What to Consider Before Starting a Restaurant

Launching a new restaurant is no small feat, requiring careful consideration, planning and preparation. While opening a restaurant may seem like an exciting pursuit, there are many facets business owners must evaluate to set themselves up for longevity in this competitive industry.

With success dependent on multiple moving parts, restaurateurs need a strategic mindset well ahead of opening their doors. Let's examine the most important factors to weigh when starting a new restaurant.

Concept Development

The first major step is defining the restaurant concept. This includes determining the target market, theme, cuisine, and overall vision for the establishment. Owners must clearly identify what type of dining experience they aim to provide and for whom.

Developing a concept involves devising the brand identity, menu styles, interior design aesthetic and service approach. It's also important to establish a unique proposition that differentiates the business from competitors. A strong, memorable concept forms the foundation for all other planning elements.

Location Evaluation

Location plays a pivotal role in any foodservice venture's potential success or failure. Considerations include traffic patterns, neighbouring businesses, parking availability and target demographics within a certain radius. It's wise to analyse customer movement data and commercial real estate records to evaluate suitable areas.

It's also worth scouting popular neighbourhoods to dine and compare average leasing rates. For independent restaurants, high-street exposure can draw in casual patrons but street-corner spaces may drive uptake of delivery and collection orders. Destination eateries may rely on scenic settings.

Menu Engineering

With concept and locale understood, focus shifts to defining the menu. This requires careful costing of ingredients, test-cooking potential dishes and assessing what cuisines appeal to target patrons. Menu items must balance affordability with profit margins and wow-factor flavours to entice return business. Experimentation with different combinations is wise before officially launching menus.

Operational Logistics

A major part of pre-opening groundwork lies in operational logistics Planning requirements include kitchen layouts, equipment purchasing, hiring qualified staff and developing standard operating procedures (SOPs). Suppliers must be sourced for ingredients. Necessary licenses and permits must also be acquired from local authorities.

Preparing SOP manuals helps impart consistency by detailing processes staff should follow. This covers everything from food safety protocols totill operations, waste disposal routines and closing procedures. Training sessions in line with SOPs socialise new recruits with expectations.

Marketing Strategy

Developing a coherent marketing strategy remains crucial before opening. Consider partnering with an experienced marketing agency, (plugging ourselves here!), to gain deep insights for brand positioning and promotions. This stage dictates how you'll attract early patrons, drive positive reviews and sustain cashflows.

A multi-channel digital marketing strategy should be developed, addressing areas like search engine optimisation, social media activity, loyalty programs and email newsletters. Print collaterals such as posters and flyers add to ambient marketing and strengthen the brand message.

Financial Planning

Competition is fierce and costs are significant, so restaurant owners must approach financing strategically. Most require investments of ￡100,000 - ￡500,000 or more, aside from recurring operational expenses. Options include self-financing, bank loans, small business grants and crowdfunding.

Building flexibility into budgets accounts for unexpected overheads. Forecasting sales projections realistically rather than optimistically prevents cash flow complications. It's wise securing working capital to keep afloat for at least 6 months before profits roll in. Accounting software streamlines financial administration.

Choosing the right point of sale (POS) system from start also improves inventory management, food costing and reporting. Integrated options in one restaurant management software suite rationalise back-end operations.

Testing Operations

Performing test runs before the grand opening is invaluable. It identifies areas needing tweaks and enables staff to gain experience before real customers arrive. Soft openings keep expectations reasonable and allow teams to practice their roles. Conduct detailed debriefs after test runs to assess gaps requiring improvement.

The weekly newsletter Food & Beverage Weekly is created and distributed by all-in-one restaurant marketing consultancy, Monogic (Hong Kong & Singapore), to explore the exciting and ever-changing world of the food and beverage industry.