Open a restaurant or bar owner's guide

New Restaurant Owner's Guide (Wishlist)

Introduction

Before embarking on the search for a location or space, it's essential to thoroughly prepare a solid business plan and gather all necessary documents. The plan must drive the search for the perfect space, not the other way around. Your concept, financials, and operational strategies should dictate the type of location you seek, ensuring that the space meets your needs and supports the success of your restaurant.

The main goal is to convince the landlord that you AND your concept are the best fit and lowest risk for them. The plan will support this by providing concrete details that give the landlord confidence in your ability to succeed. Landlords are very savvy, but they cannot read your mind. They can't make decisions based on what's in your head—they need to see your plans on paper with supporting documents.

Additionally, a strong business plan not only helps secure the ideal space but also lays the foundation for a successful and sustainable business. It serves as your roadmap for navigating the complexities of running a restaurant.

Business Plan

The Concept / What Makes You Different?

Define the restaurant's unique selling point (USP). What is the concept, and how does it differentiate from others? Why will customers want to visit?
The Menu: Provide an overview of the menu, showcasing key dishes and pricing if possible. Consider highlighting specials or signature dishes that reflect the concept. Discuss the pricing strategy and how it aligns with your target audience.
Decor & Furniture: Include a mood board that reflects the desired ambiance and style of the restaurant. Discuss materials, lighting, and furniture that will complement the brand identity and customer experience.

Marketing Plan & Target Market:

Detail the marketing strategy for pre-launch and ongoing promotions, focusing on digital marketing, social media, and local advertising.
Include any existing social media presence and how it will be leveraged to build an audience.
Set a clear budget for marketing activities to ensure consistent outreach and visibility.
Target Market: Define your ideal customer—age, income, lifestyle, dining preferences. Are you targeting families, working professionals, tourists, or another group? How does the restaurant concept appeal to this specific audience?

Promotions & Upsell Strategies: Drive revenue through loyalty programs, happy hours, limited-time offers, and featured menu items. Train staff to upsell on appetizers, drinks, desserts, and “add-on” experiences (e.g., wine pairings, signature cocktails).

Kitchen & FF&E (Furniture, Fixtures, & Equipment):

Kitchen Layout & FF&E Requirements: Provide a detailed list of required kitchen equipment, from ovens to refrigeration, and any specialized equipment needed for your menu.
Ensure the restaurant is up to code with grease traps, hood systems, and other health and safety requirements.
Verify that the equipment is either installed or requires updates to meet regulatory standards.

Staffing:

Staffing Details & Schedule: Provide an overview of staffing needs, including roles for front-of-house, back-of-house, management, and any specialized staff.
Outline the proposed staffing schedule based on operating hours, peak times, and special events.
List any staff members already onboard and plans for recruitment.

Liquor License:

Type of Liquor License Needed: Define the type of liquor license required based on your restaurant’s size and concept:

2COP: Allows beer and wine sales.
4COP: Allows full liquor sales.
4COP SFS (Special Food Service): This requires 2,000 square feet of space, 51% of sales from food excluding takeout/delivery, and 120 seats.

Discuss whether financing is needed to secure the license and the timeline for acquisition.

Operating Hours & Services:

Define the operating hours and service offerings:

Breakfast, lunch, dinner, brunch, after-hours, and happy hour.

Provide flexibility based on neighborhood trends and potential for special events or seasonal changes in hours.

Takeout & Delivery Strategy:

Define the role of takeout and delivery in the restaurant’s business model.
Consider integrating with delivery platforms like UberEats, DoorDash, or in-house delivery systems.
Discuss packaging solutions, online ordering systems, and how takeout/delivery impacts kitchen operations.

Reason for Opening a Restaurant:

Outline the owner's motivation—expansion of a previous venture, a life-long dream, a significant life change, or experience in the industry.

Owners, Partners, & Investors

Bios: Provide a short bio for each owner, partner, or investor. Highlight relevant industry experience, qualifications, and roles within the restaurant.
Experience in the Industry: Emphasize any prior restaurant experience or business management background.
Role in the Business: Clearly define each person’s role and responsibilities.
Guarantors: Identify who will be the guarantors of the business financially.
Background Checks: Background checks may be required, especially for the liquor license process.
Is This a Qualified Venture or Just a Hobby/Dream? Prove the commitment and expertise behind the venture by showcasing experience, funding, and a solid business plan.

Financials

Projections & Budget (Including Marketing):

Expected daily/weekly/monthly sales based on seating capacity, average ticket size, and customer turnover rate.
Breakdown of food costs, liquor costs, labor costs, and operating expenses.
Plan for how much of the revenue will come from eat-in vs. takeout/delivery sales.

Number of Tickets per Day & Average Ticket: Ensure this aligns with the restaurant’s capacity and service flow.
Personal Financial Statements & Source of Funds: Provide proof of funds and liquidity for starting the business.
Credit Check: Required for leases, financing, and other contractual obligations.
Need Financing? Determine the capital requirements for the restaurant and assess whether financing is needed.
Corporate Org Chart: If multiple partners or entities are involved, provide an organizational chart to show the structure.

Timeline

Create a detailed timeline for opening, from preparing the business plan to securing a lease or purchase and finalizing due diligence.

Professional Support

Legal, Accounting, & Tax: Ensure proper legal counsel for contracts and compliance. Accounting/tax experts for financial planning and reporting.
Immigration Counsel (if applicable): If opening the restaurant as part of a visa or immigration process, have legal support to navigate the requirements.
Restaurant & Bar Consultants: Consider hiring an expert to develop the menu or bar program.
Marketing Agency, Social Media Company & Branding Consultant: To help build and maintain your online presence, manage social media, and develop a cohesive brand identity.

Space Desired

Location & Type: Define the type of location you're looking for: fast food, QSR, casual dining, fine dining, bar, etc.
Size: Specify square footage requirements.
Expected Rent: Clarify rent structure, including whether it's a gross lease or NNN. Discuss percentage of sales & break points and what’s included in the lease.
Seating: Determine indoor/outdoor seating capacity.
Parking: Identify parking requirements, including valet options.
Competition in the Area: Analyze competitors nearby to assess market saturation or opportunity.

Process

Prepare Info & Business Plan: Gather all necessary documents and finalize the business plan.
Search for Space: Begin searching for a location that fits your needs.
LOI (Letter of Intent): Submit an LOI to the landlord or seller.
Pre-Due Diligence Requirements: Gather financials, tax returns, POS reports, existing lease agreements, and staff details.
Contract & Due Diligence: Finalize the contract, perform due diligence, and verify all operational details before closing.
Closing: Complete the transaction and take possession of the property.

8. Other Considerations

Rent Shouldn’t Exceed 10% of Sales: Be mindful of keeping rent as a reasonable percentage of sales.
Key Money / Asset Purchase: Assess the value of FF&E, lease terms, and whether the staff is staying.
Valuation: Typical valuation is 1-3x earnings or Seller’s Discretionary Earnings (SDE), though it can be higher in some cases.

My Compensation

Who Pays What? Explain my compensation structure and what the client will be responsible for paying.
Examples:

Buying an existing restaurant or 2nd Gen space.
Key money or asset purchase.
Leasing a space.

Minimum Payment: Discuss why there’s a minimum payment and what it covers.
Exclusive Agreement: Explain the details of an exclusive representation agreement.
Retainer: Discuss if a retainer is required for services.