Thanks to shows like Chopped, The Next Food Network Star, and Kitchen Impossible owning a restaurant has been elevated from a job to a stepping stone to stardom. Chefs and restaurant owners are now television stars, racking up hundreds of thousands of dollars from commercial endorsements, cookbooks, websites, apps, cookware - you name it, and there is most likely a celebrity chef attached to it. So, it’s very tempting when thinking of opening a new restaurant to see it as a golden opportunity to fame and fortune – or at least fortune. The bottom line is that for most people (this means you) opening a new restaurant won’t make you famous. And it probably won’t make you rich – at least not right away. Owning your own restaurant can be a highly fulfilling career, allowing you to be your own boss.
Are You Ready to Quit Your Day Job?
Depending on your current employment situation, are you ready to quit your day job? Are you the sole financial provider for your family? Do you carry your family’s health insurance? Will you be able to afford to go without a paycheck until your restaurant opens? How are you going to cover things like health insurance and life insurance?
Are You Ready to Be Self Employed?
Susan Ward, our Small Business: Canada Expert has a great article about the six traits a person needs to be self-employed. Not everyone thrives being the boss. It takes a lot of organization and discipline to run your own business – especially one as all-encompassing as a new restaurant. Are you up to the task?
What Is Your [Business] Plan?
If you are thinking about opening a new restaurant, chances are you already have a theme picked out, a good idea of the type of food you would like to serve, and who your customers are. Now you have to put all those things together into a business plan. Like a road map, a business plan will help you plan a start-up budget and a sales forecast for the coming year. A restaurant business plan also forces you to outline what you are going to do if there are problems. Perhaps the cost of new kitchen equipment is over budget, or your initial sales are lower than expected. Having details on how you are doing to deal with those scenarios down on paper will make it easier to deal with those types of problems if they occur.
Where Are Your Going to Set Up Shop?
Location, location, location. Location is the most important facet of success for a new restaurant. If the location is wrong, no amount of excellent food and service will bring in the customers. So, what is the perfect location for a new restaurant? Choosing the right restaurant location depends on a variety of things:
- Accessibility – either by foot or by car.
- Local competition – is there enough business for everyone?
- Cost – how much is the rent/lease/mortgage? Can you afford it based on your business plan?
Who Are You Going to Hire
Please don’t say, family and friends. There are many family-run restaurants out there, so the model does work. However, you need some careful consideration before going into business with family and/or friends. Being in business changes the dynamic of your relationship, so it’s important that you are both comfortable as either co-owners or as a boss and employee. Here is a great article from Jean Murray, US Tax Law Expert, about what you should know before you go into business with family.
Opening a new restaurant is an exciting venture. There are lots of things to consider as you get ready. Being honest with yourself about your goals, motivations, and expectations as a restaurant owner can help make your dream a reality.