01 Nov Restaurant Startup Checklist
While starting a restaurant is exciting, it’s also time consuming and one of the toughest businesses to successfully launch. At this point, you probably have a vision or your concept nailed down; now it’s time to organize a checklist to aid in planning. To help you out, we’ve put together a list of the ten big steps you need to take to open a new restaurant.
1. Raise startup capital with the help of a solid business plan
Your business plan should reflect your vision for the restaurant. Include market research, an explanation of your target audience, a look at competition, and most importantly, a detailed budget projection. Remember, you’ll be presenting this business plan to investors. When you start raising money, plan on having six to nine months of working capital from the start. Remember that it is normal to lose money for the first few months you’re operating. It takes time to market your business, attract a crowd, get repeat business and deal with unexpected issues that arise.
2. Find the right location
This is one of the biggest decisions you’ll make. Consider your audience, accessibility, potential for growth, terms of the lease and your budget. Do research on the locations demographics, competition, and history. Work with a real estate agent who specializes in restaurant real estate.
3. Get the legal stuff squared away
As soon as the lease is signed, start working on getting the right restaurant licenses and permits. Each state has different requirements, so make sure you check your state’s government web page. Below is a list of licenses & permits to get you started:
• Business license
• Employer Identification Number
• Certificate of Occupancy
• Foodservice Permit
• A federal and local liquor license
• Sign Permit
• Music License
Not sure where to start? It’s always a good idea to consult with a legal professional to ensure that all legal aspects of your restaurant are taken care of.
4. Figure out who will be handling your day-to-day bookkeeping & financial reporting
Failing to put systems in place is one of the biggest mistakes an independent restaurant owner makes. Determine who is responsible for staying on top of your restaurant’s finances and managing the books. If you have a greater passion for front of house operations than you do for crunching numbers, consider outsourcing your basic back-office tasks. Then you can spend your time making important operational decisions based on the numbers rather than trying to calculate the numbers yourself.
5. Purchase Insurance
Equally as exciting as restaurant bookkeeping but extremely necessary is restaurant insurance. Insurance can protect you and your business from a number of problems, from damaged equipment to employee lawsuits. We’ve put together a list of the most common restaurant insurance policies you will need but depending on your restaurant’s location, you may need others.
• Workers’ Compensation Insurance: Most states require this insurance to cover any injuries your employees experience while on the job.
• General Liability: This policy will protect you in the event a customer is injured in your restaurant.
• Disability Insurance: Provides financial assistance to an employee in the event they become disabled and are no longer able to perform their job.
• Employment Practices Liability Insurance: protects owners from claims by employees for discrimination, harassment, wrongful termination, failure to promote and other employment related issues.
• Health Insurance: Covers medical expenses for illnesses, injuries and conditions.
6. Pick the right technology
Look for technology that helps increase efficiencies, improves customer engagement and decreases labor costs. Find systems that communicate with each other, especially your POS. Investing in the right restaurant technology will ultimately save you money and time in the long run.
• Point of Sale: consider a cloud-based POS system that lets you access your restaurant’s data from anywhere, includes upgrades as part of the software, and easily integrates with other software. Ask us who we recommend!
• Billing & Payments System: consider how you will manage your invoices and vendor payments. Streamline the process with software like bill.com that allows for paperless bill pay and integrates with various accounting programs.
• Accounting and Financial Reporting: A lot of your time will be spent analyzing your finances and having accurate financial reporting can be the difference between a successful restaurant or one that fails.
Look for software or services that will help you analyze performance metrics such as profits and losses, cash flow, cost of sales and cost of labor in real-time.
7. Create the menu
Work with your chef to create a menu that represents your restaurant. Make sure the menu suits your operations, creates a unique experience for customers, and helps you control costs. Don’t go overboard; keep a small menu of items that differentiate your restaurant and supplement these with short-term and seasonal offerings that provide flexibility in pricing. Don’t forget to test your dishes and get honest feedback from someone other than you and the chef.
8. Choose suppliers for your restaurant
You’ll need equipment, furnishings, dinnerware, and disposables in addition to food and beverage suppliers. Consider both quality and price when deciding which supplier to use. Keep costs down by comparing similar vendor’s price sheets and negotiate. Remember to keep an eye on prices by reviewing vendor price sheets on a weekly or monthly basis. After you start placing orders, keeping track of inventory to prevent food waste.
9. Hire & retain the right people
Good food loses its appeal if it’s accompanied by bad service. Don’t forget that in addition to your food, it’s your customer service that makes people return week after week. Paying employees in the first few months can be daunting and stressful so hire the vital positions and create a schedule that makes the most out of every employee. Consider hiring at least one manager with industry experience early to help you make important decisions along the way. Lastly, have employee materials ready: codes of conduct, employee handbook, training guide, new employee forms.
10. Promote your restaurant
Build your website and get your social media platforms up and running. Let the press know you’re opening and, if it is in your budget, hire a publicist that has contacts in the industry. Consider hosting an opening event such as a friends and family night for increased exposure and constructive feedback. Remember, there are plenty of alternatives to traditional advertising – for example, giving a customer a free item from the kitchen can often lead to word-of-mouth promotion and repeat business.
KitchenSync has helped numerous restaurants open their doors and offers a variety of services that can help get your restaurant open successfully and quickly. From free restaurant bookkeeping to budgeting & forecasting, learn about our range of services for new restaurants here.