How to Start a Business: Opening a Restaurant by Marcia Layton Turner

How to Start a Business: Opening a Restaurant

Yes, location is important when opening a restaurant, but location by itself won't make or break you. What will? Not knowing these key pieces of information.

by Marcia Layton Turner
updated July 09, 2021 ·  3min read

Starting a business is a dream for many Americans, and opening a restaurant is high on the list of choices.

It can also be a great entrepreneurial opportunity because Americans like to eat out a lot. According to Statista, an average household in the U.S. spent $3,526 in 2019 eating out, which is up 41% from 2010.

The key to successfully starting a restaurant business comes down to how you approach your startup process. Take these steps and your restaurant will have a greater chance of success.

woman smelling food


Do Your Market Research

Understanding the demographics of the area where you intend to operate is essential, says Natalia Levey, who opened Kojo Sarasota with her husband three months ago in Sarasota, Florida. It's their third restaurant and second restaurant concept—they also own two locations of Speaks Clam Bar.

The demographics of the area should determine your menu choices and restaurant concept. For example, launching a sandwich shop or vegan eatery in a college town could become a hot spot if you can keep prices affordable for students.

In addition to studying your local customer base, take a close look at the restaurants in the area. Which ones are thriving? Which ones are struggling? Can you tell why? For example, is the food poorly prepared, or is their takeout ordering system problematic? Studying what they're doing right, what they're doing wrong, and what consumer response is can tell you a lot about what you might expect with your own restaurant.

Look at More Than Location

Yes, "location, location, location" is paramount, which is why market research is the first step in opening a restaurant, but location isn't all you should check out.

Investigate your landlord to be sure you've got a good one. Kristine Daub, founder of byCurated, says "A good landlord builds an ecosystem of businesses that feed each other's foot traffic. They upkeep the area around the premises. A good landlord knows how to bring business to his property in the retail and entertainment industry."

Understand Your Finances

"One of the most critical steps is understanding expenses," Levey says. These include everything "from permits, construction costs, technology, potentially paying recruiters to help hire staff, new equipment, products for menu testing and mock services before opening, uniforms, printed materials, takeout containers, and so much more," she says.

Identifying all of your expenses helps prevent unexpected costs from cropping up and enables a more accurate calculation of your breakeven point, which is another essential figure you'll want to be familiar with.

Know the Rules and Regulations

Mychel "Snoop" Dillard, owner of Atlanta's Crave Restaurant, Member's Only, and Escobar Restaurant & Tapas, which she owns with rapper 2 Chainz, emphasizes the importance of having "the proper licenses and permits."

Skip this step and your opening will be delayed, or you could get shut down later. Know the local codes and make sure you're in compliance.

Build an Online Presence

Even before you open your doors, start to educate your local market that your restaurant is coming soon. You can do that digitally and help build anticipation for its opening. Martin Orefice, who has helped build restaurants and who now runs Rent to Own Labs in Orlando, Florida, recommends using "social media platforms like Facebook and Instagram to generate buzz about your restaurant." He suggests asking questions regarding dishes they're looking forward to or want to see, what kind of interiors and ambiance they prefer. "The answer to these questions can help you build a restaurant that resonates with the needs of the customers."

Combining a great location, a concept that locals are excited about, and marketing to spread the word about your delicious food are among the most important steps in opening a restaurant.


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Marcia Layton Turner

About the Author

Marcia Layton Turner

Bestselling, award-winning writer Marcia Layton Turner has authored, co-authored, or ghostwritten more than 50 nonfictio… Read more

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