Guide to Starting Your Own Restaurant

Those considering starting a restaurant will want to ensure they perform their due diligence. There are many aspects that must be taken into account to make certain their new business has the best chance at success. Carefully consider where your new business will be located as well as the type of menu you wish to serve as this will help determine the capital needed. In addition to determining the layout of your restaurant, a thorough business plan that includes a comprehensive marketing strategy is key. Through careful preparation and diligent research you can lessen the chance your new restaurant will fail as you work hard at achieving your goals of a successful, well run, restaurant.



 Whether starting a new restaurant from scratch or expanding your food business by offering specialty items, make certain you understand the complexities of starting a small business. Determine the best name for your business and choose the most appropriate location for your restaurant. Make sure the name is something simple and catchy that will grab the attention of potential customers. When determining a location for your business, consider how much competition is already in the area, and look at industry trends. Many national restaurant organizations can identify trends before they hit local markets so stay connected with these organizations. Take as much time as needed to learn about starting, sustaining, and growing restaurants before you consider buying property or making other financial investments into the business.



There are federal, state and local laws and regulations that restaurant owners must follow. From food safety, employee hygiene and cleanliness of the facilities to setting up payroll and hiring policies, new restaurant owners must ensure they are abiding by established laws in a multitude of areas. Know your local laws as well as state and federal laws. Before you begin choosing your restaurant’s name, concept, layout or physical design, you should have a thorough understanding of zoning laws and a general idea of what you will be permitted to do. Understanding zoning laws will help you determine building or renovating costs and will help to visualize your new restaurant’s overall layout and design. This planning stage is crucial and shouldn’t be rushed. By carefully planning out the physical location, overall structure and determining a business concept, you can begin to put your business plan together and continue pushing towards your goal of opening your dream restaurant. If you’re having difficulty with this stage, consider choosing a computer program that will let you draw a layout or restaurant design. This can have an enormous impact on seeing a visual of your new business long before it is completed. At some point during this stage, you will also need to hire employees. It is required to first obtain an Employer Identification Number from the IRS. Once that is done, you will need to establish a pay rate and benefits so applicants know their compensation. Once you find a qualified applicant, you may want to perform a background check and investigate that individual within your legal rights. A background check is also a good way to determine whether or not a person has stolen from their employer in the past. Employees who steal often stay late when unsupervised and do not take vacations so the employer has no time to investigate. If you suspect an employee is stealing from you or your business, audit the reports and sales. When you finally hire the employee, they will need to complete Federal Tex Withholding Form W-4. Then you must decide how often they will be paid and agree on certain variables such as payment for overtime hours and vacation days.  



You’ll need various licenses and permits to operate legally. Every business must follow general licensing requirements, which vary by state. Certain businesses have other licenses they must obtain to legitimize business. For example, if you plan to serve fish at your restaurant you will need a permit. This applies if you catch the fish yourself or if you import them from elsewhere. For restaurants, the most common license in addition to the general ones, allows them to serve alcohol. These licenses also make it possible for your restaurant to qualify for a business checking account. These accounts help to keep company money separate from one’s own – though in the case of a partnership there are a few more hoops to jump through. Determine what type of legal structure your business will operate under as well. Are you going into a partnership or a corporation? The I.R.S. has a wealth of information for those launching their own businesses and as restaurants are one of the top business types to undergo an audit, it is crucial that new restaurant owners understand the legal and financial responsibilities they must meet. 



There are many areas where a restaurant owner will need to educate him or herself in order to make their business a success. Even something as simple as recognizing counterfeit money can make a huge difference in yearly take-home profits and it is imperative that owners as well as workers recognize counterfeit bills in order for the business to thrive. Counterfeit money is fairly uncommon, but bad checks plague the marketplace. In order to avoid bad checks, outline a check acceptance policy. Checks should only be accepted from in-state banks, they should always be numbered and they must be accompanied by the customer’s full name and address. Marketing a restaurant is an important area that can determine the success or failure of your new business. The most important step to success, however, is in developing a thorough and comprehensive business plan. A business plan is a guide that may be used from the initial concept and early developmental stages of the new restaurant throughout its many years. The Small Business Administration reports that the majority of successful businesses all share one thing in common: their owners used business plans.



By reviewing industry market trends you can help develop your business’ goals and create a plan that will put you on the path to success. Include in your business plan the overall layout and design for your restaurant, the proposed name, startup costs, the type of seating that will be needed, the interior as well as exterior design, such as lighting and landscaping, the types of signs you will use, your choice for music, competition, customer profile, and projected sales. For optimal comfort, there should be twelve square feet of space per customer. Therefore if your restaurant is 1500 square feet; you can have seating for up to 125 people. Good seating is expensive but worth the cost. Consider this: a restaurant with poor seating risks going out of business from uncomfortable patrons who never return. Be sure not to mismatch the seating, or any of the other décor items. It is tempting to reuse items left over from the last business in the facility, but it is important to remove all traces of its existence. Lighting can account for up to 50% of energy consumption for your business so be sure to think economically. If you choose a refractive color of paint a little light can go a long way. As for music, you need to review your clientele and make an educated decision. If your restaurant is mainly visited by teenagers, consider some upbeat pop music. If, instead, your restaurant is more intimate, play classical music and relaxing solo performances that will not interfere with the conversation at the tables. Startup costs in particular can be troubling because every business has a unique purpose and therefore requires a different amount of money for different products and services. Some of these costs are ongoing as well such as rent for a facility, the price of utilities and pay for the workers. You need to determine how many months of seed money you need before the business will be successful enough to support itself. By connecting with restaurant associations you can find a slew of ideas for everything from marketing to design techniques for your new business. Once you have a business plan begin developing your marketing strategy.



A dish at a restaurant is generally priced at least three or four times what the ingredients cost. Your menu prices reflect not only the amount you pay for food from a wholesaler, but also the cost of cooking and serving it. One of the most important areas that all restaurant owners should pay careful attention to is in food safety, safe handling procedures, rules regarding cleanliness and food storage and preparation. A restaurant that fails in these areas will see their business encounter great trouble. It isn’t enough for restaurant owners to understand the importance of food safety and hygiene but all employees and patrons must be made aware as well. Placing food safety posters in cooking and food handling and storage areas is one way to convey the importance of food safety issues. Restrooms should have posters reminding employees and patrons to wash their hands and buffet style restaurants should keep signs posted reminding patrons to only use clean plates when at the buffet. Additionally, restaurants should be designed in a manner that makes food preparation, storage and delivery to customers easy, safe and trouble free. By taking the time to perform your research, develop a business plan and map out your marketing strategy you can increase the likelihood that your business will become a success.