You’ve always had a fondness for food and decided it’s now time to open your own restaurant. And as exciting as the prospect is of being able to share your passion with others, there’s quite a few logistics you need to follow. Opening a restaurant requires more than raising enough capital. It’s also important to know how to handle some of the most common mistakes new restaurant owners make.
Choose The Right Niche
Even if you graduated from a top-tier cooking school, nothing really prepares you for restaurant ownership. Many lessons learned simply from experiencing them. The first mistake many restaurateurs make is not choosing the right niche. There needs to be a demand for what you’re serving in your desired location. For example, you may love preparing French cuisine but the demand for it really isn’t that high. If you choose to open a French restaurant, you might get some business initially, but it might not be sustainable. Perform market research and determine which type of restaurant would cater to consumer needs and your interests as well. There might be a way to blend the two without having to sacrifice what you love doing.
Not Writing a Business Plan
Think about your business plan as if it’s a cherished family recipe. Just like a recipe needs all of the ingredients to taste delicious, your business plan needs to cover all of the important what-ifs and logistics of opening a restaurant. It should include your value proposition, specifically why you’re opening and what you want to accomplish, the location, the type of cuisine and most importantly, the financials. You also need to think about possible supply chain issues and how you’ll handle those should they occur. For instance, if you’ll need deliveries of fresh ingredients delivered every day, how will you endure that your fleet remains HOS compliant and avoid violations? Keeping your fleet compliant helps to lower costs and keeps your drivers safe on the road as well.
Apply for Licenses and Permits
Not securing appropriate licenses and permits is probably the fastest way to go out of business. In addition to proper health department permits, you also need to obtain licenses from the FDA and a liquor license, if applicable. You’ll also need to think about other types of coverage you need to protect your and your employees. These coverages include liability insurance, fire and flood coverage, property insurance and disability. There are common myths about hiring attorneys that might steer you away from seeking one out for these specific purposes but in many cases a professional advantage can help you avoid costly oversights or missteps.
Not Investing in High-Quality Equipment
Another common mistake when opening a restaurant is not investing in high-quality equipment. While it might be tempting to cut costs by purchasing cheaper options, this can lead to inefficiencies and higher expenses down the line. For instance, opting for a low-grade freezer may cause food to spoil quicker, leading to wasted ingredients and extra costs. Instead, consider investing in durable, reliable equipment like a glass top chest freezer, which can provide better visibility of your inventory and ensure your ingredients remain fresh. Quality equipment is essential for maintaining the overall efficiency and longevity of your restaurant operations.
Management software
Once you’ve established the foundation of your restaurant, it’s important to consider how operational and restaurant management tools can help support and streamline your business. For example, if you decide to expand your venture into a food truck, investing in a reliable food truck POS system is key. A well-designed POS system will help manage orders, process payments efficiently, and track inventory in real-time, making day-to-day operations smoother. It ensures that even in a mobile setting, you maintain the same level of professionalism and organization as a traditional restaurant.
Registering Your Business
You also need to register your restaurant. There are several ways you can go about it, so it’s important to understand which is best. As a sole proprietor, you’re responsible for everything from A to Z. This entity is suitable you’re only opening a small food truck and will work alone. However, mishaps can still occur, so choosing to register as an LLC might be the better choice. As an LLC, your business assumes all liability. If you’re planning on going into business with someone else, you can register as a partnership. Partnerships can be registered as general, limited or as a joint venture.
Comments are closed.