How To Open A Successful Restaurant - Chef's Deal

The way to a man’s heart is through his stomach. Okay!

Then what about a woman? It is through the stomach, too!

Undoubtedly, food is the way to reach anyone! This is the reason perhaps why a restaurant business can never get out of fashion. Even though there are sufficient risks, the rewards are attractive.

If you are looking to set up your restaurant, and are looking for some inspiration, this article is for you!

Here is a step by step guide on how you can open a restaurant flawlessly and effortlessly. Check out.

Concept - Theme - Cuisine

The most important aspect of opening any restaurant is getting the idea right. What does the idea mean here? It refers to the concept, the theme and the cuisine of the place.

Your restaurant is expected to be unique. There might be hundreds of restaurants in a single area, so how is yours any different? The theme of the place could be your answer here.

The choice of the concept depends on the APC of the place. APC refers to the average price per customer. While this value is the lowest for small food carts, it is moderate for cafes and the highest for fine dining.

How much a customer is willing to spend at your restaurant could well determine the kind of theme you should choose.

Plans Are Pointless Without Investments

While you could be making a lot of plans to get the perfect food joint in the area, they are redundant without proper investment. The first step here is to determine the total capital investment of the business. This depends on your chosen concept or theme. Once you have these numbers straight, you could then proceed towards getting the funding. You can finance the venture in three different ways.

  • Self - funding - This is the most convenient option if you have sufficient cash with yourself.
  • Bank loans - The next best option is to take a bank loan to fund the business. This is convenient but the financial institutions often look for collaterals to protect the loan amount.
  • Investors - You could resort to investors for your restaurant. But this offer is most applicable for restaurant chains that already have some reputation. First-time ventures usually have a tough time persuading investors.

Restaurant Costs Could Be More Than Anticipated

We hate to break it to you, but a restaurant comes with a host of different overhead costs and associated expenses. If you are looking for an investment, it is imperative to have an in-depth idea of all the hidden costs. This will help you in breaking down the budget and segregating it as per the requirement.

First and foremost, the food will occupy about 30-40% of the total menu price. This could give you a decent enough profit and start.

Next comes the rent of the place. This should not exceed 10% of the total revenues. Kitchen equipment can be a little heavy and drill a hole down the pockets, but they tend to recover the costs in the long run.

The licenses are another significant expenditure in the restaurant business. Once these costs are covered, you would have to focus on the marketing costs involved, manual labor and the likes.

Choose the Location Well

It is imperative that the restaurant is situated in a good location. What are some of the considerations in this regard? Who are the potential competitors in the same area? What cuisines are being served? What are the demographics like? How accessible is this location? Can potential consumers locate this place easily?

A restaurant with high visibility is often a good choice and makes a decent revenue. Apart from that, there is one other aspect to keep in mind. Before opening the restaurant, the owner would have to get a No-Objection certificate from at least three neighbors in the surrounding areas. This is an important consideration that must not be skipped.

Licenses to Take Off!

When you are planning to open a restaurant, it is important to do it right. You must gather information about all the applicable licenses. The costs involved depend on the type of venture you are investing in. Also, it is best to apply for these licenses early so that there are no delays or hiccups. Some of these licenses include:

  • Trade license – This license permits you to run a business within the city. It usually has a validity of one year beyond which it would have to be renewed again.
  • Food license - This is the foundation stone of the restaurant business. The venture size, investments, location and all contribute towards you obtaining a license.
  • Professional tax license - This allows you to hire people to work at the restaurant and to give them a monthly salary
  • Liquor license - This would be required if you intend on providing alcohol at the restaurant.

Make an Attractive Menu

One of the highlights of the restaurant is the menu. People remember the place based on the menu they observed. Thus, it is ideal to keep an attractive menu that could attract consumers.

However, it is highly recommended to keep your menu items such that the required ingredients can be sourced locally, without much hassle. Dishes using similar ingredients could bring down your restaurant costs.

The Right Combination of Suppliers and Vendors

Your restaurant is incomplete without suppliers and vendors. When you start off with the business, you should have at least 3 vendors for each supply. This will help you run things smoothly.

In the long run, it is advisable to make long-duration contracts with the vendors such that there is a fine run of resources to your business. You could get the quality vendors and build a suitable inventory for yourself.


Finally, think about the manpower you would need for your restaurant. Essentially, this can be divided into three segments.

  • Kitchen staff - Hire some quality cooks, specific to the cuisine chosen by you, along with food preparation manpower and support staff.
  • Service staff - This would include the waiters. Communication is expected to be top-notch for them! Along with that, you could include housekeeping staff and the likes in this category.
  • Management staff - This category would include the restaurant managers, cashier, head chef and everyone else who is involved in the management of the restaurant services.

Your Turn

Although the entire process of opening your new restaurant could look like a herculean task, it is worth all the efforts. As the restaurant industry is growing at a steady rate, there is a huge scope for another extraordinary eatery. All you need to do is plan and execute the things well with unique ideas, and watch your business flourishing.

What are your views on this? Let us know in the comments below.