Most authentic restaurants never go out of business. If you think you can have a solid idea for a restaurant, the next obvious step is to start with the planning process. Even the best concepts have to be tested. In this post, we are offering a few ideas on how to open a restaurant and things that must be considered.
Ask the basic questions
Your restaurant needs a physical address, which means you have to decide on a location first. The foot traffic at the location is something to consider, and you have to figure out competition. For example, if you want to open a pan Asian restaurant, you have to check if there are similar eateries in the area, and if there are a few, how well are they faring. Every restaurant needs to have its USPs, and you must define some of the basic things like your target audience, the experience that will be offered, and special services.
The process of conceptualization is often the hardest, so take your time to ask questions like –
- Why would people select my restaurant over others?
- Are there too many options in the same area?
- Do I need help for formulating the business plan?
- Do you need a loan for financing the restaurant?
- What licenses would you need?
In most cases, you will need a general business license, Employer Identification Number (EIN), food service license, and license for music, liquor. For selected music usage, you must also get copyrights.
Figuring out the finances
Even if you have all the savings to start your business, opting for a loan for your new restaurant may offer some added flexibility. For instance, if you ask for financing, you can get a better deal at repaying the money with some lenders. Usually, 5 & 10-year amortizations are common, but for bank loans, you may have to share more details and complete paperwork. Private lenders usually offer a higher interest but don’t have as many requirements.
Licenses can be tricky
Getting an alcohol license is often the toughest part. Your property has to be zoned right for such licenses. For instance, you may have to buy more than one license if you intend to serve more than just beer. Wine is also a special license category, and so are spirits. If you don’t understand how licensing works for your restaurant idea, consider seeking expert help.