoleon Hill
Well, there you have it, folks. Your dining experience makes a huge difference and loyal customers are bound to spread positive words about your brand. MenuCRM offers a full-features web application that simplifies customer loyalty programs for small businesses and independent restaurant owners.
MenuCRM can be your restaurant’s website, online ordering system, CRM, restaurant loyalty app, and customer communications toll, all packed into one. By adopting MenuCRM, you will not only be able to increase your foot traffic and orders in less than 45-days but also streamline meal purchase processes without the need for internal restaurant maintenance.
