10 Key Considerations Before Opening a Small Restaurant

Intro

Are you thinking of starting a small restaurant but you’re not quite sure where to begin? Before you take on this challenge, take a look at the guide below where we’ve outlined the main things you should be aware of as a new restaurateur:

• Concept
• Target audience
• Business plan
• Location
• Staff
• Menu engineering
• Marketing plan
• Layout and design
• Restaurant technology
• Analytics

10 Things You Need to Know Before Opening a Small Restaurant

1. A unique concept can help you stand out

As a small restaurant owner in a highly competitive industry, you need all the help you can get to make yourself known to a larger audience. Especially since it’s difficult to compete with large brands that have dedicated marketing budgets and resources.

One way to increase your chances of standing out starts even before you’ve opened your restaurant. When you’re brainstorming what you want your restaurant to be, try to come up with a concept that’s not highly competitive in your area.

That will bring something new to the neighborhood, increasing the chances of your restaurant being a success. Whether it’s a farm-to-table concept, a pop-up restaurant that rotates locations periodically, or a pet café where people can interact with cats and dogs, the more you stand out, the more noticed you will get.

It can be hard to compete as a pizzeria in a place full of other similar restaurants, but putting a twist on your concept can help you outshine the competition.

2. The target audience is the cornerstone of your business

Your restaurant concept goes hand in hand with the target market you’re catering to. Before you can formulate a marketing plan and come up with ways to promote your restaurant, you need to know who you’re trying to attract.

That’s because different audiences will have different platforms and types of content they respond to. Let’s take social media, for example.

If you’re targeting a younger crowd, you should focus on platforms like TikTok and Instagram. If your target audience is more mature, Facebook is the way to go.

When exploring your target audience, it’s good to create a customer persona of the type of customer you expect your restaurant to attract. Include information like:

• Age
• Gender
• Income bracket
• Geography
• Family type
• Personality type
• Goals
• Motivations
• Challenges
• Job
• Interests

3. A comprehensive business plan will keep you on track

Opening a restaurant and leading it to success is an extremely complex process that shouldn’t be treated lightly. You need a detailed business plan to ensure nothing slips through the cracks while you’re busy dealing with something else.

Your restaurant business plan should contain:

• An executive summary that kickstarts the plan with an overview of the main points to come. If you’re looking for investors for your restaurant, this bit should capture their attention and make them want to keep reading.
• SWOT analysis looking at your business’s strengths, weaknesses, opportunities, and threats.
• Detailed breakdown of your restaurant’s concept.
• Company description including name, owner information and experience, location, and so on.
• Sample menu (pricing included).
• Financial analysis including startup costs, food costs, overhead costs, as well as estimated profit margins.
• Market research looking at your competition and how you can stand out in your chosen location.
• Marketing plan detailing the ways you’re going to promote your restaurant online and offline.
• Hiring plan featuring the positions you need to hire for and what you’re looking for in an employee hire.

4. The perfect location will bring you new and recurring customers

You probably already know that location is key not just when for residential spaces but for commercial ones as well. The success of your restaurant could very well depend on where it’s located.

When choosing the perfect location for your restaurant, first look at the areas where your target audience lives or spends the majority of their time. That will increase the chances of them finding your restaurant and coming back to it again and again.

Next, consider how visible the space is and how easy it is for customers to access it. If it’s hidden somewhere in an alley with not a lot of foot traffic, this can severely impact your business.

Competition in the area is another aspect to keep in mind. If there are too many restaurants similar to yours around, you might not be able to find a spot for your restaurant there because the market is already oversaturated.

When choosing a location, decide whether you want to lease or buy the space. Additionally, measure the space carefully to ensure you have room for everything you need. Before opening, get the space authorized by a building inspector to make sure you’re up to code. Lastly, integrate online ordering systems for restaurants to increase customer convenience and streamline operations.

5. A dedicated staff is a must-have

Running a restaurant is not a one-person operation. If you heard the expression “it takes a village,” you can easily apply it to the restaurant industry.

There are a lot of moving pieces that need to work well together to ensure the success of a restaurant, and none of these would work without the right staff.

Starting with the restaurant manager who has to keep everyone on track and inspire them to give their best, all the way to chefs, servers, dishwashers, and more.

Remember the hiring plan we mentioned in the context of a larger business plan? Now is the time to expand on it more before you start the interviewing process. Make sure you know exactly what you’re looking for so as not to waste both your time and the interviewees’.

Taking more time in the initial hiring process will pay off long term because it’s more expensive to hire a new employee than to keep an existing one. That’s why you need to hire people who align with your vision and goals and who are looking for a long-term commitment.

6. Menu engineering can help you sell more

As the main selling point of your restaurant, you should think long and hard about your menu, its contents, design, pricing, and how you’re going to promote it.

In comes menu engineering, the practice of analyzing and optimizing your menu so that you can sell more food.

Keep in mind that we live in an increasingly digital world where customers will expect your menu to be readily available online and easy to read on mobile devices. Forget about PDF menus that customers need to download – they will make users click away from your website.

Provide a digital version of your menu and make it more than a list of your dishes by enabling customers to also place orders online.

As opposed to a physical menu, an online menu gives you the option to play around with mouth-watering photos of food, enticing dish descriptions, and limited-time items that you can just add and remove from the menu without having to reprint the entire thing.

7. A detailed marketing plan can make you the talk of the town

Marketing can be such a broad concept that you might find it difficult to navigate as a restaurant owner. The good news is that basic marketing practices can make a difference for your eatery, so you don’t have to be a marketing specialist to learn how to promote your business. You can also use dedicated restaurant marketing software to help you optimize the process.

First, cover both offline and online promotion. You might think offline marketing is dead, but the truth is a simple flyer featuring a discount code distributed around the neighborhood can bring in good business and make people aware of your restaurant.

Naturally, online marketing should still be your main focus since that’s where most of your audience will be. Start by creating a website and a Google Business Profile for your restaurant. Both of these platforms can help you increase brand recognition and visibility online.

Make sure that your website is optimized for search engines so that it ranks high in Google searches for your cuisine in your area. Add a link to your website and menu in your Google Business Profile to redirect users looking for more information or a place to order.

Don’t forget to also create business profiles on the most prominent social media platforms that your audience is on. That can be Facebook, Twitter, TikTok, Instagram, or even Pinterest or Snapchat.

8. Layout and design matter to your target audience

When designing your restaurant space, keep your target audience in mind. There are subtle ways in which you can attract them by knowing what their interests, likes, and dislikes are.

For example, think of the dining room layout and seating arrangement. If you’re targeting families with kids, classic table seating and a kid’s area could be useful. If you’re targeting big groups of friends, consider bench seating and large tables. Or, if you want to attract couples looking for a private experience, booth seating is for you.

The same goes for design elements such as lighting and color. Bright colors and lights make people eat faster, which will lead to faster table turnover. Dim lights and muted colors encourage people to spend more time in your restaurant, which will lead to a higher check value.

9. The right technology will bring in more business without breaking the bank

Opening a restaurant in this day and age means you need to take advantage of the tools and technology at your disposal if you want to streamline operations, increase customer satisfaction, and outdo the competition.

Luckily, there are affordable tools you can use, such as an in-house online ordering system to accept pickup and delivery orders, or a table reservation system that enables customers to book tables online.

If you want to serve more people daily, you should also consider implementing a QR code menu with dine-in ordering capabilities that customers can scan to order and pay at the table.

A restaurant POS system is also essential when opening a restaurant because it can help you streamline operations, improve the speed of service, manage staff schedules, and track valuable analytics. When it comes to restaurant technology, you don’t need to spend a lot to make a lot, and that’s great news for small restaurants that are just getting started.

10. Key analytics and KPIs will help track your success

Finally, there is no way of knowing what works and what doesn’t at your restaurant if you don’t track key performance indicators like sales, orders, table reservations, redeemed offers, and so on.

Keep a close eye on your data so you can make changes on the spot and adjust your strategy before it’s too late and you’re already losing money.

Final Thoughts

Starting a restaurant from scratch can seem like a scary experience, but it is also an immensely rewarding one. Being organized and prepared before you make the first step will help you on your journey so remember to map everything out based on the considerations above.