Do You Have What It Takes To Run a Restaurant Business?

Owning a restaurant business is expensive and requires hard work and dedication

Americans are eating out in record numbers.  The National Restaurant Association reports that restaurant sales reached about $537 billion in 2007.  With 935,000 restaurants and food service outlets and 12.8 million employees, this industry is the country's number one employer.  It is also a very difficult business in which to achieve success.  Do you have what it takes to open your own restaurant business?

In order to open a successful restaurant business, you need to have stellar business skills.  In addition, you need to be able to:

• Oversee all aspects of your restaurant from cooking to serving to hosting.
• Step in and cover any position if you need to.
• Delegate responsibility and assign jobs.
• Provide a comfortable dining experience for customers.

The restaurant business offers a lot of benefits, including:

• Potential for big income
• A lot of choices for specialization
• Great market
• Big labor market

The restaurant business also has its share of downsides, such as:

• Fierce competition
• Competitors with lower prices
• Market saturated with big name restaurants
• Long hours
• Hard work
• High start up costs
• High overhead
• A lot of regulations and laws to abide by

Equipment is a major cost when opening a restaurant business.  Here is a list of some of the most important items you'll need to start:

• Refrigerators
• Commercial frying equipments
• Ovens
• Food prep supplies
• Preparation tables
• Beverage and ice machines
• Mixers
• Dishes (for cooking and serving)
• Utensils (for cooking and serving)
• Tables and chairs
• Menus
• Food supplies
• Bar supplies

Licensing is an area in which you need to make sure you fully comply.  You need a business license, a food license or permit, and a liquor license if you want to serve alcohol.  You also need to pass inspections by fire, safety, and health commissions.  Contact your state to get more information on the specifics.

You will also want insurance.  This protects you in case of a fire, damage, or theft.  You don't want to have to replace equipment out of pocket, and it also protects you in case a customer is injured on the premises. 

There are several associations which you can join if you decide to pursue a restaurant business. Check out the following:

• National Restaurant Association
• Best Independent Restaurants Association

The financial investment for starting your own restaurant business is high.  You can get funding from banks, private investors, your own savings, and the Small Business Program.  Starting from scratch is very expensive.  You need to rent or purchase a building with adequate facilities.  You need to set up equipment, which will cost tens of thousands of dollars, and you need to make sure the building is ready for customers. 

You could buy a franchise, but this is also expensive.  A McDonald's franchise for example costs about $175,000.  An Applebee's franchise costs $1 million.  Maybe the least expensive route to take is to purchase an existing restaurant whose owners want to sell the building and all the equipment.

Opening a restaurant business is very expensive, but it can also be very rewarding.  If you are committed to opening your own restaurant, look at existing restaurants for sale and used equipment.  Also, start researching different funding options.  It will take a lot of hard work and dedication. 

See Also: How to Start A Business

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