In most parts of the world, there is a growing demand for cafes and restaurants. Despite the rising cost of living and the fact that eating out is more expensive than it was a year or two ago, people still love to do it. For example, in China, according to the restaurant guide Black Pearl, the number of new venues opening in 2021 was double that of the year before. A Popmenu survey of 1,000 US diners showed that 58% were dining out more often than they did in 2021.
So, now is not a bad time to set up and run one yourself. But building your business on a firm foundation is crucial.
Is this business model right for you?
Running a café or restaurant is hard work. There are a lot of tasks for you to juggle. You also need to be good with people. This skill is essential for keeping your customers happy and turning them into regulars as well as for managing staff members.
Before you spend any money, sit down, and ask yourself whether you have what it takes to start and run a successful café or restaurant business. Use this checklist-style article to help you to do that. It includes an in-depth section about working out whether you have what it takes to run a café or restaurant.
Understand the business model
Before you go further, ensure that you have a basic understanding of how the finances for this type of business work. Profit margins are very tight for this industry. Typically, a full-service restaurant or café will make 3 to 5%, while a successful fast-food outlet will make between 6 and 9%.
Most of the biggest overheads are either fixed or difficult to reduce. For example, power is expensive, but using it is unavoidable. Your café or restaurant has to be heated, cooking consumes energy, and you can´t switch the lights off when people are eating. This combination of unavoidable expenses and relatively low-profit margins makes it incredibly easy for a restaurant or café to go bust. There is no wriggle room. You have to be clear about how much you need to turn over to make a profit.
Reading this article and this one will help. Using the information you find there will enable you to better understand how much you can afford to spend on rent etc. so that you don´t buy or lease premises in an area that you can afford.
Do your market research
Once you have identified potential locations, do some market research. Spend a bit of time in bars, cafes, and restaurants that already trade in the area. Visit local markets, food courts, and trucks. Doing this will provide you with a better understanding of the type of people who live in the area, what they like to eat, and what they typically spend.
Only sign a lease when you are satisfied that there is sufficient demand. Be realistic about what your turnover is likely to be.
Create your brand and design your café
Decide on the type of café or restaurant you want to own. Think about who your typical customers are going to be and produce a design and brand that will appeal to them. Ideally, you want your brand colors, fonts, and logo design to fit in with all of this. This in-depth article explains step-by-step how to get café or restaurant branding right.
Start the process of getting your licenses
In most places, you will need a license to trade. You may also need planning permission to convert or update your premises. Find out what is needed before you sign the lease, and check that you can get the relevant permissions, how long it is likely to take, and what it will cost.
Once you are happy you can get what you need within a reasonable time frame, you can sign the lease, and do the paperwork. But not before you get a couple of quotes from Shopfitters. You do not want to inadvertently sign a lease for premises that need extensive work. For example, the installation of a new ventilation system to comply with recent legislation.
Get the Shopfitters in
Once the lease is signed you can let the shopfitters in to do their job. Unfortunately, this part of the process tends to overrun. Be realistic and schedule your opening day for a week or so after the date the shopfitters give you. This allows you plenty of time for snagging and gives you a chance to have a soft opening.
Design your menu and start recruiting
Work out what food you are going to offer and hire people that have the necessary skills to prepare and serve it. If you’ve done your market research right you should already have plenty of ideas.
Buy your supplies and equipment
As soon as you have signed the lease you can start shopping around for supplies. Doing this gives you a chance to shop around for the best deals. Ensure that you will be able to securely store everything and time your deliveries accordingly. Use this checklist to make sure you don´t forget anything important.
Put in place your marketing
Plan your marketing campaign early. Once you have your branding in place you can set up social media accounts, order your digital signage screens, your branded serviettes, and uniforms. As well as any paper-based advertising materials you are using.
Start advertising the fact that you are opening early, to create buzz and anticipation. For example, put your digital signage up in the window and run some ads that tell would-be customers about what you are planning to offer. This can be done as soon as you get the key to the premises.
Open with a bang
Make your opening an event. Advertise it early, put together some tempting special offers, consider hiring entertainers, and decorate the premises for a celebration. You want passersby to notice something different is going on so that they pop in.
Opening a café or restaurant is hard work. But there is nothing better than seeing it full of happy people enjoying the food and drink that you provide.
