Owning a business is the dream of many people. An independent streak and the desire to be self-sufficient rather than answering to somebody else often drives people to start their own business, with restaurants being a top choice. While a love of food and great hospitality are a start in this industry, there are other aspects to take into consideration when thinking about opening your first restaurant.

Overview

Starting a restaurant is about more than menu plans. It requires forethought into many areas to establish and run a successful business in the food industry.

• The first decision that must be made is the type of food and atmosphere you desire for your restaurant. This decision will impact all others. Choosing between casual and fine dining, family and bar, ethnic and home-cooking are examples of narrowing your scope to your specific type of restaurant.
• You must choose a location that will support the type of restaurant you wish to open. This means evaluating the type of people in the area, the population density, and the restaurant saturation of the area.
• The size of staff you will need will depend on the type and size of restaurants. Your staff may include several chefs and/or line cooks, pastry chefs, dish workers, bus workers, waitstaff, host staff, management, bartenders and janitorial staff.
• A realistic budget must include projections for all salaries and wages, product cost, utilities, renovations, decor, equipment cost and legal fees, as well as a portion set aside for incidentals not foreseen in the planning process.

Start-up Costs

Beginning any business has costs associated with the initial start up. These are generally one-time expenditures that prepare the business to actually function.

• Acquiring a building is the probably the first cost you will encounter. The amount of this expense will cover a large range depending on the location, size and accessibility.
• Construction costs can accrue when the building you choose is not ready to house a restaurant. These may be for renovation, decoration and safety measures. The average start-up construction cost is between 49 and 280 thousand dollars, depending on the finished size of the restaurant.
• Besides massive construction, the largest expense of opening a restaurant is the most obvious, the kitchen and bar equipment. This is comprised of ovens, ranges, preparation surfaces, refrigerators, freezers, dry storage, washing areas and numerous other elements needed for the preparation and presentation of food and beverages. Though these costs can vary wildly depending on the type of cooking that will be done in your restaurant, the average cost of establishing your kitchen and bar is between 30 and 115 thousand dollars.
• Smaller expenses associated with starting a restaurant include legal costs, licensure, inspections, food and beverage costs and initial payments for any professionals you may enlist as advisers or guests to help get your kitchen moving.

Earning Potential

Though you should be realistic, the potential for sustainable income with a successful restaurant is huge. Several factors can contribute to your revenue, but they should be considered carefully as some may not fit in with the overall theme and effect of your future restaurant.

• Offering catering services provides the opportunity to make money without filling your seats. Providing food for small or large events not only earns you the fee for that event but exposes you to others that may become customers in the future.
• Just when it seems like everything has been done in the food industry, something new and incredible breaks onto the scene. Being that something can work to your advantage by increasing interest and luring in customers by curiosity alone, then securing their loyalty with high-caliber food and service.
• For some very trendy restaurants, merchandising has become a secondary source of income. Selling customized clothing, household items and food products produces revenue and spreads awareness of your business.
• The average annual sales for a profitable restaurant is just under $1,200,000. This obviously varies depending on the size and popularity of the restaurant.

When considering starting up a restaurant business it is important to remember that these endeavors sometimes take months to become profitable. Factoring this into your starting budget, and ensuring that you will have the capital to keep the restaurant going while it moves toward profitability it is crucial to the future success of your restaurant.