How to Plan a Restaurant Business

Planning a restaurant business is an exciting prospect, but it can be physically and financially draining. With every start-up business, risks are going to be taken, but with hard work and dedication any entrepreneur can succeed. You'll need a significant amount of knowledge about the restaurant business to open a restaurant; careful consideration of location and budgeting is also crucial in being a successful restaurateur.


Write a detailed business plan for your restaurant. The business plan should include budgets, description of involved individuals, prospective locations, and the type of restaurant you plan on opening (i.e., Italian restaurant, sushi restaurant). The budget needs to be available to investors at all times, at the beginning of the planning and a year or two during operation. Investors always need to know what they are spending their money on. The average business plan is 50 to 150 pages.

Generate investors for your restaurant business. There are many types of investors, such as angel investors and venture capitalists. Venture capitalists give business owners money to start their new venture. Start with venture capitalists that are specific to the restaurant industry. That way, it will be easier to acquire capital for the business. Look for individuals who want to invest in a restaurant or are already investors in other restaurants; they might be interested in your venture.

Generate start-up capital. Starting a restaurant business is a very costly task. The average cost to start a restaurant business is $500,000 to $1 million. Don't let this deter you; just know that getting investors is crucial for the success of a restaurant. The cost is significantly high because of the many things you have to purchase. If you want to serve alcohol at your restaurant, a liquor license has to be purchased. A liquor license will cost up to $100,000. You may need permits to create outdoor dining, if that is desired. A significant chunk of the money is going to go to the purchase of equipment and furniture for the restaurant; food is also going to be a monthly expense.

Scout out locations. The location of the restaurant is one of the most important aspects when planning a restaurant business. Choose a location that is close to the nightlife, transportation, and parking. Choose a location that has an active crowd of people.

Hire employees. Every restaurant needs a waitstaff that will help the restaurant run smoothly. Employ a chef and kitchen staff. This is very important because the food will determine your success or failure in the restaurant business. Choose carefully when hiring a chef. View resumes, check references, and have the chef prepare their specialty dish. Their ability to prepare a great meal will ultimately get them the job.