January 5, 2016

How to Start a Restaurant: 7 Things to Remember


How to start a restaurant? When it comes to running a successful restaurant there are many mistakes to be made. It’s a tough business, everyone knows this.

We’ve all heard the statistics before, but they are worth repeating. The fact is that 60 percent of restaurants go under in their first year and 80 percent won’t survive five years.

Here a few words of wisdom that any restaurant owner, past or present, would agree are good to know when starting your own restaurant.

how to start a restaurant

Success Isn’t Guaranteed

The restaurant industry isn’t for the weak of heart. It takes determination and passion. If you’re looking for fast cash, you won’t find it here. Becoming one of the few food-service operations that succeeds requires planning and hard work.

Ignoring these facts is the reason many restaurants fail within the first year. Don’t get into the restaurant business unless you have a true love for it because without devotion it’ll be hard to survive.

What’s Important When Deciding on How to Start a Restaurant

The pyramid of restaurant success is made up of your concept, chef and location. Don’t assume you can skate by without one of these three. If any of these elements are missing, your restaurant will come crumbling down.

Your concept should include the restaurant style (quick-service, midscale or upscale), your menu and pricing. It should be a well-developed idea that clearly explains the unique aspects of your restaurant. Your chef should be inspirational while also complementing your vision and strategy.

If the two are not aligned, it’s a recipe for disaster. As far as location, look for a space that offers a nice flow of retail traffic, affordable rent, and a layout that meets your kitchen and dining needs. When all three of these elements are secure and strong, your restaurant can come to life.

Never Skimp on Customer Service

When you’re first starting a restaurant, it’s normal to want to cut back on costs wherever possible. Being smart with your money is commendable but never at the expense of customers.

Maintaining value in your guests’ eyes is imperative. Always allot funds to enhance their time with you. Whether it’s valet parking or passing around appetizers when on a wait. Any little gesture that confirms their importance is money well spent.

how to start a restaurant

Structure Doesn’t Kill Concept

Flying by the seat of your pants is not a good strategy for starting a restaurant. The more systems and organizational methods you can implement, the smoother your business will run.

Many small business owners think that by enforcing structure they are selling out to corporate culture and killing the creativity behind their concept. In reality, the reason chains and large corporations succeed is because of the clear systems they have in place.

Organization relieves anxiety and stress so you can scramble less and spend more creative time enhancing your restaurant.

You’re Not Always Right

As a business owner, it’s important to be open-minded to the idea that others may know better than you.

Focus on your strengths and delegate your weaknesses to others. Simple tasks like payroll and data entry can be outsourced to a virtual assistant, while complex projects such as interior design and website development should be left to the professionals.

When you try to do it all, you set yourself up for failure. Be comfortable asking for help and accept that micromanaging only leads to exhaustion.

how to start a restaurant

Overestimate Funding Needs

Even if you’re sure you’ve considered every factor that could affect your finances, you’ll still need more money. Realistically you should have nine months of working capital to keep your business running.

In the first year, you’ll experience ups and down and unexpected expenses. Having enough funding to fall back on will get you through that hard first year while you build a loyal customer base and market your restaurant to the community.

Don’t Get Stuck in Your Ways

Change is good — and in the restaurant industry, it’s necessary. Be ready to let your idea evolve as you learn more, meet new people, and see your restaurant come to life.

If something isn’t working, adjust it. Try something new and see if that works better, especially when you’re still in the phase of figuring out how to start a restaurant.

Look into email marketing and ways that you can optimize your website with online ordering.


The article is a guest post by Tim Sunderland and our friends at NetWaiter.