The restaurant business is a very serious business and shouldn’t be taken lightly. Before opening a restaurant, a restaurant contractor has to look into various areas and plan the venture accordingly.
Due consideration on the points mentioned below is of utmost importance in running the restaurant successfully. Taking these things into account will allow your dream project to achieve the great success it deserves.
Arranging Finances Should Be Your Top Priority:
In running any successful business, finances are one of the top areas of consideration, and running a restaurant business is no exception.
Before opening a restaurant, one should have a sufficient amount of finances, as the landlord who is leasing the building needs to know how serious you are about the venture, and that you don’t pose a financial risk.
If you are securing a loan for the business, potential investors will gauge your worth from the amount of finances you are initially investing in the business. Having sufficient finances at the time of opening the restaurant will allow you to take greater risks and to plan innovative methods to run the restaurant successfully.
Check Your Financial Projections with Restaurant Occupancy: There is no denying that location is one of the greatest factors in running a successful restaurant. The better the location, the better the chance of the restaurant being a successful venture. We understand that better location does not come cheap, so before opening a restaurant, one should ensure that when adding all costs, there is a minimum profit of about 10-percent on the business.
Arrange for Insurance: Like any other business, restaurant businesses also carry a chance of accidents. Chances are that your chef or waiter may slip, the kitchen may have a fire, or burglars might steal your precious decora. You may have to compensate your employee for any accidents that take place during their time at work. It is better to have a sufficient amount of insurance for your restaurant, as well as the employees working there. This will relieve the restaurant manager from unnecessary worry, and he can concentrate on the many other important areas of restaurant management.
Arrange for Permits and Licenses: Every restaurant needs licenses and permits from the authorities to run the restaurant regardless of the location. There may not be specific permits like music permit or fryers permits, but business permits, fire department clearances, liquor permits and sales tax permits and licenses are very necessary. Always arrange these permits before your restaurant is open for business.
Budget for Renovation: It is very rare that when purchasing a running restaurant, there is little to no need for renovation. Chances are a new coat of paint on the walls is required or a change of furniture upholstery is needed, or perhaps new fixtures in the bar. It is also important to renovate the front office as per the theme of the restaurant. Be sure to keep a sufficient contingency budget for these renovations.
Budget for Kitchen Renovations: The kitchen is an important area of cost outlay. The maximum amount of budget in opening a restaurant is incurred on kitchen and its fittings. Here you can plan financing options in purchasing kitchen appliances, as spending enough on this area will leave you with little finances for other restaurant areas.
Always Follow Rules: When you pay your restaurant employees, you should always follows the labor rules. Generally, tipped employees are paid less than minimum wage, but non-tipped employees are to be paid at least minimum wages as per the labor laws. One thing to be kept in mind is that staff payments are part of your primary area of expenditures.
Form a Policy to Source Your Ingredients and Inventory: As a restaurant owner, it is your duty to ensure that you have made sufficient arrangements for all your ingredients and other necessary supplies before opening a restaurant. Only open the restaurant to the public when your kitchen is fully stocked with all the ingredients and necessary supplies. Also arrange for furniture, POS systems, music system, internet routers, and computer systems before opening the restaurant.
Follow the Business Practices: Always follow the business practices that are prevalent in the restaurant business. Don’t rely on word of mouth to generate a buzz for sustaining restaurant business. Consider hiring a reputable PR firm for a few months to generate business leads, as these agencies have contacts with local press to provide your restaurant all the important coverage in the area of your restaurant business.
Leave Enough Leftover Money to Cover Day-to-Day Expenses: You should have enough working capital to meet day-to-day business expenses. These resources are needed to cover the cost of employee wages, food costs, and to meet regular expenses. As a rule of thumb, there should be a budget for at least 3 to 6 months for this purpose until the restaurant business is profitable and running.
If you are in the restaurant business or opening a restaurant in Boston or greater Boston area then we at Little Gekco technology consultants are here to provide you full consultation in opening the restaurant, arranging various restaurant needs like POS system, Computers, Internet routers, music systems and acoustic needs. We have a team of experts who are abreast with the latest technology in every sphere of restaurant management, from the beginning to the last stage, along with employees training.