How to start your restaurant business: Beginner’s Guide?


Last Updated on January 17, 2024 by Umer Malik

Starting your own restaurant business can be a very exciting prospect. As the owner of a restaurant, you have a lot of responsibilities, such as training new staff, preparing a delicious menu, having an online ordering system, setting up the restaurant, and so much more.

But if you’re a beginner, the business aspect of it may seem overwhelming in the beginning. Managing finances to marketing your brand properly- all of this can be very tricky.

But Starting your own restaurant business can be a very exciting prospect, if you really want to start your restaurant business, here is a beginner’s guide. that shall help you in finding some clarity.

1. Deciding on the concept

The first thing to do while thinking of your business is to decide its concept. The Average Price per Customer (APC) will give you a fair idea of how much a customer will spend while eating. This will help you to plan your budget accordingly.

Once this idea has been solidified, the next thing to think about is the menu or theme of the restaurant. While you can have a restaurant without a particular theme, the themed ones tend to be more popular nowadays.

The interiors and the menu need to be in sync with your theme. For example, if you plan on serving only seafood, the interiors can be bluish with white and other colors as a contrast.

2. Investment for funding

After planning the preliminary things, it’s time for your funding and investments. Here are some ways to raise money to open your restaurant:

Self-funding: If you have enough money in your account, then voila! You can easily open a restaurant of your choice and liking as soon as possible. It is a good idea to have partners while opening a restaurant because it reduces the risks of investment.

Loans: Securing a loan is a popular method of raising money but it also has its own cons. For example, most banks ask for collateral or for someone who can underwrite the loans.

Angel funding: This can be slightly tricky since other investors don’t easily spend money on a beginner’s restaurant business. But if you can convince them enough, then funding from angel investors is a great option. Present a pitch highlighting the potential and growth of your business and you’ll be good to go.

3. Evaluation of the costs

When it comes to a restaurant, there are various cost factors to keep in mind. Some of these costs have been given below:

Food costs: This refers to the cost of raw materials you’ll need to buy for the kitchen. It should ideally be around 30% of the menu price.

Labor costs: This is the second most important cost after food costs. This refers to the manpower you will need to run the restaurant smoothly, such as kitchen staff, waiters, cleaners, etc.

Overhead costs: These costs are neither related to food, nor labor. They cover all other types of costs such as rent, interiors of the restaurant, crockery and cutlery, license, and marketing among others.

4. Location

The location of your restaurant is also an important factor while opening it. If it’s located in a place easily accessible by people, the success of your restaurant will be tenfold.

For example, a fast-food restaurant near a college has much more success than if it would have been located elsewhere. Also, keep in mind to study and observe your competitors in that locality, if any.

Take into account the cuisine they offer, the type of dining they provide, and the cost of eating there. It will aid you in mapping out your business strategies easily.

5. License

No restaurant can be run properly without a proper license from the government. The cost of obtaining such a license varies, depending on your venture.

But remember to apply early, as it will save both time and money. Also, get your registration number and make sure all your necessary documents are up-to-date so that you are not faced with any hassle while running your business.

One last thing to remember here is to follow the hygiene protocols laid down by the authorities in your country and maintain cleanliness and food standards throughout.

Over to you… Did you know that in India, the restaurant market is expected to reach INR 5.99 lakh crores by 2022-23? Needless to say, opening a restaurant can be a wonderful choice of career, and if you follow these rules, your dream restaurant will be popular in no time!

Apart from this, if you are interested to know more about Desserts you can serve in your restaurant then visit our Business category.