Starting a Restaurant or Fast Food Business
Restaurant business is widely regarded as one of the money making business in Nigeria. There is no person that can stay for a day without food unless he or she is observing a fast because food is very important and essential to our body system. As a car without fuel is of no use, so also a body without food will be weak. Food is the major supply of strength to the human body.
A restaurant business planned well hardly experience little or poor sales because the target market for the business is limitless. Everyone eats everyday and most people are very busy that they don’t have the time to cook in their various homes so they settle to buy food in restaurants. This explains the ever increasing demand of restaurants in Nigeria.
STEPS INVOLED IN STARTING A RESTAURANT OR FAST FOOD BUSINESS
Restaurant business is one of the most stressful business I know, trust me, it can be very stressful. Though it is a very profitable business, but it is not really as easy as people think, it is very stressful and time consuming. It also requires a high level of discipline to operate effectively and efficiently.
Who can start a restaurant business? Anyone can start this business if you have an adequate knowledge about the business and you have the capital and all what it takes to start the business.
Below are some of the steps you need to take before starting or opening a restaurant;
PLAN YOUR BUSINESS
Poor planning or not even planning at all leads to poor performance. This is the first step to take when starting any business at all. To start a restaurant business , you need to sit down and plan. You don’t just wake up one day, cook and start selling. You have to think about and decide the kind of restaurant you want. There are different types of restaurant; fast food restaurants, a casual dining restaurant e.t.c. You should focus on the one that has the largest target market. You should also make plans on how you want your business to operate, methods of operation to be used, how it would be different from other restaurants. The truth is that, there are so many restaurants so you have to make strategic plans on how to make your restaurant unique and how to make it stand out from that of your competitors.
RESEARCH ABOUT THE BUSINESS
Many often think because they know much about food selling, they just need to open one and start selling but it doesn’t work like that. Before putting money into any business whatsoever, you must have made the necessary research about such business and the restaurant business is no wise different. Before opening a restaurant, you must have adequate information about everything that has to do with a restaurant; the cost of opening a restaurant, how it operates. You must make necessary research about the market, your potential customers. Research is very necessary as it gives you more insight into the restaurant business. Meet with those who have done the business in time past or those who are still into the business to get information about the business, ask them questions and receive feedbacks.
WRITE A BUSINESS PLAN
Really? A business plan? For a restaurant? Are you kidding me? A woman asked me these questions when she told me she wanted to start a restaurant business and I asked her if she has written a business plan. She was really shocked when I asked her and I had to ask her back that, Is a business plan meant for a particular type of business?
This is the mistake many business owners make, they believe business plan is for some selected business but actually it is not. A business plan is needed for any business you want to start as it keeps you focus.
What exactly is a business plan?
According to Wikipedia, a business plan is a formal written document that contains business goals, methods on how to attain the goals and the time frame in which the goal will be achieved.
In simple terms, a business plan summarize your business and its goals. A well written business plan also drive investors to invest in your business. A business plan should contain;
- Executive Summary : This is the summary of all what is in your business plan. The executive summary must be captivating enough to make people want to read your business plan. It should also contain your vision and mission statement.
- Company Overview : This should contain who you are, your business goals, how you intend to operate your restaurant , and everything about your restaurant.
3.Your Services : This section of your business plan contains or explains a clear description of the kind of food you want to sell and any additional service your restaurant will offer.
- Market Analysis : This describes everything about the market for your food, your market research, your expectation on the market , how your restaurant will strive in the market, your competitors. It also contains your SWOT analysis where you list your strengths, weaknesses , opportunities and threats .
- Marketing and Sales Strategy : This section explains how you intend to market or sell your food , how you will promote your restaurant and penetrate into the market. It should also include your selling cost , promotion and advertising costs, e.t.c.
- Business Structure : This will contain everything about your business, the type of business; either sole proprietorship, partnership or limited liability company , the number of staffs you want to hire and the intended salary.
- Financial Analysis : After getting your market research, a professional accountant should be consulted to help prepare the financial analysis of your business plan. It should contain realistic financial information about a restaurant, which should include your cash flow statement, projected income statement and statement of financial position ( balance sheet ) for the next three or five years and other relevant information.
- Conclusion : This should highlight the key strengths of your plan, remind the reader why your business is in the best position to execute the plan , and the summary of your vision and goal.
GET THE REQUIRED CAPITAL
As earlier said, the type of restaurant you want to operate will determine the amount of capital you will need. Money is very important in starting any business, the next step to take is to source for fund. Some of the factors that determine the start up capital are location, choice of equipments, type of restaurant, number of staffs to be hired and some other amenities. If you have the required capital to fund your restaurant business, you are good to go but if not, below are some of the ways you can raise capital for your business;
- Personal savings.
- Get a bank loan : This is one of the most common way people finance their business, by obtaining loan from bank.
- Crowd funding : It is the act of funding a project by raising small amount of money from a large number of people.
- Loans from family and friends.
- Apply an Angel Investor: An angel investor is a high net worth individual who provide financial backings for small start-ups or entrepreneurs, typically for ownership equity in the company. They are also known as private investor or seed investor.
- Cooperative Societies : They also give people loans at a particular interest rate which they must pay at an agreed period of time.
SECURE A GOOD LOCATION
The location of your restaurant matters a lot, in fact it has a lot to do with how you attract your target market. To make sales more feasible and realistic, you should get a location close to your target market. Apart from the nearness to potential customers, other things to look out for when securing a location are;
- Competitors : Another thing to look out for when determining the location of your business is the nearness to other restaurants. For a start up, if you have two or more restaurants around your vicinity, it might not be good enough as you may not be able to compete with them.
- Costs : You must also consider the cost of establishing your restaurant in a particular location.
3.Environmental factors : You can’t afford to locate your restaurant close to a cemetery, a sewage deposit, waste dumps or anything at all that can terminate your image. In this type of business, you need to be very neat because you are feeding a whole lot of people and you would not want to spread food poisoning or contaminate people so you have to be extremely neat, your surroundings need to be clean always and your workers must also appear neat at all times.
GET NECESSARY EQUIPMENTS
This is an important aspect of running a restaurant and it is also the most expensive asset in a restaurant. After obtaining the required capital, then you can take a step further to get the necessary equipments. You must make sure you get quality equipments to save yourself the stress of getting new equipment every month. This also include buying the necessary food items needed for your restaurant. These depends on the type of restaurant you want to operate as there are different types of kitchen appliances. Set your menu in accordance to the type of restaurant you want to operate and get the necessary equipments.
According to an online source, the minimum amount to plan for restaurant equipment is three hundred thousand naira(300,0000).
HIRE GOOD AND EXPERIENCED WORKERS
Even if you are planning to start a small restaurant that is not too big, you still need people to work with you. You can’t be the one cooking, serving, and doing the dishes at the same time, you need workers. The number of workers needed depend on the type and size of restaurant you want to operate. You will need nothing less than five workers for a small restaurant.
Employ people whose values are aligned with yours, who are capable, who are easily teachable, trust worthy people ,who are experienced in the restaurant business, customer- driven people and friendly people because this type of business deals with different kind of people and the attitude of your workers to customers can boost or reduce sales.
LEGALISE YOUR RESTAURANT
You can hire a professional lawyer to help you with this stage. To operate a restaurant in Nigeria, there are some steps you need to take;
- Have a Business Structure : Your restaurant should have a structure, maybe it’s a sole proprietorship or partnership.
- Have a Business name : One should start thinking of the name you want to give your restaurant, this is very important. Do your research to know if the name you have chosen can be legally used by your business, that is, if no one has registered that name.
- Register your restaurant : After deciding on a business structure and a business name, the next step is to register your business with the Corporate Affairs Commission ( C.A.C).
- Licenses and Permits : You will need to obtain the required licenses and permits related to the set up of your restaurant. For example, if your restaurants will run or operate all through the night, there is a specific permit that you have to obtain or if you want to sell alcoholic beverage in your restaurant, there is a certain license required. There are also some license that depends on the location of your restaurant so it is often advised to seek professional legal advice.
At this stage, when all things have been put in place, you can now start selling your food. Note that the quality of your food and service is the greatest way to gain an upper hand over your competitors, to draw new customers and to retain old one. Never underestimate the power of your food and service quality.
GROW AND PROMOTE YOUR RESTAURANT
This is the last stage in setting up a restaurant but it’s definitely not the least. You must seek for ways to make people know about your restaurant. A good way is to improve the quality of your food and service, with this you draw the attention of new customers and retain old ones. You can also advertise your restaurant, make use of social media e.t.c.
ABOUT THE AUTHOR
Damilola Babatunde has a great passion for writing. She write articles on starting a business, how small business owners can grow their business e.t.c and many small business owners have really benefitted from her write ups.
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