How to start a restaurant business: a step-by-step guide for beginners

Whether you’re an experienced chef dreaming of a place to call your own, or a savvy entrepreneur who’s spotted a gap in the market, opening and running a restaurant is a dream for many in the UK.

That being said, it’s been a rough few years for the sector. Between rising energy bills, increasing ingredient prices, supply chain issues and staff shortages post-Brexit, hospitality businesses continue to face difficulties.

That doesn’t mean opening a restaurant is off the menu. But as with any new business venture, it needs to be approached with careful planning and hard work.

In this guide, we’ll walk you through the crucial steps of cooking up a successful restaurant business – from creating your business plan and digging into market research to finding the right location and hiring the best talent to bring your vision to life.

How to open a restaurant: step-by-step

As it always goes with starting a business of any kind, you can’t just jump into opening a restaurant. Chances are if you snatch up the next available property and start selling food right away, it isn’t going to end well.

You need a solid plan, the right location and a clear understanding of your target market before you can start serving customers. To help you get started, here’s a step-by-step guide on how to open a restaurant the right way.

1. Write a restaurant business plan

The very first thing you’ll need is a strong business plan. Put simply, this is a document that describes what your business is, what your goals are and how you plan to achieve them. While there isn’t a definitive way to create a business plan, it should include the following:

• Executive summary: a brief description of your business, your mission statement, objectives and core values.
• The business: this should include details of the founder(s), ownership structure, estimated startup costs, property, location, opening hours and suppliers.
• Market analysis: where your business fits in the market, who your target audience is and any relevant competitors.
• Marketing strategies: how you will attract customers through marketing practices, such as social media, email campaigns and content marketing.
• Financial information: the expected costs of running your restaurant, including startup costs, staff salary, annual rent and maintenance costs.

2. Conduct market research

Next, you’ll need to carry out thorough market research. This will help you better understand your target market and the restaurant industry. It’ll also help you make informed decisions and identify any growth opportunities. Here are the key aspects you should consider:

• Demographics: the age, income level and occupation of your target audience. Are you catering to young professionals, families or retirees?
• Consumer trends: keep an eye on industry trends. Is there a demand for vegan and plant-based options? Are more people leaning towards quick, casual dining or sit-down experiences?
• Price sensitivity: research what the average customer is willing to spend in your area.
• Foot traffic and accessibility: look at the traffic patterns in your area, for both drivers and pedestrians. Are people likely to walk by your restaurant? Is it easy to access by car or public transportation?
• Delivery demand: research whether there’s a demand for online ordering or delivery services in your area, such as Deliveroo and Uber Eats, and how many competitors offer this.

As for approaching your research, you should conduct it through the following methods.

Primary research

This involves gathering new data directly from potential customers and the local community. You can do this through surveys and questionnaires (e.g. SurveyMonkey or Google Forms), or interviews and focus groups.

You could also spend time observing customer behaviour in competing restaurants. Pay attention to their ordering habits, dining preferences (e.g. table or counter service) and how they interact with staff. 

Plus, if you’re still in the early stages, consider doing informal interviews or questionnaires in the area where you plan to open your restaurant. Approach people on the high street or people sitting in cafes to ask for their opinions about local dining options. You can offer cash or a gift card in exchange for their participation.

Secondary research

Secondary research is when you’ll need to gather existing data. For this, you should look at:

• Industry reports for statistics on trends, consumer behaviour and regional economic data. Websites like IBISWorld, Statista or government sources might have useful reports.
• Competitor research, such as checking competitor websites, menus and social media presence. This will give you an idea of what’s working well for them and where you can differentiate yourself.
• Online reviews through platforms like Yelp, Google Reviews and TripAdvisor. This will help you understand what customers like and dislike about local restaurants.
• Census data to help you understand the demographics in the area, including age, income levels, household sizes and occupation types. Many cities and towns have free access to demographic data.

Competitor analysis

Having a deeper understanding of your competitors can really help you get a feel for the market. Here’s how you should analyse your competitors:

• Menus and pricing: collect menus from local restaurants and assess their offerings and pricing strategies. Look for gaps in the markets that your restaurant could offer (e.g. healthier options or unique cuisines).
• Customer experience: visit competing restaurants as a customer and observe the service, food, quality, atmosphere and overall experience. Take notes on what works well and areas where customers seem dissatisfied.
• Unique selling points (USPs): what makes each competitor stand out? Is it their food quality, location, brand, customer service, or menu variety? Understanding the unique value each competitor offers can help you differentiate your restaurant.

Online research and social media

Social media and online platforms offer a good way to measure customer sentiment, especially for younger audiences.

To do this, you can monitor social media channels like Instagram, Facebook, X (formerly Twitter) and even TikTok to track conversations related to food, dining preferences and new restaurant openings. Specifically, looking at hashtags related to food and restaurants in your city or local area can give you insights into what’s trending.

Blogs and local food vloggers can also help you learn what people say about the local restaurant scene. Those with a loyal following can often influence local dining trends.

Community engagement and networking

Being involved in the community and networking with other business owners can help you understand more about what people want and what’s popular in your area. Here are a few avenues you can take:

• Joining your local chamber of commerce or business networking groups to meet other businesses and learn about economic conditions and consumer trends.
• Attending food festivals, farmer’s markets, and other events to engage directly with potential customers and learn about what the community enjoys. You can also network with other restaurant owners and suppliers.
• Hosting a small pop-up or tasting event to get feedback on your menu or concept. That way, you can test your offerings and make adjustments based on real customer feedback.

Data analytics tools

As you gather all this information, using analytical tools can help you better interpret the data, such as:

• Google Trends: track popular food searches and see if certain cuisines or dining preferences are on the rise in your area.
• Social media analytics: if you have a social media preference or are planning to build one, use performance analytics (e.g. Instagram Insights or Facebook Analytics) to understand your audience demographics, engagement levels and preferences.
• Online ordering and delivery data: platforms like Uber Eats and Grubhub offer insights into popular delivery trends in your area, allowing you to gain insight into what types of food are in high demand for delivery services, which can be useful if you plan to offer delivery options.

3. Look for property to buy or rent

Finding the right restaurant premises is a significantly important part of starting a restaurant. There’s a lot to consider, from location and transport links to lease lengths and business rates.

First, you’ll need to determine whether to buy or rent your space. Buying is more of a long-term commitment. You’ll own the property, but you’ll also be responsible for all the maintenance and renovations.

On the other hand, renting can give you more flexibility. You won’t have to worry about maintenance or large upfront costs, but you’ll have to deal with rent increases and might face restrictions on what you can do with the property.

There are plenty of ways to look for locations to buy and rent. Start by checking commercial real estate websites like Rightmove and Zoopla. These platforms allow you to filter spaces by location, size, and price – making it easier to find something that fits your budget and needs. Don’t overlook local listings either, as some smaller property owners might only advertise in local newspapers or community boards.

Additionally, working with a commercial real estate agent who understands the restaurant industry can also be a huge advantage, as they have insider knowledge of available space, market trends and lease negotiations, helping you secure the best deal.

Networking is another way you could go. You can talk to other restaurant owners, business owners, or industry contacts who might know of available spaces that aren’t publicly listed. Sometimes, the best opportunities come through word of mouth, so staying connected with the local business community can really help in finding the perfect location.

4. Develop your restaurant’s branding and design

It may be the most important part, but having great food is only one aspect of running a successful restaurant. After all, good food alone won’t be enough to attract or retain customers if your business isn’t memorable. 

That’s why it’s important to take the time to develop your business’s branding and design. This includes its name, logo, menu and interior – all of which should clearly convey your concept. You should also have a strong business website to show it all off.

In other words, branding is what makes your restaurant stand out and stick in people’s minds. It’s not just about the food – it’s the vibe, look and the experience you create.

With that in mind, here are the best branding practices you should follow to create a strong and memorable identity for your restaurant, and common pitfalls to avoid.

Branding do’s

• Define your unique identity: establish what makes your restaurant special – whether it’s a signature dish or a unique dining experience.
• Create a memorable logo and name: choose a restaurant name and logo that are easy to remember, visually appealing and aligned with your brand’s theme and values.
• Stay consistent all on platforms: this includes your website, menu, social media, packaging and interior decor. Use the same fonts, colours and message to keep a strong brand presence.
• Leverage social media: use platforms like Instagram, Facebook and TikTok to showcase your food, behind-the-scene content and customer experiences. Reply to comments and messages to build relationships with your customers.
• Invest in high-quality photos and videos: professional-looking pictures of your dishes can make a significant difference in how your brand is perceived online.
• Tell your story: people love a good backstory, so share why you started your restaurant, your culinary inspirations and what sets you apart from competitors.

Branding don’ts

• Copy competitors: while researching competitors is important, avoid mimicking their branding too closely.
• Be inconsistent: using different colours, fonts or styles across platforms can confuse customers.
• Overcomplicated your logo or menu: a complicated logo can be hard to recognise, and an overly complex menu can overwhelm customers, so keep things simple and easy to understand.
• Ignore online reviews: your brand’s reputation is shaped by customer feedback, so you should respond to both positive and negative reviews in a professional manner to show that you care about the customer experience.
• Forget about packaging: if you offer delivery or takeaway, make sure that your packaging reflects your brand as well, as a well-branded, eco-friendly or creative packaging design can leave a lasting impression.
• Try to appeal to everyone: trying to cater to everyone can dilute your brand message and make it harder to build a loyal customer base.

5. Get funding for your restaurant business

Opening a restaurant requires significant financial investment, such as securing a location, purchasing equipment and hiring staff. Whether you’re starting small or aiming for a large-scale establishment, securing the right funding is crucial.

There are many funding options you can explore to get the capital you need. These include:

• Bank loans: many banks offer small business loans but require a strong credit score and a solid business plan. You’ll also need to provide financial projections and collateral.
• Business grants: some local councils and other organisations offer business grants for new hospitality firms.
• Investors: angel investors or venture capitalists may be willing to invest in your restaurant for equity, but this means you’ll lose complete ownership.
• Crowdfunding: platforms like Crowdfunder and Kickstarter can help you raise money through crowdfunding. You can also offer rewards like discounts, VIP experiences or free meals to attract backers.
• Business credit cards or overdrafts: these can provide flexible, short-term funding to help manage cash flow, cover unexpected expenses or bridge gaps between supplier payments and customer income. However, interest rates can be high.

6. Stock up on supplies and catering equipment

This isn’t exactly the glamorous side of the restaurant business, but you can’t have a restaurant if your chefs have nothing to cook, or nothing to cook with. 

Having the right supplies ensures that everything runs smoothly in the kitchen, and helps your team work efficiently to create the quality dishes that keep your customers coming back.

Supplies and equipment

When it comes to supplies and equipment, think about your menu and how much space you’ve got. 

Do you need large equipment for high-volume cooking, or are there specific tools you’ll need for your menu? Planning ahead will help you avoid overspending and ensure you have everything you need when you open the doors to customers.

Meal ingredients

If you can, try to avoid buying too many speciality ingredients that are only used in one dish and try to base most of your menu around common, affordable ingredients. This not only helps keep your costs down but also makes it easier to manage inventory and reduce food waste.

When you do need speciality ingredients, consider buying in bulk or from local suppliers to save money. Also, think about ways you can use these ingredients in multiple dishes to get the most value out of them. This will help you add more flexibility to your menu while ensuring you’re not overstocking on ingredients that might end up going unused.

Choosing a supplier

It’s important to choose your food supplier carefully. You’re not just running the risk of late deliveries – unhygienic packaging and transportation of perishable food products could pose a serious health risk to you and your customers.

With that in mind, make sure to look into the following when considering suppliers:

• Are they registered with the local authority?
• Do they have any certification or quality assurance?
• Are they recommended by other local restaurants?
• Do they store, transport and pack their products hygienically?

It’s also a good idea to carry out your own spot checks on temperature and quality to make sure the produce is suitable. You’re also legally required to keep a record of all the food products you’ve purchased, where you bought them from, how much you bought and the date of purchase. Keep this information safe in case it ever needs to be presented to an inspector or enforcement officer.

Equipment and other essentials

There’s no two ways about it – restaurants need a lot of equipment. So, we’ve broken down the essential items you’ll need to get your kitchen up and running in the table below.

Cleaning and hygiene	Tableware	Consumables	Clothing and uniform	Kitchen appliances	Catering equipment
Cleaning equipment (eco-friendly if possible)	Crockery	Disposables (paper napkins, paper straws etc.)	Chef uniform	Fridge	Knives
Toilet hygiene	Glassware	Food labels and wrapping	Staff uniform	Freezer	Chopping boards
Pest control	Cutlery	Lighting	Aprons	Ovens	Graters
Safety signs	Table linen			Deep fat fryer	Food processor
Bins	Service trays			Hobs	Blenders
				Stainless steel tables	Pasta maker
				Sinks
				Shelves
				Dishwashers and glasswashers
				Microwave
				Toasters

7. Find the right staff

Hiring the right staff for your restaurant business is crucial for its success. Your team plays a huge role in creating the right atmosphere, providing good customer service and delivering quality food consistently. 

Also, you shouldn’t just hire anyone, as you’ll need to find workers who align with your values, understand your vision and can keep up with a fast-paced environment when it gets busy.

Here’s what you should consider when hiring staff for your restaurant.

Define your team needs

Before you start hiring, think about the specific roles you need to fill. Whether you need chefs, front-of-house staff or cleaners, make sure you have a clear idea of what each role requires and how much your budget allows for wages, training and other associated costs.

• Kitchen staff: chefs, sous chefs, line cooks, prep cooks
• Front-of-house staff: waiters/waitresses, bartenders, managers
• Support staff: dishwashers, cleaners and maintenance

Use different recruiting channels

Finding the right staff involves casting a wide net. Here are some places you can advertise job roles:

• Job boards: websites like Indeed, Totaljobs, Monster and LinkedIn allow you to post ads for your restaurant and reach a large pool of applicants.
• Social media: use Instagram or Facebook to advertise open positions – people already familiar with your restaurant may be more likely to apply.
• Referrals: ask existing staff (if you have any) or friends/family for recommendations on people looking for work.
• Recruitment agencies: specialised hospitality recruitment agencies can help you find qualified candidates more quickly.
  

Create a good work environment

Good staff will be more likely to stay if they enjoy your restaurant’s organisational culture.

You should create a work environment that encourages teamwork, respect and open communication. Employees who feel valued and appreciated are more likely to be engaged, and a good culture will help build on your brand’s reputation.

You should also consider offering employee benefits like free meals, discounts or flexible working arrangements, as this can help increase job satisfaction, reduce staff turnover and help attract the best talent.

Provide training and support

Once you’ve found your team, you’ll need to train them. Make sure all new staff are familiar with your menu, restaurant culture and customer service standards. Even experienced workers can benefit from specific training on your restaurant’s procedures.

Additionally, you should update your staff on new menu items, any seasonal changes, or important health and safety guidelines. It can also be useful to offer training on soft skills like communication and problem-solving to help everyone work better together and provide the best service.

The costs of running a restaurant business

Running a restaurant isn’t cheap, as it involves a variety of costs that can add up quickly. Here are some of the typical expenses you’ll have to account for.

• Rent or mortgage: prices can vary on the area and size of the space
• Utilities: electricity, water, gas, WiFi
• Staff wages: National Minimum Wage (NMW), National Insurance Contributions (NICs), staff benefits
• Food and beverage costs: ingredients, beverages, supplier costs
• Licences and permits: food business registration, alcohol licence (if applicable), health and safety certification
• Marketing and advertising: website design, paid social media ads, paid search ads, print ads
• Cleaning and supplies: cleaning materials (e.g. napkins and toilet paper), cleaning services (if needed)
• Technology and software: point-of-sale (POS) system, reservation software, accounting software, inventory management system
• Insurance: public liability insurance, property insurance, employers’ liability insurance
• Unexpected costs: urgent repairs, staff turnover, equipment breakdowns

Budgeting and managing your restaurant business

To make money running a restaurant, it’s essential to budget effectively.

You’ll need to work out your costs (like the ones in the table above) and give a reasonable estimate of what your sales might be. This means factoring in your expected number of customers, average spend per customer and how often they’ll come back.

It’s important to balance your pricing strategy with the costs of running your business. For example, if your food costs are high, you may need to increase your menu prices or negotiate better deals with suppliers.

Moreover, you should track your cash flow regularly. This will help you understand when your business is bringing in money and when expenses are due. It’ll also help you avoid surprises, like running out of cash to pay for bills or wages.

For managing your restaurant, a good point of sale (POS) system is a must as this will help you track sales and manage your inventory, while also speeding up order processing and reducing errors. 

With the right POS system, you can see which menu items are selling best, identify slow periods and even track staff performance. Many modern systems also integrate with accounting software, making it easier to manage your finances and keep everything organised.

For more insight, check out our guide to the best POS systems for restaurants.

Rules and regulations around opening a restaurant

Before opening your restaurant, you must follow several rules and regulations to ensure your business operates legally and safely.

You must register your restaurant business with your local council at least 28 days before opening. This is free and can be done through the government website. 

Other relevant regulations include:

1. Certain licenses and permits

Depending on what you offer, you may need:

• Alcohol licence: if you plan to sell alcohol, you’ll need a premises licence and a personal licence holder.
• Music licence: if you play music in your restaurant, you’ll need a PRS for Music and a PPL licence.
• Outdoor seating permit: if you plan to offer outdoor seating options for customers, you’ll need to apply for a licence from your local council.
• Late-night refreshment licence: this is for businesses that wish to serve hot food and drinks after 11 PM. 

2. Food hygiene and safety standards

Under UK law, you must comply with food hygiene regulations, including:

• A food hygiene rating: the Food Standards Agency (FSA) will assess cleanliness and safety
• Food Safety Management System (HACCP): a system to monitor and control potential food safety hazards.
• Staff training: all staff handling food must have food hygiene training.

3. Health and safety compliance

You should also follow standard health and safety regulations to ensure your restaurant is a safe place for both staff and customers. This includes:

• Conducting a risk assessment under the Health and Safety at Work Act 1974
• Follow fire safety regulations, including proper fire exits, extinguishers and alarms
• Have a first aid kit available and train staff on emergency procedures

4. Allergen and nutritional information

Under Natasha’s Law, food businesses must clearly label allergens on pre-packed food. For non-prepacked food, you must provide allergen information upon request. Waiting staff should also check for allergies or any dietary requirements from customers when ordering.

5. Tax and business structure

For this, you’ll need to:

• Register your business structure to HMRC – either as a sole trader, partnership or limited company
• Set up PAYE (Pay As You Earn) for hiring staff
• Register for VAT (Value Added Tax) if your turnover exceeds £90,000 per year.
  

6. Waste management and recycling

You must have a proper waste disposal plan, including food waste and grease traps if you use fryers. Many councils have specific rules on commercial waste collection, so you should check with yours to understand the requirements for disposing of food waste, and general rubbish properly.

Final thoughts

As you can see, there’s a lot that goes into running a successful restaurant. But if you’ve got the skills and a real passion for food, then this is a business that you can really stamp your personality on. Food may be the starting point, but successful restaurants are about identity and atmosphere coming together to create memorable dining experiences.

It won’t always be easy, as there will be challenges along the way – from managing costs to keeping customers happy. But with the right planning, a strong brand and a great team, you’ll be in a solid position to build a restaurant that not only survives but thrives.