Making the decision to set up a restaurant /food business involves careful consideration. As the standards and expectations of customers are rising all the time, the setting up of any food business could involve considerable financial outlay and time. Food business are required to be compliant with a range of legislation and non-compliance can result in serious consequences so food business owners need to be well prepared before they commence in business. The purpose of this guide is to take you through the steps to get started and provide you with relevant information that will help you plan your business start-up.
Step 1 – Market Research
Your first requirement is to conduct detailed market research. This will reassure you that you are doing the right thing and that there is a market for your new business. A successful restaurant always has a carefully planned mix of elements that combine to make it work and getting one of these wrong could have a detrimental effect on your business. Think of your favourite restaurant – why do you go there ? It is probable that you like the general ambiance, the food is consistently of good quality, the restaurant is clean and staff are friendly. It is estimated that 30% of restaurants in Ireland fail in their first year in business and furthermore, 50% wind up their business within five years of opening. Therefore, it is crucial that you conduct proper planning prior to investing any money in a new venture.
For research purposes, start by clearly identifying what type of restaurant / coffee shop you would like to open, you will need to choose a broad concept (e.g. pizzeria, ethnic cooking, modern coffee house, fish restaurant etc) in order to establish if there is a market for this type of food business. See what is working in other areas or towns of similar size. Remember you can always change your concept if, following initial research it does not prove feasible.
Another option to consider is a franchise restaurant such as KFC or Eddie Rocketts. The advantages of operating a franchise are outlined in the Starting Your Own Business Guide produced by Ron Immick/Brian O Kane available from Westmeath County Enterprise Board.
Learning about your market
How do I work out if there is a market for my business ? Start by writing down your answers to the following questions.
• Who needs / wants this type of restaurant ?
• Who do you think are your typical customers ?
• Is the market for my product / service growing and expanding ? • Who are my competitors ?
• What is working well in the local environment ?
• Is the local market familiar with my proposed product (e.g sushi bar) ? • What restaurant closed recently and why ?
• Where will I locate this business ?
• What are my set up and operating costs going to be (estimates) ? • How much are people willing to pay ?
• How much can I expect to make running this business ? • Am I capturing new trends, for example Asian and Fusion cooking or healthy eating options like Smoothie Bars ? • How many potential customers will I need per day to make this business work ?
Can you clearly identify your potential customers ? Who do you envisage your typical customers to be? Can you identify the number of potential customers you could have? This can be difficult and you may need help from an enterprise professional to work this out.
Information about the number of people living in your area, and their age profile, is available from the Central Statistics Office at www.cso.ie or from Westmeath County Enterprise Board.
Further information about peoples’ spending habits may be available from published research including Household Budget Surveys or Enterprise Support Agencies.
Published research from trade associations may also help you with background research for...