How to Start Your Restaurant in 8 Steps
So you’ve decided to start your own restaurant - how exciting! At this point, you probably know you’ve got a lot of work ahead of you, so where to begin?
We’ve got 8 steps you can take towards ideating your restaurant and making it into a reality, from planning stages to opening day, with some advice on how you can find funding, start marketing, and begin prepping for the doors (or walk-up window) to open on your restaurant soon!
1. Pick a niche
The first step to starting a restaurant is deciding on the restaurant niche you want to fill! Is it going to be a smoothie bar or a wine bar? A steakhouse or a hamburger joint? This decision is dependent on your own passion and expertise, the availability and accessibility of ingredients, and a bit of market analysis to round it all out.
Who is your target market going to be? Students, families, young professionals, or seniors, all different age and demographic groups have their own needs and interests in different kinds of restaurants. This kind of analysis matters because the generation, income level, location, and lifestyle factors will all account for many other decisions you make about your restaurant.
You see, a good old-fashioned breakfast diner might have something for everyone, whereas a fine-dining restaurant where the bill is several hundred dollars and everything comes served in a ring mold might be serving a very particular customer market.
For that matter, what kind of food are you planning to serve? This will determine the kind of service, decor, location, and more for your restaurant. Is it healthy or indulgent? Organic or conventional? Local or exotic? Trendy at the moment or an eternal favorite like a coffee shop?
The next decision you need to make is how you’re going to serve your food. Is it going to be fast food, midscale, or upscale? Will you be operating full-service (meaning with waiters and sitting at tables), takeout only, self-service, or will you be forgoing service altogether and operating a ghost kitchen?
Another way you can think about finding your restaurant niche is by diversifying from the standard restaurant model. Red Feather, a restaurant in Cincinnati, opened up a retail wine shop, larder/grocer, ghost kitchen, delicatessen, and wine bar that was funded with their $56,555 Honeycomb crowdfunding campaign.
2. Location matters
The location certainly does matter because it’s impacted by pretty much everything we’ve already talked about - customer demographics, food niche, service style, pricing, cost, etc.
The first question to answer is: can you afford to open up in a certain location? Sure, opening up downtown makes the most sense since it’s busy, however, rent can be expensive, and the market is supersaturated with other restaurants that may be similar to yours.
Also, take a look at the demographics of the area - for an obvious example, maybe it’s not the best idea to open a bar/nightclub in a quiet residential area. On the other hand, maybe if you’re opening up in an area with a lot of busy and health-conscious young professionals, your fast-casual salad and poke shop might be the move.
Finally, the size and shape of the restaurant matter. Maybe you want a cozy little spot, or maybe you want it to be an open concept, it totally depends on your vision as well as the restaurant niche you’re planning to fit into.
Iron Born Pizza in Pittsburgh knew that when they wanted to open up a second location, they wanted it to be a bit different from their first spot, a walk-up pizza shop in Millvale. So, they found a place in the Strip District, an area of Pittsburgh well-known for their restaurants, where they could build out a full-service restaurant. This second location was also funded by a Honeycomb campaign that raised $107,000 from 49 investors.
The foot traffic you anticipate will also play a large role in choosing the space you want your restaurant to be. Another thing to consider, which has become increasingly important in this era of pandemic restrictions, is whether your restaurant has the capability for outdoor seating or a walk-up window.
3. Get Official
Starting any new business comes with a bit of paperwork, red tape, and “t’s” and “i’s” to be crossed and dotted. The first step is to make sure you’re registered with the state as a business. Then, you need to make sure you get all the restaurant-specific licenses and such to make sure your restaurant is running safely and legally. This includes food safety certifications, liquor licenses, ADA accessibility, and so on.
A great resource to learn about all these regulations is the National Restaurant Association’s Educational Foundation, which has information, programs, and workshops that are all about getting into the restaurant industry.
4. Find funding
We already have an entire blog post that goes more in-depth about how to find funding for your restaurant, but here are the basics:
Have a business plan ready
You can find investors through many outlets: family and friends, industry connections, online groups, banks and small business administrations, and crowdfunding (that’s us!)
Different investors have different priorities - so make sure the people funding you also align with your mission and vision for the restaurant’s future.
5. Start building out and get ready!
Now that you’ve found funding and all your ducks are in a row (or maybe are in the oven roasting), here comes the fun part: building your dream restaurant.
If you’re starting from scratch in a new brick-and-mortar space, you might have an idea of how you want the space to look, but no idea how to go about making it a reality. We highly recommend hiring an architect to design your space because they can take your creative vision and use their technical knowledge to bring it to life. They’ll also be useful in helping you meet building codes and city regulations and take the stress off of you in making minuscule decisions about the space.
Other costs to consider in the buildout are what it’ll take to buy things like new equipment, tables and chairs, small wares, ingredients, cleaning supplies, and so on. The Speckled Egg, a brunch spot in downtown Pittsburgh, used their Honeycomb campaign (which raised $49,500) to help fund startup costs such as the food, training for staff, and utilities, all of which are certainly necessary expenses leading up to the big day!
6. Now Hiring!
You’ve got the space, you’ve got the recipes, now you just need to fill it with people! The first people you’ll need will of course be your employees.
There are many ways to find restaurant employees out there. You can go old-fashioned by putting up a “Now Hiring” sign, and you can also put up job postings on sites like LinkedIn, Facebook Jobs, and Glassdoor. Other restaurant owners prefer to use their own personal networks to find employees, whether it be people they’ve worked with on the line or a referral from an old colleague.
Before you begin hiring, it might be helpful to have an onboarding program in place, which has been shown to improve retention and engagement.
Melissa Hirsch, the owner of the UnBar Cafe in Cleveland, was able to hire back her employees after the pandemic lockdown made her temporarily let them go after her successful Honeycomb campaign which raised $30,675.
Any restaurateur knows that the employees are one of the most powerful ways of representing the business to the world. Stellar service leads to happy customers, which leads to returning customers, after all! So, make sure that your employees are happy, well-trained, and represent your restaurant’s culture well and they’ll become some of your biggest advocates.
Square Cafe, another alum business, is well-known for providing a more than livable wage and benefits for their employees. This model has proven so successful that they were able to expand from their tiny 2,000 square-foot space in Pittsburgh’s Regent Square to a space three times as big! For their Honeycomb campaign, they raised $250,000 for this move.
7. Tell the world about your restaurant
For a restaurant, marketing comes down to the sign on the front door, the menu on the table, and the ads on your customers’ Facebook feeds, and how well they’re representing your business.
For many restaurateurs, one of the most affordable and accessible ways of marketing your business is going to social media. You can learn about social media marketing for small businesses here in this blog post, but here’s a quick overview:
Decide on the social media platform(s) that’s right for you
Consider investing in professional-quality photos
Build your small business industry network
Put out relatable content - consistently!
Tell your story through your product, employees, and customers
Make it easy for your customers to convert to your website and engage with you
Social media is proving to be a fantastic way of promoting your restaurant. Take for example, Ryan Peters, former chef at Iron Born Pizza. His TikTok of all his pasta-making techniques has almost 2 million followers, and now he’s working on his own pasta business!
8. Opening up!
OMG, it’s your opening day, we’re so excited for you! A restaurant’s opening day can be an exciting if daunting day. What if no one shows up? What if an employee spills soup on an investor? What if we can’t keep up with demand and people are waiting on their appetizers for hours?
There are many different ways you can manage your restaurant’s opening. The first is putting on a soft opening and inviting your family, friends, neighbors, and investors for a dry run. This will take the pressure off a bit and give you and your team a chance to evaluate what your strengths and weaknesses are before opening up to the public.
Other ways of getting people interested in your restaurant for the opening day can be by offering first-day perks, partnering with influencers, and investing in some flashy decorations to get people’s attention from off the street.
One way you can have customers lining up out your door on day one is by letting them invest in your business’s startup costs! Wait, what?
Okay, here’s the deal: Honeycomb campaigns are about more than just raising the capital needs your restaurant needs through crowdfunding. They’re also valuable tools for building community buzz and for turning your customers into brand advocates.
By investing in your restaurant, your customers are automatically more invested in the business and become not only loyal regular patrons but brand advocates. Running a Honeycomb campaign can help bring your restaurant concept to life and get a built-in customer base in the process, making your opening day smooth sailing.
Starting your restaurant from scratch?
Whether you’re just getting started in the restaurant business or a James Beard-nominated chef, crowdfunding can be an option for you to fund your next step in opening a restaurant! Learn more at www.honeycombcredit.com/restaurant
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