5 Min. Read

How to Start a Restaurant: A Step-by-Step Guide

July 2, 2021

Entering the restaurant business is a lifelong dream for many. But the restaurant industry is also a competitive and difficult one to get into. There are lots of things to-be restaurant owners need to prepare beforehand to ensure their restaurant’s launch is successful.

Let’s break down what you need to do to start a restaurant step-by-step.

Here’s What We’ll Cover:

Step 1 – Define a Target Market and Restaurant Niche

Step 2 – Create a Business Plan

Step 3 – Get Funding for Your Restaurant

Step 4 – Choose a Location and Purchase Equipment

Step 5 – Acquire Permits and Licenses

Step 6 – Design Your Restaurant’s Menu, Space, and Uniforms

Step 7 – Find a Food Supplier

Step 8 – Hire Staff

Step 9 – Advertise Your Restaurant

Step 10 – Start with a Soft Opening

Key Takeaways

Step 1 – Define a Target Market and Restaurant Niche

The first major goal should be to define your restaurant’s target demographic or market. In other words, consider the type of restaurant or restaurant concept you want to have. For example, will your restaurant serve Mexican food, seafood, American food, or something else?

You’ll also need to consider which type of customer you want to attract. Your target audience will determine things like:

Your décor or restaurant aesthetic
The type of cuisine you’ll serve
Your pricing – if you want to attract budget-minded families, for instance, your prices must be affordable
Your location
And more

Business owners should come up with all these answers before moving on. It’s difficult to change your type of business later on in the process of launching a restaurant.

Step 2 – Create a Business Plan

All successful restaurants start with a business plan. The business plan is useful because it serves as a guide for your efforts and can be shown to investors to attract funding. It should include:

A company overview and description of your business model
A concept and menu for your restaurant
A business strategy for future growth
An explanation of its management and ownership structure
The staffing and equipment needs that you project will be necessary
A financial projection and summary, which tells a prospective investor how much money you need to launch your restaurant

Step 3 – Get Funding for Your Restaurant

Send your restaurant business plan and a financial proposal to investors in your area. These can be friends or family or dedicated financing institutions like banks and venture capitalists. You may need to acquire multiple investors to get your restaurant up and running.

Step 4 – Choose a Location and Purchase Equipment

Once you’ve acquired funding, pick a location and purchase equipment for your restaurant. Depending on the commercial space you lease or purchase, you may need to buy equipment like:

Seating equipment like chairs and tables
Ovens and grills
Kitchen utensils and tools
Silverware and cutlery
Artwork or décor
Refrigeration equipment
Accounting and other software
And more

You might consider buying your restaurant equipment online. This broadens the options available for your new kitchen and you can ship the equipment straight to your restaurant’s door easily.

Step 5 – Acquire Permits and Licenses

All new restaurants must acquire various permits and licenses so they can legally operate in their state and city. It’s also smart to enlist legal help, like a business lawyer, when filing for the permits and licenses to ensure you don’t mess up and have to refile later. In total, you’ll need:

A business license
An EIN or employee identification number if you want to hire staff
A food service license
A liquor license if you plan to serve alcohol

Step 6 – Design Your Restaurant’s Menu, Space, and Uniforms

Now comes the fun part. You can get to work designing the menu, interior design, and uniforms for your restaurant. You’re effectively coming up with its aesthetic and style! If you already have an idea, great. If not, spend some time coming up with an attractive restaurant design that is consistent across all of its aspects.

For example, the menu needs to seem aesthetically consistent with its interior decorations.

Step 7 – Find a Food Supplier

Naturally, your restaurant will need a food supplier if you plan to feed hungry guests promptly. You can sort through different food suppliers based on what they offer. Consider whether you plan to offer special dietary options, ingredients, or foods to boost your restaurant’s appeal. These include non-GMO fruits and vegetables or gluten-free meals.

Step 8 – Hire Staff

Your restaurant will need talented staff to cook and serve its food. Start by creating a list of the restaurant positions you have to fill. Then start posting on hiring websites like Indeed. You’ll need:

A management team, like a general manager, kitchen manager, and so on
Kitchen staff like a head chef, prep cooks, dishwashers, and more
Front-of-house staff like servers and hosts
Bar staff if applicable, such as bartenders or cocktail servers

Step 9 – Advertise Your Restaurant

No prospective customers will visit your restaurant if they don’t know its opening. Launch a marketing campaign using Google or social media platforms and content posts. You should also put up advertising posters around your local area.

Step 10 – Start with a Soft Opening

A “soft opening” is essentially a practice run for your restaurant. Set a date for the soft opening and invite friends or family of the staff to see how everything flows at first. You can use the soft opening to refine your restaurant’s operation before it fully opens.

After the soft opening, you can launch your restaurant for real!

Key Takeaways

Entering the food service business is a risky but potentially profitable endeavor. Following the basic steps above will help you get on the right track to launch your restaurant successfully. Best of luck!

Interested in learning more about starting a business? Check out our resource guide.