Everyone has fantasized at one time or another about starting a restaurant. For those that are serious about embarking on this adventure need to understand a few things before getting started. Starting the process without having an understanding of the fundamentals can spell disaster from the gate. Just like a business, running a restaurant takes time to understand and become successful at. Here are five things you need to know before opening your restaurant.
1. Incorporating a point of sales (POS) system
Installing a point of sales (POS) system is one of the most important steps to complete before opening a restaurant. A restaurant POS system helps to ensure that transactions go smoothly and efficiently. All transactional information is held within the POS system for future use or consultation. These systems save time and money by speeding up the sales process and also store a lot of critical information for future analytics.
2. Understanding the tax codes and forms
Starting a restaurant brings with it a whole new tax code and series of tax forms that must be filed and filled out appropriately. As taxes for normal citizens can seem complicated enough, these extra pieces of work don’t settle well with any business owner. However, this is a critical part of starting a restaurant and must be understood thoroughly. A lawyer can always be hired to help advise the legal process.
3. Consider all the different financing options
Restaurants are not cheap to run and are even more expensive to build. According to Restaurant Engine, the average cost of starting a restaurant is $275,000. While the price can vary from millions to only several thousands, having an average idea helps top this sort of investment into perspective. A more specific statistic finds that the average cost per-seat of starting a restaurant is $3,046. From this point, it is critical to understand the different financing options such as bank loans and investors that are available.
4. Know the restaurant market
It is fun to fantasize about opening a dream restaurant with personal tastes and everything catered to our own preferences. However, the restaurant market is not catered to our individual tastes. For this reason, it is critical to understand the restaurant market before starting one. Having this knowledge will help determine what kind of restaurant and mode will be successful in that particular area. It is important to note that restaurant markets vary greatly depending on location and sometimes even on a local scale.
5. Study competitors
Many new restaurant owners are scared to have competition within their market. They see this competition as a sign that the market has become saturated. However, having competition can also mean that there is a high demand for this particular type of restaurant. As a business owner, it is important to study one’s competitors to understand what makes them successful and what doesn’t work. With this knowledge, a restaurant owner can make certain tweaks and changes within their own operation to stay ahead of the curve.
There’s a popular idea in pop-culture that running a restaurant is tremendously volatile and risky. While this concept is debatable on many levels, there are certain ways to mitigate the inherent risks. First and foremost, those aspiring to own restaurants must first understand some critical factors before embarking. These five tips are just the tip of the iceberg when it comes to the knowledge needed before starting a restaurant.