Opening your own restaurant is exciting! And perhaps it’s also a little daunting. Before you move forward with your new business venture you’ll want to do some legwork so you can minimize potential mistakes you might make. Preparation is key in the restaurant industry and without proper planning you could find yourself scrambling for funds and customers early on. Consider these five tasks before embarking on a new restaurant.
1. Assess your personality and lifestyle.
Starting a business that conflicts with your nature and schedule is either going to reflect poorly on your personal life, or your restaurant. Before deciding on a food concept and bringing your idea to life, take an honest look at what personality type you have and your lifestyle. For example, if you’re a morning person that likes to be in bed by nine, you’re not going to fair well in a late night bar environment. A bakery or coffee shop would better suit you, as you’d be required to rise at the crack of dawn with your customers rather than saunter home after 2 a.m.
2. Draft a partnership agreement.
Just like our personal relationships, a business relationship can quickly go sour. When starting a restaurant with a partner or team of investors, it’s important that you have a formal partnership agreement in writing. This contract should clearly state each individual’s roles and responsibilities, and what would be the exit plan or buyout should someone choose to leave later on. Foregoing this document can lead to more conflict, financial debates and even lawsuits. No matter if you’re going into business with a family member or friend, a partnership agreement is a must before any real maneuvers are made.
3. Research your location.
When choosing a location for a restaurant, owners sometimes focus on traditional features like the cost and layout and fail to properly research the property. It’s in your best interest to learn as much about your prospective location as possible. Who were the previous renters? Does the space have a history of failed businesses? If a spot has a long track record of restaurants going out of business, it’d be naïve to think your restaurant would be any different. In addition to doing a background check, a little investigation into the future can eliminate surprises down the road. Check in with the city’s planning and zoning department and inquire about any future construction or development scheduled in the centralized area.
4. Create a marketing strategy.
Don’t start writing your business plan before having spent some time thinking about marketing. It’s something you will want to include in detail, and can be a lifeline for a new restaurant. The first year can be rough — customers will come and go and unexpected expenses can eat up funding faster than you thought. Your marketing strategy should include different methods, such as how to reach out to local businesses and your approach for social media, so that you can obtain and retain a loyal customer base that will help get your business off the ground.
5. Tap into local and government resources for small businesses.
If this is your first restaurant, you’re probably unaware of the assistance available to help first time business owners. Your local city hall should be able to educate you on registration procedures and point you in the direction of the city’s building department. From there you will be instructed on permitting procedures and restrictive ordinances that will strengthen your knowledge on securing a restaurant location and making any renovations.
For more generalized procurement information, the U.S. Small Business Administration is a helpful resource that can provide you with facts on how to start a restaurant, applying for grants and loans, and different programs available to entrepreneurs. Tap into any free education available and learn what red tape you’ll face before you finalize any plans.