10 Tips for Starting Your Own Restaurant

Starting bakery business concept

Starting a restaurant could be a great way to make money and do something you’re passionate about at the same time. Unfortunately, it’s also incredibly difficult. Gathering the funding and resources necessary to start a restaurant from scratch can be challenging—and beyond that, you’ll have to find ways to remain profitable despite razor-thin profit margins and tons of competitors.

Fortunately, if you go into restaurant ownership with a clear understanding of the challenges before you and a plan to overcome them, you have a good chance to succeed.

Tips for Starting a Restaurant

Follow these tips if you’re going to start a restaurant:

1.        Choose the right software. Modern restaurants rely on software to remain productive and achieve their goals. Your choice in software could easily make or break your strategy. For example, you’ll need effective management software for kitchens if you’re going to ensure your kitchen operates smoothly; if the platform is too expensive, too hard to learn, or if it doesn’t cover all your needs, it may actually work against you.

2.     Set the right expectations. Before starting the business, you need to set the right expectations. Even if you have a great restaurant idea, an amazing team, and a good location, there’s no guarantee you’re going to succeed. About half of all businesses fail within their first five years of development. If you want to be one of the businesses that succeed, you’ll need to be ready to learn and adapt to new circumstances.

3.       Draw up a business plan. Too many new restauranteurs think they understand the industry, and dive headfirst into starting the business. Before you do this, it pays to research and draft a complete business plan. This document will serve as a blueprint for your forthcoming business, laying out research on your finances, your competition, and the overall business landscape—including your strengths, weaknesses, opportunities, and threats.

4.       Find an unoccupied niche. You may be able to come up with an idea that competes with an established restaurant in your area, but this is often an ineffective strategy. It’s better to find an unoccupied niche—entirely new territory that no competitors are obstructing. Consider offering a type of cuisine that isn’t currently offered or target a different demographic than the other restaurants in the area. The more you minimize your competition, the better.

5.       Apply for licenses early. Your restaurant may require certain licenses, permits, and other forms of paperwork to operate, such as a liquor license. These documents may seem straightforward, but they can also be associated with long delays. Make sure you research what you need and apply as early as possible; this way, if you run into obstacles, you’ll have plenty of time to overcome them. You will definitely need a food handler certification in Texas, as that’s required for all employees handling unpackaged food.

6.       Spend time on the financial strategy. Creating a restaurant isn’t just about coming up with cool ideas for foods and drinks—to make the business work, you need a solid financial model. What are your expenses going to be? How much are you going to charge? How are you going to make money, and can you scale the business eventually?

7.       Rely on objective data. When making decisions for your restaurant, rely on objective data wherever possible, rather than speculating about the situation or relying on anecdotal evidence. When researching your competition, work with hard facts and numbers. When testing your products, get objective feedback from your test subjects.

8.       Test your products early and often. Speaking of testing, make sure you test your products early and often throughout development. Your signature dish may sound delicious on paper to you, but it may not actually be delicious, and it may not appeal to your target audience the same way. Put together a focus group and gather both quantitative and qualitative data on your work.

9.       Figure out a way to differentiate your brand. Even if you have a somewhat unique position, your brand is going to have competition. If you want to stand out and attract your own customer base, you’ll need to figure out a way to differentiate your brand. What is it that makes your restaurant unique?

10.   Invest in marketing and advertising. Good food can help you grow through word of mouth, but to get those initial customers, you need a marketing and advertising strategy. Don’t be afraid to invest here.

Learning and Improving

Even if you follow the best-laid advice and plans for your restaurant, you’re going to make mistakes along the way. The only way to get better is with a commitment to ongoing improvement. Talk to more experienced restauranteurs, read up on the latest information on the industry, and gather information straight from your customers. The more time you invest in better understanding your business, the more it can develop.