The restaurant industry is a dominant piece of our everyday life and a large portion of our time revolves around food and spending time with friends and family over meals out of the home. In fact, 84% of consumers say going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up, according to the National Restaurant Association.
Though it is still bouncing back to pre-pandemic levels, the foodservice industry is only projected to grow in the coming years. Projections by the National Restaurant Industry show that it should reach $997 billion in sales in 2023 and that the industry workforce will grow by 500,000 jobs for a total employment of $15.5 million!
Are you looking to join this thriving industry? We’re excited for you and we’ll be first to call for a reservation! In today’s video I’m going to go over a few steps you should consider before launching your own restaurant.
- First, get clear on your concept and business plan. Have you really thought through what is going to make your restaurant stand out? Your concept and for your new space should not only include your food menu and pricing, but also the identity of your target customer, style of service, brand identity and competitor analysis.
- Next, you will need to understand startup costs and plan for funding. The total average cost to open a restaurant ranges anywhere from $95,000 to over $2 million, according to restaurant coach, Ryan Gromfin. Some of the largest contributors to those costs include utilities, your commercial space and equipment, finishes for the interior and your initial pre-opening inventory. These costs may sound high, however there are numerous ways to fund your new restaurant, including restaurant incubators, small business loans and of course connecting with investors.
- After that, you can secure your commercial space. Make sure you consider your target audience in choosing where you want your business to be located. Is it accessible for them and easy to find? It’s also important to think through whether you can afford to pay your employees a fair wage in this area. Consider your proximity to competitors, as well.
- It is vital to secure proper licensing and permits for your restaurant space. Some of the essential ones to consider are a business license, food service license, health department permit, occupancy permit, signage permit and an outdoor seating permit. Depending on where your restaurant is located, you may also need employment permits.
- Lastly, secure your insurance coverage. We know you want to be a responsible business owner and a huge factor in that is protecting yourself, employees, customers and property from risk. Your business is unique, as are your insurance needs, so we recommend a policy that is customized to the size of your operations, location and more! Here are a few of the most common policies restaurant owners should consider:
- General Liability Insurance: This provides coverage for third-party claims related to bodily injury, property damage, or personal injury that may occur on the restaurant premises. Working with food and kitchen tools can be risky business, so it can help protect against lawsuits and medical expenses resulting from accidents or involving customers, suppliers, or other individuals entering the space.
- Property Insurance: Property insurance covers damage or loss to your restaurant building, equipment, inventory, and other physical assets due to events like fire, theft, vandalism, or natural disasters. It can also provide coverage for business interruption, helping to compensate for lost income during the time your restaurant is unable to operate due to a covered event.
- Workers’ Compensation Insurance: Workers’ compensation insurance provides coverage for employees who suffer work-related injuries or illnesses. It helps cover medical expenses, disability benefits, and lost wages for employees who are injured on the job. It is typically required by law.
Are you already thinking through ideas for your own restaurant space? We hope so! Our team can’t wait to help you get your business covered, and then visit you for a bite to eat! Please give us a call or send us a text at 858-384-1605 to learn about your options!
Reference list: OpenAI. (2023, May). [What kind of insurance do restaurants need]. Retrieved from [ChatGPT.com].
