The Recipe of a Restaurant: How to Break into the Industry

Open for Business

Have you dreamed of owning your own restaurant? Maybe you’ve sketched out what the exterior would look like on a napkin, daydreamed about what you would serve, or even picked out your china?

But have you ever thought of taking this dream one step farther and putting your ideas to work?

If you’re looking to bust into the restaurant business but aren’t quite sure of what you would need to do it, we’ve compiled the largest pieces you need, into one guide. And because opening a restaurant is no easy task, we spoke with Rob Coffaro, owner of Coffaro’s Pizza in Slippery Rock, Pennsylvania, to get his expertise on the subject.

Coffaro's Pizza

Prep Time

Concept- First things first, you need a concept. This may be something you already have under belt, but if not, you need to cement what your vision is for your restaurant. Having a more concrete concept can help you carry the elements you want into your restaurant more clearly.

Location- Whether you’re taking over another restaurant or building from the ground up, you should have your location. Talk to your realtor about the different options for your commercial venture. This will impact how you finance your restaurant.

Finances- How you finance will largely depend on your situation. If you are so lucky to have been saving up in your personal savings account, these liquid funds could get you on your way. If your credit is in good standing, a credit card could be a viable solution, depending on how much you need. Another option could be a restaurant specific loan or a Small Business Administration loan. A restaurant specific loan is not bound to a specific need and has a varying interest rates and terms, depending on the size of the loan. Based on the financial institution, this loan can have many different names but serves the same purpose. An SBA backed loan can offer lower down payments and longer terms to the business owner but can be difficult to qualify for. To qualify, a business must meet size requirements, be in good financial standing, be in the for-profit industry, and meet the credit requirements of the lending institution. Instead of going the commercial route, you could also have investors help fund your restaurant. If these are friends and family, remember that while the money can be convenient, it can also be a strain on the relationship.

Business plan- After you’ve analyzed the risks and you’re ready to take on the responsibility of owning your own business, it’s time to create a business plan. This plan gives you a guiding light when things seem dark or what to do next. When documenting your business plan, be sure to include information on your concept, team standards, design, target market, market overview, financial risk, business structure, and external individuals that will be helping you run your business (like a lawyer or accountant).

Legal matters- If you plan on serving alcohol or having a BYOB policy, make sure you check your state’s liquor license laws. Some states can take longer than others for this process, so if this applies to your business definitely get a jump on it!

Slice of Advice- Be Organized

Mix in Your Ingredients

Write your menu- It’s time to test out what culinary creations will grace your menu. Use focus groups of friends, family, and other chefs to narrow down what fits your restaurant’s style and flow. Make sure to also include various substitutions to accommodate guests with food allergies or dietary restrictions. When designing your menu, you need to keep in mind the physical look of the menu, how categories will be presented, and the pattern in how it’s read.

Network- How are you going to obtain the ingredients of your daily fare. Research foodservice vendors on price, quality, and delivery time but also keep local farms or vendors in mind. A great way to build relationships in the community is to partner these homegrown businesses which could help get your foot in the door for future events.

Get social- Start creating a buzz about your establishment. Choose two or three social media platforms that you are well-versed in (or are prepared to master) and begin showing the world what makes your business unique. You have a great opportunity to show the beginnings of your restaurant, from the first time you walk through the door to opening night. Use it!

Dimensions- Space planning can give you important figures such as your capacity, how many pieces of furniture you can order, and the image of how your restaurant will look at the end. There are many requirements that restauranteurs need to implement in their layout. Whether large or small, your restaurant can be planned out before you purchase a single piece of furniture.

Filling the space- To complete your restaurant, you will need commercial furniture and restaurant equipment (think refrigerators, ovens, etc.). Be sure to purchase products that promise quality and durability. Don’t forget to also pick up dinnerware, napkins, cooking utensils, and silverware to run your business smoothly and efficiently. It’s also time to finalize your menus and send them off to print!

Safety is key- In most states; you need to have a pre-operational inspection done before your restaurant opens. During this inspection, there should be absolutely no food on the premises. The pre-operational inspection confirms that your restaurant is compliant with health laws.

Build your team- The amount of upper-level management you need will depend on your business structure and size but most restaurants have a general manager, assistant manager, shift leaders, and chefs. You will want to look for individuals that are successful in recruiting, supervising, and budgeting. When your management team is in place, you can start hiring the wait and kitchen staff. From top level management all the way to the first-time job holder, training is important for seamless, united customer service.

Slice of Advice- Hiring

Let’s Get Cooking

Get your feet wet- Have your soft opening a couple weeks before your grand opening that introduces your business to the community. This lets your future customers get to know you and get excited that you will be opening very shortly.

Call your health inspector- Directly after your soft opening, schedule an operational inspection with the health department. Staying up on these issues is important for the longevity of your business.

Make it an event- For your grand opening, make sure that you are present and available. This is the time to enjoy your handiwork and introduce yourself and your team to all those who came out to support you. You should invite some sort of press outlet, but you may want to also hire a photographer to attend. Designate a staff member or friend to be in charge of social media that night, this is an event you will want to remember.

Slice of Advice- Do the Math

Enjoy Your Final Product

So your restaurant is now a full-blown operational business. That’s awesome, but the hard work is just beginning. You need to keep up on budgeting, food safety, licenses, and your customers’ overall experience. It’s important to keep in mind that while it may be simpler to hire the accountant and just leave the finances to them or hire an assistant to focus on staying up to date on licensing, you need to be involved. Just because your restaurant is open does not mean you can stop researching and educating yourself. Let this and every ounce of customer feedback drive you to become a better restaurant and business. You need to be involved with each workings of your business to protect and nourish it every step of the way.


How to Open a Restaurant: 10 Steps to Success

Do your 2013 goals include opening a new restaurant? If you’ve always wanted to create your own food service brand but were never sure where to even start, this checklist will help you take action to launch and grow your new business.

1. Define your concept.
Creating a brand will serve as a foundation for all other decisions you’ll make as you open your new restaurant.  It will define who your target audience is, what types of cuisine you’ll offer, if you’ll serve alcohol or not, and what equipment you’ll need.  You will want to do some market research to see how many competitors in that niche you’ll have in your community and if your neighborhood will be a good fit for your concept.  Reapply the concept in a new way for your target customers, so you’re offering them something different that they can’t get anywhere else.  This first step will lead you to the right size space (seating for 20 or 350? full kitchen? bar area?) and help direct every single subsequent step you’ll take, so make sure you put a lot of effort into establishing your concept and brand.  It’s the basis of your entire vision.

After you decide on your concept (fast-casual, fine dining, sports theme, family friendly, bar-focused, etc), then you can create your restaurant’s name.  Be sure to survey some people or ask your potential customers to help you choose on the best name.  A bad name can turn diners away before you even get the chance to win them over.  Picking the right name is crucial.  It may sound easy, but it’s often not.  You want a name to be clever, tell what type of restaurant you are, and be easy to remember.  If you are going to experiment with a different spelling, make it really obvious.  Or you’ll be forever talked or written about incorrectly.  A good name is a key element to success.

Once you’ve developed your concept and given yourself an awesome name, your entire brand will start to come together.  Your look, your message, your values – the perception you want others to have when they see your name or logo is very important.  How do you want them to feel about you? What do you want them to think of immediately?  You have to decide what exactly your restaurant stands for, then stay consistent with how you communicate that message to your constituents and community.

A graphic designer can help crank out a logo and color scheme that meets your brand’s expectations.  Start using it immediately, even through the planning stages, to start creating brand recall in the minds of those you’re marketing to.  Write some key messages that you can also repeat on all collateral you produce for distribution.  Incorporate those colors, messages, and overall branding into the rest of what you do.  Knowing who you are as a business helps others know and remember who you are, too.  And people knowing who you are is important for the bottom line.

Sometimes it is months to years from concept to grand opening, so be patient and plan accordingly.

2. Write a business plan.
Now that you know more about the business, you can write its plan.  The plan is a great “guide” to getting your business  launched and will be what you share with potential investors in order to get the backing you need to move forward.  Here are the parts of a basic business plan:

  • Executive Summary – State your objectives.  Summarize your business plan into an introduction statement. State your restaurant’s mission and vision statements. Include what makes your restaurant different.
  • Company Summary – Include founder biography(ies), your proposed restaurant name and logo, and take the entire concept you defined in step one and put it into writing.
  • Market Analysis Summary – Include charts and statistics from the initial market research you performed.  Include resident demographics in the geographical area you’d like to open your new place.  From the totals, show which market share you assume your business will be able to target and gain. If there are opportunities you can identify to collaborate with a competitor or another small business to capture more market share, list it here.
  • Strategy for Implementation – State where you will look for property to lease/purchase. Share how you will recruit and train staff, and give details about your management strategy. Discuss your ideas for integrating technology and promotions. Provide a 5-year outlook and any additional expansion goals you may have.
  • Financial Plan – Show the numbers.  How much do you need for upfront costs?  What are your expected monthly expenses?  When do you think you can begin repaying loans?  How much do you expect to gross in the first year, in the first 3 years?  What is your pay-off schedule?  What is your expected revenue?  An accountant or marketing forecaster can help you with writing a solid financial plan for your business.  This section will be the most interesting to your potential lenders, and therefore, it may be the most critical if you’re not the one fronting all the costs to start up.
  • Appendix – Provide any referenced materials, additional research, sales forecast charts, etc. in the back of the report.

3. Get funded.
Identify potential investors and consider all your options for small business loans, if needed.  Take your plan, and let your brilliant concept do the talking.  Negotiate, beg, hope for a good outcome, and be sure to stick to your promises and pay-off schedule.

4. Consider technology.
Technology drives any business model in today’s world.  Even in food service, technology is a critical consideration – and often a necessary investment.  Here are some common questions you will want to explore:

  • What will you use as a point-of-sale (POS) system? Do you need an advanced computer and cash register system, or can you incorporate a square card reader on your phone?
  • What online directories can you be added to?  What restaurant directories?
  • Are you setting up a website, or just using Facebook?  Who will manage your online presence?
  • How will people find you on their mobile devices?  Do you need to be added to dining apps?
  • How will you recruit staff?  Track hours and pay staff?
  • Will you integrate social media into your restaurant design?
  • Should you offer online ordering? Online reservations?
  • Is there an app you should develop for your restaurant?

5. Create a menu.
Most likely, you already have an idea of what types of food you’ll be serving up in your new restaurant.  Now, it’s time to make it official. If you’re not serving as the Executive Chef yourself, you need to recruit one, who can then in turn recruit other talented kitchen staff.  It’s the chef and their staff who need to develop a menu that can be replicated meal  order after meal order consistently and deliciously.

The menu should fit the brand and concept perfectly.  If there’s something on the menu “just because” someone likes it, but it doesn’t fit the overall theme, then nix it.  Keep the menu relatively small at first and really get down a few specialties before expanding your menu offerings.  Experiment with item names and descriptions, so your brand reads well throughout the entire printed menu.

When creating your menu, consider your suppliers.  Will you be able to get fresh ingredients from your local farmers or fish markets?  What do you need to order from your food service company(ies)?  Also consider cost.  Make sure your expenses are kept low and price out your menu items accordingly, so you have a reasonable profit margin on each of your menu items.

Don’t stop at main courses.  Think about which appetizers, beverages, and desserts tie well into the overall restaurant concept.  If you’re a family friendly joint, don’t forget a separate kids’ menu.

Beyond what you’ll be serving, do you know how you’ll be serving it?  Do you want basket foods, or will you be using fine China dining ware?  Maybe you’re offering family style meals?  Or want to serve it up on something unique? Perhaps everything comes in a bowl, or your sandwiches come ready-to-assemble, or you’re going Asian and need to have a supply of chopsticks?  Presentation will be an important consideration as you create your tasty menu.

You’ll be developing your menu during the whole planning process, but your final menu changes should be in place a month before the grand opening, to allow time for you to secure the right suppliers and get your menu in print for opening day.

6. Design your space.
Congratulations! You have the funds and menu in mind.  Now you need to lease or purchase your property – whether that’s an urban bar, a family restaurant, a mobile food truck, or a street cart.  If you will have restaurant seating for your guests, space planning can be very helpful in determining how many people you’ll be able to seat and which size tables and types of chairs you’ll use.  You’ll also want to consider the entire layout and flow of the space you have.  Whether you’re launching a coffeehouse or opening up a saloon, your space needs to reflect your brand.

We recommend being in a space and getting your equipment and furniture ordered approximately six weeks in advance of opening.  Depending on what the space requires, the lead time for furniture delivery, or the licenses/permits you’re applying for, your time frame may need to fluctuate accordingly.

7. Hire and train staff.
Determine how many staff you’ll need, and what their individual functions will be, in order to run a smooth, effective business.  Then, recruit trust worthy, dedicated employees and turn them into a team.  The first thing you need to train them on is your overall brand and your key messaging, so they can also be brand advocates with each of your customers.  If you need to recruit professionals to train your staff, do it.  Your staff will be the link between your business and its customers, so they need to be the best you can afford.

8. Promote your opening.
It’s almost time to open your doors for the first time!  Most restaurants start with a soft opening, in which attendees are by invite-only, and you can give your team a practice run in taking orders, making the new menu items, and serving up a great time.  When you’re ready to open to the public, you want to start your business with a bang.  Pull out all the stops. Consider what fun entertainment or offers will entice your new neighbors to give you a try.  Don’t forget to spread the word.  Here are some ideas to get your restaurant name in headlines (or potential customer status updates):

  • Hand-deliver a news release and media kit to local newsrooms, along with a tray of samples featuring your signature item, asking for pre-opening publicity and a food critic/blogger review the first week you’re in business
  • Book your chef on a news segment a week before your opening, and offer to have him/her prepare one of your menu items live on air
  • Book your front end supervisor or most outgoing host/hostess on a round of radio interviews – be sure to arm him/her with all the branding messaging you’ve developed
  • Schedule a live remote during your opening
  • Team up with your local sports venue, shopping mall, or charity event to pass out samples to a mass number of guests at once while inviting everyone to come to your grand opening for more – exchange the free food at their event for a mascot appearance at yours, or negotiate a similar deal

9. Engage with customers.
It’s opening night.  You’re busy.  You have a lot to do.  Make sure that includes talking to your customers.  Encourage your staff to ask your customers questions.  Provide multiple ways for customer feedback.  Then, listen.  Get to know your customers on a personal level, and be sure to say thank you – a lot and in many different ways.

10. Have fun, learn, adapt.
You’ve made it!  Your doors are open.  Your kitchen is cookin’.  Your guests are happy.  Enjoy it!  Have fun, and keep having fun.  If things get mundane, shake them up a bit to make them fun again.  Keep talking to your customers and incorporate the feedback you receive.  Pay attention to what people are ordering, and not ordering.  Take note of wait times and cook times.  Keep your books tidy, so you are aware of increasing expenses or fluctuating sales numbers.  Then don’t be afraid to adapt in order to be more successful. Change menu items, experiment with different hours, switch suppliers.  Change is good.  Change should be constant.  So have fun, and keep growing!