How to Start Your Own Restaurant Business

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The restaurant industry is often viewed as one of the most competitive industries in business. With nearly 600,000 privately owned food establishments throughout the United States according to the U.S. Bureau of Labor Statistics, as well as the thousands of corporate restaurant franchises, a new restaurant can easily encounter competition on every level. In order to ensure a competitive and successful start, the new restaurant business requires plenty of planning, attention to details, and commitment toward quality and success.

Outline your restaurant’s menu, and define its specialties. Research the restaurant industry in your area. Determine the industry’s growth trends and identify the industry’s needs and voids. Determine your restaurant’s desired customer base, or target market. Identify how your restaurant will meet the market’s needs and voids, such as offering deliveries or being the authentic Japanese cuisine restaurant in town.

Compare your restaurant to the competing restaurants in the area. Identify the strengths and weaknesses as compared to the competition, and ascertain the strategies your restaurant will implement to maintain a competitive edge.

Write a business plan for your restaurant. Include the information you gathered in steps 1 and 2. Use the business plan to organize your business and develop metrics and milestones for its development. Create a budget with the business plan information to determine the required startup costs and funding requirements.

Establish your restaurant’s legal business structure. Register your business with the state. Corporations are often recommended for restaurants for personal protection and funding. Apply for an Employer Identification Number with the Internal Revenue Service and secure a D-U-N-S number with Dun & Bradstreet.

Secure a restaurant location that meets the operation’s size requirements. Make sure the location’s kitchen is large enough to hold the required equipment, ovens, refrigerators and cooking staff. Ensure that the floor and lobby is large enough to accommodate tables, furniture and comfortably seat guests while providing ample parking and proper lot lighting.

Apply for the appropriate vending and restaurant licenses, as required by your city’s ordinances. Prepare for city officials to inspect the facility to ensure that the restaurant meets all city and fire ordinances and codes.

Purchase or lease your restaurant’s equipment, inventory, furniture and fixtures. Choose professional installation, if possible, to ensure proper and safe installation of equipment. File any warranties and receipts for future reference and tax purposes. Speak with an insurance agent and secure a strong business policy that provides strong protection and liability coverage for the business, its customers and staff.

Begin hiring your staff once you have secured your restaurant’s location and licenses. Avoid hiring staff at the last minute as this may cause you to overlook quality employees. Have each employee complete the proper paperwork, including the IRS Form I-9: Employment Eligibility Verification form. Train your employees carefully to ensure that they are prepared for the restaurant’s grand opening. Provide uniforms or aprons to promote a unified team environment, and insist that employees maintain a clean and tidy appearance. Be sure to provide your employees with a handbook that outlines the restaurant’s policies and procedures.

Review and implement Occupational Safety and Health Administration (OSHA) standards in your restaurant to ensure that federal compliance is met. Contact OSHA’s compliance assistance specialists for free assistance in implementing OSHA standards in your restaurant.

Promote your restaurant’s grand opening as you set up its operations. Increase the advertisement efforts as you approach its grand opening. Entice potential customers with small samples of the menu, pass out menus and draw attention to the restaurant.


  • If you do not have enough money saved up to start the restaurant and operate it for the first six months, you will need to obtain a business loan from a bank. Your business plan and personal credit report will be the most important aspects the bank will look at in deciding whether to approve the loan.