Have you dreamed of opening your own restaurant in Toronto? If so, this article is for you.
Restaurant ownership offers many perks, including creating your own menu and expanding your culinary skills.
Before you sign a lease and get to work on creating a menu, though, you’ll want to complete a few key tasks. Here are a few crucial steps to take before opening a restaurant.
Consider Your Goals/Wants
Brainstorming is one of the first steps toward opening any business. Consider the type of restaurant you want to own.
Do you want something formal and upscale? Would you prefer a small, quaint cafe that serves brunch and coffee? Have you always dreamed of a late-night restaurant that caters to shift workers?
The options are endless, but narrowing them down can help you decide the best business model for you.
Establish Funding
You’ll also need to decide how to fund your new Toronto restaurant. There are many methods of funding a new business, including crowdsourcing, borrowing from friends and family, taking out a small business loan, or using your savings.
Researching funding options ahead of time can ensure you have the money you need once you find the perfect restaurant business for you.
Choose Between an Established Business or From Scratch
You have two options when it comes to opening a restaurant business. You could start from scratch, which means creating a concept out of nothing.
You’ll be responsible for creating a menu, naming the restaurant, gaining brand awareness, and furnishing the space.
You could also buy an already-established restaurant. When you buy a functioning restaurant, you usually acquire the business name, menu, cooking supplies, location, and staff.
Of course, once the restaurant is yours, you can control any changes you want to make.
One of the biggest differences between starting from scratch and buying an established business is how long it takes to begin earning revenue.
You can expect a longer timeline until you earn a profit with a brand new business than with an already existing one.
Write a Business Plan
Next, you’ll want to create a business plan. In fact, you may need a business plan to obtain financing for your purchase.
This is also a good way to understand your proposed restaurant’s finances better. It can be more difficult to predict the expenses of a new business accurately.
If you plan on purchasing an established restaurant, the seller will typically provide you with information like rent price and current monthly income. Using this information, you can project sales by quarter and year.
A good business plan should include business goals, a competitive analysis, marketing plans, and financial statements.
Most lenders will also want to know your experience and why you’re capable of opening a profitable restaurant.
Seek Licensing and Permits
Most cities require licensing and different permits to open a new business. Some of these may transfer with the purchase of a business, but this isn’t always the case.
Ensure you acquire all required licenses and permits to ensure your business is legitimate.
For example, Toronto requires all new business owners to notify the City of Toronto and the Medical Office of Health before starting the business.
This applies to all restaurant-based businesses, including fixed, mobile, or home-based restaurants.
If you plan to serve beer or alcohol, you’ll also need a liquor license from the Alcohol and Gaming Commission of Ontario (AGCO).
Keep in mind it can take some time to obtain all licenses, so it’s best to start early.
Choose a Good Location
You’ll also want to choose the right location for your restaurant. Of course, if you purchase an already established restaurant, you should carefully consider how profitable you can make the business in the current location.
Ideally, restaurants do best in busy cities with easy ingress and egress, plus a good amount of parking.
The type of food you serve may also make a difference when it comes to choosing the perfect location. For example, coffee shops require convenient entry and parking.
Test Out Different Menus
Ultimately, your menu will make or break your restaurant. Customers will continue to frequent your business if they find your menu delicious and of good value.
Even if you buy an already established business, making a few updates to the existing menu may be worthwhile.
This allows you to give the restaurant your creative twist while encouraging people to visit or revisit to test out the new menu.
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The bottom line
Restaurants can be a profitable business idea. Before starting your own restaurant business, however, it’s important to conduct a few necessary tasks.
These tasks can help you clearly define your business goals and create a blueprint for success.
