Skip to content

How to Start a Restaurant Business

There are very few businesses that customers love more than a great restaurant -a place that brings together friends and family to share delicious food and conversation has a special place in the heart of many patrons.

Inc5000 logo

Join 1,000,000+ Entrepreneurs like you

Entrepreneurship is booming – and we're happy to be one of America's fastest growing companies.

Business Startup Guides

On this page

    Is Restaurant Entrepreneurship for You?

    Running restaurants requires resilience. You will need to combine a taste for the interesting and unusual with great marketing and local presence. You will need to attract patrons in a very competitive local marketplace. Then, you must create amazing dishes, hire staff, acquire great chefs and create atmosphere and ambiance.

    You can’t forget about the administrative side either.

    Sourcing ingredients, sorting out disputes, working out profits and more are all required. In fact, running a restaurant requires one of the most well-rounded skill sets of any business you might choose to go into. Along the way, you’ll learn amazing skills, develop great people management techniques and build huge amounts of experience in creating and running a successful business.

    What Are the Main Skills, Expertise and Experience Needed to Be a Successful Restaurant Entrepreneur?

    As we mentioned above, running a restaurant requires a huge and diverse range of skills. Among other areas, skills include:



    Finding, interviewing and hiring great service industry employees both for front of house and kitchen work


    People management

    Dealing with staff, coverage, issues and other people management areas



    Promoting a restaurant against a fiercely competitive field. Local marketing expertise is essential.


    Meal design

    Working with chefs to create innovative meals, source ingredients and creating reasonable profit margins


    Restaurant creation

    Setting up the restaurant in the first place. Finding equipment, furniture, fixtures and fittings to create a cohesive decor with the right atmosphere


    Operational management

    Ensuring customers are being treated well, orders are dealt with promptly and food is prepared to the standards you expect


    Business administration

    Sorting out profits, payroll, financial management, accounting and all the other areas that go into running any successful business

    What Are the Main Challenges for a Restaurant Entrepreneur?

    There are several major challenges for any restaurant owner. These start with competition — your local area only has a certain footfall, and you’re likely competing with dozens of other local eateries. Although you will build up a good reputation over time, strong marketing is essential in attracting patrons to your business from the start.

    Another major issue for restaurant owners is financial management and making a profit.

    The vast majority of payment you receive from patrons will go toward food ingredient costs (30-35 percent), staff salaries and wages (30-35 percent), occupancy costs like utilities and rent (5-10 percent) and other costs. After all expenses are taken into account, overall profit margins typically clock in at between 2 and 6 percent.

    Staff management also comes with its own list of challenges. From unexpected absenteeism to interpersonal conflicts, juggling staffing priorities will take up a lot of your time!

    No two days are the same for a restaurant owner, but all those days will be long! From working out menus, training staff, marketing and administration in the mornings through lunch and dinner services, you can expect to start work before 8 a.m. and not finish until well after close. If you open a restaurant, you need understanding family and friends...because they will not be seeing much of you.

    Right Business Structure

    Set up & Maintain Your Restaurant Business

    Once you've legally created your restaurant business, you’ll need to get some other things in place.

    Business location

    This is one of the most important choices for a restaurant owner. You will need to find a location that’s easily accessible, can meet the needs of your staff and guests and that won’t eat into your profit margins too much. Getting your business premises right is one of the most challenging aspects for a new restaurateur.

    Equipment and ingredients

    Restaurants need a lot of upfront capital outlay on equipment, fixtures, furniture and decoration. From kitchen equipment through to tables, chairs, plates and silverware, you will need to carefully budget everything you spend. Add to that the cost of ingredients, and you will need to keep a tight rein on expenses.

    Finances and Taxes

    What kind of bank account will you get? Do you need a business credit card? How will you pay your business taxes? These are important questions to consider so your restaurant business stays in the green. Here at Bizee, we can even help you file your taxes.


    You will need to hire employees throughout your restaurant business. From executive chefs to bar staff and servers to assistant cooks, getting your staff balance right is essential to your success.


    Your restaurant likely needs its own website, and you will also need to develop a local brand, logo and other marketing collateral. You should engage with local marketing firms who understand your immediate marketplace and can provide advice on getting your name out there.

    Permits and licenses

    Running a restaurant business comes with certain rules, regulations and legalities you need to be aware of, especially around staff health and safety and food hygiene and preparation. Bizee can conduct a Business License Research package for you, or you can take the time to do the research yourself.

    Business maintenance

    Most states require businesses to file an Annual Report once a year. You will also be expected to pay estimated taxes on what you plan to earn in the current business year. Your federal, state, regional and city business licenses and permits may need to be renewed on a regular basis, typically once a year.


    There’s a variety of software products specifically for restaurants that can make managing one much easier. From taking orders to food preparation and point of sale, the right software can make running a restaurant more efficient and cost effective.

    The Complete "Start Your Business" Checklist

    A Clear and Comprehensive Guide to Starting Your Business the Right Way

    Business Checklist
    Business Checklist

    Discussion Groups and Forums for Your

    Restaurant Business

    There are plenty of forums and online discussion groups for restaurant businesses. Start with these:

    Conferences for Your Restaurant Business

    Of course, there are also regular conferences for restaurant businesses:

    Useful Online Tools for Your Restaurant Business

    Here are some really great online tools for managing your restaurant business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.

    Project Management


    Marketing Automation

    Customer Relationship Management (CRM)

    Customer Support

    Human Resources

    Website Development

    Please note: This post contains affiliate links and we may receive a commission if you make a purchase using these links.


    If you want to start a business that’s going to be a challenge, but also comes with a huge reward potential, then running a restaurant could be right for you. Through the food and drinks you create, you will bring joy into people’s lives and give them a reason to choose your business. Over time, you will create a reputation as a truly unique eatery and be a place that people seek out to make new memories.

    What could be better than that?