Start a Restaurant Business
Every child has a dream; somebody wants to become a rock star, a basketball player or a military man. My dream has been to open my own restaurant. The restaurant business has ever been the most existing thing for me. Every time my parents took me to a restaurant, even if it was a local café or a simple fast food restaurant, I tried to imagine how I would change the place, whether I would add new decorations or change the restaurant style at all or maybe I would change the dishes and make them richer. Sometimes I used to imagine the restaurant of my dream; I used to build every detail of my imaginary restaurant beginning with a hostess and ending with a chief cook who could surprise the visitors with his/her signature dish.
When I grew up, I did not give up my dream and I set a goal to open my own restaurant at any cost. However, I understood that to be a good restaurant owner means to pass all the stages of the restaurant business; thus, one has to work at different positions. In order to receive the priceless experience that I can put into practice now I worked as a hostess, waitress, cashier, and a manager’s assistant in a Greek Restaurant.
My goal is to open a restaurant in New York City. However, it is quite difficult because of the numerous competitors who have the most visited restaurants in the world. Nevertheless, I believe that my original restaurant will attract the attention of New Yorkers and they will consider my restaurant as one of the best in the city.
New York City
New York is a city that provides people with numerous opportunities, but only those who can use them wisely will be successful. New York City is the most populous city in the United States, and it is a commercial, financial, educational, entertainment and technical center of the United States. Thus, a successful business in New York becomes known all over the world and if one wants to receive global recognition, New York City is the best place for this goal.
The variety of restaurants in New York City is really impressive. One can visit a simple tea room and pay twenty five dollars for a cup of coffee and a piece of cake or visit a luxury restaurant, where a senior chef amazes customers with delicious dishes of different cuisines (Long 12).
For example, dinner at the Hard Rock Cafe International will cost only twenty dollars while lunch at the Four Seasons Restaurant will cost more than one hundred dollars. The difference in price depends on the status of a restaurant, its place in the top listed restaurants, dishes and service.
I want to open a Chinese restaurant, though I realize that it would be a quite difficult task because of such famous New York restaurants as Big Wong, Han Dynasty, Jing Fong, Joe’s Shanghai, Shun Lee West and many others. Nevertheless, I strongly believe that I can achieve success in this business, that my restaurant will prosper and that it can receive the title of one of the best Chinese restaurants in New York City.
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My choice to open a Chinese restaurant is not accidental and it is not connected to my preferences for Chinese culture and cuisine. This choice is determined by marketing; in other words, the eastern culture raises a lot of interest among people in the western world. Indeed, people who live in the United States perceive Asian cultures as exotic and when they have a choice between an ordinary American meal and a Chinese meal, many of them choose something that they probably cannot cook at home; thus, the preference is given to Chinese food (Jung 17). Despite quite ordinary Chinese food that one may buy in any Chinese fast food restaurant like noodles, soybeans or ice, there are dishes that are served only in specific Chinese restaurants and not many western people have ever tasted them. According to this fact, the second reason is the uniqueness of Chinese cuisine.
Chinese cuisine is not only a meal prepared with strange components that are not natural for American culture. Chinese cuisine means also an opportunity to visit Little China, located down the street. Confucius, an influential Chinese philosopher once said that Confucianism contributed not only to philosophy, but also to Chinese food and the way it is prepared and served. Preparation of Chinese food requires special skills and experience; this task can be a challenge even to a Chinese person. If one wants to get to know more about Chinese food, he or she will probably realize that Chinese cuisine is really a philosophy. One will not find a knife at a dinner table because there is no need for it; food products are cut into small pieces, so a person does not have to cut them into smaller pieces to eat.
The third reason, why a Chinese restaurant is more preferable than an ordinary one is healthy food and its nutritious qualities. Indeed, one of the most important problems of modern American society is obesity. Every third citizen of the United States has problems with excess weight. The reason is not only the dynamic way of life, but also American traditional dishes that are hamburgers and French fries; foods that contain a lot of fats lead to obesity. Chinese food, however, has a balanced combination of all ingredients necessary for good nutrition. An ordinary Chinese meal contains herbs and condiments as well as meat and vegetables. Thus, it improves health, leads to longevity and also has medicinal value (How to Start a Restaurant). Moreover, Chinese dishes are cream, butter and cheese free. However, meat is also used.
A Chinese restaurant may offer such dishes as chicken or beef with vegetables, sesame chicken, beef with cashew and broccoli etc. In Chinese cuisine a lot of soy sauce is also used; it is rich in sodium and, thus, it is good for health. As a conclusion it can be said that Chinese food contains a lot of vegetables, it is low in salt and in fat and thus, it is one of the healthiest foods in the world.
Hence, such reasons as exotic culture, unordinary meal and healthy food show why a Chinese restaurant is more preferable. These reasons will be beneficial especially at the early stages.
Location is probably one of the most important things one should keep in mind when planning to open a restaurant. Whatever location one chooses, he or she should realize that after the restaurant starts working, the only thing that cannot be changed is location. Thus, location should be paid special attention to because the right location of a restaurant is directly connected with its success.
The first step is to choose the right business location; one should not hurry up with this decision and rent the first place he or she finds. Instead, as much offers as possible should be considered before making the final decision. After that, all pros and cons should be compared and the best location should be identified.
A comparative analysis should contain the following criteria:
- Passing traffic;
- Freehold or leasehold;
- Potential for outdoor seating.
Moreover, if an advantageous location is almost next door to the competitors, one should not be afraid to open the restaurant there. Unlike other businesses, in the restaurant business it is beneficial for a restaurant to be located near the competitors. Restaurants of the competitor may already have a lot of clients, thus, a new restaurant in the well-known area will attract the attention of potential clients. Besides, some customers might change their opinion and visit the new restaurant in order to try something new (Haden “Start a Killer Restaurant: 6 Tips.”). As a result, an owner of the new restaurant doesn’t have to spend money on advertising.
Another important issue in regard to location is whether it is better to buy or to rent a restaurant space. Both variants have its advantages and disadvantages. Buying a property requires a significant amount of capital and it is sometimes unreal for a young business owner. Moreover, the process is time-consuming and requires additional costs. However, when one owns a property he/she can avoid such risks as increased rent and is provided with total freedom of action (Egerton-Thomas “How to Open and Run a Successful Restaurant”). For example, he/she may decide to reconstruct some parts of a building that is quite difficult or impossible when one rents the building. On the other hand, rent provides an easier exit strategy when something goes wrong and there is a need to close a restaurant because of financial or some other problems. Thus, the decision depends solely on a restaurant owner and his/her preferences and plans for future development and growth.
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Budget plays a significant role when one wants to start up his or her own business. Rent and salaries are two major components that impact the initial capital of a business owner. According to this fact it is hard to estimate the accurate figures because a business plan of two restaurants as well as their costs will never be the same. Another factor is location of the future restaurant. For example, to open a small restaurant in Brooklyn will cost about 500,000 dollars, while to open the same restaurant in the neighborhood of Brooklyn will be approximately 100,000 dollars. David Chang, a famous restaurateur in New York City, states that one should expect to pay about 300,000 dollars for a small restaurant and up to 10 million dollars for a luxury four-star restaurant in the center of New York (Miller “Starting a Small Restaurant: How to Make Your Dream a Reality.”).
However, buying or renting a restaurant space does not limit the costs and to be honest it is just the beginning of the future costs. As a rule a restaurant`s kitchen and dining room require renovation as well as furniture and some equipment. In some cases it is necessary to make a thorough overhaul or at least redecoration. Moreover, it is necessary to spend some money on advertising, signs and marketing. The first few months the restaurant will not bring much profit, but still it is necessary to buy food and to pay salaries to workers, thus, these additional costs should also be taken into consideration.
To conclude, the final budget that is needed to start up a new restaurant in New York City is about 500,000-600,000 dollars. This figure, however, can vary according to the restaurant`s location, economic conditions and the restaurant`s owner preferences among others.
Raising of the Restaurant`s Capital
When one decides to open a new restaurant, he or she should have a detailed plan of actions that will include all aspects ranging from rent and location to employees’ salary.
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Thus, it is necessary to include the following:
- Make a business plan that will cover all costs including those that are difficult to predict. The financial plan consists of the costs related to a restaurant`s location, reconstruction, acquisition of new furniture, employees` salaries and acquisition of food products. Moreover, one should also have extra money because it is impossible to predict all costs and it is better when one has some rainy day fund.
- Choosing a location. When the business plan is ready, one has an approximate sum of money that he or she can spend on buying or renting a restaurant space. Taking into consideration this sum of money, one chooses a location which suits him/her the best.
- Finding the perfect name for the restaurant. A restaurant`s name is the face of the restaurant, the first thing that the potential visitors pay attention to (Ray “How Much Money Does It Take to Start a Small Restaurant in New York City?”). Thus, it should be a catchy name which would correspond to the restaurant’s general idea. For example, if it is a Chinese restaurant, the restaurant`s name should probably illustrate its Chinese origin like Sing Yang or the name may be in English, but still refer to Chinese culture like Red Dragon. Moreover, it is good to think over a future slogan of a new restaurant when choosing a name for it because as a rule slogans are usually connected with the restaurant’s name.
- Writing the menu. A new restaurant requires the menu that will differentiate it from the others. New York City has a great variety of Chinese restaurants and thus, it is necessary to impress the clients with dishes that are not available in other restaurants. The uniqueness and originality guarantee the future prosperity of the restaurant.
- Staff hiring. This issue requires special attention. Waiters are in a direct contact with clients. Their capacity to impact clients’ decisions is priceless for a restaurant. In some cases waiters save the restaurant from bankruptcy. Thus, waiters should be qualified professionals who have experience of working in the restaurant business. Another issue is waiters’ origin, for example, if it is a Chinese restaurant it is better to hire waiters who are Chinese. People who visit a Chinese restaurant expect to dive into Asian culture. It concerns not only decorations and dishes, but also people who serve them. Indeed it would be strange if the Chinese restaurant does not have Chinese staff. The same thing concerns a chief cook; even if a person can perfectly prepare Chinese dishes, it does not mean that a Chinese restaurant should hire a chief cook who is not Chinese. If it is a Chinese restaurant, every detail of this restaurant should correspond to the main idea of the restaurant.
- Buying equipment. Kitchen equipment may become a real disaster for a new restaurant because it costs quite a lot. However, it does not mean that one should spend enormous sums of money on quality equipment or vice versa buy low quality one. About 60 percent of new restaurants fail and this sad fact makes owners of these restaurants sell their equipment at lower prices in order to pay the debts. Thus, the first rational step would be to search for those restaurants that have recently shut down; this would save an owner`s money and provide him/her with good equipment.
- Registration of a business with the Environmental Health Service. One should register its business with the local authority at least 28 days before opening. Registration is absolutely free and it is necessary to receive legal permission to open a restaurant and provide services to people, otherwise it may lead to the loss of reputation, clients, time and money.
- Taxes. Every year a business owner should make a general report and pay taxes to various governmental bodies. Tax rates are predetermined by governmental institutions and depend on many factors. The main factor, however, is an annual profit. The more profit a restaurant`s owner receives, the more taxes he or she should pay.
- Advertising. When a restaurant is ready to work, there is a need to present it to the audience and to attract clients. Advertisement may be done in different ways; it may be a TV commercial or a bright message on a billboard. Moreover, it is recommended to attract attention of first clients using some special offers like 50 percent off for the second dish or free desserts on Friday evening. Advertising is an essential part of any business`s development, thus, one should not ignore this opportunity.
Market the Restaurant
Nowadays marketing of a new business does not require enormous sums of money as it was two decades ago. Today, modern technologies, especially the internet and social networks make the process of marketing much easier (How to Start a Restaurant).
The following marketing strategies could inform potential clients about opening of a new restaurant and it will cost nothing to its owner:
- – Facebook. Facebook is the most popular social network in the world and it is widespread among the young generation as well as among the older generation. One may post information on Facebook about a new restaurant and that will be enough because this message will be reposted by other users and it could reach many potential clients. The same procedure may be made on twitter to increase the effectiveness of the message.
- Staff is the best advertisement. Clients of a restaurant should receive the royal treatment since it makes them come back to the restaurant again and again.
- Add the kids menu and special offers for kids every weekend. Kids love when they receive special treatment and they will ask their parents to take them to the restaurant again.
- Hot offers or “Family Hours” every Wednesday or another working day from 6:00 till 8:00 p.m. Moreover, good discounts on every fifth visit or half priced kids meals will positively affect the restaurant`s reputation. Moreover, one may organize special events with quizzes and gifts.
- Encourage the clients to give the restaurant reviews on the Net’s top review sites like CitySearch.com, MetaFlavor.com or Yelp.com. These websites became popular these days and people often visit them to read the reviews about new restaurants and whether it is worth to visit them.
Nevertheless, the usage of the internet as the main source of advertisement is not the only task that one must perform when marketing a restaurant. Marketing also predetermines that one should take into consideration the following tips in order to improve a restaurant`s performance:
- Stay current. The restaurant should also develop; it must be up to date and correspond to customers` demands.
- Provide a functional website. The restaurant should have a professional website, where the clients can find out about special offers, discounts or events. Moreover, the visitors may leave their opinions concerning the restaurant there.
- Invite local food bloggers. Local bloggers are people who the clients trust because they have rich experience in the restaurant business and can easily identify whether the restaurant is worth to visit. Thus, it would be useful to invite a few famous food bloggers in order to raise the reputation of a new restaurant.
- Give the menu a fresh look. Even the best menu becomes old after some period of time. The menu should be always updated; for example, each Friday a new dish should be added.
- Ask. Provide questionnaires online on Facebook or on the restaurant’s official site. One should not be afraid to ask the clients what they think about the restaurant and what they would like to change. Remember, satisfied clients are the key to the restaurant`s prosperity.
How to Encourage Investors
Opening of a new restaurant requires a lot of money and there are two solutions for this problem. The first is to save money, ask relatives and friends to lend you money, however, this way of receiving money is quite durable and may not satisfy the financial plan. The second solution is to use the help of investors (Haden “Start a Killer Restaurant: 6 Tips.”). Investors invest their money in promising projects. As a rule they do not experience difficulties with money and can give quite big sums of money, but only if an owner can persuade them to do it. Thus, if one wants to ask investors for help, he or she should encourage them to provide the business with financial assistance.
A memo should contain basic information about the restaurant, its type, location, costs and a financial plan. The main idea of the memo is to provide such information that makes investors sure that this is a profitable business the only disadvantage of which is the lack of financial support. Thus, when one makes a memo he or she should include only advantages and possible benefits. For example, a new Chinese restaurant is located in a beneficial location that gives it an advantage over other Chinese restaurants. However, after a detailed analysis of potential competitors it was established that its attendance is lower as compared to the previous year. The reason is high prices and stagnation of the restaurant`s development. This restaurant does not provide any special offers and thus clients lose interest in visiting it; besides, the restaurant`s new chief cook is not as good as the previous one and it also reflects on the reputation of the restaurant.
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On the other hand, for my new restaurant I have already found a few candidates for the chief cook position; they all have a brilliant reputation and experience of working in Chinese restaurants. Waiters have already completed short-term trainings and are ready to perform their duties. Moreover, investors may examine the menu and comparatively low prices that give the restaurant an advantage over other restaurants located in the same area. Special offers and discounts will not damage profitability of the restaurant. A detailed list of all possible offers and discounts is available on the official website of the restaurant.
Nevertheless, if one tells only about advantages and says nothing about possible threats or challenges, investors may think that the restaurant`s owner withholds some information because it is impossible for a business to work without any difficulties. Thus, it is necessary to identify several problems that may arise, but the information should be provided in such a way as to show that these problems can be easily solved. For example, a Chinese restaurant may experience some difficulties at the early stages. First of all, it is due to a low number of clients. However, this task can be solved during the first few months. My restaurant has numerous advantages over other restaurants, such as better location, decorations that correspond to the general idea of the restaurant, professional chief cook and skillful waiters. Taking into consideration these facts, investors may estimate potential, workability, profitability and further development of the restaurant and make positive conclusions.
To sum up, I would like to say that the restaurant business is a real challenge and it requires hard work and enthusiasm to overcome all difficulties that one may face. However, I believe that I can complete this task and make my restaurant successful. One should realize that success of a business depends on two main factors; an accurate business plan and, more importantly, an owner’s desire and willingness to cope with challenges.