Independent Operators

How to launch a restaurant: An 11-step guide (part 1)

Many food truck operators are taking the big step of launching a brick-and-mortar restaurant. The key to ensuring a smooth expansion is knowing as much as possible before undertaking such a big business step. Here is the first part of an 11-step guide that can help you get start on the best footing possible.

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November 29, 2021 by Richard Traylor — Writer, WebstaurantStore

Owning and operating a restaurant is a dream job for many aspiring food truck operators. It's a dream that may have been put on hold as the pandemic forced restaurants to halt indoor dining or even close their doors permanently.

Here is an 11-step restaurant startup checklist that can help food truck operators expand into the brick-and-mortar restaurant realm.

Where to begin

Starting a restaurant requires some careful planning and is a more manageable feat when broken down into steps. Here are the first five. The remaining six will be presented in part two of this feature next week.

1. Choose a restaurant concept and brand
If you've been dreaming of opening your own restaurant, you've probably thought of just expanding your food truck offerings. But there is an opportunity to create a new restaurant concept. Your concept should include the type of restaurant you want to open, the style of cuisine you'll serve, and the service style you'll use. The interior of your restaurant should also be in line with your concept. Here are some examples of restaurant concepts to spark your creativity:

A ghost kitchen concept that serves vegan comfort food for delivery only.
A fast casual restaurant that specializes in build-your-own ramen bowls.
A fine dining restaurant with a traditional French menu.
Your restaurant brand is more specific and can be thought of as the way you choose to communicate your mission and identity to the public. Your restaurant name, logo, menu design, and merchandise should all present a cohesive image of your brand. The advertising channels you use should also rely heavily on your brand identity to influence the style and method.
If you already have a location in mind for your business, the demographic of the area should be used to shape your concept. If you're beginning with the concept first, you must choose a location with a demographic that can support it.

2. Create your menu

Building out your menu is the next creative step in the process of opening your restaurant. Choosing which menu items to feature should be enjoyable for any food lover, but make your decisions carefully. Your menu will dictate the type of equipment you'll need, the skills you should look for in your staff, and the type of crowd you hope to attract. For instance, if you envision a dessert menu full of delicate French pastries, you'll need a pastry chef and the supplies to match. If pizza is your thing, you'll need dough mixers, proofers, and experienced chefs who know how to handle pizza dough.

Also consider your demographic. If you get a great deal on leasing a space in a college town, your restaurant menu should be tailored to college-age customers. But if you won't budge on your dream to create an upscale menu, you must choose a location where the median personal income can support higher price points. When you finalize your menu choices, use our guide to menu design and our resource for pricing a menu to create an attractive, profitable menu.

3. Write a restaurant business plan

Starting a restaurant, like any new business, requires a solid business plan. This is the step that may become a stumbling block for those unfamiliar with business plans and how they are written. Restaurant business plans are divided into sections that describe all the aspects of your new business, from your restaurant concept to your financials. The purpose of the plan is to help you flesh out the finer details and summarize your business to potential investors. When you reach out for restaurant loans, the restaurant business plan serves as the proof that your venture will be successful.

Below are the principle components of a restaurant business plan:
Executive summary - This is the first section in your business plan, but it's helpful to write it last and make it a summary of the other sections you've already completed.
Company overview and description - Use this section to write a more detailed company overview than what you've included in the executive summary.
Concept and menu - In this section, describe all the details of your restaurant concept and menu.
Management and ownership structure - Outline your management and ownership structure. It's helpful to use charts as a visual aid.
Employees and staffing needs - It's easy to underestimate the number of staff members you need. By putting it down on paper, you'll have a more realistic vision of how many employees you need to hire to operate your business.
Marketing and competitor analysis - This section of your business plan requires careful research. You'll need to provide an analysis of the demographics and competition for your chosen location.
Advertising and marketing strategies - Use the marketing analysis you completed in the previous step to choose the right marketing strategies.
Financial projection and summary- When it comes to obtaining funding for your new restaurant, this section is the most important. Use it to provide a sales forecast and break-even analysis.

4. Obtain restaurant funding

The next step needed to start your new restaurant is to obtain funding. Most of us don't have enough capital on hand to cover the cost of opening a restaurant without financial assistance. Securing funding from outside sources will determine if you can make your dream of restaurant ownership a reality.

Begin by estimating total restaurant startup costs along with the cost needed for daily operations. Use this information to create a budget and forecast the total cost of running your restaurant for the next year.

With your restaurant budget now in hand, compare the total cost to the amount of capital you have on hand to determine how much funding you will need. Remember to include the costs of licenses, equipment, building repairs, and staff salaries. Here are a few ways to secure funding for your new restaurant:

Traditional commercial loan - This type of loan is acquired directly through a bank. You will typically see lower interest rates and access to higher amounts of capital with a traditional commercial loan. However, collateral is required, and you must have a high credit score.
Business line of credit - Similar to a credit card, you can get approved for a maximum credit amount. Interest only accumulates as you use the money, though lending standards are higher, and you may not be able to borrow as much money as you could with other types of loans.
Small business loan- While you can get a small business loan directly from a bank, many banks partner with the U.S. Small Business Administration (SBA). You can receive a small business loan even with borderline credit, and the SBA guidelines are set up to protect both the lender and small business owners. Collateral is required, and it may take some time to get approved.
Investors - Reach out to your network or sign up for a site like AngelList to find investors for your restaurant.
Crowdfunding - Sites like Kickstarter, FoodStart, Indigogo, and GoFundMe are great platforms to raise money to cover your startup costs.

5. Choose a location and lease a commercial space

When choosing a location for your new restaurant, the following factors are among the most important:

Visibility and accessibility - Select a location with good visibility that receives plenty of vehicle and foot traffic. Consider parking availability and ease of access for cars and pedestrians.
Demographics - The target market of your restaurant should match the demographics of the area.
Labor costs - Your labor cost will vary depending on location. In areas where the cost of living is higher, you'll need to pay a higher wage to attract good employees.
Local competition - You can learn a lot by looking at the competing restaurants in your area. The key is to choose a location where similar restaurants are successful, but avoid a neighborhood that is saturated with restaurants that directly compete with your concept. When it comes to choosing a space, we recommend leasing. It allows you more flexibility if you decide to expand or make other business changes when first starting out.

Check back next week for the second part of the 11-step guide to launching a physical restaurant enterprise.

About Richard Traylor

Richard Traylor graduated from Temple University in the winter of 2014 with a degree in Strategic Communications. After graduating, he taught English in South Korea for two years, during which he was fortunate enough to travel and see the world. In October 2016, he returned home and started to work in SEO Content at Webstaurant Store. This blog previously ran on Webstaurant Store.

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