A shift in consumer lifestyles means that more people are eating out or ordering food in than ever before. As a result, the future of the food industry looks bright, provided that you’re willing to work hard and plan ahead.
Whether you’re interested in starting a catering service or opening a full-fledged restaurant, we’re here to help. We’ll go through the main steps to getting started in the food industry.
Choose Your Food Service
The first step in joining the food industry is to decide what kind of company you’re looking to start, whether it’s catering, casual, mid-scale or fine dining. Make the decision based on a combination of your existing talents and the desires of your target market. For instance, if there are already 100 pizza joints, you might want to consider an alternate niche with less competition.
Take the time to study the food services already available. Understand what competitors charge for particular menu items, and look at their clienteles.
Once you’ve chosen a name for your restaurant, you need to register with your city, county or state administration. You will also need a vendor’s license, which enables you to collect sales taxes. Be aware that particular states of municipalities may require further licensing, so do your due diligence.
Next, you’ll need to determine how you’re going to fund your new restaurant. You could invest from your own savings, or you can bring in investors. You may also apply for loans from your bank or from business associations.
However you choose to fund your company, you’ll need a business plan that lays out how you intend to make money and pay back any creditors. A business plan should include:
- Description of target market
- Menu and pricing
- Who’s providing funding and how much
- Expected costs and income
- Employee hiring plans
- An exit plan
Define Your Target Market
In food service, you can’t expect to please everybody. You need to consider who you want to target, and how best to target them. Example demographics include:
- Unmarried working professionals – they may desire quicker service and less variety in dishes.
- Seniors – seniors may prefer restaurants that are open at earlier hours and provide specials for their age group.
- Couples – couples may be more concerned with ambiance than anything else, and the pricing should be adjusted accordingly.
- Kid-Friendly – a restaurant that targets the whole family may require games to keep children entertained, as well as a child-specific menu.
There are many other potential targets, but these are some of the common ones.
Which you choose affects your startup costs – a restaurant for couples may require fancier table settings and décor than a service that’s friendly to children.
Choose a Location
Once you’ve made your business plan and defined your target market, you need to put the restaurant together. This means sourcing a location and then outfitting it. When choosing a location, think about your target market, and where to reach them. Keep in mind that certain high traffic areas will have higher rent.
Contact wholesale suppliers and compare prices. Select the one that provides you with the quality you need at the lowest price per item. If you call the National Restaurant Association, they can provide you with a list of local food and supply wholesalers.
You will also have to source furniture, utensils, and appliances such as refrigerators, ovens, and cookware. Try to negotiate a bulk rate with a single supplier, as they will give you a better rate with higher volume.
When you get closer to the restaurant opening, you need to start advertising for employees, and marketing the restaurant in general. Invite the local newspaper to review your restaurant. Also consider promotional offers for the first week, in order to get new customers to try it. Once the restaurant is open, you should consider other advertising opportunities, such as television and radio, in order to maintain public interest.
Photo courtesy of chotda via Flickr