How to Open a Restaurant in 3 Steps - The Starting a Food Business Checklist
So you love to cook and you want to start selling your menu online? Or maybe you want to sell your catering services as a personal chef?
Whatever your concept, you want to learn how to start a small food business or restaurant and we're here to help.
When it comes to launching in the food industry, we find that many of our clients are intimidated by the connotation the industry has. High turnover, low success rate, large startup investment, and the list goes on.
But, if you prepare yourself and do the work required to lay a proper foundation and get started on your concept, the journey doesn't have to be rocky.
If you're interested in starting a service-based food business (restaurant, catering, bakery, personal chef, etc.) but don't know where to start, then grab a pen and paper, and keep reading. In today's post, we're sharing the 3 V's to start a restaurant or small food business.
1. Validate your concept
Every food business starts with an idea - maybe it's a family recipe that you want to sell, or a meal plan that worked for you and you think would help others too.
Your idea is great ... to you! In order to be successful as a business though, your idea has to be relevant to others.
Will your idea solve a problem that a customer faces?
Will your idea have an advantage compared to competitor services?
Will your idea fit in with customer values and lifestyles?
It's important to understand your concept inside and out, and realistically (without bias) analyze the validity of its success in the marketplace.
When working with our clients, we recommend validating concepts using two different focus points.
First, determine who your ideal customer is. Pinpointing your ideal customer, or niche market, will help you to understand whether or not your concept is relevant to them. For instance,
Idea: all-natural drink shop using herbal ingredients to promote restful sleep
Ideal customer: young to middle-aged adults leading busy lifestyles that prohibit them from getting a full night's rest
On the contrary, a poor example of a customer for this idea would be young children and teenagers. These individuals would not generally be in need of assistance getting restful sleep, hence they are not the ideal customer for this idea.
By understanding your idea, and determining who would best benefit from supporting your service, you will be able to identify a gap in the marketplace in which your idea will capitalize.
Second, determine what the market is like. Researching the market climate will help you to understand what is or isn't working in the marketplace currently, and where the market is headed. Market research will help you to understand trends that may evolve into lifestyle purchasing habits as well as competitor offers and sales strategies.
Are you interested in learning more about locating your ideal customer and understanding your competitive advantage? Take a look at our 7-Day Brand Assessment Challenge - we go into more detail on these topics and 5 others. You can learn more about it here.
2. Verify your sales strategy
This is where the logistics of your business will come into play - your sales channels, your sales mix, and your sales plan.
Sales channels are methods used to bring a product to a customer with the intent to create a sales transaction. When mapping out a plan to start a restaurant or small food business, your sales channel options are an essential piece of your business model.
Will you sell in a brick and mortar shop or feature your catering services online?
Will you operate a food truck or sell as a vendor at local markets?
There are a variety of sales channels which you may enter into, though the key is to choose the sales channels that best align with your findings from step #1 (your ideal customer and your industry climate).
Your sales mix is exactly as it sounds - the mix of items or services you intend to sell. When opening a restaurant or service-based small food business, your sales mix will likely include a variety of options. Again, ensuring that each item is in line with your findings from step #1 (your ideal customer and your industry climate) will create consistency within your business sales strategy.
When opening a restaurant, configuring a menu can prove to be challenging. When working with our clients, we recommend using the attributes discovered during the market research phase as a starting point for menu development. Other key factors include seasonality, procurement, ingredient cost, storage, and variety within your menu.
Your sales plan consists of identified targets and action steps to reach said targets. A sales plan is essential to restaurant and foodservice operations. However, while in the idea phase, it's important to not only have a sales plan but to include that within your business plan.
Similar to a sales plan, a business plan identifies targets and action steps but on a larger scale. Instead of restricting these targets and steps to your sales approach, a business plan encompasses the business as a whole. Ideal sections within a restaurant or food business plan may include:
Mission and values
Your findings from step #1 (ideal customer and industry climate)
Your findings from step #2 (sales channels and sales mix)
Operations and management
Permits and licenses
Equipment needed to start a restaurant
Are you interested in learning more about how to write a business plan for a restaurant or food business? We will be sharing a blog post with more details in a couple of weeks! Sign up for our email list to be notified when the post is live!
3. Visualize your brand
A big mistake that I notice when working with our clients and speaking with aspiring food entrepreneurs is that they focus on their brand prematurely. By brand, I mean the typical visuals that come to mind when you think of a brand - logo, color palette, font selection, a website even.
This plays a problem when determining how to open a restaurant or start a small food business because the key factors of the business (the ideal customer, industry climate, sales channels, sales mix, and sales plan) get pushed to the back burner, though these are the core identity of a business. Only once these are in order and finalized, then the brand should be developed.
A brand identity, or brand story, is how you want your brand to be perceived. This lays a necessary piece of groundwork for your brand and determines a starting point for your branding strategies. Without brand identity, you or your marketing team will not have a baseline to build from when creating sales collateral or marketing content.
When outlining your brand identity, maintain clarity in the tone and experience of your brand, as well as the reason your brand exists. Customers find it easier to relate to and support brands that communicate their story with intention and integrity.
Now, comes the portion that we've all been waiting for - choosing a color palette and designing a logo. A brand design offers visual collateral that will differentiate your brand from others. When designing your brand visuals, utilize your findings in steps #1 and #2 (your ideal customer, industry climate, sales channels, sales mix, and sales strategy) to inspire your selection. The psychology associated with the colors, fonts, and insignia that you select will play a large role in how your brand is perceived.
Essentially, a brand strategy is an outline, plan, or document that encompasses the combined components of a brand and how those components should be brought to market. It serves as a guide as you move into the marketing phase of opening a food business, to make sure your brand is functional, intentional, consistent, and relevant.
When determining the best brand strategy to start a restaurant or small food business, the platforms in which you promote branded content is incredibly important. Social media plays a huge role in brand strategies for food businesses in the current market. Though, you will want to review your findings in steps #1 and #2 to make the best selection for your brand.
Are you interested in learning more about brand identity, visuals, and strategy for your food business? Check out these posts:
Opening a restaurant or starting a food business does not have to be as scary as it sounds. With these 3 steps, you'll have all your bases covered and create a strong foundation to ready your recipe for the restaurant!
If you're interested in learning more about how we can help you start your food business, you can check out our services here.
Do you have an idea that you want to turn into a food business? What questions do you have? Share them in the comments section below!