Opening a restaurant means building three things at once: a concept guests want, a kitchen that can produce it consistently, and a cost structure that leaves profit after food, labour and rent. Most of the risk is in the numbers, so the plan comes before the lease.
1. Define the concept and menu. Cuisine, service style (counter, fast casual, full service) and price point determine the space, kitchen and staffing you'll need.
2. Build the financial model. Estimate covers per day, average check and prime cost before looking at sites. This tells you the maximum rent the concept can afford.
3. Find the location. Look for the traffic your concept needs, adequate parking, and existing kitchen infrastructure — a second-generation restaurant space can save heavily on build-out.
4. Fund the opening. Combine owner equity with bank or SBA financing, equipment leases or investors. Keep several months of operating cash in reserve.
5. Licences and inspections. Food service permit, health inspection, certificate of occupancy, fire inspection and, if serving alcohol, a liquor licence — which can take months.
6. Hire, train and soft-open. Run soft openings to test kitchen timing and service before the public launch.
7. Write the business plan. Banks and investors expect a plan with prime cost targets, a sales ramp and a monthly cash-flow forecast for year one.
Revenue is covers multiplied by average check, across dine-in, takeout, delivery and catering. Food and labour together — prime cost — are the benchmark operators track weekly. Rent, utilities and delivery-app commissions come next. Margins are thin, so menu pricing and portion control decide whether the restaurant is profitable.
What is prime cost in a restaurant?
Food cost plus labour cost as a share of sales — the main benchmark operators track.
How long does it take to open a restaurant?
Commonly many months, driven by site build-out, inspections and, where relevant, liquor licensing.
Can I get an SBA loan for a restaurant?
Yes. Lenders will expect a full business plan with monthly projections and evidence of owner equity.