Opening Your Own Restaurant

Restaurant

Many cooks and chefs want to open their own restaurants. Perhaps you also share this dream. If so, be careful, because without proper planning, this dream can quickly turn into a nightmare. Restaurants often have exorbitant start-up costs, so you’ll need a lot of money just to get off the ground. In addition to the financial toll are the physical and emotional aspects of working extremely long hours for many months, or even years, while the restaurant struggles to turn a profit. On the other hand, owning a restaurant can bring you great rewards. You get to be your own boss and have the autonomy to express your creativity on your own terms. Chef Mary Cannataro, who is planning to open her own restaurant in Maui next year, has this advice:

First, work as hard as you can for as many places as you can. When you feel like you’ve learned enough or know as much as you can about a place, move on to another. Save lots of money. Have an excellent business plan⎯and have lots of confidence in yourself, or you’ll never succeed. Also, understand that with your own place you need to be willing to work 18−20 hour days sometimes, and you need to have management skills, too. Both front and back of the house knowledge is necessary, as well as some knowledge of janitorial and appliance repair. You’ll never be able to afford (at the beginning, anyway) to call someone to unplug a sink or fix something every time one little thing goes wrong.

If you would like to open your own restaurant some day, you can take some entrepreneurial courses at a local college or university to help you decide whether or not to go this route. Your small business instructors can help you weigh the pros and cons of your proposed venture. It can be a difficult decision to make because the failure rate of new restaurants is high. While no one knows exactly what the failure rate is, some sources claim that 80% of new restaurants fail within their first year. You can increase your chances of being one of the restaurants that succeed by conducting research, seeking expert advice, and creating a winning business plan. Here are several things to consider before opening a restaurant:

You can gain valuable information to help you make decisions on these key areas by conducting research. For example, look at the demographics of the locations you are considering. How dense is the population in a five-mile radius? What are typical income levels of people in the surrounding area? Find out as much as possible about your prospective customers to help you decide which type and price of cuisine to offer. Resources are available from the U.S. Census of Population that list demographic profiles, income levels, and types of housing in particular neighborhoods. You can purchase these lists from the U.S. Bureau of the Census-check your phone book for a branch office near you.

In addition, you can take a survey of the people in the neighborhood to see what type of restaurant they would like to frequent. Talk to other business owners in the area to get an idea of the level of traffic and to find out if business is seasonal or strong year-round. Contact a few real estate agents who specialize in commercial sales and ask them questions about each site you’re considering. Also, learn about the local zoning codes, ordinances, and licenses that are required. You can find out more about these regulations by contacting the local chamber of commerce or city zoning office. Another resource is the Small Business Administration (SBA). This organization provides free assistance with writing business plans, loan and financing guidelines, and free consulting through SCORE, the Service Corps of Retired Executives. Check your phone book for a chapter near you.

After you’ve completed significant research and assembled all the ingredients for success, you get to look forward to your grand opening. It could either be a hectic and busy few hours or an extremely slow eternity. This is where strong marketing and publicity skills come in to play. You need to find ways to draw people into your new restaurant. Consider the advertising budget carefully, and don’t be afraid to spend money on this key aspect of the business. If your opening night goes well, you’ll get to breathe a large sigh of relief before moving on. During the first few weeks of business, you’ll want to keep a close eye on food supplies. Are you running out of key ingredients on a regular basis, or are you throwing out spoiled food because you ordered too much of one thing? These are key areas in which you can curb costs and improve your bottom line.

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