Looking to get into the food business? Starting a small business, especially opening a restaurant, is no easy feat. It takes months (sometimes even years!) of planning and preparation — enough to intimidate even the most seasoned of entrepreneurs. Beyond hiring a top-flight chef and narrowing down your target market, there are plenty of other important considerations and legal requirements to take care of, too.
But fear not, because we’re here to help make that leap of faith a little less daunting. Here, we’ll give you some critical steps to accomplish on your glorious journey to feed your city the food that you love to make — and that people deserve to eat!
Of course, there’s a lot more that goes into restaurant planning than a three, six or even 50-step article can provide, but here are our 10 steps to opening a successful restaurant.
10 steps to opening a successful restaurant
All great things start with an idea, and your restaurant is no exception. Before you can start on even the most preliminary of steps, you first must have a vision — which, coincidentally, is the first step!
Step 1: Develop your restaurant vision
Having an idea about what your restaurant will look like will be a major help when it’s time to get to work. And we don’t just mean what type of food you plan to serve.
If you’re someone who has trouble visualizing things, it could be helpful to jot down some notes, sketch out a rough floor plan or ideate design elements that you wish to include in your finalized business. If you already have a well-developed idea, that’s great — head on to step two! But if you need some more time, that’s okay, too. Consider these items when dreaming up your perfect restaurant:
- Cuisine: This is probably one of the first things that aspiring restaurant owners have an idea of. That’s because you likely already have something that you love to cook, which is why you want to open a restaurant! Now, writing a menu is a very important and crucial aspect of restaurant ownership — as well as finding the right chef to help you cook it. (Menu writing deserves its own standalone step, so more on that later.) But, having an idea of the type of food you want to make is a great place to start when developing your vision!
- Design elements/theme: Next up — and arguably the most fun — is the design and theme of your restaurant. As a budding restaurateur, the way your space looks and feels is entirely up to you. What do you want your customers to feel when they sit down for some grub at your new restaurant? Is your dream restaurant high energy or low energy? And, how can you incorporate the cuisine into the theme for a well-rounded dining experience? Just a few things to think about when considering aesthetics.
- Service style: How will your restaurant run in relation to the food you are serving? Some of the most popular service styles in the industry are quick service (think fast food), casual, fast-casual and fine dining. Choosing something practical based on the type of food you serve can positively contribute to your customers overall dining experience.
- Location: Where would your business boom, or what kind of location best-suits your vision? Depending on your concept, you might consider a busy and bustling downtown, or a cozy and quiet establishment on the outskirts of a city — an important thing to consider when dreaming up your perfect restaurant.
Step 2: Create a restaurant business plan
Every business starts with an idea, but after conception, you need a solid business plan. You wouldn’t want to start off on the wrong foot by omitting this critical step.
A business plan is a written document that outlines the goals, methods of attainment and achievement time frames for your business. It not only helps you see the full-scope of what you’re about to take on as a new restaurateur, but also provides some clarity for if things start to feel overwhelming. That’s not all, though. Business plans offer a myriad of offer benefits, too, such as:
- Funding: With a well-crafted business plan to show investors, you’ll have a better chance of securing capital. Investors want to know that they’re money is being well-spent. A comprehensive outline will help them understand exactly how you plan to get your business up and running, while also showing the dedication you have to making it happen.
- Hiring: Having a business plan to show potential employees and managers will help them understand your vision. And when they get the picture, they’ll have a better idea about how you wish your restaurant to be run, and what your desired service style is. Bring people aboard by showing them a solid plan and make them as excited as you are about your new endeavor.
- Marketing: Business plans are a great start to your marketing strategy. They’ll help you nail down your target market and provide direction when it’s time to start advertising. You worked hard to make it this far in the process, so fill up that restaurant with hungry people.
These are just three fundamental benefits of having a strong business plan that will help ensure success when your doors finally open. They’ll also help you maintain that success as your business grows.
Step 3: Write a menu
While all of these steps are important, writing your menu is near the top of the list for a reason. The food you serve is quite literally what your restaurant is built on — besides all of your hard work that led up to you being able to offer such deliciousness to everyone who wants a taste, of course.
Whether or not you’re the head chef of your new restaurant, the menu writing process can be a little different. And, the type of menu you come up with will dictate all sorts of things about your establishment, besides just the food itself. We’re talking about things like what the back-of-house looks like in terms of appliances and equipment that you’ll need, the talent that your staff should have and the audience that you want to attract.
If you’re a chef and you already know exactly what you want to serve, that’s great — don’t forget to write it down in detail. However, if you need a helping hand, reaching out to a chef or other food industry professionals for assistance can be extremely beneficial in the menu curation process.
If you end up needing some advice, don’t be afraid to tweak your menu based on the professionals’ guidance. It could be what helps take your menu from good to great.
Step 4: Collect funding
You need money to start a business, but luckily, it isn’t just on you to come up with it. Lots of businesses still use tried and true methods of funding, like taking out a business line of credit or a bank loan to get their doors open as soon as possible.
However, there are more contemporary ways (and with less interest to worry about) to procure funding for your restaurant, too! Here are just a few examples of how to come up with the money to get your restaurant off the ground:
- Crowdfunding: While crowdfunding has been around for some time, it’s still the newest and one of the most popular options for entrepreneurs to gain funding today. Usually done through a crowdfunding platform like GoFundMe, the idea is that lots of people who believe in your vision contribute what they can (e.g., $5, $10 or $1,000). With enough people chipping in, you could have the capital you need to get things started.
- People you know: This method is kind of like crowdfunding, only on a much smaller and more intimate scale. Getting your friends and family to contribute to your endeavor can be a huge help. Oftentimes, your loved ones are your biggest fans, and they’ll be happy to help in whatever way they can.
- Investors: Piquing the interest of investors is a classic and effective way to secure funding for your business — but where do you find them? Some possibilities include within your existing network, at pitch events or incubator events.
- Grants: There are lots of grants available to startups of all kinds, including restaurants. And the great thing about grants is that they’re essentially free money — no paybacks or interest to worry about. Grants.gov is a great resource for finding grant opportunities in the US.
- Line of credit: A business line of credit works just like a credit card, meaning that you only pay interest on the amount of credit that you actually use — no matter what the limit of the credit line is.
- Loans: Bank loans are in a league of their own and are pretty well known for being hard to get and harder to pay off. But, if you’re left with no other option, or previous efforts came back fruitless, it’s another way to get those doors open.
Rest assured that there are lots of options out there for entrepreneurs to secure the funding they need to kick things off. And, restaurateurs maybe even have an advantage over other types of business, because people love good food and good food brings people together. Don’t be afraid to impress those investors with some samples!
Step 5: Choose a location
A key ingredient of any successful restaurant is a great location. Does your target market live within a few miles of your restaurant? If not, they may choose restaurants closer to home no matter how savory your food is. Once you’ve found the right neighborhood for your business, weigh the pros and cons of each space to determine which one is the best fit — both for you and your customers.
Next, consider your leasing or purchasing options for your chosen location. Rent costs add up quickly and vary relative to your exact location. Depending on where you are in the country, the state you’re operating in and even the city are all determining factors in your rent cost.
Sometimes the cost of rent gets overlooked in the startup process or isn’t paid the same amount of attention as other aspects of the business, but it’s incredibly important. Making certain rent and leasing choices could ultimately make or break your business, so it’s wise to consider all of your options before making a decision. Talk to a real estate agent or accountant to gain insightful information about your options.
Step 6: Implement your design
Now is the time that you get to bring your vision to life. While a lot of design elements are totally up to you as the owner, you’ll want to ensure that things like seating and high-traffic areas work well with the layout of your chosen location. Here are some key items to consider when designing the layout of the space:
- Entrance: The entrance to your restaurant should be welcoming, accessible and interesting.
- Seating capacity and arrangement: How many people can the building comfortably seat? Be sure not to include too many tables so as to not crowd the dining area and make it uncomfortable for patrons.
- Restrooms: Restrooms should be spacious, clean and separate from the dining area. Bathrooms contribute more to a customer’s overall experience than you think — so spend some time on them!
- Kitchen layout: The optimal layout of a kitchen will differ from restaurant to restaurant. The way a kitchen should be designed will depend on many factors, such as the size of the overall space and the service style.
Step 7: Hire front- and back-of-house staff
It’s tough to maintain a restaurant without the help of a talented team. Incredible front- and back-of-house staff are one of the major keys to your business’s success, so hiring the right people is important.
You have high standards for your dream restaurant, which should shine through in the staff that you choose to hire. During the hiring process, look for potential employees who have a good amount of customer service experience under their belt, or people who are eager and excited about the restaurant business — almost as much as you are! This will ensure that you onboard staff who will represent your establishment well.
Additionally, an accompanying training program can help to quickly get all front- and back-of-house staff members up to speed on customer service best practices. Consider offering professional development opportunities as a way to recruit employees eager to build a career in the restaurant industry.
Step 8: Market your restaurant
While word-of mouth is still a highly effective marketing tool — especially for restaurants — it shouldn’t be the only method you rely on to attract customers. While your food might do most of the talking, you should do everything you can to amplify its voice and reach as many new people as possible.
Before your grand opening, you should be thinking about your restaurant marketing strategy. Here are some great places to start:
- Buyer persona: HubSpot defines the buyer persona nicely: “A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.” When marketing, it’s important to create these personas so you can better segment, identify and connect with different types of buyers.
- Website: Accessible websites are essential for every type of business. When building your new website, be sure to include things like your menu, hours of operation and address. For bonus points, consider implementing a reservation booking system (if your service style calls for that), and even information about delivery options, like Grubhub, too! Nowadays, customers appreciate when everything can be done online without having to pick up the phone and make a call. Also, it has become increasingly important to optimize your website to present and operate well on mobile devices — over half of all internet traffic (58.3%) comes from a mobile device.
- Social media: Perhaps the greatest marketing tool today, social media’s value should not be understated. Sharing pictures of your food is a sure-fire way to get people’s mouths watering and talking. For a restaurant, you may want to focus on photo-centric applications, like Instagram. But there is incredible value to be uncovered on Facebook, Twitter and other apps, too. Most of those platforms have business-specific account options that give you access to important data, which you can use to refine your social media marketing strategy. Besides being a great way to market, social media is also a fantastic tool for sharing updates, news, service changes and behind-the-scenes content.
- Review sites: Perhaps the new age of word-of-mouth, review websites see millions of visitors annually. These websites are exactly how a lot of people discover new restaurants, so be sure to remind your customers to leave a shining review about their experience when your doors finally open. Statistically, people are more likely to leave a review if they have a less-than-awesome experience, so it’s worth it to remind them to share their thoughts — like on menus and receipts. Incentives can also be a great way to encourage customers to leave feedback, such as small discounts or free appetizers in exchange for a review on Yelp or Google.
Step 9: Increase revenue by adding online ordering and delivery options
Partnering with an online ordering provider, like GrubHub, will place your restaurant in front of an entirely new audience. Aside from offering increased revenue, the convenience of online ordering and delivery will enable your staff to spend less time on the phone and more time focusing on the customer experience.
Even still, offering online ordering and delivery offers customers:
- Contactless ordering: Something that we’ve all grown used to over the last handful of years, and something that’s been majorly appreciated by tons of customers.
- On-demand service: People have grown to expect fast and reliable service across many different industries, but especially in the restaurant business. So, partnering with a delivery service lets you offer that dependable, quick service to your customers easily.
Step 10: Scale as needed
After you’ve established yourself as a competitor in your local restaurant community, what’s next?
The possibilities are endless in terms of how you scale, from opening a second location to expanding on what you’ve already built by offering more services and increasing revenue streams — it’s really up to you. One thing to remember, though, is that you should scale at a reasonable pace based on how business is going. Avoid getting too far ahead to the point where you may risk loss or burnout.
Are you seeing high volumes of traffic that your original space is having a hard time accommodating? Consider a second location. In need of more staff to keep up with demand? Hire some additional team members. Do you currently only offer dinner service? Consider breakfast or lunch options.
What makes a restaurant successful?
There are lots of determining factors that will influence the fate of your restaurant. The good news is that, as the owner of a small business, a lot of them are within your control.
Some of the major keys to success in the restaurant business are:
- Putting emphasis on the customer experience: Happy customers are more likely to return and recommend you to friends and family. So, make sure that you’re doing all that you can to make their experience a great one. Take time to consider any negative feedback and use it to adjust along the way.
- Using data to your advantage: Data is a major tool across almost every industry these days, and restaurants are no exception. Customer data is valuable and can help you make changes based on customer preference and habits, so make sure you’re collecting and analyzing it.
- Ensuring that your menu is profitable: Curating a menu is one priority, but maintaining profitability is another. Consider your ingredients, your audience, your staff and your location and charge accordingly.
- Retaining great staff: A great roster of staff is the backbone of any good restaurant, so make it worth it for them to stick around.
Furthermore, engaging with entities like the National Restaurant Association, who offer training and development programs, resources and more can help make your restaurant — and your staff — superb.
Already have your brand new restaurant up and running? Congratulations! You’ve already completed the hardest part of starting a new small business, and you should be proud! When you’re ready to reach new customers and put your food in front of more people, Grubhub can help. Visit our website for pricing options and more information, and to sign up.