What Should Aspiring Restaurant Owners Know Before Starting Up?
Restaurant ownership is dream for many. Even if you don’t have a background in cooking or catering, the idea of being able to share the gift of great food is something that you might find irresistible, especially if there’s an element of job satisfaction missing from your existing career.
As you might expect, setting up a restaurant isn’t easy. It takes time, dedication, and the maintenance of relentlessly high standards. And even if you know what you’re doing, there’s a risk of failure! Let’s try to manage your expectations, and let you know exactly what to expect from a career in the restaurant trade.
What are the start-up costs of a new restaurant?
Most of your initial outlay is going to go onto your equipment and décor. To cook quality food, you’ll need a kitchen that’s kitted out with the appropriate machinery. That doesn’t just mean the equipment you’ll be cooking with, but the cleaning apparatus, too. You can save here by looking at what you really need, and by examining the second-hand options. The failure of other restaurants might be something that you can capitalise on.
Similarly, you’re going to be buying lots of crockery and cutlery. You’ll need to get more of this than you need, as shopping for like-for-like replacements further down the line can be difficult. If you don’t have the facilities to process the volume of trade you’ll be getting through, then you might end up literally running out of clean dishes.
Another start-up cost is marketing. For your restaurant to hit the ground running, you’ll need to spread the word prior to the grand opening. Putting something through a letterbox is a great way to target everyone in the vicinity, but it can be more expensive than online avenues. For best results, you’ll need to go omni-channel. The marketing budget is often slashed when businesses run into cash flow problems – but this can often be a false economy. After all, your restaurant isn’t going to be successful if people don’t know it’s there.
While not technically a start-up cost, the food itself can represent a cost that’s effectively decided at the outset when you decide upon your menu. Shop around for vendors and choose expensive ingredients only when they make an appreciable difference to the dish. There’s no point buying in guanciale over pancetta if it’s going to slash your margins to close to zero.
How will you find the funding?
The capital costs of starting a restaurant can be significant. Putting together a cohesive and clear business plan will help you to attract investment, and identify potential obstacles that might be looming on the horizon.
Cash-flow problems can be disastrous in the restaurant trade. If there isn’t enough liquidity on hand to pay your staff and keep the lights on, then things can deteriorate pretty rapidly. The right financing will ensure that you’re comfortably able to keep the business running day-to-day. Once this stress is dealt with, you’ll be able to focus on making a success of your restaurant!