Financial help for small businesses these days is manifested in any of a variety of ways. One of the most popular: restaurants. It’s rare to stumble upon a financing company that does not include restaurants in its list of supported businesses, and most small business loan firms have at least one glowing testimonial from a restaurant owner. It’s the reflection of an industry which—according to a 2014 report by the National Restaurant Association—comprises 10 percent of the overall U.S. workforce, owns 47 percent of the U.S. food dollar, and racked up $683.4 billion in sales. So, how can you start a restaurant of your own? Here are a few things to consider:
Always start with location, concept, and staff.
These are the big three when it comes to restaurants. The harsh reality is that as lucrative as the restaurant industry is, most establishments actually fail within the first year. And the root cause is usually traced to the lack of one of the essential elements. You should establish your restaurant at a place where it can be easily spotted and accessible. You should choose a food concept that is reflective of its location or the targeted demographic. And you should surround yourself with a chef and an army of employees that can execute such a concept to perfection.
Establish and stick with a décor.
This is also hugely important, since you should be aiming for a particular audience in mind. For instance, if you are going for a casual-dining establishment, you’d want to make sure that the prices are midrange, the atmosphere is comfortable and inviting, and the menus have a wide variety of food items. Family-style décor should accommodate a larger clientele—with muted tones, speedier service, and booster seats and high chairs for children.And if your restaurant is a sandwich shop, delicatessen, pizzeria or coffee house, make sure you provide the option of dining in or taking out.
Be an eager teacher.
Even if you hire the most seasoned cooks in the entire universe, chances are that you’d have to teach them to conform to the distinctive food concept of your restaurant. Less familiar dishes, particularly those branded in the U.S. as “ethnic,” are obvious candidates. But that also goes for more popular food items, which you might give your unique twist. So, you have to be prepared to give clear, concise instructions at all times—and enjoy doing so, too.
Don’t afraid to be formal with business operations.
Some restaurant owners prefer to be easy-going, falsely thinking that coming off as “corporate” can stifle the business. The truth is that one of the keys to starting a restaurant and making it thrive is ensuring that day-to-day activities flow as they are supposed to. From the cooking and cleaning to the accounting and customer service, a restaurant should have a well-oiled and fully functional organization system in place.
Never downplay how much working capital you need.
Restaurants can take a while to really get going. And expenses can add up and overwhelm you before you even know it; some restaurant owners close shop because their initial excitement gives way to the eventual realization that they were perhaps too excited. It is recommended that you have at least six to nine months of working capital when you start. That way, you are assured of reserve cash when the costs start piling up.