If you’re considering opening a fast-food restaurant, there are a few things you need to do before you head off to the bank for financing. Just because you’ve seen a great location, or you were lamenting the lack of a good burger joint in your neighborhood, doesn’t mean you’re ready to take the plunge.
Here are five things to do before you open a quick-service restaurant:
1. Do your research
Start by looking around your town, is there a type of fast-food restaurant missing? This could be a good place to start. You don’t want to open a burger place if there’s already multiple restaurants competing in that space. This will help you define your niche and your target market. Also, pay attention to any recent restaurant closures. Try to identify if they closed because of location or restaurant type, this will help you from repeating the same mistake. If you can, try and find someone who owns or has owned a quick-service restaurant. They could be a wealth of information about what works and what doesn’t.
2. Start small
Just because you dream of a large corner lot with plenty of parking and a state-of-the-art kitchen doesn’t mean that’s where you should start. If you’re planning on opening your own place, consider starting with a stand in the local farmer’s market to get feedback on your recipes. You can also get a small place in a food court so you’re not on the hook for bringing in your own traffic. You could also consider a franchise. While the start-up costs on a fast-food franchise might be higher, you’ll also be guaranteed more revenue when you’re just starting out due to brand recognition.
3. Write a business plan
This doesn’t have to be an overly formal document, but it should lay out what you plan to do and how you plan to do it. And you should have this in place before you take your first step toward owning your own quick-service restaurant. In addition to laying out your concept, market research, financial information, expenses and revenue forecasts and your marketing plans it should also include (and be signed off by) all of your current business partners. You’ll need a strong business plan if you want to secure outside investment as well. Go here for more information on writing a business plan.
4. Know your health regulations
Unlike other small businesses, quick-services restaurants have a lot more regulations they have to adhere to. From labor laws to food safety laws, you need to be familiar with all of them before you open your doors. This includes food handling and safety, food storage, fire safety, sanitation, sales tax on food and beverages, alcohol and tobacco regulations and employee hygiene. That’s a lot to think about for a first time business owner. Your state’s general information office should be able to put you in touch with all the agencies that you will need to work with. This is one area where you’re going to want to know everything you can.
5. Set up a business bank account and accounting system
If you’re a serious business owner you need a business bank account. Starting from your personal account will just makes things messy in the future when you try to separate out your expenses. You also need an accounting system to start keeping track of costs, vendors, inventory and payroll. A financial advisor may also be helpful before you open your doors to help you manage your cash and to direct you on where and how your money needs to be spent to get your fast-food restaurant off the ground.
If you have all the right tools in place, opening a quick-service restaurant should go much smoother. Once you’ve done your research, make sure you have the right team to support you. You won’t be able to do it all when you’re running a successful small business, so having strong support in all areas of your business will be key.