The food business is one of the most lucrative options, and that is one business why most new entrepreneurs are tempted to enter the food industry. However, managing eateries and restaurants have their own share of hassles, plus the negligible barriers of entry make it an aggressively competitive business. That makes setting up the business immensely cumbersome for entrepreneurs. You need to plan the initial phase of your business right so that you can set a strong footing in the market. Here is how you can set up your entry easily.
Type of Eatery
The first step in setting up a food business, especially an eatery is to decide what type of eatery do you aim to establish. The type of eatery will determine the course of lots of future decisions that you will be making. For example, your marketing strategy and layouts for a fast food joint would be different from a fine dining restaurant.
Menu
Now that you know what type of an eatery you are going to establish, decide your menu. If you are establishing a fast food joint will it be serving only burgers, or will you have tacos, pizza, and sandwiches as well? You may even decide to have a vast menu with assorted items. Even if you intend to cater to a broader customer segment, it is recommended that you start with a limited menu, and gradually increase the items as the cash flow starts to come in. That will help you cut down on capital investments and financial management would be a lot easier.
Target Group
Yes! Even eateries have target groups, and it is very important to determine that. Your target group will determine your pricing, the layout, and design of your eatery and a few other things. For example, a fine dining restaurant that targets business executives will have a certain type of design and crockery along with higher price point, while a family joint or a student café will be more economical and kid-friendly design.
Decide a Location
Will your eatery be located in a shopping mall or a food street. Will it be a café on a beach strip or a stand-alone fine dining establishment in a downtown area Your location decision will be driven by your target group and will determine your capital investments and working capital requirements. Remember that some locations have higher rental expense than others so choose your location wisely.
Acquire Funds
Setting up any business means you need capital investments and the same applies to food businesses. Determine and align your sources of finance according to your capital requirement. You might need to inject extra cash flow in the initial period until your eatery is up and running and cash flow starts coming in. Your financing can come from your personal savings, from partners and even through bank loans.
Equipment and Ingredient Supplier
You need to determine your supply line for equipment, ingredients and other restaurant supplies. Instead of purchasing everything randomly, take quotes and keep fixed suppliers so that you can develop a business relationship and can get supplies at discounted prices. You will be needing commercial kitchen equipment, which can be quite expensive. It is recommended that you either rent or lease out the equipment instead of going for a full purchase.
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