Are you a future restaurant creator? One thing is sure, you won’t have enough time to do all the necessary tasks to manage your establishment. Indeed, having a restaurant is not easy, that’s why you will have to organize yourself well and carry out certain actions in priority.
1. Carry out your business plan
The failure rate for new restaurants is significantly high: 60% of them close after three years. To avoid being one of them, it is essential when you want to open a restaurant to draw up a business plan.
It should answer the following questions:
– What type of cuisine will you be cooking? Why might your customers like it?
– What will your business plan be to bring your customers?
– Where and who will be your suppliers? And above all, at what price?
– How will you measure your success?
– How much will your restaurant bring you?
To help you answer this question, keep in mind that an establishment’s turnover varies according to its type, region, size and service. Therefore, it makes sense that the business plan of a fast food restaurant is different from that of a brewery. Nevertheless, if you want to have an approximate figure related to the competition, you should know that the average monthly turnover for a restaurant that is less than a year old is about €100,254.66 according to a data survey called “Toast” where 43 new restaurant owners provided their monthly turnover for the magazine “2019 Restaurants Success Report”.
– What is the lifespan of a restaurant?
The restaurant business is a tough business and according to sources, it is indicated that the lifespan of a restaurant varies between 2 and 5 years. Of course, this average can vary depending on the establishment, the operation of the restaurant and other factors.
Each restaurant is obviously different, but these six questions form the basis of any successful business plan.
2. Finding the right location
If there is one thing you should not make a mistake about, it is the location of your premises. Opening a restaurant in a bad location will prevent you from growing before you even start. That’s why it is essential that your research is meticulous and that you take the time to complete your project.
Choosing a location is not only about understanding the key factors, such as the neighbourhood’s affluence or its notoriety. It also means understanding the habits and behaviours of the clients you are targeting. Your restaurant needs to blend quickly into the landscape and become a daily and weekly fixture in the lives of your customers. These different factors will allow you to have a better attendance and will ensure a better life span of your restaurant.
3. You need money, a lot of money
One of the main reasons for business failure is not taking into account its need for working capital. Everyone knows the expression, “It takes money to make money”. So to know how much money your restaurant could make, you will need capital for your commercial lease, for staff and for equipment (we are only talking about the main expenses here, but you can add to that all your variable expenses: electricity, merchandise, gas, etc.). As you grow, these costs will increase, so make sure you’ve reviewed your capital needs and create a detailed cash flow statement for at least the next six months (but preferably for the next two years).
Now more than ever, banks are becoming more difficult to meet their lending criteria, so consider alternatives to bank borrowing, including giving up a share in your restaurant with a partner. There are also leasing companies that will be a good alternative to traditional bank loans.
4. Manage the legal aspect upstream
The first months of operation of your restaurant will go by at breakneck speed, you will be sometimes a chef, sometimes an accountant (and sometimes a surface technician!) Therefore, before launching your establishment, try to get rid of as many tasks as possible, especially legal ones. It is very easy, for example, to register the name of your restaurant or to choose an adequate legal structure. Unfortunately, making a mistake in these administrative formalities at the beginning can have long-term repercussions, so you must carefully consider all the advantages and disadvantages of such or such legal structure.
A good legal structure can minimize your financial risks in case things take a bad turn. Remember to keep this in mind when you’re trying to open your restaurant. One thing is sure, this step will take time and energy. Indeed, the steps to open a restaurant are multiple but decisive for the success of your project. Here is a small summary of these different steps:
– Obtain a license (restaurant as well as a pub);
– The creation of the company;
– Taxation ;
– Health and safety regulations.
Being patient will therefore be the watchword for your creation!
It is said that nothing in life is certain except death and taxes.
For the moment, let’s look at taxes! Once you have chosen your legal structure, you will have to choose your tax regime. To assist business creators in this kind of process, the state provides you with the CFE (center for business formalities), it guides you through each of your steps. Once you know how to pay your taxes, you will need to know how to pay as little as possible! It is your accountant or your legal advisor who will be able to help you optimize your tax plan.
A good business plan, a strong desire to launch your business and good anticipation will guarantee that you will not find yourself in the 60% annual closing rate. So make sure you have the best partners and success will be there to open your restaurant!
6. Having the right equipment
Even before opening your restaurant, it is essential to anticipate the purchase of your equipment! Whether it’s your kitchen equipment or your management tools, take the time to think about everything you need and get closer to the right suppliers. Keep in mind that quality is paramount for your equipment to last.