Starting your own restaurant may look easy at first glance, but this is one industry that never sleeps. Even with a team of managers, as the owner you are ultimately accountable for inventory, payroll, marketing, repairs, banquet booking, unique recipes and everything else in between.
The first decision you should make is your restaurant’s location. Securing your property should be done through a commercial real estate agent who has access to restaurant facilities and permit instructions for building conversions. Not all commercial property can be licensed for food and beverage use, as the water and electrical supplies must meet food service requirements. In addition, there must be ample parking for your maximum seating capacity. Foot traffic is also important, but parking is essential.
Choosing a name is key to represent the type of food or service you will be offering. The name should interlock with a visual image of your restaurant and be easy to spell for customers looking you up online. Words that have multiple spellings may cost you some business. So, keep it simple and directly to the point.
Marketing is essential to catch the interest of potential customers, especially in your first year of operation. Have a marketing budget set aside for 6 to 12 months to build your customer base. Local cable spots are excellent for brand recognition and most companies offer complete packages with scripting for a competitive price. Mailings are another source for advertising impressions, but don’t rush into mass mailings. Although they cost much less than television, mailings are less fruitful unless you target a specific group with discounts, such as a local business park that may bring you a large lunch clientele.
Your start up capital will be used mainly for industrial-sized kitchen fittings, three months of payroll, food costs, employees’ benefits, and insurance. Liability insurance coverage must extent to your customers with a premium package to cover slip and fall and any other predicament that may generate a lawsuit.
For larger restaurant operations with the possibility of an increased financial return, you may want to seek a venture capitalist to cover most of the start up costs. Try VFinance for a flexible financing plan for the sole proprietor or partnership business. If you prefer to retain your profits and wish to finance on your own, Velocity Commercial has options for commercial lending, many of which require minimal qualifications. You can expect the interest rate to be higher than your bank, but if you need funding now Velocity is a tried and true provider.