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How to start a restaurant business

Thinking of starting a restaurant? Startups has the essential business guide for you...

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What type of entrepreneur is a restaurant business suited to?

No doubt you have eaten out yourself and have your own ideas about what makes a good restaurant, whether it’s the food or the atmosphere. However, being a great cook doesn’t qualify you to run a successful restaurant. Celebrity chefs such as Gordon Ramsay highlight all too well just how many dream projects can run into trouble. Sitting in a restaurant dining room is a whole different experience to working behind the scenes.

Ian McKerracher, former chief executive of the National Restaurant Association, says many people fall into that trap. “People tend to go with what they enjoy rather than what there are the right resources for. Too many people say ‘I know what I like’ when it’s rather more a question of marketing and the quality of your product.”

In fact, it is less about being front of house and more about knowing the other face of the industry. That’s what Steve Cox, owner of fashionable London restaurant Prego, did: “Work in one first and get experience, both back and front of house. Wash the pots. I’m a chef by trade and I came through the mill and nobody can pull the wool over my eyes.”

If you think you’re escaping the ‘9 to 5’ or ‘the rate race’, think again. Forget the idyllic movie representations of business people enjoying long lunches, days on the golf course or at the beauty spa. Gordon Ramsay is probably the most successful, if not the most famous restaurateur, in the UK; indeed it is thought that he is currently worth around £76m. But he works incredibly hard to maintain that level of success; the pace doesn’t slow down just because he ‘made it’ in the restaurant industry.

For at least the first two to three years, put the holidays on hold and expect to work longer and harder than you are now. Expect to make sacrifices with family and friends who, no matter how much you explain, won’t understand why you’ve turned into an obsessed bore who ruins dinner parties and nights out with obsessive rants on the price of asparagus or the worsening quality in cuts of meat.

The average price of a restaurant meal is now between £12 and £20, and these figures continue to escalate in accordance with monetary inflation.  So it’s important that you value your product properly, and don’t under-sell yourself; many customers actually prefer to eat in more expensive restaurants because of the feeling of class and exclusivity they convey.