How to start your own restaurant

How to start a restaurant

how to open a restaurant If you are excited about the prospect of starting your very own restaurant business, you are in luck. This guide will cover all the information you need to know so you can get the ball rolling.

It’s a dream for many across the UK to open and run a restaurant. Whether you’re a chef who has always wanted your own place or an entrepreneur who’s spotted a gap in the market.

However, this dream must be achieved with a lot of hard work and careful planning, so you need to prepare yourself before you take any rash actions.

You will also learn about market research, costs, budgeting, regulations, and branding from our guide. Expert insight is provided into all the key aspects of starting a restaurant business, from writing business plans and selecting locations to picking an interior style and hiring staff.

How to open a restaurant

Here’s an overview of some of the steps you’ll need to take when setting up a restaurant. We’ll talk more about them below, but here’s an overview of some of the steps you need to know right away.

  1. How much does it cost to open a restaurant?

Depending on location, size, target market, staffing, etc., how much it will cost to start your restaurant will differ greatly. Nonetheless, it is important to consider how much it will cost you in terms of premises, ingredients, staff, and other costs, and run the numbers to determine whether it is an undertaking you can actually afford.

  1. How to budget when starting a restaurant

Considering how you’ll handle your finances is never too early, and maybe even consider investing in some top accounting software.

  1. How to manage restaurant payments

To handle restaurant payments, you’ll need a good POS system. At first, you may be able to use an iPad POS like Zettle, but to grow your business, you’ll need a POS that does far more than just take payments.

  1. Writing a restaurant business plan

It’s almost like a recipe for success to write a restaurant business plan. You should explain what you plan on doing and how you will achieve your goals.

  1. Restaurant market research

You should prepare a business plan by conducting some research on what other restaurants in your area offer and what food trends you can capture as part of your business plan.

  1. Buying/renting restaurant premises

Finding the perfect restaurant location requires a lot of effort. You’ll want to consider location first, because it dictates passing traffic and levels of competition, but also look at business rates and the possibility of taking over a pre-existing business.

  1. Branding and designing your restaurant

It’s not just about the food when it comes to a restaurant experience. Consider your name, logo, menu design, and interior layout carefully if you wish to stand out. Finally, show it all off with a top-notch website builder like Wix.

  1. Stocking your restaurant: supplies and catering equipment

The exciting part doesn’t come here. But a restaurant won’t do well if there isn’t anything to cook and nothing to cook with. Work out how much profit margin you can make on different dishes based on your ingredients. A restaurant has a hefty energy demand, so you might also want to plan ahead for that.

  1. Restaurant recruitment: how to hire top talent

It is likely that your restaurant’s success more than anything else depends on the quality of your employees. Ensure you create a positive workplace culture and think about what your future employees want in a job in order to compete effectively.

Now let’s take a look at each step, starting with costs:

How much does it cost to start-up a restaurant?

Expect to spend between £100,000 and £200,000 to start up a restaurant. There’s no definitive answer to restaurant startup costs – you might shell out a few thousand pounds to open a popup in an affordable area or a few million creating a top-of-the-line restaurant in London.

You’ll have to factor in the following costs:

  • Premises – Regardless of whether you lease or buy your restaurant premises, it will always be a major expense.
  • Staffing – You should plan to hire at least a few employees, and their wages should play a significant role in your budget.
  • Supplies and equipment – Prices for catering equipment and ingredients can vary widely depending on how ambitious and experimental you are. Mark up your dishes accordingly if you are ambitious and experimental.
  • Energy bills – Restaurants consume a lot of energy, so shopping around for the best deal is crucial.

How to budget when starting a new restaurant

In order to run a successful restaurant, you must budget effectively.

It is important to calculate your costs (such as those mentioned above) and to estimate your sales. The difference between your total sales and your total costs is your profit (or loss), the most important figure for a small business.

If you’re running a restaurant, it can be difficult to keep track of where your money goes, so it makes sense to invest in good accounting software once you’re up and running.

The best accounting software packages, such as QuickBooks, cost around £20 a month and let you track every penny that enters and leaves your business account accurately as well as calculate your most profitable periods and keep track of taxes easily.

How to manage restaurant payments

In order to start a restaurant, you’ll need a good POS system.

In addition to taking payments, you’ll need POS software that supports more features than just payments, like Zettle.

Our pick for the best restaurant POS system is Lightspeed, which includes various features standard with high-end restaurant POS systems, such as:

  • Customized menus that allow you to make changes based on seasonality or food trends, and also to add photos and descriptions for your servers
  • Online ordering makes the process much more efficient as orders can be sent directly to the kitchen from anywhere
  • you can access inventory management tools that help you keep track of your supplies

How to write a restaurant business plan

You must include in your restaurant business plan things such as a concept, marketing plan, business structure, management team, financial strategy, and what makes your restaurant different from your competitors.

Don’t be afraid of keeping it short 

At the end of the day if your business plan is extremely long and detailed, nobody is going to want to read the whole thing, and therefore no one probably will read it all the way through. This, of course is an issue, because when it comes to gaining funding, you need the potential loaner to know the ins and outs of your future company.

The other issue with making it overly extensive is that your business plan should ideally be a tool that you can use in the future. When you get to a point where you want to make refinements to the structure of your company, you should be able to look back over your plan and finalise some decisions from there. So, keep things short and sweet and have an easy time during the years ahead.

Use it as an idea tester for your business

Working through your business plan, and beginning with a one-page pitch, can help you test the feasibility of your business’ original concepts and ideas well before launch day rolls around.

As you work through everything from your branding and mission statement to your budget and future hopes, you are best of getting some feedback in different areas and look out for any recurring criticisms that seem to be popping up. This can be as basic as having a tutor or peer reviewing some of your ideas, or leading statistical surveying and talking straightforwardly to your potential client base.

The more you test and survey components of your plan, the more effective your plan and organisation will ultimately be. This can save you from going through days building up a strategy that simply isn’t doable.

You should conduct your market research locally, but you should also keep in mind trends that will likely impact the restaurant industry in the next few years, including:

People are becoming vegetarians, vegans, and flexitarians

Increasingly, people are wanting to eat less or no meat, and turning towards vegetarian, vegan or being flexitarians, these are influenced by factors such as personal beliefs and growing awareness of the impact of food production on climate change.

In fact, a Statista survey of 2,000 UK consumers in 2021 found that 7% followed a vegetarian diet, and another 3% followed a vegan diet.

Increased adoption of technology

According to the researchers at EHL Insights, several digital tools are progressing rapidly in UK restaurants, including EPOS systems, digital menu boards for kitchen staff, online booking, QR code menus, online ordering, and inventory management software.

Clearly, not all of these will be suitable for your restaurant, but it’s worth considering whether they could make your business more efficient.

Transparency, sustainability, and trust

The consumer is becoming more concerned about the impact their food choices have on the environment and society. To highlight restaurants that excel in environmental sustainability, Michelin introduced the Michelin Green Star.

Buying restaurant premises

Taking over an existing establishment with a fully equipped kitchen and bar might be the easiest way to get a restaurant location, but this can be costly.

Consider the size, location and experience level of the establishment, as well as the business’ previous performance and the reasons for its sale.

We advise that you should obtain the previous restaurant’s profit and loss statement and find out how long the lease is for the property.

BusinessesForSale.com has a dedicated restaurant section, which lists the asking price as well as the current net profit and turnover (unless you request them).

You can also buy commercial space or just a restaurant on Rightmove.

Branding and designing your restaurant business venture

The food may be the most important aspect of running a successful restaurant, but it is only one part of it.

Branding and design will also be important – your name, logo, menu, and interior design should all convey your concept, and a striking website should demonstrate all of this.

Take a look at these guidelines:

Restaurant name and logo

A restaurant’s name and logo should:

  • Make a lasting impression
  • Easily pronounceable or spelled
  • Convey your message

As a general rule, less is more. You can summarize your concept in one or two words and create a simple logo that isn’t too flashy and distracting.

This is where market research comes into play. Consider how well your competitors’ names and logos convey their ideas and consider what you can do to do the same.

The final tip is to avoid well-known names – even if your family name is McDonald, you will mislead your customers and maybe even get sued if you call your restaurant McDonald’s.

Choose a name that doesn’t limit business growth 

This is an important point to take on board for any new business owner looking to put a name to his/her venture. If you call your business ‘The Best Book Store’ (we wouldn’t recommend that name), but then a little further down the line you decide you want to sell more than just books, your business won’t be in a great place to do so.

Remember that your company name is the first point on connection and communication you’ll likely have with any of your target audience members. Therefore, you should call it something that is open to future growth, but also something that will connect with people as quickly as possible. Do not allow naming confusion to limit your projected sales.

Restaurant licence and regulation laws

Let’s take a look at what you need to know about A3 usage licenses and restaurant hygiene regulations.

Restaurant regulations

Restaurant owners and operators must apply for all the necessary licenses and certifications before they can open their restaurants under an umbrella license. Be prepared to deal with a lot of paperwork and to-ing and fro-ing when it comes to restaurant regulations and laws.

We also provide a list below of courses you will need to complete if you plan to get involved in the food preparation process.

Food business registration

You should definitely register your food business with your local authority. In order toprepare, cook, store, handle, distribute, supply or sell food, you must have this license. The business must be registered at least 28 days prior to opening. You could receive an up to two-year prison sentence if you fail to register your business.

You may be visited after registering your business with the Food Hygiene Agency. You should be prepared to open even if opening isn’t mandatory – a low inspection rating would severely harm your chances of succeeding.

Food Premises Approval

To get a Food Premises Approval, you must be inspected and approved by your local council if your restaurant handles meat, fish, eggs, or dairy products (so all restaurants, with the exception of strictly vegan restaurants). The license application can be found here.

Premises Licence

Any activity that requires a license, such as selling alcohol, requires a Premises Licence. In addition to serving hot food and beverages after hours (between 11pm and 5am), the license allows you to play live and recorded music. The cost of a premises licence depends on the value of your premises but can range from £100 to £1,905.

Personal Licence

It is required that either you or someone on your team holds a Personal Licence if you wish to sell alcohol. A Personal Licence authorises every sale of alcohol. This must be obtained from your local council.

Restaurant Insurance

A restaurant insurance policy does not exist, but public liability insurance is a must. If a member of the public is injured or becomes ill while visiting your restaurant, public liability insurance will cover legal and compensation costs.

In the event that a member of your staff becomes injured or ill at work, you’ll also need employers’ liability insurance. In addition to buildings insurance, be sure to consider contents insurance and stock insurance (covered by your landlord if you are leasing your premises).

Pest control regulations

Pest control requires “adequate procedures” to be in place. Visit the Government’s website for more information about The Food Safety (General Food Hygiene) Regulations.

Food hygiene certificate

A food hygiene certificate isn’t required by law, but knowing how to handle food the right way will help ensure your restaurant is a safe place to eat. Training and certification are available online. Additionally, the government offers free food safety courses, including food labelling, and allergen training.

Covid-19 restaurant regulations

Be sure to comply with the latest Covid-19 rules for your area when operating your restaurant. It is important to note that they differ for England, Wales, Scotland, and Northern Ireland.

Invest in an order and pay app

In the event of a full lockdown, you’ll be able to operate your restaurant legally through an order and pay app.

Despite the fact that you can’t serve customers in your restaurant, you can still offer a takeout and delivery service. Your customers will love being able to access your menu, order food, and pay online with an order and pay app. You’ll likely find that this option is becoming more popular as 2022 progresses; it is being used in far more restaurants than ever before. When they pay with the app, they’ll be able to come pick up their order or have it delivered if that’s an option you offer.

You don’t have to spend a fortune to utilise order and pay apps. Several white label suppliers will allow you to create an app on their platform that is totally branded for your business, which will save you from hiring an app designer.

It depends on whether you choose a web-based app (doesn’t need to be downloaded) or a native app (must be downloaded), but generally it’s not more than a couple hundred pounds. A percentage of every order placed through the app will then be charged by your order and pay app supplier.

Creating a restaurant menu

Menu design is one of the most important factors that potential customers consider when deciding where to dine.

You should design a menu that is easy to read, descriptive, and uncluttered, and complements your theme.

Furthermore, you should clearly segment your dishes into clearly identifiable sections, highlight special or popular dishes, and provide accurate and eloquent descriptions of your dishes.

Don’t use clip art (instead use free image databases like Shutterstock), unnecessary technical jargon that your clients won’t understand, too many disclaimers, poorly readable “artistic” fonts, and too long descriptions of dishes. Laminating your menu is also not recommended.

Website design for restaurants

You need a great website to show off your great name, unforgettable logo, carefully crafted menu, and atmospheric interior.

Today, it’s easier than ever to get one up and running. There are plenty of restaurant-specific templates available on popular web builders like Wix that can be easily customized to fit your design concept.

By making a few key design choices, you can create a restaurant website with Wix’s ADI (Artificial Design Intelligence) in minutes.

Stocking up your business venture

Restaurants can’t exist if their chefs don’t have anything to cook with or with which to cook. Equipment and supplies come into play here.

Supplies and ingredients

Make sure to keep your ingredient costs in mind when you are assembling your menu. Consider buying a lot of common, affordable ingredients rather than special ingredients that are only used in one dish.

Additionally, a restaurant POS system like Lightspeed can make keeping track of your inventory a lot easier since it automatically updates as supplies arrive and dishes are sold, so you don’t need to worry about tracking it yourself.

Choosing a supplier

You should be careful when choosing your food suppliers. There is more at stake than just late deliveries – unhygienic packaging and transportation of perishable foods could put you and your customers at serious risk.

Consider these factors when choosing suppliers:

  • Do they have local authority registration?
  • What certifications or quality assurance do they have?
  • Does anyone recommend them?
  • Are their products stored, transported, and packed in a hygienic manner?

It is also a good idea to spot check the produce in addition to checking its temperature and quality.

Keep in mind

Keeping track of how much you’ve bought, where you bought it from, and when you bought it is legally mandated. In case it is ever needed by a government inspection or enforcement officer, keep this information safe.

Equipment

Restaurants require a lot of equipment, there is no way around it.

You should be able to determine what you need to invest in by looking at the following list:

Cleaning and hygiene

  • Eco-friendly cleaning equipment
  • Toilet hygiene
  • Pest control
  • Signage
  • Bins

Tableware

  • Cookware
  • Glassware
  • Crockery
  • Tablecloths
  • Serving trays

Consumables

  • Disposables (paper napkins, paper straws etc.)
  • Packaging and labels for food
  • Lighting

Clothing and uniform

  • Chef uniform
  • Staff uniform
  • Aprons

Kitchen appliances

  • Fridge
  • Freezer
  • Ovens
  • Deep fat fryer
  • Hobs
  • Stainless steel tables
  • Sinks
  • Shelves
  • Dishwashers and glasswashers
  • Microwave
  • Toasters

Catering equipment

  • Knives
  • Chopping boards
  • Graters
  • Food processor
  • Blenders
  • Pasta maker

All of these things are not needed by every restaurant, and the dishes you serve will always have an impact on the equipment you need.

Lastly, you should carefully consider how your restaurant will deal with its high energy costs. Choosing the right business energy broker and switching service can be challenging. Here are a few tips for choosing the right broker and switching service.

How to make sure you’re hiring the best people possible

It is crucial to hire the right people for your business, whether they are front-of-house staff like waiters and greeters or back-of-house staff like chefs.

However, now is not an easy time to hire, because Brexit and “the great resignation” have left the job market short of high-quality candidates.

Today, restaurant owners can benefit from a lot of advice: developing an engaging workplace culture, emphasizing your business’ story in your pitches, devoting enough time to hiring, and offering some flexibility.

Invest in your staff’s motivation by offering them incentives and career development opportunities that will keep them at your restaurant for longer (such as a pay raise after a certain amount of time).

Set a few business goals for your company to aim for

This could benefit your restaurant business venture greatly during the earliest stages; you will award your company with a sense of direction and purpose.

Whenever you begin to develop short term goals for your small business venture, you need to ensure that you are following the SMART framework. This means that each and every single one of your goals or objectives are specific, measurable, attainable, relevant and time bound. Without following this structure, you run the risk of creating unrealistic goals for yourself and your small business venture; setting your company unachievable tasks isn’t going to help it in any way.

For example, if you want to grow your social media followers, don’t use Coca-Cola as something to aspire to just because they’re one of the biggest brands creating content in the digital age. Instead, compare yourself to others in your field of work and try to be the best performer in your own niche market. If you’re a small business, you must have small business goals; do not set yourself impossible tasks, or it’ll only end in disappointment, and you’ll end up pointing the finger at someone who shouldn’t really be blamed.

In order to successfully set and achieve goals you’ll need to first identify where the problems lie in your business structure and where there is some room for improvement within the firm. This will award you with some guidance and set you down the right path from the beginning of the improvement process.

Our final thoughts: make sure you leave a tip

You’ll have to manage everything from recruitment to interior design when running a successful restaurant, as you can see.

This is a business you can really stamp your personality on if you’ve got the skills and a passion for food. Successful restaurants are not just about food, but also about identity and atmosphere combined to create unforgettable dining experiences.

Even though we covered a lot in this guide, it is really just an introduction. Make sure you take advantage of the numerous resources out there offering detailed advice on all aspects of running a successful restaurant.

You shouldn’t go too far wrong if you focus on creating a positive atmosphere for your employees and customers. Best of luck!

Could we help you to fund your restaurant?

Business Cash Advance for restaurants in the UK is an alternative restaurant funding solution. Restaurant owners need to come up with new innovative ways fund their businesses. Business Cash Advance is one way to raise between £5,000 unto £200,000.

Menu