There are lots of reasons to open a restaurant. Maybe family and friends rave about your cooking and you’re ready to share it with the world. Or maybe running a restaurant sounds rewarding, or financially lucrative. All of these reasons are legit reasons to flex your entrepreneurial muscles, but you need to do your research before diving in.
The thing is, owning a restaurant is hard work, and costs can quickly add up. While budget-friendly suppliers can fulfill almost all your needs at a fair price, start-up expenses are high and it can take time to recoup your costs before turning a profit. That’s why, according to Prixfixe Accounting, making money in a tough business should never be your motive. If your motives are found elsewhere and they can continue to fuel your passion as you wait for the money to roll in, here are some tips for trying to open a restaurant in the toughest of US markets—New York City.
Look for a partnership
Partnerships can help ease the up-front expenses of restaurant ownership by splitting the costs two or three ways. The trick is finding the right partner.
“Find a partner who complements your skillset and your values,” Prixe Fixe accounting says. “If they want to create a fast-casual place, and you’re looking to build a sophisticated upscale restaurant, you don’t have the same goals. It’s important that you both build a road map and see where your paths converge and peel off and then ask yourself if the relationship can be sustainable.”
Of course, it would be best to find someone who can fill your gaps in knowledge. For instance, if you can supply more cash up-front, maybe you can seek out someone who has years of experience in restaurants in the United States, knows the business side and the foodservice industry, and can run the operation in your absence. “Before engaging in serious partnership discussions or agreements, it is crucial to complete a feasibility study, concept development plan, and business plan,” advises Juliana Hahn on Tipsy. “Is the idea of a partnership even feasible? Can your restaurant concept withstand not only the market but also two or more owners? Is there enough of a profit margin for all partners to live a healthy lifestyle? What are the short and long-term goals?”
These are good questions, and the goals of both partners should be considered carefully before proceeding. While partnerships can certainly be rewarding and helpful, they can also be a source of stress and challenge if you choose the wrong partner.
Select the right equipment
When you do move forward, having found the right building and location, you are going to have to equip your restaurant. Look for high-quality, affordable suppliers that can offer some of the best deals on restaurant appliances and services. If you know other restaurant owners in the area, ask for recommendations—there’s a chance a dealer would offer a discount to both of you in exchange for the referral. Likewise, don’t be shy about keeping an eye out for restaurants that are closing—you can often score lightly used, but high-quality equipment at a discounted price.
And really, there’s so much to buy, you’ll probably end up with a mix of lightly used and brand new commercial kitchen equipment. For instance, you’ll need a freezer, refrigerator, warming equipment, and ice machines, but that’s just the tip of the iceberg. One advantage of working with high-quality suppliers is that they’re experts in the industry, and if you share your budget and goals with them, they can help you select the items you need to have at a price you can afford.
Seek out distributors Of course, beyond equipment, your restaurant needs food and beverages to keep your customers happy, and the distributors you select can make a big difference to your bottom line and your brand’s appeal. For instance, if you want to open a farm-to-table restaurant, you need to look for distributors of local produce and meats (harder, but not impossible, to do in a big city). Likewise, you want to look for alcoholic beverages distributors that will get you the absolute best price on high-quality liquors and mixers. Remember, whatever savings you find on the wholesale side, you can pass on to your customers on the retail side, making it easier to sell even more drinks and widen your profit margin in the long run.
About Carson Derrow
