Mistakes You Want to Avoid When Opening A Restaurant


You’ve always had a fondness for food and decided it’s now time to open your own restaurant. And as exciting as the prospect is of being able to share your passion with others, there’s quite a few logistics you need to follow. Opening a restaurant requires more than raising enough capital. It’s also important to know how to handle some of the most common mistakes new restaurant owners make.

Choose The Right Niche

Even if you graduated from a top-tier cooking school, nothing really prepares you for restaurant ownership. Many lessons learned simply from experiencing them. The first mistake many restaurateurs make is not choosing the right niche. There needs to be a demand for what you’re serving in your desired location. For example, you may love preparing French cuisine but the demand for it really isn’t that high. If you choose to open a French restaurant, you might get some business initially, but it might not be sustainable. Perform market research and determine which type of restaurant would cater to consumer needs and your interests as well. There might be a way to blend the two without having to sacrifice what you love doing.

Not Writing a Business Plan

Think about your business plan as if it’s a cherished family recipe. Just like a recipe needs all of the ingredients to taste delicious, your business plan needs to cover all of the important what-ifs and logistics of opening a restaurant. It should include your value proposition, specifically why you’re opening and what you want to accomplish, the location, the type of cuisine and most importantly, the financials. You also need to think about possible supply chain issues and how you’ll handle those should they occur. For instance, if you’ll need deliveries of fresh ingredients delivered every day, how will you endure that your fleet remains HOS compliant and avoid violations? Keeping your fleet compliant helps to lower costs and keeps your drivers safe on the road as well.

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Apply for Licenses and Permits

Not securing appropriate licenses and permits is probably the fastest way to go out of business. In addition to proper health department permits, you also need to obtain licenses from the FDA and a liquor license, if applicable. You’ll also need to think about other types of coverage you need to protect your and your employees. These coverages include liability insurance, fire and flood coverage, property insurance and disability. There are common myths about hiring attorneys that might steer you away from seeking one out for these specific purposes but in many cases a professional advantage can help you avoid costly oversights or missteps.

Registering Your Business

You also need to register your restaurant. There are several ways you can go about it, so it’s important to understand which is best. As a sole proprietor, you’re responsible for everything from A to Z. This entity is suitable you’re only opening a small food truck and will work alone. However, mishaps can still occur, so choosing to register as an LLC might be the better choice. As an LLC, your business assumes all liability. If you’re planning on going into business with someone else, you can register as a partnership. Partnerships can be registered as general, limited or as a joint venture.


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