Thursday, December 31, 2015

An Overview of the Costs Associated with Opening a Restaurant

One of the most important steps in opening a new restaurant is creating a realistic, viable budget. The costs involved with opening a restaurant can vary wildly according to the concept, location, and several other factors. Opening a restaurant in Manhattan will prove much more expensive than finding a commercial space in suburban Indiana. Likewise, creating a classic French bistro with table service will cost more money than opening a deli.

Regardless of the location or concept, however, restaurant developers need to take into account all of the possible expenses to ensure that their business will be viable. The startup budget should also include cushion for the unexpected expenses that will undoubtedly arise.

Costs Associated with Space

Rents charged for commercial spaces vary widely across regions, cities, and even within a neighborhood. Individuals should research the general neighborhood in which they would like to open a restaurant and figure out the range of rental rates. Importantly, restaurant developers should do more than investigate the rents of nearby businesses, since that may not reflect current market rates. Hiring a professional to negotiate the lease can be a good decision as well.

The typical startup costs associated with space include the security deposit, first month’s rent, and the first month of utilities. Typically, security deposits equal the first month’s rent, but this practice can also change across geographic locations.

Restauranteurs should not neglect the cost of utilities, which routinely cost thousands of dollars. This includes phone service and Internet, as well as water, electricity, and gas. Predicting the exact costs can prove difficult, especially if the space was never previously used as a restaurant. However, local utilities providers may offer tools for estimating costs.

Some restaurant developers may choose to purchase a space or build a new structure to house their restaurant. While both can be viable options, they may also include additional local government fees and permits, so restauranteurs should be sure to consult with experts about these potential costs and regulations.

Costs Associated with Location Improvements

Even if a retail space was previously used as a restaurant, owners will still likely need to make improvements or updates to the kitchen or dining area. While some spaces have kitchens that are adequately initially, it’s important to include the cost of future updates in the budget. These building expenses can quickly mount into the hundreds of thousands of dollars.

Another major expense is tables and other furnishings. While this cost largely depends on the restaurant’s concept, it is critical that restaurant developers conduct research to ensure their estimates are realistic. Bar and kitchen equipment, as well as utensils, dishes, and other tableware, typically cost more than furniture. In fact, it is not uncommon for these items to cost double what restaurant developers pay for tables and chairs.

Costs Associated with Business Operations

Starting a new business involves buying insurance, obtaining necessary permits and licenses, and paying the professional fees associated with these expenses. Many restaurant developers hire a legal professional to ensure compliance and help file the necessary paperwork, which can add to the expenses. In addition, restaurants need point-of-sale systems and other ordering and payment technology, which can cost several tens of thousands of dollars.
bread baker restaurant operating cost

In addition, all businesses need an accounting system. Today, several cloud-based systems are available for smaller businesses, but successful restaurants can outgrow these quickly. Purchasing accounting software developed specifically for restaurants can be a wise choice, and hiring an accountant on a part-time basis can ensure more accurate bookkeeping. In all cases, it is important to investigate the possibilities before deciding on the best course of action.

Business expenses also encompass payroll for any staff brought on, as well as the benefits provided to this staff. While these expenses may not become extremely important until the restaurant begins to expand, restaurateurs should have an idea of the cost per employee and build this figure into their budget.

Costs Associated with Marketing and Advertising

Restaurants are businesses and they require a marketing and advertising budget to pull in crowds. While the Internet has made advertising cheaper in some respects, restaurants still need a budget for public relations to promote the opening. This should include the cost of purchasing attractive signage, which is important in drawing customers off the streets. A good website is also important, and it may be worthwhile to hire a professional designer to build one. The site needn’t be extensive, but it should feature an attractive design, include the menu, and provide clear information about the restaurant’s location. The startup marketing and advertising budget also involves costs associated with printing menus, fliers, and other advertisements. In addition, restauranteurs may want to create business cards.


Many restaurant developers choose to have a large opening party to boost hype for their new business. While this is a great idea in terms of generating excitement and building brand loyalty before the restaurant opens, such an event can easily cost tens of thousands of dollars, and this price tag must be factored into the budget. 

Tuesday, December 29, 2015

4 Key Tips for Effective Menu Development

cafe menu on well
Menu design is an extremely important part of restaurant development because the menu serves as one of the primary points of contact between customers and the restaurant. A poorly designed or unclear menu can discourage potential customers from visiting the restaurant, especially because many individuals will look up a restaurant’s menu online before they even decide to dine there.

For this reason, restaurateurs should view the menu as their primary marketing document. Several decisions go into designing the menu, from the ways in which dishes are organized to the font and overall branding of the document. The following tips can help restaurateurs keep the important considerations in mind when deciding upon a final design.

1. Make sure that the menu reflects the restaurant’s brand.

The menu should be a highly branded document. When your customers examine the menu, they should not only be excited to try the food, but also understand the type of experience that they will have at the restaurant. For example, restaurants that deliver the menu in an embossed leather folder send a fundamentally different message than those that choose to use heavy stock paper menus. The style of the menu should reflect the restaurant’s mission. A rustic, farm-to-table restaurant that changes its menu frequently may want to use simple, paper menus, whereas an eatery with a more timeless, prix-fixe selection may want to invest in something a bit more lasting. It’s important to remember that a paper menu does not necessarily communicate that the restaurant is cheap or low quality. A single sheet of paper offers the benefit of presenting the diner’s choices in a more manageable, less overwhelming format.

Restaurateurs should also pay attention to geographic expectations. Customers in New York City may expect a different type of menu than diners in Miami.

2. When it comes to graphics, less is typically more.

Virtually everyone has been to a diner or a chain restaurant that has a flashy menu full of graphics, photos, and a dizzying array of dishes. These sorts of menus can overwhelm diners. A clean menu with plenty of negative space is often more aesthetically pleasing, and in the end, easier to read. While restaurants can certainly include some graphics to help with branding, these pictures should not distract from the dishes, which form the core of the menu. Photos are risky; if the dish comes out looking nothing like the photo, the diner may be more likely to complain.

Of course, some restaurants want to develop a kitschy aesthetic, especially those that appeal to families and children. In these cases, a bright, fun, and eclectic menu can be engaging. For this reason, the first tip trumps this one. However, most restaurants will likely not fall in the eclectic category and should opt for more understated menus.

3. Tell a story with the menu.

Diners often develop a feeling of personal connection to a restaurant when they understand the story behind the food. While not every item on the menu needs a detailed backstory and the information should only include a short sentence, restaurateurs should feel free to do more than simply list the ingredients in a dish. For example, a farm-to-table restaurant may want to include details about the farmer who is delivering a key component of a dish. An Italian restaurant may want to share that a dish’s inspiration comes from the chef’s grandmother. These types of small insights will make diners feel like they are part of something special. The story ultimately helps develop brand loyalty, so restaurant developers should ensure that these stories align with and reinforce the restaurant’s brand.

4. Pay attention to menu trends.

Often, trendy restaurants do not generate enough income to stay in business after diners’ preferences inevitably shift. However, restaurants can nod to trends through relatively inexpensive changes, such as altering the menu. Changing the menu’s appearance can give the restaurant a new, updated feel without breaking the bank. For that reason, restaurant developers should pay attention to new trends as they arise and think critically about whether adopting them could strengthen the restaurant’s brand.


Some current menu trends include serving fanciful cocktails and elaborate nonalcoholic drinks, offering shareable dishes, and incorporating technology into the ordering experience. Also, as the farm-to-table concept becomes more popular, some more casual restaurants are experimenting with new forms of menus altogether, such as writing them on chalkboards rather than offering traditional printed menus. These trends could last months or years. A restaurant developer has a responsibility to stay current with changing customer expectations.

Thursday, December 24, 2015

The Importance of an Inviting Restaurant Entrance

cafe restaurant front door

Restaurant developers must pay a great deal of attention to the physical space that they create on behalf of their customers. If customers do not feel welcome at a restaurant, they will not want to return. Likewise, is the space is simply not functional, the level of service will suffer and the restaurant will become incapable of delivering the type of experience necessary to remain viable. While advertising efforts have largely shifted from physical advertisements to online engagement, this shift should not minimize the importance of making a good first impression on customers who enter the restaurant. A poorly designed entrance can quickly disenchant customers who previously had a good impression of the restaurant based on its online presence. On the other hand, a beautiful, welcoming entrance can pull people in off of the street and convince otherwise uninterested customers to give the restaurant a try. The entrance of a restaurant has three fundamentally key elements: the doorway, foyer, and the greeting staff.

Creating an Inviting, Appealing Doorway

A restaurant’s doorway is a fundamental form of advertising. The doorway should reflect the unique brand and character of the restaurant. Ideally, the doorway will get customers excited about entering the restaurant and intrigue passerby, potentially drawing them in to explore the rest of the space. If people can see the restaurant from their cars, restaurateurs should think of the entryway fundamentally as a billboard. Large windows can give people a glimpse of the inside space from a distance, while bright colors and unique architectural design can attract attention from people on the street. However, the entrance should align with the restaurant’s mission. A restaurant that serves simple food may want to avoid a flashy entrance in favor of a beautiful, understated doorway.

Restaurant developers should not forget the physical aspects of a doorway. If the door is so heavy that a diner must use two hands to open it, this can create the wrong psychological effect as a person enters. Along the same lines, the design elements should not be so intricate that make it challenging to figure out how to open the door. While intricate designs may seem appealing, they can make diners feel inadequate if they do not immediately know whether to push or pull, or even worse, figure out where the handle actually is. In the Northeast, developers should also consider how their entrance could change depending on the weather. If possible, restaurateurs should plan to include a temporary enclosure during the winter months in order to allow guests to warm up and collect themselves before entering. The enclosure also prevents cold gusts from disturbing guests in the foyer.

Instilling a Sense of Hospitality with the Foyer

bistro seatingWhen designing a foyer, restaurateurs should put themselves in the shoes of their guests in order to figure out what elements they may need. The primary concern should be the feeling that the foyer creates. Does the space blend seamlessly with the rest of the restaurant and make people feel welcome, or is it closed off so that they feel removed from the rest of the space? Another important consideration is where exactly hosts will stand and greet people when they enter the restaurant. The ability to look someone in the eye is an important part of hospitality. When diners enter the foyer and the host is around the corner rather than immediately present, then customers may feel that they are an intrusion.

The foyer should also fulfill hospitality needs. On the East Coast, this often means providing space for a coat check. Many restaurant developers shy away from coat checks because they take up valuable space and are only really relevant a handful of months throughout the year. However, this simple gesture can significantly enhance the feeling of hospitality experienced by a guest. Some restaurants have adopted creative solutions to this problem by creating coat checks in the basement or in other spaces out of public view, and they have runners take coats back and forth on behalf of customers.

Welcoming Customers with an Engaging Staff

The doorway and foyer are largely cosmetic aspects of a restaurant’s entrance. A business may have a beautiful, opening, and welcoming space, but it will still fail if it does not also have a friendly staff to enthusiastically greet diners. Good service ideally depends on several factors. The host should effectively manage the foyer space to ensure that everyone present has adequate space. Hosts serve as the initial liaison between the restaurant and diners, and they should strive to make the entire dining experience as comfortable and enjoyable as possible.


Front-of-house staff members, including the hosts, servers, and bartenders, should greet diners warmly while also keeping a critical eye on the space at all times. These members of the team must have several key skills, including the ability to relate to people and remain mindful of how they comport themselves, ranging from their facial expressions to their body language and tone. They must have an expansive capacity to pick up on problems and the ability to think quickly in order to solve these before they become real issues. For restaurant developers, creating a great front-of-house staff depends on hiring people with talent and providing them with critical training in order to develop the skills that are necessary to make customers feel welcome. 

Monday, December 21, 2015

3 Important Steps for Building a Restaurant’s Brand

When developing a restaurant, creating and maintaining a consistent brand is extremely important in attracting the desired clientele and building a great reputation in the community. Brand consistency has become increasingly difficult with marketing shifting largely toward social media and other online outlets. Despite these difficulties, restaurant developers need to deliver a concise and uniform brand everywhere, ranging from the restaurant itself to its Twitter account. When a restaurant is new, establishing a robust and recognizable brand may be difficult. Developing a solid, appealing brand takes time and effort. In addition, brands develop regardless of effort, so customers will create their own vision of a restaurant if not given direction. For these reasons, the brand needs to remain a central concern for all restaurant developers. The following tips can help restaurateurs get a head start on brand development when they open a new restaurant:


1. Write an inclusive mission statement for the restaurant. People may not commonly associate mission statements with restaurants. However, restaurateurs who take the time to define a vision have a better sense of what their brand should look like. Restaurants are busy, especially in their early stages, and investing time in a brand early on helps to keep seats filled for months and even years to come, so developers should prioritize the mission statement. The statement should not be completed alone. Instead, it should involve input from the whole team. When a restaurateur asks for input from other team members, it creates more alignment in the restaurant, which ultimately allows it to deliver a more consistent customer experience.

Inclusion also creates a greater sense of ownership among employees and makes them more committed to its success. While inclusion is important, a project needs a clear leader or else it will likely never be completed. If restaurant developers do not want to take on a project personally, they need to delegate the task to a trusted individual and continue to play an instrumental part in the process. Many restaurateurs hire outside firms to help refine their mission statement and translate it into a culture.

2. Create a memorable sign or logo that reflects the brand. A symbol, logo, or sign must speak to a restaurant’s brand. Customers should be able to easily recall this image and see it in alignment with the rest of their experience at the restaurant. Restaurant developers should think about how they can incorporate the establishment’s name or concept directly into their signage in order to broadcast exactly what kind of image they want to create. By looking at the signage alone, diners should be able to get an idea of what kind of cuisine the restaurant offers. In addition to the logo, restaurants can consider various slogans that could contribute to the branding of the eatery.

Signage is essential to creating the complete package. The storefront should align with the design of the menus, which should likewise reflect the style of the website. While the need to be consistent may feel overwhelming, restaurant developers should think about their ideal customer and what they are looking for in a restaurant. The branding image—everything from the choice of colors to the font—makes a statement and will attract some people, while persuading others to look elsewhere. No brand is universally attractive. However, a brand should be attractive to the restaurant’s core audience.


3. Establish a voice for the restaurant. Today, restaurants largely advertise by engaging with customers in an online setting, which means that they need to have a distinct voice. A restaurant can use its voice to communicate information on its own website, as well as through social media outlets. A restaurant’s website is particularly important since it is the first encounter with a restaurant’s brand for the majority of diners. The feelings that a person gets from looking at a restaurant’s website need to be consistent with the message that the restaurant wants to send. Sending the wrong message can quickly cause a restaurant to lose potential customers. Moreover, a restaurant’s social media presence should have the same voice as its website. Restaurants that are serious about food may seem disjointed if they use a lot of emoticons in social media. Likewise, a fun, family-focused restaurant that has very professional and polished text may come across as cold.


Restaurant developers should also consider the importance of its voice in internal communications. Too often, restaurateurs forget how large of a role employees play in perpetuating a particular brand. Through frequent and consistent international communications, these individuals gain an understanding of how a restaurant wishes to communicate and can use that information to deliver a better level of customer service. Employees should understand what type of experience a restaurant wants to sell and develop a connection to the brand. The way in which a host speaks to customers as they come in the door says a lot about a restaurant, as does the level of service and friendliness from the wait staff.

Wednesday, December 16, 2015

5 Tips for Choosing the Best Restaurant Location

Choosing a location for a restaurant is one of the most important factors in predicting its success. The decor, food, and overall theme must be consistent with the location. Since people are unlikely to travel great distances for a restaurant, convenience is also a factor. When deciding on a space to lease or purchase, restaurateurs must weigh a number of different points. When restaurant developers select the most conveniently located space, especially in cities such as New York, they will generally pay an exorbitant amount of money. This type of overinvestment could end up causing a restaurant to fail. Even celebrated chefs are branching outside of New York and opening flagship restaurants in other nearby areas. Finding the best spot is all about balance. The following tips will help restaurant developers to find the ideal space for their project:
1. Keep an open mind. People develop a picture in their head of where they would like their restaurant to be located. When this picture becomes highly specific, restaurant developers enter into dangerous territory. Restaurateurs may pass up great sites simply because they do not align with their expectations. With each option, people should carefully consider a restaurant’s potential and how it could fill the space. Sometimes, restaurant owners will seek out a spot on a main street in a popular neighborhood, so they pass up a wonderful potential location in an up-and-coming part of town. Areas can change rapidly, and restaurateurs can secure great returns when they get into a developing area early.

2. Avoid making impulsive choices. Sometimes restaurant developers will fall in love with a particular spot and think that they do not need to look any further. While that place may indeed end up being the final location, restaurateurs who continue to look can gather more knowledge about an area and, in the end, greater power to make the right choice. Impulsiveness can also lead to bad deals. Many do not realize that restaurant leases are largely up for negotiation. Beyond rent, restaurant developers can negotiate about everything from maintenance costs to snow removal. They need to make sure that they are getting a good, sustainable deal when they finally decide on a location.

3. Look out for the competition. Ideas on how to deal with the competition can vary depending on whom you ask. When looking at a location, people should certainly look at the other restaurants in the area and what they have to offer. If a proposed business does not offer anything new, it may not do well. Moreover, if a restaurant is too radically different, it may not succeed either. If a neighborhood consists mostly of fast casual restaurants, perhaps it is because the neighborhood does not want an elegant, sit-down restaurant. In addition to looking at the competition, restaurateurs should research what sorts of restaurants have failed in that neighborhood.

The predominant belief regarding competition is to set up shop as close as possible to your biggest threat. Rather than trying to create distance with one’s competition, restaurateurs should take advantage of the advertising already paid for by another restaurant. A successful rival restaurant is already drawing the intended demographic to the area. When people are visiting the rival restaurant, they may notice the new establishment and decide to give it a try. Opening a restaurant close to the competition is a gamble, but it shows that confidence is necessary to bring people into an establishment.

4. Consider working with professionals. A wide range of professionals can facilitate the search for a site. Lawyers are a great resource for negotiating a lease and ensuring that no problems arise with the landlord in the future. Real estate professionals with a deep understanding of a city, its neighborhood, and its inhabitants can help to identify options. They should have a clear understanding of the changing demographics of each neighborhood and the ways in which they may develop in the near future. This knowledge can help restaurant developers to identify an up-and-coming area where their establishment could become a primary element of a new neighborhood center. Other types of professionals can help restaurant developers to identify the costs involved and time needed for licensure, construction, and other needs. These expenses can vary dramatically between cities, as well as between neighborhoods.

5. Think about accessibility and visibility. Considerations in selecting a restaurant location such as accessibility and visibility can vary according to the city. Expectations about parking in Manhattan are different than those in Providence, or even in Atlanta. However, many customers at higher-end restaurants will fully expect valet parking, even in a population-dense locations such as Manhattan. Even with this in mind, restaurant developers should always look at public transportation options. Proximity to a Metro stop will make people much more likely to visit a restaurant, especially if they do not own a car.


In terms of visibility, restaurateurs should think about foot traffic and the potential for signage. Again, these factors may vary between urban and suburban settings. Visibility is much easier in urban settings. In suburban settings, restaurant developers should ensure that they are close enough to main thoroughfares to take advantage of free advertising through signage.

Wednesday, December 9, 2015

5 Mistakes to Avoid When Developing a Restaurant

A study conducted by Ohio State University founder that 60 percent of restaurants do not make it past their first anniversary, and only 20 percent survive more than five years. Restaurant developers need to understand the most common reasons why restaurants fail and create strategic plans for avoiding these missteps. The best restaurant developers are those who learn both from their own experience and from the failures of people who have come before them to create solid business plans and launch businesses with the potential for falling into that prestigious 20 percent that make it to five years. The following are some of the most common reasons why restaurants fail, particularly in large urban areas:

1. Relying on great food to draw in customers. Smaller restaurants often suffer from this mistake. Amazing food is an important part of every restaurant’s success, but in the end more than great recipes are required to help a restaurant last. A restaurant is a business, and great food must be complemented by a deep understanding of how to launch, market, and build an enterprise. In many ways, the business aspects can outweigh the good food. How many restaurants with amazing food close their doors every year? On the other hand, how many restaurants with mediocre food stay in business for decades? Developers should think of a restaurant as an experience. Beyond the food, the location, ambiance, and other factors play an important role in a restaurant’s success. After all, food is largely a matter of taste. What one person finds a thrilling and unique flavor combination may disappoint someone else.

Management skills are also critical. Creating a wonderful menu means little if the service is lousy or the restaurant seems mismanaged. Great managers understand how to keep their employees happy, which in turns translates into a better experience for diners, one that makes them want to come back.

2. Not knowing the current market and the neighborhood. Before opening a restaurant, developers need to undertake a great deal of research about the various neighborhoods of their target city. A restaurant that will succeed in one area of town will not necessarily thrive in another. Before leasing a spot, restaurant developers need to know that a market for the restaurant that they envision exists. Some neighborhoods prefer casual pubs, while others may want a restaurant where diners need to put on a shirt and tie. Likewise, if the neighborhood already has three established restaurants that serve farm-to-table food, a developer should either find a new idea or location.

The importance of location cannot be emphasized enough. People may travel some distance for great food, but they are more likely to settle for a good meal in their own neighborhood simply for the sake of convenience. When restaurant developers walk into an idea thinking that it will become a destination eatery, they should do the necessary research to prove that a market exists and that the restaurant will not sit empty for weeks on end after it opens.

3. Lack of familiarity with the restaurant business. Too often, people launch restaurants as their first real venture into the business world. While this approach can work, individuals must recognize the need for a mentor, someone with a great deal of experience who can show them the ropes. Even if a person has an extensive background in business, this experience does not translate to success as a restaurateur. People who want to develop restaurants need to truly understand the industry on several different levels. In addition to knowing the industry as a whole, they must have an intimate relationship with the local and microlocal scene.

Restaurant management involves an overwhelming amount of complexity. Unexpected issues related to everything from food preparation to presentation can creep up on a daily basis, and developers need to understand how to handle these situations with speed and care, or else hire someone who does. In addition to food, management also involves bookkeeping, finances, and customer service.

4. Making poor advertising choices. Every marketing and advertising choice should be made strategically. Smaller restaurants often have rather tiny marketing budgets, so making the most of this money is extremely important. Marketing has become an increasingly popular online activity, and taking advantage of social networks and viral, person-to-person advertising is both cheap and effective.

If restaurant developers can somehow figure out a way to make into the local newspapers, that can also boost awareness of the restaurant. Many newspapers write features on new, local spots to eat. On the flip side, taking out an advertisement in these papers can often be a waste of time. Newspapers generally have so many advertisements that they largely go overlooked unless the ad features a coupon or something else to draw people into the restaurant.

5. Failing to secure adequate cash flow. Restaurants can avoid cash flow problems by overestimating the capital that they need. Something always comes up, so operating on a tight budget can quickly lead to disaster. Businesses in general, - and restaurants in particular - can take years to become profitable, and if funding runs out before that time, the operation can go under despite every indication that success is on the horizon. Sometimes, restaurant developers will begin to cut corners in order to increase profits. However, this strategy often ends up alienating regular customers as quality decreases. Restaurants should also plan for the slump that comes after the excitement of a grand opening ends, since business can slow considerably after the first few months. At this point, restaurant developers need to think of creative ways to bring people back rather than how to reduce expenses.

Wednesday, December 2, 2015

6 Things You Must Do when Opening a New Restaurant

Opening a restaurant requires tenacity, expertise, endurance, and flexibility. Several factors play into the decision to open a restaurant, including the physical location, the culture of the larger area, food trends, and investment capital, just to name a few. The thought of opening a restaurant may initially seem overwhelming, especially given the large number that fail. However, if you believe you have a truly great idea, then the following tips can help you get the restaurant off the ground and on the path to success:


1. Overestimate the capital that you need to start the business.



From the very start, you should have at least six months of working capital. Although, ideally you should have more, because expenditures can quickly add up, especially while you are still building a regular customer base. During the first month or so, many people will come to check the place out, but when the novelty fades, they will quickly lose interest. Therefore, it is wise to plan for a drop in income after the initial excitement wears off.

With proper advertising and development, though, you can restore your restore your previous rate of income. You just need to have enough capital to survive the critical gap months. Your restaurant can remain viable if you plan for the future and resist blowing through all of your first-months’ profits. Remember, it takes years, not months, to achieve success.


2. Restaurants are about more than a love of food.



Of course, people must have a passion for food if they want to create a restaurant, but passion, by itself, is not enough. Restaurants are a business, therefore you must work to hone your business sense or find a partner who has solid experience. You do not need to have expertise in accounting, IT, or even management, because you can hire people for these functions. However, you do need a general sense of what it takes to turn a profit.

Chefs must focus on making innovative, attractive cuisine, but when you are a chef-owner, you also need to understand how to make money. If you are early in your career, you should find a mentor. This sort of one-on-one education is better than business school in some ways, because it is tailored to the restaurant business.


3. Pay close attention to the equipment in your restaurant.



The initial investment in a restaurant can be overwhelming because of the costs associated with quality equipment. Keep in mind, though, that the equipment you purchase will limit the creativity of chefs, so try not to skimp. If you need to bring costs down, you can always investigate used equipment. Often, you can purchase used equipment for fairly cheap from restaurants that are closing or upgrading their existing equipment

Never attempt to save money by purchasing something other than commercial-grade equipment. While it may seem like a good idea, this equipment will break quickly under the daily demands of a restaurant. Even the dishes should be designed for commercial use if you do not want to replace them after a few weeks because of the chips and cracks.


4. Don’t neglect alcohol on your menu.



Different jurisdictions have different rules governing liquor licenses. Some states require a public hearing as part of the application process, while others have a limited number of licenses, which means you could be waiting months or even years for it. Because restaurants that cannot serve alcohol don’t draw as many customers as those that do, you should apply for a liquor license as soon as possible.

Also, be sure to invest in a great bartender who knows how to curate a unique drink list and sell unusual concoctions. Excitement is infectious, thus employing someone with a flair for mixing drinks will make diners more excited about trying new things or ordering the restaurant’s take on classic cocktails.


5. Spend money to add value for guests.



When people come to your restaurant, you should make them feel special. This will make them more likely to return. If you try to cut costs on things like valets and desserts, your customers will lose that sense of enchantment.

Everything that a guest encounters directly should take financial priority. To improve your restaurant on a consistent basis, you should dedicate a certain percentage of revenue to adding value for guests. In many ways, this money will have a higher return on investment than an advertising and marketing budget. By spending money on the people who are already dining in your restaurant, you gain valuable word-of-mouth advertising, especially in today’s social media-driven society.


6. Understand the importance of the big three.



The “big three” refers to a great chef, an innovative concept, and an attractive location. These three elements are crucial to the success of a restaurant, and they should all work in unison. For example, a Southern soul food concept may sound great, but not when it is located in an area known for its love of healthy foods or executed by a chef versed in French cuisine. On the other hand, designing the restaurant as a French-inspired soul food restaurant located in a hip, up-and-coming neighborhood could prove very successful. Your chef needs to be able to execute your concept, which should appeal to the surrounding demographics. Destination restaurants are rarely successful.