So youre dreaming of opening

a restaurant, and everyone is asking:

Are you serious? Youre starting to wonder if youre really making the right decision.

The key to going from confusion to setting a plan in motion, is research. You already
know that restaurants are rarely get-rich-quick schemes. Theyre a lot of hard work with
an extremely high rate of failure. Recent stats show 60% fail in the first three years.1 So
why do it?

Ask successful owners and theyll tell you: passion. The life of a restaurateur is like no
other, and when you do well you do really well.

But successful is the key word here. You dont enter the game to fail. So how can you
ensure success?

Plan to succeed: Based on the rise and fall of thousands of restaurants over the years,
we know that success is the result of many factors, some within and some beyond an
owners control.

Great food and an original concept are fundamental, but at the end of the day a
restaurant is a business like any other revenues battle expenses for the upper hand.
The product is the dining experience as a whole, including food, service, atmosphere,
neighborhood and every other conceivable aspect. A restaurant is truly a venture with a
thousand moving parts.2

With careful research and planning, you can make intelligent decisions about the things
within your control, and learn about the risks that are beyond your control.
 Table of Contents
To help you put your best foot forward, Lightspeed has
created a master checklist for opening your first restaurant.
To help you organize those thousand moving parts, weve
separated your planning process into nine main concepts.

STEP The Venture STEP

The Food
#1 #6

STEP The Concept STEP The People

#2 #7

STEP The Location STEP The Sell

#3 #8

STEP STEP
The Space The Tech
#4 #9

STEP
#5 The Money
 Before you embark, take a close and honest look at your goals and
STEP passions, your personality, your strengths and your weaknesses. Decide
#1 what kind of owner you want to be and whether you need a partner or
external help. Even if you prefer to keep a lot of control, dont try to do
everything yourself.

4 Opening a Restaurant: A 9 Step Survival Guide

 Lifestyle
Youll be spending a lot of time between those four walls, so its important that your
concept reflects your personality. Early risers run bakeries, night owls run bars and
extroverts can greet guests all day long without tiring. You get the picture. The restaurant
industry is extremely taxing, so make sure that you understand the lifestyle that comes
with your chosen field and that this is something you want to do with your life.

Ownership
Because all new restaurant owners must invest start-up capital, the decision on what
kind of restaurant to run cannot be taken lightly.

Franchise Franchisees benefit from the brand recognition and

corporate systems already in place. For this, they pay fees
to the franchisor. This is best for those looking to align their
business with a well-known or powerful brand name.

Owners set up everything on their own. Your

Independent choices, your risks and your payoff. An entrepreneurial spirit
runs deep with the owners of the independent restaurant.

Partners can be invaluable when you share ethics and

Partnership outlook. If youre a chef, consider partnering with a front-of-
house manager, and vice versa.

5 Opening a Restaurant: A 9 Step Survival Guide

 You dont need to please everyone; you need to stand apart from the rest.
STEP Find a clear niche that responds to a proven need among a defined target
#2 demographic.

6 Opening a Restaurant: A 9 Step Survival Guide

 Dining experience
Diners seek a unique experience; they want to connect with, remember and recommend
you. So find a hook that no one else is using, or use a concept in high demand and place
it in an area or neighborhood where it is lacking. Work through the following basic
questions, to start thinking in the right direction:

Theme What are you all about? How will diners remember you?

Market Are you targeting a younger crowd, families, baby boomers?

Service Seating, bar service, buffet, take-out?

Mood Lively bistro, retro diner, lunch counter, roadhouse, fine-dining?

Food What is your food concept? Where will you source from?

Music Loud or subdued, live music or none at all?

BRAND Name What will you call your restaurant?

Market Research
You shouldnt launch your business without knowing what your competition is doing and how
theyre doing it. Think about the following points as youre conducting your market research:

Who are your competitors? Look at all restaurants in your target neighborhoods
as well as those offering a similar product in a different area.
What are they doing right?
Where are they failing?
Read reviews online for added insight.

7 Opening a Restaurant: A 9 Step Survival Guide

 A major part of the dining experience is the space and the neighborhood
STEP that the restaurant is located in. In order to survive, you need to carefully
#3 match your location and restaurant space to your concept, food and
target market.

8 Opening a Restaurant: A 9 Step Survival Guide

 Narrow your choices down to a few streets in a few neighborhoods with spaces available
for purchase or lease. Does your concept match? For example, high traffic commerce
areas tend to favor lunch counters over sit-down dining restaurants. Research the
areas you are considering. Doing some informal on-street surveys in your potential
location is also a great idea. Ask passers-by what they would like in the neighborhood?
Whats missing? Document everything you hear to ensure that you make the best of the
information you gather.

Neighborhood Does your target demographic spend time there? Is the area
residential or mostly business? Does the neighborhood suit your
concept?

Street A busy main street or tucked away? Does the street suit
your concept?

Pass-by-traffic Will the higher volume of foot and car traffic on a main
street make up for the extra rent you pay?

Parking Is there street parking or will you need a parking lot?

Valet service?

Lease What are the terms? Who were the previous tenants and
why did they leave? Its critical to negotiate a smart lease.

Restrictions What are the time-of-day noise restrictions and delivery

truck allowances?

Development Any projected development or road closures nearby?

Surroundings Will nearby businesses, parks or roads work for or against

your revenues?

Regulations Understand the requirements for restaurant, liquor and

outdoor patio permits and licenses.

9 Opening a Restaurant: A 9 Step Survival Guide

 The size, shape and style of your potential space are critical.
STEP How will the room fit your ideas for the restaurant?
#4

10 Opening a Restaurant: A 9 Step Survival Guide

 Design Will you hire a firm or design the space yourself?

Layout How much space will you devote to dining, bar, kitchen,
bathrooms and storage? Will you have an outdoor patio or terrace?

Flow How will people and food move through the space?

Dining How many doubles, how many group tables and booths?

Equipment What will you need and where will it sit or be stored?

Kitchen Create the best flow for receiving stock, storage, prep, cooking, plating
and dishwashing.

Codes Contact your regulatory authorities to make sure youre meeting

building code and health standards for your physical space.

11 Opening a Restaurant: A 9 Step Survival Guide

 Many restaurants fail because they run through their start-up money
STEP too quickly before becoming profitable. To attract capital, youll need a
#5 business plan.

12 Opening a Restaurant: A 9 Step Survival Guide

 Concept definition Include every element that relates to the concept of your
establishment.

Target market The age, income level, preferred mode of transportation and stage
of life are key in identifying your target clientele. Define an ideal
customer while knowing that things may not go as planned.

Start-up costs Know your purchase or lease costs, renovations, equipment, initial
food and beverage inventory and staffing for the first year.

Operating costs Project future weekly food and beverage costs, staff
salaries, marketing and promotional activities and lease.

Marketing Ensuring that you have a clear marketing strategy for your
restaurant is essential to understanding how much you will need to
devote to promotion.

Financing Where will you get your start-up capital? Understand your own
assets, partners, banks and government sources and ensure that
your revenue streams are properly explained.

For tips on the best metrics to measure your progress, including

cash flow and revenue per seat, read Lightspeeds Five Key
Performance Indicators to Ensure your Restaurants Success.

13 Opening a Restaurant: A 9 Step Survival Guide

 Your menu is the basis of your business and the link between your
STEP customers and their perfect meal choice. There is a real intricacy to
#6 building a menu.3 Your menu should be concise, complete, and in line
with your brand and your guests expectations. Customers should be
excited that theyve come to the right place.

14 Opening a Restaurant: A 9 Step Survival Guide

 Menu Design Reflects your brand while covering all the bases for your
demographic. An effective menu maintains focus, reduces decision time
for patrons and drives sales.

Trends What are the trends organic, raw, local, comfort foods? Will you follow a
trend or go rogue?

Kids Will you have special kids items?

Suppliers Youll need suppliers for every element of your business. Whats coming
from where and why? Do suppliers fit your values?

Contracts Find out what others are paying for supplies. Negotiate with
multiple vendors to make sure that you get the most cost effective pricing
for what you need. A good contract will benefit not only you, but your
customers as you will be able to offer a well priced product.

$ Prices Read up on the different strategies to pricing meals. Are your

prices in line with your target demographic? How much profit are you
making per dish?

Regulations Ensuring food prep and storage processes meet health standards is an
understandably integral step.

For more tips on creating the best menu on the block, from plate
choice to layout, pricing and photography, read Lightspeeds 7
Tips for Crafting an Exceptional Menu.

15 Opening a Restaurant: A 9 Step Survival Guide

 A smoothly running restaurant means that the front-of-house and back-
STEP of-house employees work together in perfect synergy. The people you
#7 hire will make or break your restaurant, so being extremely careful when
building your team is integral to your success.

16 Opening a Restaurant: A 9 Step Survival Guide

 NOW
HIRING
Hiring When your job ad matches your culture, so will the applicants.
Read our blog post to learn how to create an effective job description.

Managing Will you hire a manager or do it yourself?

Environment What kind of ambiance, facilities and technology will help you
attract the kind of staff youre after? Carefully consider what kind of
people will create the kind of environment youd like.

Salary How much will you pay? How will you handle tips?

Training What is your training and mentoring plan? Making sure staff
understand their responsibilities will help with staff retention.

To recruit the best and create a winning culture, read Lightspeeds

Best Practices for Hiring and Building an All-Star Restaurant
Team.

17 Opening a Restaurant: A 9 Step Survival Guide

 Why would customers choose your restaurant over another?
STEP Some experts feel marketing is the top success factor for
#8 restaurants, above food quality, location and management.4
When creating a marketing plan, always keep your target
demographic in mind.

18 Opening a Restaurant: A 9 Step Survival Guide

 BRAND Brand What do you stand for? Translate your ethos into a logo and look.
Extend your brand into your room design, signage, menu, ads,
website, promotions, POS systembasically: everything.

Online Youll need a website with your location, hours, contact info,
menu, photos and possibly a reservation function. A
presence on social media will also enable you to communicate with your
clients directly.

Search Make sure hungry diners can find you in local directories,
especially in near me searches on mobile devices.

Print Print media and in-person marketing are still powerful.

Consider fliers, magazine ads or posters in a local partner business.

Community On opening day (and beyond) hold tastings on the street.

Participate in local fun days, charity events and competitions. Being a part
of your community is a great way to build a returning client base.

Promotions Will you offer giveaways, gift certificates, coupons, or a loyalty program?

Contacts Build your customer email database and communicate! Offer a

monthly email with special deals. Ask for client business cards or email
addressess on comment cards for entry in a draw. Set up customer
profiles in your POS or CRM system to help you recognize repeat visitors
and tailor marketing campaigns.

Analytics Make sure you can measure your marketing activities and results
so you know whats working and what isnt.

19 Opening a Restaurant: A 9 Step Survival Guide

 Gone are the days of paper bills and cash registers. Now
STEP restaurants can open with easy-to-use POS systems that run
#9 on tablets and support all service and management tasks. Your
POS will be the center of your business for years to come. Pick
a good one your employees and your customers will thank
you.

20 Opening a Restaurant: A 9 Step Survival Guide

 Ordering Will you offer mobile ordering? Servers can quickly send orders
from table to kitchen or bar no more forgotten orders!

Payment Servers should be able to easily split bills, run tabs and
collect payment at the table.

Workflow The right POS will make managing your restaurant easier from kitchen
workflows to back office reporting.

Tables Staff should be able to customize the table layout on the fly.

Staff How will you schedule shifts, clock in and out, divide tips, and
manage employee performance?

Reporting The right reports will let you know what youre doing right and what
needs to change. Which menu items perform best? Which ones need to be
retired or reformed? Which employees sell the most? Which dishes do best
during happy hour?

IT A modern cloud-based solution can be set up quickly and doesnt require

a huge upfront investment.

Accounting How will you track your revenues and expenses? What accounting system
will you use and how will it interface with your POS?

Efficient POS systems let you serve fast, cut costs, grow, profit and
much more. Read about them in Lightspeeds 9 Reasons Why a
Mobile Point-of-Sale is Better for Your Restaurant.

21 Opening a Restaurant: A 9 Step Survival Guide

 Conclusion

Every venture is an adventure, right?

Research and planning in each of these
nine areas, from staff to food and
design all the way to your POS system,
will lay a strong foundation for success.
Creating a proper business plan means
that youll save time and money doing
it right the first time.
 About Lightspeed

At Lightspeed, we build end-to-end

commercesolutions that restaurateurs
can use to build, manageand grow their
businesses. Lightspeed is an all-in-one
point of sale, table management, and
analyticsplatform for restaurants of any
size. With the righttechnology, restaurateurs
can make their customershappier, and
make the world a more delicious place.More
than 24,000 businesses use Lightspeeds
tools tosell over $10 billion a year.

Start your free trial

 Sources

[1] Miller, Kerry. The Restaurant- Other Sources

Failure Myth, Bloomberg
Business. Apr 16, 2007.
[2] Lynn, Jacquelyn. How to
Start a Restaurant, excerpted
from Start Your Own Restaurant
and More, Entrepreneur. 2012.
Haden, Jeff. Start a Killer
Restaurant: 6 Tips, Inc.
Howard, Steven. 7 Reasons
Opening a Restaurant Should
Scare You, Chefs Blade.

[3] Daley, Jason. From Mealey, Lorri. How to Open a

Independent Business Owner to New Restaurant, About Money.
Franchisee, Entrepreneur. Apr
12, 2014. Tice, Carol. Bootstrap Startup:
Inside A $13K Restaurant
[4] ODell, Brandon. The biggest Opening, Forbes. Nov 24, 2013.
mistakes restaurants make, and
why they have a high failure
rate, Evan Carmichael. Also
Mahe, George. Ask George:
Why Restaurants Fail, St. Louis
Magazine. Jan 17, 2013.
 Other Restaurant Resources

7 Tips for Crafting an Exceptional Menu Best Practices for Hiring and Building
From plate choice to layout, pricing to an All-Star Restaurant Team
photography, create the best menu on the block. Recruit the best and create a winning culture.

Restaurant Marketing Guide 9 Reasons Why a Mobile Point of Sale is

15 expert secrets to successful restaurant Better for Your Restaurant
marketing. Super efficient systems let you serve fast, chop
costs, grow, profit and much more.