In the last article, we learnt about the basics of starting a restaurant: vision, business plan and location. Once these three steps are completed, you know where you stand presently and how you want to achieve your business goals.
65% of restaurants are not protected if there is an interruption in daily operations. And these obstacles can be anything – government interference, angry customers, zero bank balance, etc.
While nothing can be done about the second point until you start running a restaurant, first and second points can be totally taken care of.
On the other hand, quite interestingly, the hottest technology trends in this business include tablet computers (27%), smartphone apps (25%) and mobile/wireless/pay-at-the-table (19%).
It is a fact: to do your job better, you need to make use of state-of-the-art software that keeps all your payments and POS challenges at bay.
To make sure your restaurant business has a smooth start, you must strengthen the foundation in three key areas: accounts, legalities and technology.
Get your basic accounting and financing in place
The customer-servicing side of the business is exciting. You are bound to have a lot of fun fixing special menus, sorting logistics and managing your staff. There is no doubt about that!
However, you also have to spend a considerable amount of time analyzing your ledger, submitting taxes and doing other accounting tasks.
This is the reason why you must learn the basics of restaurant finances so that you can spend your money wisely. As a restaurant owner, you need to look into every possible expenditure: employees, furniture, liquor, food delivery, laundry, linen, general repairs, etc.
Besides, your budget should also keep aside a certain amount of money to tackle emergencies in future. Therefore, when you are starting off, be sure to be extremely realistic about how much you can “actually” spend.
Please remember that it will take you a couple of months (or maybe a year) to break even.
Once your venture has taken off, here are 5 restaurant metrics you should track:
- Cost of goods sold (COGS) = Beginning Inventory + Purchased Inventory – Final Inventory
- Prime cost = Labor + COGS
- Food cost percentage = Food cost / Total sales
- Gross profit = Total sales – COGS
- Employee turnover rate = Lost employees / Average number of employees
Research and apply to legal licenses and permits
You have an idea to grow, a business plan to execute, a location to call “your restaurant” and a budget in control. So what is the next step? To get all legal formalities done before it is too late.
The most frustrating part of the process is to acquire the right permits and licenses. However, to make your business official, you have to go through tons of legal procedures, haggle with the local government officials and most importantly, wait before your restaurant can be termed “legal”.
Since the requirement of every local government is different, make sure you check out their website and note down the requirements beforehand. The sooner you start with the registration process, the better it is for you.
Here is a list of most common restaurant licenses and permits:
- Business license: This is required to open and operate your business. To find the application, google “[your state] restaurant business license”.
- Employee Identification Number (EIN): This is a tax ID number which is issued by the IRS. Since only one is issued per day, apply ASAP.
- Certificate of occupancy: This is to state that the building has been properly constructed and maintained. Google “[your city] certificate of occupancy to download the application.
- Food service license: This is issued by city or county health departments that certifies that your business is in compliance with all food service safety regulations. To get the application, google “[your city] food service license.”
Get the latest technology to operate
Invest in a POS system that helps you measure the total sales, number of daily/weekly/monthly customer visits and day-by-day sales performance of your restaurant business.
Luckily, Onesto Payments can take care of all your payments and POS challenges. With absolutely no risk of being cheated on by technology providers, this software equips small businesses with the best of the best technology in hand,
It also shares knowledgeable information such as which menu item is bringing your customers back, which server is generating the most revenue, which marketing efforts are working for you and what your customers are saying on social media.
Till then, good luck!