Restaurant start up information

Walk down any high street in the country and you can be almost certain of finding at least a small selection of restaurants. There may be a Chinese, Indian or Italian restaurants. You may not even notice them unless you're actually going for a meal. But many of them started as little more than a dream for an aspiring entrepreneur.

If the idea of being surrounded by food, providing excellent service, seeing people enjoy themselves and being at the heart of the community is your idea of heaven, then the restaurant trade could be just for you.

What is it?

The term restaurant can encompass everything from your local pizzeria to haute cuisine. Essentially, restaurants serve and prepare food for the public. As our own cooking skills have declined, a new generation has become more and more dependent on someone else doing the cooking.

Who is it suited to?

No doubt you have eaten out yourself and have your own ideas about what makes a good restaurant, whether it is the food or the atmosphere. But you shouldn't think that makes you qualified to set up a restaurant.

Many people fall into that trap but it is precisely the wrong idea to go into the business. People make the mistake of going into something they enjoy rather than what they are good at. "Too many people say 'I know what I like' when it's rather more a question of marketing and the quality of your product."

In fact, it is less about being front of house and more about knowing the other face of the industry. The best thing to do is work in one first and get experience, both back and front of house. Even wash the pots! Once you've done all the jobs it becomes easier to manage people, help them and also know when they are trying to pull a fast one!

Research and regulation

Firstly, test your commitment to the trade. As long as you are prepared to run a business rather than merely indulge a hobby, you may be on to something.Too many people think like this, a possible reason for the high rate of failures.

Part of the reason for the high rate of failures is that professional restauranteurs aren't doing them. That's not to say that you can't change careers, but you can't waltz into it, without having already experiencing the sweat and tears of the trade.

Then consider the competition. If there's a whole street of French restaurants, then another French restaurant may be something that the public could live without. But if there's nothing serving Mexican food, then there could be an opening. Alternatively if there are a whole host of French restaurants in an area - then clearly they must be making money - so how can you compete and steal their customers?

Marketing skills are absolutely critical. You need to check out the location and the competition. What's your catchment area? You can't charge a premium when you first open. You need to know what will make people want to come and spend their money with you. With local research you can see what is popular whether it be Mexican, Thai, Japanese, whatever.

Just how critical marketing is, is documented by the fact that in the late 1980s, approximately 97% of restaurants went bust within the first two years. Location, location, location, never was a truer word said. A crowd will draw a crowd. You need to look at the site and see what's lacking. Competition can be pretty intense, so for that reason you wouldn't want to put an Italian restaurant next to another.

Once you have established that there is a need for a particular restaurant, then you can move on to the nitty gritty. It was then that the real work begins: sit down and cost everything out - right down to the teaspoons.

Recruitment is also something that needs serious consideration. It may attract students seeking extra pocket money but the turnover can be notoriously rapid. Chef's are likely to come and go - being a chef is very hard work, so if you can get a good one it's worth paying them a little extra to keep them, maybe offer a share incentive - a percentage of profits.

What are the rules and regulations?

Owning a restaurant means there are a mountain of regulations you must abide by. Your kitchens must adhere to strict rules concerning hygiene. The primary rules are set out in the Food Safety Act. Basically, this sets out standards of cleanliness for walls, floors and ceilings. You must prove that there is adequate pest control and drainage.

Mechanical and electrical ventilation systems are compulsory. You also need licenses if you are selling alcohol, although you can be unlicensed and allow diners to bring their own. Refrigeration systems need to be digitally controlled. You can't just buy a couple of old domestic fridges. It's really what you can't see in the restaurant that actually costs the most.

In addition, the electrical equipment required by most restaurants means that you could fall foul of health and safety at work laws. The building and the wiring must be safe and your kitchen must be a reasonable size to cope with the restaurant.

If you are planning to take over an existing shop and convert it to a restaurant, remember that you might have to apply for planning permission depending on what country you are in. This may require changes to the kitchen to bring it up to standard. And you will also have to provide disabled facilities again depending on what country you are in.

How much does it cost to start?

There are some basic costs that will apply to almost any restaurant. Clearly your shopping list will include tables, chairs, cutlery and crockery, kitchen and cooking equipment, toilet facilities and ventilation.

As money is tight setting up your business - consider buying second hand - hundreds of restaurants are going out of business so there are lots of opportunities to purchase quality gear at a bargain price.

As well as ovens and fridges, your kitchen equipment will include dishwashers, storage units, scales and don't forget the all important fly killers. If your premises are multi-story, then you'll require lifts for disabled diners and for taking food and plates between floors, although pretty essential, can also be expensive to install.

It also depends where you start your business. You need to have quite a lot of money particularly in a capital city. However, if you are going for something slightly more modest, a restaurant on a suburban high street for example then your start up costs will obviously be a lot less. You need to have some cashflow, there is a relatively high risk. Restaurants do come and go and are very sensitive to the economy."

Aside from the equipment, staff are your biggest cost. If you are open seven days a week, you will need more than one chef. You may even consider advertising for chefs in a different country. Head chefs should have 10 years' experience, while their more junior colleagues should have three to four years.

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