BusinessHABSpecialty foods: Opening a new restaurant can be a risky business venture, but with the right planning, financing and plenty of hard work it’s definitely doable. Owning a successful restaurant could be one of the most exciting and rewarding experiences of your life. So what are you waiting for?
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Specialty foods
1. Know more about the business:
A specialty food is a food that is typically considered as a “unique and high-value food item made in small quantities from high-quality ingredients”. Consumers typically pay higher prices for specialty foods, and may perceive them as having various benefits compared to non-specialty foods.
Compared to staple foods, specialty foods may have higher prices due to more expensive ingredients and labour. Some food stores specialize in or predominantly purvey specialty foods. Several organizations exist that promote specialty foods and its purveyors.
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2. Know the Specialty foods
Foods that have been described as specialty foods include:
- Alici from the Gulf of Trieste near Barcola.
- Artisanal foods.
- Caviar.
- Cheese and artisan cheese.
- Specialty coffee – sometimes referred to as artisanal coffee.
- High-quality chocolate.
- Foie gras.
- Iberico, Serrano, and other artisanal Dry-cured ham.
- Morel, Chanterelle, Matsutake and other rare mushrooms.
- Mostarda.
- Gourmet pet foods.
- Edible seaweed.
- Stinky tofu (Chinese: chòu dòufu) – has been described as a local specialty food in the Old City of Shanghai.
- Truffles.
- Truffle oil.
- Taboo food and drink is also a good way to find “other” speciality foods.
Some specialty foods may be ethnic specialties.
Foods that have been described as specialty foods as per not precisely corresponding to other food categories include:
Specialty foods
Umeboshi being dried in the sun
- Kimchi.
- Olives.
- Royal jelly, bee pollen and propolis.
- Sauerkraut.
- Sea vegetables.
- Umeboshi.
Read also: 16 Tips to Start Selling Specialty Produce
3. Determine a food concept.
A food concept is the first thing to consider when planning on opening a restaurant. Are you aiming for a family-style steakhouse, upscale French cuisine or a quick-service ethnic restaurant? Having a food concept will give your potential customers some idea of what they can expect from your restaurant. Determining a food concept from the get-go will also help you to structure and organize other aspects of your business.
- Some potential food concepts include: seafood, steakhouse, family-style restaurant, casual-dining restaurant, ethnic restaurant, pizzeria, sandwich shop, coffeehouse, bakery.
- Once you have decided on a food concept, you can begin crafting your menu. Don’t worry about pricing or exact recipes to begin with, just try to get a sense of how your menu can best reflect your chosen food concept. Some things to consider when planning a menu include: what potential competitors are offering, where you will source the required ingredients, special equipment or layout requirements for the preparation of menu items and whether any special personnel skills will be required.
Specialty foods
4. Consider the ambiance.
The ambiance or atmosphere of the restaurant is another important factor, relating to the food concept. Many varied factors contribute to the ambiance of a restaurant, such as furniture, lighting, dish and glassware, servers’ uniforms, music, serving style and clientele. Having an idea of the ambiance you wish to create is important as it will help to guide you during the decision-making process. Always keep an image of what you aim to achieve in mind.
5. Plan on a serving style.
Your food concept, target customers and location will all play a role in deciding on a service style. There are three main service styles: quick-service, mid-scale and upscale. It is important to decide which category your restaurant falls in to, as this distinction will help shape future decisions, such as staffing requirements and pricing.
- Quick-service restaurants, or fast-food restaurants, are known for their low-cost menus and quick preparation. Examples include burger joints, pizza restaurants and ethnic foods.
- Mid-scale restaurants fall halfway between fast-food and upscale restaurants. They offer full service and good value menus. Some mid-scale restaurants include buffets and salad bars.
- Upscale restaurants pride themselves on providing excellent food and high quality service. Fine-dining establishments are the fanciest type of restaurant available – they offer the best quality food at the highest prices.
Specialty foods
6. Research the cost.
It is imperative that you are fully aware of how much your new business venture is going to cost. Do your homework. Talk to other restaurant and local business owners. Find out about rent, insurance and permit costs. The more information you have, the more financially prepared you can be.
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Craft a business plan.
A comprehensive, accurate business plan is the most critical component of opening a new restaurant. In fact, the success or failure of your restaurant can hinge on the strength of your business plan, so make sure to do it right. When you’re writing a business plan you should include:
- A comprehensive description of your concept.
- A description of your target customers.
- An outline of your menu and potential pricing.
- As much financial information as possible. Include details on your start-up capital (how much money you have and where its coming from), as well an estimate of your long-term income and expenditure.
- Information on how you plan to market your restaurant.
- Details of your plan to hire and train employees, as well as an outline of any employee retention programs.
- You should also include a section which addresses how you plan to cope with the pressures and problems that you, as a restaurateur, will have to face on a daily basis. Working out a possible exit strategy in your business plan may also be helpful.
7. Choose a location with proper zoning.
It is vital that you research local zoning ordinances and regulations before deciding on a location for your restaurant. Zoning ordinances deem that a commercial property, such as a restaurant, cannot be located in a residential zone. Therefore, you should contact the town manager to find out if your potential property is properly zoned for a restaurant, before contacting the landlord about lease options.
- Zoning laws also regulate how you intend to use the space within your property, along with any renovations or improvements you plan on making, so it is important to understand all of the ins-and-outs of the zoning laws regarding that specific property before you commit to a lease.
- If you intend on having a bar in your restaurant, be sure to ask about serving alcohol in that particular area as well. Some towns prohibit the sale of alcohol in certain zones.
Specialty foods
8. Clean the place up according to federal, state and local safety laws.
Once you’ve determined the location to be in the proper zone for a restaurant, you need to know how safe it is. A local building inspector or code enforcement officer can walk you through all the safety requirements needed to pass a building inspection. Along with a fire suppression system in the kitchen, the building may require an entire sprinkler system. The code enforcement officer will also look at the general safety of building to decide if it is fit to operate as a restaurant.
Read also: 27 Tips to Open Edible Food Industry
9. Register your business.
A business licence is required by all restaurants. It essentially grants you the permission to open your doors for business. Generally, business licences are issued by the city or local municipality.
- Go to the city or county office to apply for the business license. There you will be required to complete an application and pay a licensing fee.
- You should also contact your state’s department of revenue to determine if you are required to register your business with the state.
10. Take care of any licences and permits.
You must obtain certain permits and licenses before opening the doors of your restaurant, including a health permit, a liquor licence and a music copyright licence.
- Most health permits will only be granted after the restaurant passes a health inspection. Therefore, it is important to understand the local requirements early in the process to ensure that any planned kitchen or dining room configuration will be in accordance with the local health department rules.
- If a restaurant plans to play live or recorded music (including music played on a iPod), it must obtain a copyright license from the appropriate music licensing agency. The two primary agencies are the American Society of Composers, Authors & Publishers (ASCAP) and Broadcast Music, Inc. (BMI).
- Your local restaurant association can often provide information about required permits and licenses.
Specialty foods
11. Know the costs involved in opening a restaurant
The costs to start a restaurant vary, but generally include:
- Building security deposit: $10,000 to $12,000
- First month’s rent: $10,000 to $15,000
- First month utilities: $2,500
- Customized build out for kitchen: up to $350,000
- Tables and furniture: $40,000 to $50,000
- Tableware, utensils, dishes, kitchen, and bar equipment: $50,000 to $80,000
- Initial overhead, including food and prep materials: $8,000 to $15,000
- POS: $1,500 to $20,000
- Insurance: up to $6,000
- Sign: $10,000 to $20,000
- Menu printouts: $1,500
- Business cards: $70 to $300
- Fliers: $5,000 to $10,000
- Grand opening event: $15,000
- PR for grand opening: up to $5,000
Total cost can run $600,000 or more depending on the type of restaurant you want to run. These costs can be much more expensive, or much cheaper depending on a number of factors including, location, necessary equipment, and vendors through which essentials are purchased.
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Specialty foods
12. Get the on-going expenses for a restaurant
A restaurant has numerous ongoing expenses, but the major ones include:
- Rent for the building: $10,000 to $12,000 per month, depending on location
- Utilities, which can include phone, internet, T.V., electricity, water, gas: up to $2,500 per month (sometimes more, depending on location)
- Food and supplies: $10,000 to $15,000 per month, or more depending on the menu
- Labor cost: variable, based on staff needs
13. Know the target market
Customers are typically individuals and families who are dining out for the day or evening. Some restaurants also cater to larger functions, like business or government organization events, birthdays, and other large-scale catering events.
14. Know how to make money
A restaurant makes money by charging customers money to prepare food and drinks for them. Prices are typically fixed on a menu. Customers may also tip waiters and staff for good or exceptional service. For waitstaff, tipping is customary. These tips are sometimes split amongst the workers in the restaurant, or can contribute to the waitstaff’s pay.
Specialty foods
15. Know how much you can charge customers
Menu prices vary considerably based on the type of restaurant and the fare being served. For example, a high-end restaurant serving seafood may charge between $20 and $50 per plate. A small diner may only charge between $4 and $10 per plate.
Customers pay for menu items a la carte or as a meal or plate. Some restaurants also offer bundled specials which include an appetizer, the entree and a dessert for one fixed price. Meals are paid for after customers finish eating and a tip (or an option for a tip) is usually included on the bill.
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16. Know how much profit can a restaurant make
The restaurant business has a high degree of failure, but businesses that make it can also be very successful. Even a modest operation can turn over $1 million or more in revenue in a year. Franchise operations may bring in several million per year based on location and the type of restaurant.
17. Know how you can make your business more profitable
A profitable restaurant is one that usually targets a specific demographic or narrows it cuisine to serve a specific type of market. For example, an authentic Mexican restaurant may be able to charge more for its Mexican fare than a generic restaurant that happens to serve Mexican food. Location also matters. Restaurants in wealthy or well-off communities tend to attract individuals with a higher income.
Restaurants in cities, for example, may be able to charge more than restaurants located in very rural areas in economically depressed areas of the country. Some restaurants expand their profits by starting sideline businesses, like catering or food trucks for special events.
18. Invite the health inspector over.
Before a new restaurant opens, it must pass an initial health inspection. To arrange a health inspections, contact your local health department at least 30 days prior to opening. During this visit, the health inspector will most likely focus on your equipment and food storage.
- The health inspector may check to make sure your walk-in cooler is reading the correct temperature and make sure your establishment has enough hand sinks located in the correct places.
- The health inspector will also check to make sure you have your food service operator’s license and any other documentation the health code requires.
19. Partner up.
Specialty foods
20. Contact food service vendors.
Reliable food service distributors play an important role in the success of your business and you will want to choose a distributor who provides good quality products with prompt, consistent delivery.
- You can find food service vendors online, in the Yellow Pages or by attending restaurant conferences or trade shows.
- Ask other restaurants in your area who they get their products from. Ask which suppliers they like in particular and why.
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21. Get in touch with local producers.
Restaurants using high-quality, locally-sourced ingredients are becoming increasingly popular. Approach local farmers and food manufacturers about buying food in bulk. Farmers can supply your restaurant with produce by the bushel, as well as fresh meat and dairy products. A local manufacturer, such as a bakery, can supply large quantities of breads, rolls and other baked goods.
22. Shop around.
Make sure to shop around before signing any agreements with food suppliers. Getting a good deal does not necessarily mean choosing the supplier with the lowest price. The quality of the food and service provided are just as important.
- Look for references and contact other restaurants the supplier has worked with.
- Negotiate the details of food specifications, delivery times and terms of payment. Choosing a vendor with whom you can forge a good working relationship will be helpful in the long run.
Specialty foods
23. Hire employees.
A well-trained and professional staff is essential to the success of any restaurant. Before hiring, decide how many employees you will need, what the job description for each position will be and what the pay scale will be. Take the time to thoroughly interview each applicant. You also need to ensure that they are aware of exactly what their role will be within the restaurant, and what you expect of them. You will need to hire:
- A manager. Choosing a manager for your restaurant is one of the most important decisions you will have to make. A good manager will have a wealth of experience (hopefully managing a similar type of restaurant), excellent leadership skills, and an in-depth knowledge of the ins and outs of running a successful business. They should also share a similar value system to you and be enthusiastic about embodying the style and character of your restaurant.
- Cooks. A restaurant is nothing without great food, so getting your hands on some excellent cooks should be a top priority. Local cooking schools can help point you in the right direction, and placing the ad in the paper can yield promising results. Depending on the size of your restaurant, you’ll probably need at least three cooks to begin with, one of whom will be part time. When hiring cooks, besides producing great-tasting food, you are looking for consistency and attention to detail.
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- Servers. Servers will have the most interaction with your customers, so you will need to hire friendly, capable people who can multi-task and work well under pressure. You will need to train any new servers, whether they have experience or not, to reflect the serving style of your particular restaurant.
- To determine how many employees you will need, consider how many tables, seats and service stations you will have. Think about what your busiest hours will be and ensure they will be adequately staffed. You will also need to consider your budget, this will influence how many employees you can afford to hire and at what rate of pay.
Specialty foods
24. Know your target market.
Be aware that it is impossible to appeal to 100% of the market. You cannot satisfy everyone. With this in mind, focus on your target market. Identify what their needs are and do your best to meet those needs. Some examples of target markets are:
- Teens, students and young adults. This is a large and ethnically diverse market. Fast-food or quick-service restaurants are popular with this market.
- Families with children. Good value and a child friendly atmosphere are important here. Menus should cater to both adults and children.
- Empty nesters. Empty nesters consist of people aged between 50 and 65 with grown children who no longer live at home. This group tends to have a higher income and typically visits upscale restaurants. They are less concerned with price and are more focused on excellent service and outstanding food. Appeal to this group with elegant surroundings and a sophisticated ambiance.
- Vegetarians. Restaurants catering specifically for vegetarian and vegan customers are becoming more and more popular.
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25. Plan your grand opening.
A grand opening is the best time to get press for your restaurant. Although it can be costly, the money you spend on your grand opening will be worth it if your restaurant gets publicity. A successful grand opening takes time and planning, so choose the date well in advance and consider hiring a local publicist to help with the advertising. Here are some ideas to help make your grand opening a success:
- Hire photographers. Make sure there is someone there to photograph your grand opening. That way, there will be pictures ready for any journalists looking to cover it. Keep in mind that the press that comes after your grand opening is just as important as the press that informs the public of your opening. Do not let up on your public relations efforts just because your grand opening is over.
- Invite a reviewer. If you know that your food is top notch, you will want to invite a food critic or restaurant reviewer to your grand opening. This is sure to get you some press, although there is a risk that the press might be negative.
- Invite a local celebrity. If you get a local politician, television host or any other local celebrity to come to your grand opening, you will be more likely to get some media coverage.
- Provide entertainment. By providing your customers with an enticing form of entertainment – such as a live band, DJ, dancing or contests – you will create a night that they will remember.
26. Place traditional ads.
Specialty foods
27. Offer incentives using social media.
Facebook, Twitter, Foursquare, Yelp and other social media sites are this generation’s means of word of mouth marketing. Promote social media activity that promotes your restaurant by offering various incentives such as:
- Free drinks for checking in to Foursquare while at the restaurant.
- Receive 10% off your next bill with a Yelp Review.
- Dessert thrown in with any entrée order with a location update in Facebook.
Read on: 20 Tips to Start Beans Wholesales Market
28. Create a logo that can catch on.
29. Keep up to date on legal matters.
Specialty foods
30. Mind the books.
31. Listen to employee and customer feedback.
In the restaurant business there is always room to improve. Listening to both customer and employee feedback is a great way to figure out what you’re doing right and what you could do better.
- Make sure your waiters are asking customers whether they enjoyed their meal – this isn’t just good for feedback, it’s good customer service.
- Sites like tripadvisor.com are very useful when it comes to monitoring customer opinion. Don’t be afraid of negative reviews, see what you can learn from them and move on.
- Listening to employee feedback can help to create a better workplace for everybody. Happy employees lead to higher productivity, lower turnover of staff and satisfied customers!
32. Know how to keep customers coming back
This is a customer service business. Pay extra special attention to service. This is what brings guests back. Likewise, poor service can drive guests away forever and damage your reputation in the community.
Beyond that, you must have some business skill, which can be obtained by taking business courses, or working under a restaurant owner.
33. Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Specialty foods
34. More tips
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Try to avoid buying pre-cooked or frozen food. Sometimes, it will be unavoidable, but the costs and taste actually make it prohibitive. You should be able to get fresh, better-tasting food for cheaper.
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Try a seasonal menu so that you can source the freshest, cheapest food at the right time. This will help cut down on your costs and provide even better food.
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Make sure you hire a good manager.
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Many restaurants fail within their first two years of opening. Starting a restaurant can be fun, exciting, and rewarding, but it’s also a whole lot of work and can be risky.
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