When starting a business, you’ll want to stick to the most basic necessities: water, food, shelter, and clothing. The food service industry, in particular, has gained quite a strong momentum and is expected to continue its growth at a rate of 10.1 percent annually.
But while the industry is booming, launching a restaurant is no piece of cake. In fact, there’s no guarantee that your business will automatically bring you wealth during the first year — unless, of course, you do it right by working hard and completing the most crucial things needed to start this kind of business.
Although many restaurants fail during their first year, you still have the chance to avoid this with proper planning. To help you get started, below is a list of five essential things you need to start your own restaurant:
A Sellable Concept and Brand
Having a concept and brand is crucial when you want to launch your own restaurant.
The concept serves as the “theme” of your restaurant. This would essentially dictate what your establishment would look like, the kind of food you will serve, the location, the type of restaurant management system you need, and basically everything else.
The brand, on the other hand, is the intangible force that will drive your restaurant to success. It is comprised of the vision, personality, and the identity you want your restaurant to have.
A Profitable Menu
What good is having a good concept and brand if you don’t have the right menu to match? In launching a food service business, it is imperative that you come up with a list of profitable food items and beverages.
While the menu items may change over time, it goes without saying that you still need to have some basic food items in it – much like staples, if you may.
Aside from your own food expertise, you’ll also need to consider the type of crowd you wish to cater to, the equipment you need to use, and the skilled staff you will hire.
You should also remember that there’s no single type of food service that will have a universal appeal. This means that you shouldn’t try to please everyone and expect to succeed. Instead, focus on a specific portion of the population – your target market – and invest your ideas, money, time, and effort into tickling their taste buds.
A Well-Thought-Out Business Plan
As with any other business, a food service company should have a well-thought-out business plan. This will serve as an outline of your restaurant venture – from the financial aspects to the specifics including marketing, supplies, and customer service. It should also include a possible exit strategy should you find your restaurant sinking earlier than you expected.
You can also use your business plan to present your business idea to potential investors. This plan can be presented to banks and other lending companies should you choose to apply for business loans. In addition, it can help you see the feasibility of the business and the tools you need to succeed.
Like the business plan, no venture would be able to thrive without sufficient working capital. To determine how much you need to launch a restaurant, you should compute for the following:
- The cost of applying for permits and licenses
- Labor expenses
- Operational costs such as rent, supplies, utilities, and other day-to-day expenses
Come up with a budget that will cover a minimum of one year of operations. From there, determine how much money you already have to help you decide whether you need to apply for a loan or seek out investors for your business.
An Accessible and Marketable Location
Last, but definitely not the least, is the restaurant location.
When choosing a place to build your food service business in, you need to consider how much traffic it gets, be it by foot, private vehicles, or public transport. You should also look at places with convenient parking and close proximity to other establishments like offices, malls, schools, and others. Revisiting your chosen target market is also a good way to check whether it matches the demographics found in the potential site of your restaurant.
Also, don’t forget to pick a site with competitors nearby to help with marketing your business, but don’t come so close that your patrons will be tempted to switch.
Launching a food service business requires thorough planning and research. While there are no guarantees when starting a business, you can certainly ensure that you get off to a good start by knowing all the essential things you need for a successful launch.
Ahmad Alzaini is the co-founder and CEO of Foodics, a fast-growing foodtech startup. A businessman by nature, Alzaini is an app aficionado, developing businesses in Saudi Arabia within several industries. Today, Foodics has extended to new markets across the MENA region, processing over 1 billion transactions, and offering the latest technology in POS and restaurant management.