Opening a small restaurant is one of the most common and exciting business ventures that people opt to engage in, apart from their 8 to 5 job. In addition, aside from earning additional income, it can also serve as a good investment and a springboard for a much larger business venture in the future. Whether it’s a grand buffet type of restaurant or a quaint, small diner by the road, what’s important is the restaurant stays afloat and generates more income that what it cost. However, opening a small restaurant is no easy task.
In fact, it entails intricate planning, performing researches and feasibility studies, finding the exact type of location, and most of all, generating the needed finances to put it up. Considering today’s global economic crisis, it may be very difficult to raise the capital and resources to open up a new business like a restaurant. Another hurdle is maintaining the restaurant and keeping the loyalty of customers. With so many competitors and small food stores and stalls popping up, it can be hard to have a loyal customer base.
For example, if one opens a restaurant with chicken as its main product in the menu, consumers would think twice especially if there’s a KFC just around the corner. On the other hand, food is a basic human need so there is no doubt that people would constantly search for a place where they can satisfy their needs. Meaning to say, most of the time, food is the best option when deciding what type of business to start. However, as mentioned above, the challenge is to strengthen the restaurant and ensure that right from the start, it has the potential to grow and expand into a larger business.
In this regard, this paper will basically discuss the steps in starting a small restaurant. It will mainly tackle the planning stages, the implementation phase, the search for an ideal location, and the general guidelines in starting a small food chain. Researching & Planning the Theme Before anything else, it is necessary first to research about other small restaurants in the area. This basically involves conducting feasibility studies and pinpointing the competition’s strengths and weaknesses (eHow. com, 2009).
It is also a good idea to conduct a survey among local residents, asking them questions such as “what type of restaurant would you like to have in the area” and “what kind of food would you like it to serve,” among others. In addition, it is also imperative to visit the restaurants of competitors and take not of their customer service, their menu, and their prices. Moreover, before seeking the necessary funds to put up the small restaurant, it is also important to first decide on its concept. Although the decision solely lies with the owner, his choice will depend on a number of factors.
For example, some people would like to start a restaurant that serves the food they cook and in an atmosphere they are comfortable working in. Another option is to franchise (Mealey, 2009). Basically, franchising offers a number of advantages which include instant business, immediate name-recognition, support from the main office, and built-marketing, among others. However, the drawback is that the franchisee has no say in the decoration, concept, and menu of the restaurant because it is already fixed (Mealey, 2009).
He or she will also have to follow a set of rules that the mother company provides. The type of restaurant is also crucial to its success. One can choose among a fast food store, a pub, a cafe, and casual dining (Mealey, 2009). However, as mentioned above, it is crucial to first observe the competition. For example, if there are already several cafes, such as Starbucks and Seattle’s Best, in the area, then it would be unwise for one to establish a similar restaurant in the area. Finally, in the planning stage, it is also necessary to know the requirements in the city and the state.
These may include building permit, fire exit codes, and exhaust system regulations, among others (Essortment. com, 2009). Choosing a Location After planning and studying the feasibility of the restaurant, the next step is to choose a location. Basically, the restaurant’s location plays a crucial role in determining the success of the business. It can either make or break the restaurant and in this regard, it is important to consider a sever factors before choosing the location. First, one has to consider if there are actually people passing by that area who could see the restaurant (Essortment.
com, 2009). Having a restaurant in a place that can be visibly seen by a lot of pedestrians, commuters, and travelers can potentially attract good business. Another factor to consider is the parking space available. For example, certain people passing by may show interest in the restaurant but cannot find a space to park at. Finally, it is also helpful to lease a space especially if one is operating on a low budget. However, if one is leasing a property Financing & Capital Just like in any type of business, possibly the most important step is to seek out the necessary funding and capital.
In general, a lot of people acquire most of their capital from their savings or from banking loans. However, there is always no guarantee in applying for a loan so it is important for an entrepreneur to do his or her homework. In seeking funds for the restaurant, it is vital for one to have a sound and detailed business plan, which he or she will present to the bank during the interview. The business plan must outline exactly how the restaurant will operate and how it will be profitable (Mealey, 2009).
More specifically, it should contain the following: a summary or an overview of the plan; the company description which tells the location, name, and restaurant style; the market analysis which outlines the competition, marketing, and industry; the business operation; management & ownership, and the breakdown of the funding (Mealey, 2009). In addition, it is always important to maximize and obtain the most funds as possible because several restaurant consultants blame undercapitalization as a major cause of business failure (WikiHow. com, 2009). Staffing, Equipment, & Menu
Hiring the best staff is another vital factor to the restaurant’s success. An owner must make sure that the food is always complemented by exemplary customer service. It is also important to hire experienced people in crucial positions such as dining room manager, head cook or chef, and bartender, if applicable (Mealey, 2009). On the other hand, when shopping for one’s equipment in the restaurant, it is important to go for the best bargains as this maximizes the funds available. It is also important to consider the wants as opposed to the needs as this can help avoid purchasing unnecessary equipment (Mealey, 2009).
Furthermore, the menu is the backbone and the foundation of one’s restaurant and therefore, it is important that it keeps customers coming back (Mealey, 2009). As mentioned earlier, it is important to check the price and type of food being served by competitors before writing one’s menu. Marketing After all has been said and done, the next important step is to market and advertise. In most cases, a new restaurant is a much-anticipated event in relatively small areas or cities. Thus, it is the job of the owner to further build on this anticipation by putting lively banners that announce the restaurant’s opening (Essortment.
com, 2009). It is also helpful to tap the help of the media such as radio stations and small broadsheets, among others. Handing out fliers is also a good idea to promote the restaurant (Essortment. com, 2009). Finally, if the restaurant builds enough excitement, it should have a huge number of hungry customers eager to try out the food on opening day. During the first few months of the business, it is crucial to promote and offer discounts on two or three dishes that are favorites of the customers. References eHow. com. (2009). How to Open a Small Restaurant.
Retrieved March 19, 2009 from http://www. ehow. com/how_4674691_open-small-restaurant. html? ref=fuel&utm_source=yahoo&utm_medium=ssp&utm_campaign=yssp_art. Essortment. com. (2009). How to Open a Successful Restaurant. Retrieved March 19, 2009 from http://www. essortment. com/all/howtoopenrest_rrsk. htm. Mealey, L. (2009). Before You Open a Restaurant. About. com. Retrieved March 19, 2009 from http://restaurants. about. com/od/openingarestaurant/bb/opening_hub. htm. WikiHow. com. (2009). How to Open a Restaurant. Retrieved March 19, 2009 from http://www. wikihow. com/Open-a-Restaurant.