How to Start Profitable Restaurant Business for Beginners

Restaurant Business Ideas
The process of starting is profitable restaurant business can be both fun and rewarding. With the right strategy and steps you can start a profitable restaurant business that will be amazing and good for people to patronize.

Restaurant Business is a lucrative business in most places e.g Nigeria, United States Of America (USA), United Kingdom (UK), Canada, Australia, Dubai etc.

Although running a restaurant business requires long hours of work, yet restaurant business has been one of the favorite business of entrepreneurs. That is to say, if the idea of ​​starting a food business comes in the mind of a person. So opening his own restaurant is also included in his idea somewhere and he is able to take a decision only after thinking seriously on many ideas.

Apart from this, as we all know that a lot of people are connected to the areas of hotels and restaurants. Therefore, after a time, the desire arises in those people to start their own business. So they think of starting restaurant business only. If you are also one of those people and want to know how you can start restaurant business. So this is what we are trying to tell further in this article.

By the end of this article, you’ll have the knowledge and confidence to start your own restaurant business anywhere you are. You won’t believe how easy it is to cook a delicious meal in your very own kitchen.

According to a data, the restaurant industry in USA, Indian, Nigeria, UK is one of the fastest growing industry in the world. At present, it would have increased even more, the main reason for the growth of the restaurant industry is the change in the lifestyle of the people, the increase in the income of the people, urbanization, the increase in the working population, etc. That is to say that at present people have started liking food in restaurants more.

Because usually married couples are working in the office and after coming from duty, they rarely feel like cooking. Apart from this, households where both husband and wife are not working, they also like to eat in restaurants one or two days a week. And on metropolitan cities and tourist destination, Restaurant Business works as a note printing business. Because compared to other cities, there are more customers who spend money and are fond of food.

There are some some certain goals you need to take before starting a restaurant business.

Although the most important means to start any business is considered to be investment i.e. money. The same is for starting a profitable restaurant business, but even if the entrepreneur has money, he still needs a lot of hard work and management to start such a lucrative business.

The meaning of saying is that investment is needed for more or less all business, but the biggest and most important thing to start a business is the experience and knowledge of working in that field so that the entrepreneur is involved in that business. Be able to handle the difficulties that come and maintain your composure even in the most difficult situations. Any person who wants to open his own restaurant can follow the following basic points mentioned by us.

1. Decide the Type of Your Restaurant Business

As we all are well aware that at present there are many types of restaurant business. That is to say, restaurants can be divided into different categories. These mainly include

  • Fine Dining
  • Restaurant Bars
  • Fast Food Restaurants
  • Cafe Restaurant
  • Buffet Restaurant
  • Casual Dining Restaurant
  • À la Carte

Therefore, the first step of an entrepreneur towards starting a restaurant business is to decide what type of restaurant he/she wants to open.

The entrepreneur also has to find out that at least how much fund he can generate for his business i.e. how much money he is thinking of investing on his business. Because somewhere the amount of investment will also help the entrepreneur to decide which type of restaurant he should open.

When the entrepreneur decides on this matter, then after that he needs to make his business plan i.e. business plan in writing. This should include the restaurant theme, interior design as well as investment and future planning.

2. Estimate the cost of opening a restaurant

Estimating the cost involved in starting a restaurant business is very important for this business. That is because only after assessing it, the entrepreneur will be able to do fund planning and plan ahead. So it is important to take note of the current price of the following.

Food Cost
In restaurant business, food cost refers to the cost that the entrepreneur needs to spend in buying raw materials like flour, pulses, rice, spices, meat etc. According to one figure, the food cost involved in making a dish is 30-40% of the total cost of that dish. But still the entrepreneur needs to assess it according to his plan. Because in this it is necessary to assess the labor cost etc.

  • Fixed costs or overheads are those expenses which are different from raw material or labor cost. These include the following expenses.
  • These include restaurant fare, although fares may vary depending on location and city. But an ideal fare should not exceed 10% of the total revenue of the restaurant.
  • The interior of the restaurant can be decided by the entrepreneur depending on the type of business and the theme of the restaurant.
  • Purchasing kitchen equipment suitable for a restaurant can loosen the pocket of an entrepreneur. But since most of the tools are made of stainless steel, they cost more but they also last longer. So in the long run, they recover their cost.
  • Since the entrepreneur may need to get many licenses and registrations for restaurant business. However, the license fee etc. will depend on the type of business under which business entity the entrepreneur registers his business.
  • Marketing is also necessary for business. According to one figure, the entrepreneur running a restaurant needs to spend about 1-2% of his total earnings in marketing.
  • Since at present the billing and payment process should also be easy. Hence the entrepreneur should also include these expenses while estimating the expenses.

3. Manage fund to fund

Many restaurant businesses do not come into existence because they require more investment than the capacity of the entrepreneur to open them. That is to say, due to lack of funds, many entrepreneurs are not able to fulfill their dream of starting a restaurant business. Hence investment is a very important factor for opening a restaurant.

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Based on the type of restaurant, the entrepreneur needs to manage the cost of opening his restaurant. When the entrepreneur has the figure of investment to be made, he can adopt the following methods to raise funds.

  • If the entrepreneur has money equal to or more than the cost of starting a restaurant business in his account. So the entrepreneur’s first difficulty in opening a restaurant is almost over. However, if the entrepreneur wants to reduce the risk, then he can start this business in partnership also.
  • If the entrepreneur does not have sufficient amount of money in his account then he can apply for loan from the bank. However, it may be difficult for the entrepreneur to take loan from the bank. Because for giving loan, banks are looking for some property or jewelry in mortgage or some person who will take the responsibility of that loan.
  • Although it can be very difficult to get investors for funding in the initial phase but if the entrepreneur has an effective business plan for his restaurant business. So he can look for Capital Venture or Angel Investor.

4. Select Healthy Location For Your Restaurant

When we are talking about starting a restaurant business, then it becomes very important to talk about its location as well. This is because the location generally contributes significantly to the success and failure of this type of business. When the entrepreneur is choosing the location for his business, it is very important to first assess the competition in that area, and also assess the progress of the competitor and understand their business model.

Competition should be evaluated not only in the cuisine, but also what type of food the competitors of the entrepreneur are providing to their customers like fine dining, casual food, À la carte etc. This will help the entrepreneur to understand the customer base like their spending capacity, preferences, favorite food etc. Keep in mind that for restaurant business, it is very important to choose a location where customers can easily see and reach.

The ground floor is generally suitable for restaurants. That’s because the restaurants which are not available on the roadside or on the ground floor, customers find it difficult to find them. Apart from this, the location should be such where the neighbours or neighbors of the entrepreneur do not hesitate to give him no objection certificate. Because it may be required to start this kind of business.

5. Get License and Permission for Restaurant Business

Entrepreneur may need to obtain a license from the government to start a restaurant business in Nigeria, USA, UK, Indian etc. However, for obtaining these licenses, the entrepreneur may be required to pay different fees depending on his/her enterprise. The following licenses may be required in starting such a business.

  • There may be a need to take a trade license from the municipal authority, whose fee is $50 to 100 dollars. This license is valid for one year and may need to be renewed.
  • Apart from this, the entrepreneur also needs to get a food license from the Food Safety Authority, NAFDAC, which the entrepreneur can apply online as well.
  • GST registration is also required, it can also be easily applied online.
  • Entrepreneur may also need TAN and Professional Tax License to deduct tax of his employees.
  • If the entrepreneur also wants to arrange a bar etc. in his restaurant, then he will also need a liquor license. Since it takes some time to get it, the entrepreneur should apply for it well in advance.
  • In the form of business registration, the entrepreneur can register his business under proprietorship, partnership etc. Apart from this, if the entrepreneur wants, he can also register his business under Udyog Aadhaar. Apart from this, fire safety license and pollution license may also be required in many states.
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6. Hire Neat Employees

Hiring the right talent and retaining them for a long time is a big challenge in this restaurant business. It is also a good idea if you hire employees under a referral as people mention their relatives and family members.

Although in the initial stage, the entrepreneur can recruit the employees through traditional methods. For this, the entrepreneur can call the candidates for interview by advertising in the local newspaper. Apart from this, the entrepreneur can also call the candidates for interview by advertising on Facebook and LinkedIn. For restaurant business, the entrepreneur mainly needs three types of staff which are as follows.

  • In the kitchen staff, the entrepreneur may need a cook, food preparation staff, support staff and unskilled labour.
  • There are waiters, housekeeping staff, bus boys etc. as service staff as they are required to communicate with the customers. Therefore, they should have good communication skills.
  • Restaurant manager, safe, cashier, store manager and other staff come as management staff as they have to look after the overall management. Therefore, it is very important for them to be educated in sufficient quantity.

7. Design Menu for Restaurant Business

Designing a menu for restaurant business is also a very important task because the entrepreneur needs to take care of many things while designing it. The entrepreneur should include items in the menu that he can quickly provide to the customers and the ingredients used to make them are always readily available.

Entrepreneurs should focus on menu items made from ingredients which are liked by the customers and also generate less waste. That is, most of them can be used. The menu should be designed in such a way as to encourage the entrepreneur to spend more. For this, the entrepreneur can take the help of an expert safe.

8. Identify Vendors and Suppliers for Your Business

A very good business relationship with vendor and supplier is very important for successful implementation of restaurant business. The entrepreneur should have at least two to three vendors belonging to each category. If the entrepreneur has two or three vendors of the same category, then he will be able to make a comparative difference of prices and if there is some problem with one, he can use the other as a backup.

It is absolutely essential for an entrepreneur to have at least two days’ stock to deal with emergency situations. Items from store room to kitchen etc. should be distributed every morning in the morning and stock should be assessed. However, it is better to enter into a long-term agreement with the vendor as it protects the entrepreneur from changes in prices. However, the statutory documents and trade identification number etc. of the entrepreneur with whom he is entering into this contract should be checked.

Although if seen, successfully running a restaurant is a very challenging task. But still the idea of ​​starting a restaurant business in India is an excellent idea.

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