How to Open a Restaurant

how to open a restaurant, how to start a restaurant

Estimated reading time: 7 minutes

If you currently work in a restaurant as a server, chef, line cook, or manager, there may be times when you dream about opening an establishment of your own. Or, perhaps, you work in a completely unrelated field, have a long-time passion for food, and want to become a small business owner in the restaurant industry. No matter what the reason, it is essential to understand that merely enjoying food and cooking is not a guaranteed recipe for restaurant business success. In addition to needing a solid understanding of business, you need to be willing and able to work very long hours and handle a multitude of tasks in a fast-paced and often hectic work environment.

Many restaurant owners open their establishments with unrealistic expectations regarding revenues, workload, and responsibilities, which can result in an unwelcome wake-up call. That is why planning ahead and having a solid business strategy are so important. If you are hungry for ideas on how to open a restaurant, keep reading this Balboa Capital blog article.

Be prepared for extended workdays.

Before we explain how to open a restaurant, we think it is essential to know how much time is involved when owning one. When you start, you can expect the standard 9-to-5 workdays to quickly become a thing of the past. Yes, entrepreneurship lets you be your boss and gives you more freedom, but it also comes with more responsibilities and work. It is not uncommon for restaurant owners to work ten or more hours per day up to six days a week.

In addition to planning menus, managing your kitchen, and serving staff, you will need to stay on top of your inventory, oversee your bookkeeping, interact with customers, monitor your marketing efforts, and respond to customer complaints. You will also need to react quickly and provide solutions to unexpected situations. These include long customer wait times, inventory shortages, delayed food deliveries, or kitchen equipment that malfunctions or breaks.

Pick a restaurant concept.

This is perhaps the most critical step in the restaurant planning process. The concept you choose will be the cornerstone of your brand; it will impact just about everything relating to your restaurant, such as your menu, location, décor, and budget. You may be reading this and asking yourself, “what is a restaurant concept?” Simply put, it is the overall theme of a restaurant. For example, a high-end concept typically has exceptional food, expensive wines and spirits, and an impeccable and customer-focused atmosphere that allows for a unique dining experience. Some of the most popular restaurant concepts are family-style, quick-service, casual dining, fine dining, and cafes.

When brainstorming restaurant concept ideas, make sure to research the market along with emerging restaurant trends. Knowing how many restaurants are in the area and understanding peoples’ dining habits and income levels can help you narrow down your choices. If you want to open in a small town with a handful of restaurants, you might want to avoid a concept that already exists and has a strong reputation. If you want to open in a big city, there might be immense competition, but do not let that deter you. The big cities have higher populations, and diners enjoy variety and are more likely to try new restaurants.

Come up with a restaurant name.

A good restaurant name tells diners what your establishment is about and communicates the type(s) of cuisine you serve. Marketing experts agree that a business name should be catchy and memorable. Unfortunately, creating a great name can be challenging because most of the best names are already being used. So, a good approach is to write down a list of your favorites and ask your friends and family members for feedback.

After narrowing down your list of names, visit the U.S. Patent and Trademark Office website to check if any of them have been trademarked. It is also recommended that you check to ensure the name you like is not being used in your city or town as a DBA, which stands for “doing business as.” You will also need to choose a domain name for your restaurant, preferably one with the .com extension, and check to see if the name is available on the social networks you plan to use. If the domain name is unavailable, come up with a variation that’s available on as many social networks as possible. Having consistency online makes it easier for users to find you.

If needed, you can also trademark your business name with the help of a business attorney or intellectual property attorney. Lastly, you will need to contact your county clerk’s office and register the name of your restaurant.

Determine your budget.

Moving forward with the planning process without generating a realistic budget makes no sense. It costs a lot of money to launch a startup restaurant, and there will always be unforeseen costs and expenses that can quickly add up. The initial costs include construction buildout, design, furniture, fixtures, equipment, POS systems, permits, and legal fees. In addition, you will have fixed costs (rent, employee payroll, insurance, etc.) and variable costs (food, beverages, marketing, etc.)

Having a budget can be helpful when looking at locations for your restaurant and square footage. Starting with the biggest restaurant in the area might seem like a good idea, but it will cost more than a modest-sized space. Many restaurant owners start small and eventually move to more prominent locations when they become successful.

Get funding for your restaurant.

As we just mentioned, opening a new restaurant is expensive and requires a lot of capital. If you do not have the money readily available, several options exist. These include restaurant business loans, business lines of credit, and restaurant equipment financing. The amount of funding you qualify for will be based on several factors, most notably your credit score.

Once your restaurant opens its doors, you will need funding to cover the cost of your daily operating expenses. However, if you are filling tables daily and nightly and generating strong cash flow (the money you make after subtracting your operating costs), you might not need to take out a short-term business loan or another type of funding.

Hire a great chef and support staff.

Delicious, well-presented meals and outstanding customer service can make all the difference for your restaurant. If you are not a chef, your number-one priority is to hire the best executive chef you can find. Take time with your search and look for someone who has experience running a busy kitchen and understands your vision for your restaurant. Having a chef who can bring your menu to life and train and inspire your kitchen staff members is a win-win for everyone.

When it comes time to hire servers, bussers, line cooks, and a manager for your restaurant, you want people with more than a strong work ethic. You also want staffers who work as part of a team and can shift their productivity into overdrive when you get busy during peak hours. Finally, you want all your hires to be personable and have strong attention to detail. You can outline all of your expectations during the new-hire training and onboarding processes.

Host a soft opening.

A soft opening, also called a soft launch, enables you to “test out” your new restaurant before you officially open it to the public. It is a way to get feedback from customers, including friends and family members, and ensure that everything is running smoothly. It can also help your staff members gain much-needed experience working with one another. In addition, seeing firsthand how everything works with actual customers gives you and your staff a chance to pinpoint areas that need improvement.

You can invite a select number of individuals to participate in your restaurant’s soft launch. Family members and friends might not give you constructive criticism and feedback, so you should also invite local business owners and their employees.


Starting a restaurant is not an easy task. It requires a lot of money, time, and hard work. But it might be worth the effort if you are passionate about food and want to become an entrepreneur. Just remember that the industry is highly competitive.

Balboa Capital, a Division of Ameris Bank, is not affiliated with nor endorses the U.S. Patent and Trademark Office. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.