Unsure about how to launch a food business? With our helpful 8-step guide, learn what to take into account and how to make it happen.
Have you been thinking of opening a restaurant but are unsure where to begin? As it happens, the moment may actually be ideal for making the leap. According to research, the food service sector is expanding rapidly and is expected to reach $4.2 trillion with a 3.6% CAGR annually by 2024.
But launching your own food and beverage company might be intimidating, especially given the dismal startup climate. According to research, up to 90% of new restaurants fail. 10% don’t, which is a blessing.
We’ve put together an 8-step beginner’s guide with insider recommendations to give you the best chance of success as a result to assist you in getting started.
1. Create an effective business plan
Doing thorough research is the first thing you should do before making any investments. Spend a few weeks (or even months) learning more about the overall foodservice industry, your target market, the newest trends, and your competitors before beginning to write a business plan for your investors. Consider it an investigation of the four Cs: customer, consumer, channel, and context.
To do this, you should:
o Identify your target audience: Which demographics-baby boomers, gen X, gen Z, empty nesters, and seniors-is your new company targeting? Once you’ve identified your target market, be sure to comprehend their purchasing behaviour, including what they purchase, why they buy it, where they buy it, and what drives them. This will assist you in developing a pertinent, targeted offering.
o Specify your USP. Look for the qualities that make you unique among the crowd. Look at what your direct (and indirect) competitors are doing, then identify how you vary from them. It doesn’t have to be radical, but it must be pertinent in this case. For instance, if you want to attract young families, having a kid-friendly restaurant with wholesome kids’ meals may be enough to put you ahead of the competition.
o Identify your restaurant’s style: Are you planning to create a full-service, quick-service, fast-casual, bakery, or coffee shop? Choose a channel that best meets your needs as an individual and your desired work schedule because each of these channels involves a different strategy, operational schedule, and investment.
o Choose your menu item or food type: Early on in the planning process, give your menu and the food you’ll want to serve serious consideration. Discover the most recent menu trends, especially for your target market, and adjust your menu accordingly. Vegetarian and vegan diets, allergy- and gluten-free menu items, and buying local produce are some of the biggest trends right now.
o Establish your brand: Your brand, which includes everything from your logo and graphics to the layout of your menu, the music you choose, and even the attire of your personnel, expresses who you are as a company and what you stand for. It establishes the atmosphere for your business and informs clients of what to anticipate. Consider carefully your desired identity and how you wish to present yourself.
Go out into the world and test your business idea once it is in place. Ask some of the people who make up your target market about their opinions and perceptions. This might be as straightforward as randomly selecting a few people from the street to a comprehensive market research study.
2. Obtain finance.
Your funds need to be organised now. However, not everyone who aspires to open a restaurant has the necessary personal resources. In actuality, the majority don’t.
Fortunately, there are a variety of different ways to raise money for your new business:
- Obtain a business loan
- Rely on family and friends
- Find external investors or a partner.
- Utilise crowdsourcing
- Obtain government assistance
Just keep in mind that it can be years before you start seeing a profit and that money will be limited at first. Consider starting modest (you can always expand) and pick your company partners carefully since they will be with you for a long time.
3. Select your area
You’ve heard the phrase “location, location, location” before. It seems that’s not always the case, though. Your choice of location for your business will depend on a variety of things, and you don’t necessarily need to be in the trendiest new retail area unless you primarily rely on foot traffic.
These are some things you should think about:
• What can you afford to pay on rent in light of your sales and profit projections?
• Potential consumers’ ease of access: How do your patrons arrive at your restaurant-by foot, via automobile, or by public transportation?
• Restrictive laws: Some communities have tight noise bylaws or schedule limitations for produce deliveries from your suppliers.
• The proximity of competing businesses can effect your traffic, so consider what’s going on in the area and how it might affect your business.
• foreseeable future plans: Think about how the neighbourhood will appear in two, five, ten years, and whether any significant construction projects are already under way that might transform the surrounding area.
4. Plan the arrangement of your room.
Once you select a location, you can begin planning the layout and style of your area.
Naturally, this will vary on the kind of business you run, but generally speaking, restaurants devote 45-60% of their space to the dining area, around 35%
to the kitchen, and the remaining space to storage and offices.
Make sure there is a seamless transition between the kitchen and eating spaces by carefully considering their layout. Make sure your chefs have adequate room to serve, garnish, and decorate their meals. Prep space is also essential.
And maybe most importantly, don’t skimp on your dining space. Finding the right atmosphere and decor to make your customers feel welcome is essential to success because this is the stage of the show, literally where all of the magic happens.
5. Pick your vendors.
You’ll work with a variety of suppliers as a restaurant, including those who provide furniture, POS systems, bar equipment, kitchen appliances, and, of course, food. Make a wish list, consider your short- and long-term spending, and start looking for partners. However, keep in mind that while you don’t want to skimp on quality, using overpriced suppliers will reduce your margins and ruin your company. So be sure to bargain vigorously.
But how do you even begin? Try visiting wholesalers, your neighbourhood farmer’s market, F&B conventions, asking other restaurant owners for advice, or just conducting a quick Google search.
You’ll be looking for a dependable supplier with a solid history of delivering high-quality products and a roster of fruitful collaborations. Make careful to inquire about the delivery dates and food safety management procedures of food providers. Also, buy locally because they frequently have fresher ingredients.
6. Obtain licencing and authorizations
Every nation, county, and city has its own set of regulations. To ensure that you follow all local health & safety laws and food regulations, check with your local regulatory authority and think about hiring legal advice. Just keep in mind that getting some licences might take months, so make sure to start this procedure well in advance of opening day.
7. Commence hiring new personnel.
Consider first the type of workers your business will require. This could involve HR managers, purchasing specialists, accountants, marketing & sales managers, chefs & sommeliers, waiters & hosts, bartenders, cleaning & dishwashing crew, and so on, depending on the size of your restaurant. For each task, make sure to hire enough people, and prepare ahead for shift planning and backups in case of illnesses or vacations.
Look for applicants who are effective, quick on their feet, and able to multitask who have the required experience and a strong track record. All of your team should be able to perform well under pressure, and anyone who interacts with customers should have excellent people skills.
And you can never be too careful when it comes to employing workers, so take your time. Verify their references, perform many in-person interviews, and run background checks.
8. Promote your company
You should conduct some promotion before opening your business to let the neighbourhood know there’s a new restaurant on the block.
While word of mouth is still the finest form of advertising, here are some more strategies you might want to think about using to publicise your new business:
• Create a fantastic website, making sure it is simple to use and contains all the necessary details, such as your hours of operation, menu, a booking engine, and whether or how you accommodate special requests.
• Social media usage Create accounts on Facebook, Twitter, Linkedin, and Instagram and publish pertinent information and high-quality images of your business and the preparations for opening day on each of these platforms.
• Place an advertisement in the neighbourhood paper (and online news source)
• Create a buzz about your restaurant in your neighbourhood by holding a soft opening. This is not only a terrific practise run before the big event. Consider holding a soft opening for family and friends first, then one for neighbourhood companies and partners. Keep the guest list limited.
• Offer specials to new customers, such as a free drink or dessert for the first 10, 50, or 100 patrons; this will help you become known for your friendliness and generosity. Who doesn’t enjoy free goods, after all?
We’ll leave you with one more piece of advice for success: work hard, never give up, and be willing to risk it all. Starting a new business will be difficult and perhaps uphill, but in the end, nothing is sweeter than success.