Starting a Foodservice Business: A Beginner's Guide

Starting a Foodservice Business: A Beginner's Guide

You have decided to start up your own foodservice business, but where should you begin? This is a common question, considering all of the options for foodservice operations. As you begin to sort through the colossal amount of choices for your business, there are a few basic concerns that should be taken care of before you begin. This beginner's guide will break down the process to make starting up your foodservice business as stress-free as possible.

To start out a business, you will need to know what type of operation you want to run. This should be the very first decision you make and will make the rest of the planning process a little easier. Quick service establishments are also known as fast food operations. These businesses quickly prepare food for either take-home or dine in purposes. Mid-scale restaurants typically allow you to order your food at the counter or sit and eat at a table. These restaurants generally have reasonably priced menus with a small to medium variety of items available. Upscale businesses will have hosts/hostesses to seat you upon arrival, and you will be served at your table, from ordering to paying. These businesses focus less on the price of their food and more on the quality.

Once you have chosen the type of business you want, you will need to determine the concept of your business, which will make the rest of the planning process go a little more smoothly. There are many different options for the concept of your foodservice business, and each should be carefully considered before beginning. A few popular choices for restaurant concepts are seafood, steakhouses, family style establishments, casual dining areas, ethnic restaurants, or pizzerias.After you have chosen the type and concept of your business, you will need to start looking more closely at the details of your business. The following are important items to consider:

1. Equipment & Furniture needs5. Building size.
2. Table top items (napkins, flatware, plates, etc)6. Number of employees to hire.
3. Storage, cooler, and freezer sizes.7. Parking lot size.
4. Employee uniforms.8. Signs & advertising options.

Equipment Needs

Depending on the type and concept of your business, you will need to choose specific equipment to meet the requirements of that type of establishments. The following is a checklist of items that are commonly used when starting up a restaurant.
1. Bakers' bins & tables11. Mixers
2. Bathroom Accessories12. Pans
3. Blenders13. Prep tables
4. Can Openers14. Sinks
5. Grills & Broilers15. Steamers
6. Ovens and Ranges16. Signage
7. Dishwashers17. Dispensers
8. Refrigerators/Freezers18. Fryers
9. Meat Grinders19. Garbage Disposal
10. Microwave Ovens20. Ice Machines.

Furniture

The furniture you will need for your business can be determined by the type and concept as well. A few items to consider are bars, stools, booths, chairs, highchairs, host/hostess stands, and tables. Bars are perfect for any business that wants to create a relaxed, easy-going atmosphere. Stools often go along with bars for seating needs.Booths or tables are two seating options to consider. Booths provide a comfortable seating arrangement ideal for 3-6 people. Tables are very versatile and can be arranged to meet nearly any seating needs.Chairs and highchairs are a necessity for any foodservice business that allows customers to sit down to eat their food. Highchairs are the perfect safety method for younger customers.Host/hostess stands are ideal for upscale businesses. These stands allow hosts or hostesses to organize seating charts and other important information to keep your business running smoothly.

Tabletop Items

After choosing the major furniture items for your business, you will need to think in more specific terms, such as the tabletop items you will need. There are a few tabletop necessities, regardless of the type of business you own. Dinnerware, drinkware, flatware, shakers, and are all valuable items for your foodservice business.

Storage, Cooler, & Freezer Size

The size of your business will determine the size of equipment you will need. When you first begin a business, you will have a size in mind, whether you want to run a small, corner restaurant or if you would like to operate a business with the potential to be the largest restaurant around. Smaller businesses will need smallerrefrigerators and freezers because they will not have as much product to store, while larger businesses should purchase larger coolers. Remember that your business should grow, so purchase a refrigerator or freezer that is capable of holding products now as well as later.

Employee Uniforms

The uniforms your employees will wear is an important decision when starting your own foodservice business. Uniforms should be professional and compliment the type and concept of business you choose, but should not compromise comfort. If your employees are comfortable in their uniform, they will feel more confident and will be friendlier to customers, creating a more positive atmosphere.

Building Size

The size of the building you choose to start your restaurant in is a major factor in the size and number of tables, equipment, and other necessities. You should consult a professional architect and/or interior designer to create the perfect, appealing layout for your specific business and then decide which size building would work best. Working with a professional will create the most positive, comfortable atmosphere possible, which will result in happier customers.

Number of Employees to Hire

The number of employees you need to begin your business will vary depending on the type of business you are starting. Most restaurant type businesses need cooks, cleaning staff, and wait staff, just to name the basics. You, the owner, can keep the number of employees at a minimum by choosing to perform one or more of these jobs by yourself or you can hire a crew to work for you, with your supervision to ensure that your business is run exactly as you want it to be.

Parking Lot Size

A business needs parking for its customers, and this should relate directly to the estimated size of the business you are starting. If you plan to run a small business, a building with few spaces would be perfectly acceptable. A larger, higher volume business would need a larger parking lot to accommodate the amount of customers you anticipate. Lack of parking can be a major deterrent to potential customers who do not want to wait or drive around to find a parking space.

Signs & Advertising

Without proper planning, a major portion of your startup budget can be spent on signs and advertising. A sign to announce the name and type of business you are running is a necessity, as is a small bit of advertising to let potential customers know of this new business. However, the best continued advertisement is good customer service and word of mouth. Happy customers tend to tell their friends and acquaintances about their experience at your restaurant, which is better advertisement that pricey ads or displays.

The Legal Aspects

You will need to make sure you have all appropriate licenses for your business. Be sure to meet with a lawyer or other business professional to ensure that all aspects have been covered. A successful business is one who has covered all the bases.

As a follow up to a comment left on the Starting a Foodservice Business: A Beginner's Guide blog, additional research has been done on the subject of the legal aspects of starting a business. Thanks to KaTom Weblog reader BMB for the suggestion, we really value customer input and are always striving to make our blog and site a more informative place for our customers. We hope this helps!

Write a Strategic Business Plan

When starting a new business, you should always use strategic planning, regardless of business size. Strategic planning is starting a business that you know will have a specific customer base. For example, you would not want to start a Japanese restaurant business across the street from an existing Japanese restaurant. This would simply be bad planning. It will be more difficult to tear customers away from the established restaurant. An entrepreneur should collect, screen, and analyze data about the specific business and the surrounding environment. Proper analysis of data will help to ensure that your business grows and prospers. Check out this online course on How to Prepare a Business Plan (http://app1.sba.gov/training/sbabp/index.htm) provided by the U.S. Small Business Administration (SBA).

Find a Mentor

Starting your own business can be tricky, so it would be a great idea to find a business mentor that has already dealt with these issues and is willing to help you through this tough time. There are several different ways to find a knowledgeable mentor, such as the Service Corps of Retired Executives (SCORE), Small Business Development Centers, or the Network of Training and Counseling Services.

Financial Start Up Costs

All new businesses require some type of financing. An important factor in starting a successful business is working through the financial aspect to ensure that you will stay afloat, even through these tough economical times. The Business Know How start up cost calculator (http://www.businessknowhow.net/bkh/startup.htm) is a great tool for assessing the cost of your new business.

Acquiring a Business License and / or Permit

State business licensing requirements vary by state, so make sure to check out the specific licensing costs and requirements for your state (http://www.business.gov/states/). After all of the state bases have been covered, make sure to complete all of the federal requirements for starting abusiness, beginning with applying for an EIN (Employer Identification Number). Visit the IRS website to find out if you do need an EIN, and if so, apply for one with the online application..

Most businesses will not need federal licenses or permits, however the following activities should contact the responsible federal agency to determine the requirements for the specific business:

  • Investment Advising
  • Drug Manufacturing
  • Preparation of Meat Products
  • Broadcasting
  • Ground Transportation
  • Selling Alcohol, Tobacco, or Firearms

Pay Applicable Taxes

As we all know, only two things in life are certain: death and taxes. As much as we hate taxes, they are the lesser of the two evils. It is of high importance to your business that you pay your fair share of taxes each year. To find out more about business taxes, visit the IRS Business Tax page.

These few tips will help you start up your business in an orderly and legal manner. A successful business starts with a good plan.

All Business Tips

For all other business tips, including planning your business, starting your business, managing your business, and getting out if the business does not go well, please visit theSmall Business Administration Business Planner website.