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Being a successful restaurateur is not a child’s play. It requires a lot of hard work, patience and ability to take right decisions at the right time. Initially, you may not do well in your business as a restaurateur as competing with established restaurants in your locality might eat up your business. Do not get disheartened over these initial failures as the one who will keep trying sincerely is bound to succeed. Many people are confused about how to start a restaurant business. Given below are some tips to start a restaurant business.

Arranging for Capital and Completing Legal Formalities

Arranging for sufficient capital to start a restaurant business is the main problem for most of the budding restaurateurs. You can take a business loan from a reputed bank, which offers cash credit facility on a low rate of interest. Take advantage of the various new and attractive schemes floated by the banks for start-up businessmen. You can also consider starting a restaurant on a partnership basis, wherein you will share the costs and profits with your business partner. If you are opting for a partnership, do sign an agreement with your partner before starting the business. You should have a license and a no-objection certificate from the local authorities to start your dream restaurant. Failing to do so may lead to serious legal complications. Design your restaurant business plans as per your budget. You should also consider the idea of franchise buying of a chain of restaurants.

Choosing Location and Designing Infrastructure of the Restaurant

The location of the restaurant is very important, as restaurants in prime city locations do much more business than those in the outskirts of the city. Remember that your restaurant should be easily accessible from all regions of your city. If you do not have money to start a restaurant business in the suburbs, you should start it in an area which is developing rapidly, so that you get excellent returns for your investment after a few years.

The look of the restaurant should be such that people should be impressed at the first sight, as first impression is the last impression! If your budget is high, you can go for marble flooring, attractive pictures, plush interiors like POP’s, in-built lights and a discotheque and a bar. However, it is possible to lure the customers even with a simple and systematic look of the restaurant. Use good quality chairs, tables, spoons, dishes, etc. to give the customers a nice experience for their expenditure. Hospitality is an important factor of this business. You should appoint good waiters and kitchen staff and train them well in the areas of cleanliness, professionalism and politeness. Make sure that your visitors feel comfortable and happy in your restaurant. Ensure that your restaurant has ample and good water supply, gas supply, exhausts and efficient security systems. Try and include all the popular food items to avoid limitations for your business. It is recommended that you should be present at the cash counter everyday, at least till the time your business gets settled, to ensure that everything is going as per the planning.

Proper Advertising and Quality Check

Advertising about your restaurant in the local newspapers, in a proper way, can draw the attention of people and generate interest in them about your new venture. If affordable, invite a celebrity to inaugurate your restaurant. Maintaining the quality of food is very important, if you want to survive in these days of cut-throat competition. Take every possible care to satisfy your customers. Hopefully, the above suggestions will answer your basic question – how to start a restaurant business.

It is wise to revise the business growth strategies as per the changing situations. Also, be aware of the latest trends in the industry. For example, include extra food items in your menu card specially for occasions like Christmas. Take some useful advise from other restaurant owners and implement their creative suggestions.

Opening up a restaurant is not an easy job. This is because, there is a lot of planning involved in it. Before starting a business, you need decide on the type of restaurant you would like to open, its location, the type of customer you want to cater to, the volume of your business, the number of staff to be employed initially, kitchen equipment required, the overall ambiance, the quality of food to be served and many more things that will constitute your restaurant. However, I will not go much deeper into the planning, as it is only the restaurant start up costs that will be dealt hereof.

Factors to be Considered Before Starting Up a Restaurant

At the outset, I’ll advise you that, while calculating the restaurant start up costs, always assume that the costs of everything will be higher than what you have yourself estimated and accordingly start looking for startup business financing. Taking this into consideration, the following factors would help you in calculating your restaurant start up costs.

Permits and Licenses: Well, before starting up a restaurant, you need to obtain the necessary permits and licenses. This is an important prerequisite, in order to avoid legal issues. To get essential permits and licenses, you have to pay the government for all the legal charges involved. Therefore, this is the foremost factor, you need to consider in the estimation of your restaurant costs.

Location: Location of your restaurant is the most important factor to be considered, while estimating costs. This is the area, where you will have to spend the most. The location where you are planning to set up your restaurant is important. Locations that have high profile people staying in the neighborhood would obviously be expensive, whereas, a comparatively low profile area would be less expensive. Also, locations in the midst of the city or in the downtown areas would cost you much more, than those in the suburbs. However, it is up to you to decide, which location to choose.

Restaurant Construction: Now, that you have decided the location, you also need to decide on the costs incurred in constructing the restaurant. The amount of construction materials required, the legal permissions involved to construct a restaurant at that place, all form a part of the restaurant construction costs.

Marketing: Market surveys, research and analysis all form a part of the marketing activity and will also cost you. You will have to pay heavily for the service charges, if you give your marketing work to some professional marketing service providers. However, if you do the marketing yourself, it would not cost you as much.

Advertisements: Quite obvious! To increase the popularity of the restaurant you need to advertise it sufficiently. Therefore, cost of advertising, also needs a consideration in your restaurant start up costs.

Restaurant Equipment: This includes purchasing the equipment, instruments, kitchen tools and accessories, furniture, safety measures, interior designing costs, and the installation costs. Decide the quality and jot down a brief estimate of the cost of all these things.

Employee Recruitment and Payments: You cannot go searching for employees for your restaurant yourself . To ensure that you hire the best for your restaurant, you need to contact a local recruitment agency that will shortlist the best people for you. Therefore, the charges of such agencies should also form a part of your restaurant start up costs. Further, employee salaries, incentives and uniforms, also need a consideration.

So folks, I hope after reading this article, calculating the restaurant start up costs will no longer remain a difficult job for you. Before signing off, I would like to say that correct cost estimation, financial planning, proper business handling and most importantly, vision for everything together, make an ideal entrepreneur. So, now go ahead, and see your dream of becoming a restaurateur turn into reality!
By Ujwal Deshmukh