Compeat’s Tips for Opening a Restaurant

Create a Solid Business Plan

A business plan is essentially the roadmap to the success of your restaurant.  Organizing your strategy will help you create a solid plan and will keep you on task.  There are many variations to a business plan.  You can go as basic or robust as you see fit.  For most restaurateurs, however, a simple plan with specific actions to be taken will be the best option.  Be sure to include sections outlining the following areas:

Executive Summary.  The executive summary should briefly describe your product, your customer base, competition, and strategy. Although this will be the first section of your business plan, it is highly recommended to write it last, to ensure that you have thoroughly thought through every aspect of the plan before summarizing it.

Business Concept.  This is where you can describe what niche your concept fills, and what is different about your business that will make you stand apart from the competition.

Market Analysis.  Conducting a thorough market analysis will help you understand Who is your competition and how do you compare.

Marketing and Sales Strategy.  Your marketing strategy will be the channels of communication you plan to use to build your customer base, whether it be social media, radio advertising, or printed materials such as flyers and/or coupons.

Financial Projections.  Your financial projections will show how you expect your restaurant to perform, based on your market analysis.  Typically, a complete business plan will include a 3-year and 5-year plan, especially if you are seeking funding.

Exit Strategy.  If you have partners or a corporation, an agreed upon (in writing) exit strategy can help avoid potential disagreements and legal ramifications.

Hire the Right People

Hiring the right staff is key to great customer service.  And while skill and experience are important, personality generally trumps experience when hiring restaurant employees.  You want to surround yourself by people who are driven, quick thinkers that can handle stress well.  Be sure to ask each applicant open-ended questions that will help you see what kind of person they are.  Remember that you can teach skills, but not personality.

Try to hire approximately 20% more employees than you think that you will need.  You don’t want to be short-handed while you are learning sales patterns.  Also, remember that not every hire will work out, so having some padding is important during those first few months.  Observe every employee during training to identify super stars; you will want to make sure that they are scheduled on your (expected) busiest shifts when you first open.

READ ALSO: Top 10 Steps For Training & Onboarding New Bartenders

Choose the Best Point of Sale (POS) System for Your Business

By determining the features that your restaurant needs, you can select the appropriate level of POS. After that, you can refine your criteria by establishing the hardware, software, integrations, pricing, and support that you require from your POS.

Here are some considerations:

Cash Register.  A cash register is a way to collect simple sales information and payment. This is appropriate for smaller, basic operations that may only have a handful of items or a single employee utilizing the register at a time.

Light POS.  Smaller businesses may only need an entry-level or “light” POS.  If your business only requires basic transaction handling and a few light reports, this may be the perfect solution for you

Full POS.  If your restaurant needs are complex, a full POS may be the ideal solution for you. They grant consistent control of new menu items, prices, and promotional items. A full POS may have features like accounts receivable, gratuities, revenue centers, surcharges by order mode and even integration with video monitoring.

Once you have chosen what level of POS you need, it is time to start looking at vendors.  You will want to compare the vendors that offer your level of POS side-by-side to see what kinds of reports are offered, how they integrate with your other systems, what kind of customer support is offered, and pricing options.  Be sure read other user’s reviews of the product, to get an end-user perspective.  Reviews are often a great resource because they offer you information that you may not have ever thought to ask.

From a back-office standpoint, don’t assume that the quality of the data is better for analysis just because it has the most features. Find out what back office solutions your potential POS integrates with so you can potentially turn all of the data collected by your POS into actionable intelligence that drives better decisions.

READ ALSO: From Spreadsheets to Software. 6 Signs It’s Time to Take the Leap

Price Out Your Menu Wisely

Restaurants are businesses, and like any other business, they depend on a delicate three-way balance between cost, quality, and price.  Most restaurants average a 30-35% food cost, on average.  The lower your food cost, the higher your profit.  You can start by pricing your menu in this range, and then set a goal to find ways to gradually lower the cost without compromising the quality of your food.

For an example of how the math works, let’s price out salmon in cream sauce with a seasonal vegetable medley:

Cost for an 8oz portion of salmon $4.00
Cost of 4oz of cream sauce $0.45
Side vegetable $0.80
Total for you to make the dish $5.25
Cost of ingredients / food cost $5.25/.30
Cost on your menu $17.50


While simple in theory, execution can prove to be an issue when you consider that the sauce contains precise measurements of milk, white wine, cream, butter, flour, onion, garlic, salt, pepper, oregano, basil and parsley.  There are several great software programs available where you can enter the recipe to help you determine the exact cost.

Once you have determined your menu pricing, be sure to check out the menu of several competitors.  Compare the pricing of similar dishes, as well as their portions, pairings, and presentations – this will help you to see where you can tweak your menu should something be way out of line.  Your guests need to feel that they are getting value for their dollar or they will not repeat customers.

Select the Right Food Suppliers

Before starting the selection process, consider what your needs are and write them down in order of importance to you.  Then write down a list of potential vendors and meet with them in person.  A good supplier will help you make good purchasing decisions based on their knowledge and prior experience; there is much more to consider than just price comparison. After each meeting, evaluate how they rank on your list of needs while they are fresh on your mind.  This process will help you compare vendors side-by-side once you narrow down your top choices.

When considering a vendor, be sure you:

Keep your number of vendors to a minimum.  Having less vendors not only reduces your paperwork, it also increases your buying power.  Try to partner with vendors who carry the most of your needs for convenience and cost savings.

Always tour their facility before committing.  You want to be absolutely sure that your vendor is operating a safe and clean facility.  Likewise, a vendor who is committed to being your partner will come to tour your facility as well to better understand your concept and your goals.

Don’t get stuck on the lowest bid.  You may save money on the front end, but what will poor quality and/or service really cost you?

Additional considerations.  Once you have narrowed down the pool of vendors and are getting ready to choose one, be sure to ask these questions as well:

  • What are the payment terms? Is it cash on delivery or Net30, Net60?
  • Do they have a minimal order? If so, will that lead to waste that eats into your margin?
  • Do they break cases if you do not need a full case of a particular product?
  • What is the lead time for placing an order?
  • What will be your delivery schedule? Does their schedule work with yours?  If not, is the schedule flexible?
  • Ask for references and talk to their current customers. A good supplier will be happy to share their references.

The good thing about suppliers is that they are changeable if you do not feel that you are getting the best prices or services from them.  Unless you are locked into a contract, remember that you can always keep looking for a better fit.

Plan a Soft Opening

Some owners may feel confident enough to jump right in and have a grand opening, but if you have a little leeway, you and your staff could truly benefit by easing into a soft opening.  A soft opening is when you do not advertise your opening date, enabling your restaurant to have a test run before officially announcing that you are open to the public.

Some restaurants simply open the door and let people trickle in. This slowly builds the number of customers served as you gain confidence that everything will run smoothly.  For example: Day one, just open your doors.  Day three, put up a small street sign.  Day five, put flyers in local businesses.  Day seven, hand out coupons to local businesses.

Other restaurant owners prefer to have an “Invitation Only Night” to make sure that enough customers come in to truly test the restaurant. Invited guests can be friends and family at first, then you can extend invitations out to local businesses (this is also a great way to earn some regulars!).  Be sure to include information about your soft opening and your food offers on the invitation, so that these first customers know what to expect.