How to Open a New Restaurant

People often open a restaurant thinking that all it takes for success is excellent cooking. They may ignore basic business principles to become part of the 60 percent who fail within three years or less. These principles include securing a good location at reasonable rates; hiring, training and motivating staff; and effective marketing. Ultimately, the key factor in success is maintaining an average-or-better profit margin year after year.


Many people dream of opening their own restaurant. Here is a step by step guide to get you started. Anywhere between a a couple of months to a year or more, depending on location, concept, and size.

Decide on a Restaurant Concept : Do you have a specific type of cuisine you plan to serve, such as Italian, French or Indian? Perhaps you want to specialize in one area, like a microbrewery and pub.

Select a Restaurant Location : Location, location, location. It can make or break a restaurant .

Choose a Restaurant Name : It can be a reflection of your theme or location. i.e. An Italian restaurant called Giovanni’s .

Design the Restaurant : It should be a balance between aesthetics and seating capacity, always keeping practicality in mind.

Hire Restaurant Staff : As you get closer to opening day you need to begin hiring for both the kitchen and floor. Kitchen staff, wait staff and bartenders are all integral parts of any restaurant, and you want to hire the perfect person for each position.

Profit : Full-service restaurants at all levels spent about 32 percent of each dollar on the cost of food and beverages, 33 percent on salaries and wages, and from 5 percent to 6 percent on restaurant occupancy costs. Profit margins, however, varied according to the cost of the average check per person. Those with checks under $15 showed a profit of 3 percent. Those with checks from $15 to $24.99 boasted the highest profit margin at 3.5 percent. Finally, those with checks of $25 and over had the lowest profits, at 1.8 percent.

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