What to Consider Before Starting a Restaurant

What to consider before starting a restaurant

Before you launch your new restaurant, consider the following elements:

1. Restaurant name

Have you ever been chatting with a friend who said they went to a place with an intriguing name and then immediately asked them, “What’s that?” That’s the power of an attention-grabbing, memorable restaurant name. You want to come up with a word (or two or three) that both reflects your restaurant concept and lingers in someone’s mind.

The name you choose should stand out not just in conversation but also on listing websites. When someone is faced with a big list of options on Yelp or Google Maps, they’ll be drawn to the most interesting names. Make sure your restaurant is one of those.

2. Funding

A fully functional restaurant requires a location, a sizable staff, tons of kitchen equipment and plenty of other resources, all of which quickly become costly. Chances are, you don’t just have the money lying around to cover all of these expenses, so it’s essential to consider how you’ll fund your operations.

The first step in developing your restaurant’s concept is to create a business plan that outlines the entire journey you’ll take to open and operate the restaurant. Use your business plan to guide you through getting funding from potential investors to executing the projected financial plan.

3. Location

Wherever you decide to set up shop, be sure your restaurant is visible. It should be easy to spot from the street. Your parking lot is almost as important as your restaurant’s space; if a customer can’t find a place to park, you’ve lost business. Restaurants located off of a highway are often busy.

4. Marketing

Have a plan to get the word out about your new restaurant. Take advantage of social media marketing, and look into joining restaurant coalitions so you can work with other restaurateurs to cross-promote your businesses. Many cities promote local businesses, so join a chamber of commerce and participate in food festivals to get the word out.

A clean, simple website attracts more customers to your restaurant than a busy, complicated one. Avoid too many moving parts; many intricate features aren’t available on mobile platforms.

5. Licensing and permits

Before you can open your restaurant, you need to apply for the proper licenses and permits. There may be several inspections you must pass before you can begin operations. Reach out to your city government to find out what you need for your restaurant. You also must consider state and federal requirements, so do your homework long before you set a date for your grand opening.

6. Target customers

The type of customers you want to attract will affect the kind of restaurant you operate. It’s important to consider the income level, age and lifestyle of your ideal customer persona. For instance, do you want to attract customers that typically take their time while eating? Will your target audience be willing to travel to the restaurant? How much money will they be willing to pay for their meal? Is your target customer available in the early morning, late evening and/or at any time during the month?

Once you know the answers to these questions, you will have a clearer vision of the type of restaurant you want to own, as well as the menu, price range and decor.

7. Competition

Before you sign the lease on a restaurant, it is essential to know your competition. Be sure to visit as many of the restaurants in the area as possible. Visiting your competitors gives you a chance to identify their strengths and weaknesses, which can help you differentiate your offerings and atmosphere. Look for their customers’ preferences so you can incorporate them into your restaurant, and recognize their failures and successes to learn what and what not to do.

Conduct a competitive analysis annually. Competition changes and trends evolve, so you must adjust your business plans and marketing accordingly.