Opening a restaurant can be a rewarding experience for those who love food or hospitality. However, it can also be exhausting. Although it takes hard work, you can set up a profitable restaurant business with the right planning and commercial restaurant equipment.
This guide will provide you with practical advice and guidance on conducting market research to create a business plan.
1. Before Opening a Restaurant, Conduct Market Research
Our guide to how to open restaurants includes a look at market research. This allows you to determine the demand for your location and whether it is a place where your business can thrive.
This research will also give you an idea of the best marketing strategy to attract new customers.
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Market research should begin with deep research into customer habits and industry trends. This will help you identify and solve the problems facing restaurant owners.
Ask yourself these questions:
Is it growing or declining? Which are the main causes?
Which restaurant concepts are in fashion and which are not?
What are the biggest challenges facing restaurateurs today?
Which is more successful: chains or independent restaurants?
How many people go to restaurants on average each year?
What are the peak and off-peak periods?
What length of time do customers typically take to eat lunch or dinner?
How much does an average table spend?
How much of the turnover is generated on-site or via takeout?
Which percentage of the turnover goes to food and beverages?
After you have mastered the industry of restaurant management, you can assess the potential for the location where you want to open your restaurant.
You should have access to various reports, such as the 2019 Deloitte report on UK casual dining markets or this website that provides statistics about restaurants in the US.
This is where the objective lies: to determine the market size and find the most promising areas.
You will want to ask yourself the following questions:
How big is the population in the area?
What demographic characteristics are there (age, gender, and employment status, disposable income, etc.)? What are the demographic characteristics (age, gender, employment status, disposable income, etc.)?
What are the most important features of the area that will affect your business? Is it near a pedestrian street, shopping area, office area, station, etc. ()
2. When Opening a Restaurant, It Is Important to Choose the Right Concept
After you have done your market research, you can now decide what kind of restaurant you want.
When deciding on your concept, think about the following:
You can open a traditional or vegan restaurant.
What type of cuisine would you like to serve?
What type of customers do you want to target?
You can choose whether you want to set high-end or affordable prices
How do you want your restaurant to feel?
Another option is to join a well-established chain of restaurants. This will allow you to be more efficient as the chain already has a concept. You will also have dedicated customers, but less autonomy.
Whatever the case may be, it is important to establish a distinctive identity for your restaurant so you stand out from other local restaurants.
3. Which Area Should You Open a Restaurant?
After you have made your decision on the type of restaurant that you want to open, it is time to think about where it will be located.
This is an important part of your project that will directly impact the success or failure of your business. It is important to pick a spot that attracts many people on foot and in cars.
This will allow you to be easily seen by anyone driving by or walking past. It is also important to ensure that the restaurant is easily accessible.
It’s a great idea to set up your business in an industrial or financial area. Customers who want a unique experience are best served by a location that has a beautiful view, such as a river or roof.
You may also be able to take over an existing restaurant. This will give you the opportunity to have a fully equipped kitchen and dining area, as well as dedicated clients.
4. Choosing Your Legal Structure
Our next guide will cover how to open a restaurant. It is crucial to choose the right legal structure for your restaurant.
How much is your business taxed?
Taxation at a personal level
In the event of bankruptcy, you will be responsible for paying the company’s creditors
5. Identify the Equipment and Personnel Required for Your Restaurant
After you’ve chosen the location, decided on the concept, and established the legal structure, it’s now time to start thinking about the equipment and people required to open the restaurant.
First, you’ll need to establish your premises in accordance with safety regulations. It is important to factor in the cost of equipment.
You will need to consider the cost of equipment, such as commercial convection ovens, refrigerators, and other kitchen utensils.
A restaurant’s success is dependent on its cuisine, but also its hospitality and atmosphere. This is why it is important to hire the right staff for the kitchen and the service department.
As with all businesses, opening a restaurant requires you to purchase insurance. Also, you need to hire a chartered accountant for payroll and accounting.
6. Fundraising Capital Required to Open a Restaurant
The final step to opening a restaurant is to get the financing you need to finance it.
Your location and size will determine the budget. You will need to explore all financing options to raise the money you need to start your business.
To build the company’s equity, it is a good idea to have the founder’s equity. This money is what you and your potential partners can contribute as share capital or a contribution towards a director loan (or shareholder loans).
Opening a restaurant is more difficult if you don’t have enough founders equity. These are just a few of the many ways you can get financing for your restaurant.
You can apply to banks for a professional loan to finance the rest of the project, including equipment and delivery vehicles. A crowdfunding campaign is also possible.
We hope this guide has helped you to better understand how to open your own restaurant.
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