How to Open a Restaurant: A Complete Guide

A Complete Guide

Table of content

If you are wondering how to open a restaurant, you need to know what you can offer to your guests. 

Most people think opening a restaurant depends on cooking skills and creating an appetizing menu. However, people go to restaurants not just to eat food but also to enjoy company and entertainment. 

Let’s explore how to open a restaurant so it can be successful.  

1 - Understanding the costs

How much does it cost to open a restaurant?

The cost of opening a restaurant will vary greatly depending on the nature of the enterprise, location, size, and many other factors. However, there are some basic costs that all restaurants incur in their earliest days, such as furnishings, decor, labor, ingredients, equipment, and software.

Here are the most important expenses you must consider:

Location Costs

A critical factor that will determine the cost of opening a restaurant is its location. Restaurants in prime locations pay much higher rent than those in less accessible areas.

The location also determines the type of restaurant, menu, and target market. If you can score a great spot in a bustling metropolitan area, you might want to open a fine dining restaurant to capture a high-paying customer base. However, your menu, supplies, and interior design will cost more.

Supply Costs 

To keep inventory costs low, restaurants must find suppliers that can provide quality ingredients at fair prices. Consider the suppliers’ location, price, and quality of their products before shortlisting them. 

Finding the right suppliers is crucial to keeping a restaurant's overhead expenses manageable and ensuring that the food is of high quality. 

Staffing Costs 

Staffing costs are one of the biggest expenses for restaurants. 

To keep employee-related costs under control, staff your restaurant judiciously. This means having the ideal number of staff on hand to manage the volume of business. They should also have the proper skills to complete all assigned tasks as efficiently as possible.

To assemble the best possible team for your restaurant, think about the following:

  • The type of restaurant you want to open - fast food, casual, or fine dining?
  • The size of your restaurant - small, medium, or large?
  • The location of your restaurant - urban, suburban, or rural?
  • The hours of operation for your restaurant - breakfast, lunch, dinner, or all-day?

Software Costs 

Software costs for restaurants also vary depending on its scope, features, and needs. Basic software for a small restaurant may cost $79 to $150 per month.

The cost is higher for larger enterprises or chains, with some software packages costing thousands of dollars per month. These feature a workforce management system, a point-of-sale (POS) solution, a payment solution, and even a delivery app. 

Such software costs do not need to be expensive, especially if you consider software like Push, which is suited for managing businesses of all sizes and types in the food and dining industry.


2 - Navigate finances 

There are a lot of financial elements to consider when opening a restaurant. A brand new establishment that offers food, drinks, and entertainment can take up a lot of time and money.

These include start-up costs, ongoing expenses, and financial steps that affect your investments and value.

How can I open a restaurant with no money?

How to open a restaurant with little to no money? One option is to start a pop-up restaurant. Pop-ups are temporary restaurants typically only open for a few days or weeks. You can open one to test your concept and see if there is interest from customers.

Another option is to start a food truck. Food trucks are a lower-cost alternative to opening a brick-and-mortar restaurant. They have the added benefit of being able to move to different locations to find the best customer base.

You can also start a virtual restaurant to test your dishes on paying customers. You must be able to manage cooking, packing, and delivering all orders on your own.

How can I get funding to open a restaurant?

There are several ways to get funding for your restaurant.

You can get a small business loan from a bank, the government, or friends and family.

Investment capital is another option for funding your restaurant. You can approach potential investors and offer them a stake in your business in exchange for financial support. 

You can also apply for a grant to open your business. You just need to meet the requirements for restaurant entrepreneurs to receive a grant from the government

You could also consider crowdfunding on online platforms such as Kickstarter. 

How should I set up my bank account to open a restaurant?

Restaurants have unique banking needs. They must be able to accept credit card payments, which means they need a specific type of account that allows them to do so. They also manage a large volume of cash flow, including payroll and payments to suppliers and service providers. 

Here are the types of bank accounts you need for your restaurant business:

  • Merchant account - so you can accept credit and debit card payments 
  • Business checking account - for all your business-related lending and taxation needs 
  • Business savings account - to keep your liquid assets
  • Business Certificate of Deposit (CD) - to take advantage of high interest rates


3 - Get to business 

To open a successful restaurant business, you need a detailed business plan. It is your primary reference for all the steps you need to take moving forward.

Note that most restaurants turn a profit after three to five years. Your plan should cover your business and marketing strategies over this period. 

Do I need a business license to open a restaurant?

Opening a restaurant requires several licenses and permits to operate legally, and a business license is only one of them. 

You need documents that permit your establishment to handle food, occupy a certain location, and even provide live music and entertainment. 

Do I need a special license to open a restaurant?

You may need to obtain a special permit in addition to a business license. This depends on several factors, including the type of restaurant you plan to open and the location.

Here are the basic documents and permits you need to open your restaurant:

  • Certificate of occupancy
  • Sign permit
  • Food service license 
  • Food handler’s permit
  • Building health permit
  • Liquor license
  • Live entertainment and music license
  • Resale permit
  • Dumpster placement permit
  • Seller’s Permit
  • Valet parking permit
  • Foodtruck permit

4 - Lock in your location 

The best location for a restaurant depends on the audience you want to reach and the type of enterprise you want to open. Look for areas with high foot traffic, especially your target audience. 

For example, if you want to target young adults, choose a location near universities, other commercial establishments, and entertainment centers. If you want to target families with kids, set up near parks or elementary schools.

Do I lease a restaurant location? 

Purchasing a property gives you more control over your space. You can make changes to the property to suit your needs, and you will not have to worry about a lease agreement. However, purchasing a property is a massive investment.

Leasing a space is a more flexible option. It is often easier to obtain financing for a lease than for purchase, and you can get a long-term lease agreement for your peace of mind.

How do I find a location for a restaurant?

Consider the size of the property, surrounding businesses, local demographics, and foot traffic throughout the day. 

Make sure the property is zoned for commercial use and meets all the other requirements for opening a restaurant in your city or state.

5 - Get learning 

The proper resources and learning materials will help you expand your skills and knowledge of the restaurant industry and set you up for success. 

What skills do I need to open a restaurant? 

It’s best to have some experience in the food industry. You need a thorough understanding of day-to-day operations and what it takes to run a restaurant successfully.

You should also be a good manager and leader, as you'll be responsible for various teams as you set up, launch, and run your enterprise.

You must also have good financial instincts and familiarity with handling commercial cash flow. 

Do you need experience to open a restaurant?

Some successful restaurateurs have very strong culinary backgrounds, while others have little to no prior experience in the food industry. 

Without experience, you may rely heavily on others to help you get your restaurant off the ground. But if you have a clear vision for your business and knowledgeable people advising you, you may be able to overcome your inexperience and open a successful restaurant.

How long does it take to open a restaurant?

Opening a restaurant can take several months to years. Many factors will affect your timeline: how much work your location requires, licensing issues, the hiring process, etc.

If you want to open a small, casual eatery, the process may be shorter than if you're aiming to open a fine dining establishment.  


6 - Get creative

Opening a restaurant requires a lot of creativity. You must come up with the perfect name and concept and design the ideal menu and dining space to set yourself apart from the competition.

The concept and theme for your restaurant will determine everything else about your enterprise, including the menu and marketing. Choose one you can run with and sell to customers for years to come. 

How do I pick a restaurant theme? 

When choosing a theme for your restaurant, consider your target audience, the food you'll be serving, and the atmosphere you want to create. You can choose to highlight certain ingredients (a chili-themed restaurant) or exotic dishes that will set you apart from the competition.

Your location is an important factor, too. If you're near the beach or park, a more casual atmosphere emphasizing relaxation and fun could be a better choice. 

How do I design a restaurant menu? 

Consider your audience and what they might want to see on the menu. Think about the ambiance of your restaurant and the dishes that will suit, or vice versa. Make sure you have a good mix of starters, main dishes, and desserts. 

Your menu should also be easy to read and understand in one glance. Its design should also suit your overall theme and branding.


7 - Set up your hiring plan 

When it’s time to build your staff, look for people who have the qualities and skills suitable for their roles. All your employees must be team players. 

How do I hire staff for a restaurant? 

Review applications carefully and conduct multiple rounds of interviews to get to know applicants. You will have a good idea of their skills and identify any red flags that may indicate they are not a good fit for the position.

Post job ads on LinkedIn and Facebook to reach more people in your area. Initial online applications are a great way to screen applicants.

You can also reach out to other restaurant owners and managers and ask for recommendations to find talented candidates who may not be actively looking for a new job.

What staff should I hire to open a restaurant? 

A restaurant requires employees with highly specific roles to function properly. You must hire: 

  • Manager 
  • Chefs
  • Sous chefs 
  • Dishwashers
  • Servers
  • Waiters and waitresses 
  • Hosting staff
  • Busperson
  • Bartenders
  • Security

You can also hire additional staff if you want to provide entertainment in your restaurant.

8 - Choose your restaurant tech stack

In the digital age, it's crucial to have a robust and efficient tech stack for your enterprise.

What technology do I need to open a restaurant?

There are certain types of technology you need to open a restaurant to automate repetitive tasks, keep up with all important transactions, maintain efficient operations, and provide top-notch, timely service to your customers. 

Here are some of the technology you will need when you open your restaurant doors: 

  • Scheduling software
  • Payroll solution
  • Time tracker
  • HR management software
  • Reservation software
  • Restaurant website
  • POS system
  • Customer management software 

9 - Have a restaurant business plan 

A business plan is a document that outlines your restaurant's concept, business model, menu, marketing, and financial strategy. It is a roadmap that will help you achieve your business goals. 

What to include in a restaurant business plan

You need conceptual designs, architectural blueprints, floor plans, and branding designs, along with the following key components: 

  • Executive summary
  • Company description
  • Products and services
  • Market analysis
  • Sales and marketing strategy
  • Financial projections

What else? 

Though the pandemic decreased the number of restaurants in operation, many are reopening with the boom in food delivery and the return to normalcy.

With so much to consider, don’t lose sight of the most important thing your restaurant has to offer: good food. Explore different cuisines and put your own twist on popular dishes and trending ingredients today.

Summary: 

Opening a restaurant is a tremendous challenge in these times, and there is so much to consider closely before you can even hope to open your doors. But if you have the right strategy in place and the best technological tools at your disposal, you can build a successful and profitable restaurant business.

While the restaurant industry is very competitive, there are ways to succeed and make a name for yourself. Explore the resources available to you, and make the most out of the skills of your employees to make your mark in the food world. 

Push Operations can provide you with the technology you need to simplify your restaurant management system, finances, and people management from start to end. We can help you achieve the efficiency and timeliness you need to make your restaurant a success.

Want to open a restaurant? We’re here to help!

Push Operations helps restaurant owners build brands and achieve their business goals. Our software solutions streamline all financial and people management processes, leaving you free to take care of your guests and receive the five stars you deserve. 

We can help you with everything from understanding how to open a restaurant to making sure your guests come back for seconds.

Book a demo with us today, so we can help you take your business to the next level!

How to Open a Restaurant: A Complete Guide

Want to know how to open a restaurant? This comprehensive guide will help you get started. Read on to know what will help you succeed!

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How to Open a Restaurant | The Complete Guide

Want to know how to open a restaurant? This comprehensive guide will help you get started. Read on to know what will help you succeed!

Read More!
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