If you want to start a restaurant, there’s no better time. The U.S. restaurant industry is thriving, with estimated 2016 sales of $783 billion, according to the National Restaurant Association (NRA). The more than 1 million restaurants in the United States account for 10 percent of the nation’s overall workforce, and 90 percent of them are small businesses with fewer than 50 employees.
How can you make your new restaurant stand out from the crowd? Follow these 12 steps.
1. Choose your concept
Within the basic categories of restaurants — fast food or quick-service restaurants, casual restaurants or fine dining establishments — there are innumerable variations. Your choice of concept will be shaped by your interests, target market and budget, as well as current culinary trends.
Italian is by far the most popular cuisine in the U.S., according to the NRA and Zagat. Close behind are Mexican, Chinese, American and seafood restaurants. Other popular restaurant trends for 2016, according to the NRA, include locally sourced meats, seafood and produce; natural ingredients and minimally processed food; farm-to-table cuisine; ethnic condiments and spices; sustainable foods and healthful children's meals.
Not every concept will work in every community. Research your market to determine if there’s a demand for the type of restaurant you want to start. If you have your heart set on an upscale French restaurant, but your area is mostly working-class families with young children, for instance, there’s probably not a big enough market to support your concept. Also, consider the local competition and what they aren’t offering that you could provide.
Your budget restricts your concept to some extent. If you're on a tight budget, consider a limited-service concept, such as a breakfast café open in the mornings and early afternoons, or a sandwich shop open at lunchtime. If you have more capital, you have more options.
2. Research your target market
Carefully research your target market. Ask yourself:
- Who are your desired customers? What are their demographics (household income, disposable income, age, marital status, location, occupation, etc.)?
- Where do they currently go out to eat (in other words, what restaurants are your competitors)? How often do they go out to eat?
- How will you differentiate your business from the restaurants they’re currently patronizing?
- What prices are they willing to pay?
- Is there a sufficient customer base to support your concept, both now and in the future?
Free resources for market research include Pew Research Center, American FactFinder, U.S. Census Bureau and Nielsen MyBestSegments.
3. Plan your restaurant design and layout
Once your concept is established, start planning your restaurant space. In addition to the main dining area, you'll need room for:
- Kitchen/food preparation and staging
- Staff area (for breaks and meals)
- Waiting area for customers
- Food and beverage storage
- Storage for dishware, silver, linens, etc.
- Bar, if desired
- Outdoor patio, if desired
- If you want to offer takeout, delivery or curbside pickup, factor in space for those needs, including short-term parking space near the restaurant.
While the majority of your space will be used for the dining area (known as front of house), you also need adequate kitchen and storage space (known as back of house). In general, you'll want to allow about 35 percent of the overall space for kitchen/storage/production. The more efficiently this space is organized, the more room you have for dining. For maximum flexibility, design a dining space you can reconfigure if needed--for instance, by using small tables you can put together to make larger tables.
4. Plan for equipment and supplies
You may need specialized equipment, such as a wood-burning pizza oven, depending on your concept. However, every restaurant needs:
- Refrigeration unit
- Bar equipment (beer taps, refrigerators, ice bins)
- Sound system for music
- Wall decor/window coverings
- Glassware, dishware, silverware, linens (or paper/plastic equivalents for a quick-serve or casual restaurant)
- Staff uniforms
Leasing may make more financial sense than buying, especially if the lease includes maintenance on the equipment. In general, equipment that has a short lifespan or is frequently updated should be leased. You can save big by purchasing used equipment, furniture and cookware. Find used restaurant equipment on eBay or by searching for used equipment or going-out-of-business sales near you.
Download the full eGuide to read the remaining eight steps.