Six steps to opening your first bricks and mortar site

26-Aug-2022 - Last updated on 26-Aug-2022 at 08:26 GMT

Related tags Restaurant Opening Finance

Opening your own bricks and mortar restaurant, bar or venue is a goal for many in hospitality, but it can seem daunting and overwhelming to the first-timer.

Opening a restaurant, whether it be your first, second or umpteenth, can be a tricky process. The below steps condense wisdom from working alongside numerous clients and aim to break down the journey from concept to open-doors, and what to look out for along the way.

1 Ask yourself, why am I opening?

Restaurants are notorious for antisocial hours, tight margins and not the obvious choice of business if you want to make lots of money in a short space of time. That said, they can make decent money, create rewarding livelihoods and generate a lot of satisfaction for their owners, staff and customers. You must be honest with yourself about your expectations and the hard work that is involved.

2 Create a Business Plan

This should cover: your concept, justified by your skills and experience to make the product. Who will be buying it? Who are the customers and where are they? Does demand exist for your product and is there room for new entrants? Who are your competitors – both geographically for where you are hoping to be but also in your category? What can you learn from the competition and what sets your business apart? What resources will you need in terms of people, cash, site, assets? Financial details that demonstrate proof of concept – perhaps from pop-ups or residencies- and conservative projections for the future. What are the risks?

3 Get your finances in order

Finance broadly fits into two categories – equity and debt. For debt, you might borrow from family and friends, take a start-up bank loan from a British business bank, access peer to peer lending or asset finance. Debts gather interest (with the potential exception of money lent by family or friends), meaning you will pay back more than the amount you borrowed over time, but does not necessitate you giving away a percentage of your company. Cash gained via equity is the opposite; you might sell a percentage of your business as shares to family, friends, funds or crowd funding (EIS/ SEIS). SEIS schemes encourage investment in ‘risky’ businesses via tax relief for the investor - £150,000 can be raised through SEIS, within two years of trading, with 50% tax relief for the investor, £12m can be raised by EIS – within seven years of your first sale, with 30% tax relief for the investor. It is best to ask HMRC for ‘advance assurance,’ which will give confidence to the investor.

4 Find a site

It is well worth engaging a property agent who will have a network of landlords and properties that you may have privileged sight of and will be able to negotiate on your behalf for the best deal. That said, you should always put your own boots to the ground and spend physical time in any area you are considering opening. This should include spending an entire day on the street where you might open, watching the footfall, how busy lunch services are at other places and when people start to leave at night. Your business plan should have enough room in it to adapt to a specific location, as your local clientele should have an impact on what you offer.

5 Surround yourself with the right people

Hospitality is a time and energy consuming business, it does help to have a business partner, with whom to share the burden and the wins. When recruiting your key team of chefs, managers and floor team, make sure you get on with them as people. You’ll be collaborating with them over many hours and need to trust them. This extends to your suppliers, producers, your PR, marketing agents and accountant. Unless you are a small site, confident that your friends or social media following will be sufficient to fill your restaurant for all its covers each day, engage early with a communications person or team.

6 Things will go wrong, so build this into your plan.

It’s rare with a restaurant opening that there isn’t some form of delay, be it building issues, staff sickness, you name it. Budget for this both in your cashflow and in your headspace. It’s likely that you may open a couple or so weeks after schedule. This should be an obstacle rather than a disaster. Plan for it and you’ll get over it.