Most people share a dream of opening a restaurant or a chain of them. One often hears various cuisines and themes being planned. However, no one gets into a discussion on the returns on investments in this business. They assume food margins are 50% or above as they have heard. The truth however can’t be further than this.

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To understand the business, you must be involved in both the Operations and Financial decision of the Restaurant. Like most businesses, costs depends on location, number of covers you will cater to, the cuisine you serve will define your sourcing costs and also have an impact on the crockery and cutlery. The staff hiring will depend on the cuisine being served and the price point.

I would recommend approaching the business as some of the successful technology platforms do. They define their universe and competition on a wider scale and then look for the demand in the solution they intend to bring about in their customers' lives.

 

Processes and paperwork are extremely important for a successful restaurant businesses operation. The processes allows focus on multiple brands/ cuisines and allows to manage time for a Chef effectively in a chain.

 

Sourcing is another important aspect with a direct correlation to costs. Have a reliable and trusted source. Sourcing ingredients and a reliable chain of suppliers are very important for the business. Be it frozen or fresh, the supply to meet the demand should be consistent. Define usable yield from each ingredient which goes on to calculate your cost price for each dish. Yes this is not glamorous or exciting as they show on the TV but a very important part of the business.