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How to start a restaurant business
15 min read

How to start a restaurant

Has the dream of opening your own restaurant been quietly simmering away in the background, but now you’re ready to bring it to the boil?

Here are some of the ingredients you need to take into consideration when planning your restaurant business.

Is it a good time to start a restaurant?

Before you turn up the heat, it’s important to evaluate whether now is the right time to open a restaurant. The cost of living crisis, rising energy bills, supply chain issues, a shortage of readily available staff post-Brexit, recovering from COVID-19 restrictions… The restaurant industry has been served up course after course of nightmare scenarios in recent years, which have caused many fantastic food businesses to go off the boil and shut up shop.

Let’s start with the stats:

  • Over the course of the pandemic, the restaurant and hospitality industry adapted well to the changing rules, as the proportion of temporarily closing businesses plummeted from 81% in the 2020 lockdown to just 54% in the 2021 lockdown. Business turnover also reflected this change, showing higher revenue in early 2021.
  • This revival was particularly strong for the restaurant and mobile food service activities sub-sector, where turnover in May 2021 was £3.3 billion, five and a half times what it was in May 2020; this is likely to be because more restaurants were able to provide takeaway services and outdoor dining was permitted.
  • The Guardian reported in July 2022 that UK restaurant insolvencies had jumped by 64%. Closures rose to 1,406, as worker shortages and the cost of living crisis put more pressure on the hospitality sector.
  • There were 35,129 full-service operating restaurants within the UK in 2022, down from 42,070 in 2021.
  • The UK food and drink industry provided formal employment for 475,000 people in 2022, down from 487,848 individuals in 2021.
  • According to a Lumina Intelligence report released in early 2022, it predicts a year-on-year growth of almost 60% for the UK restaurant industry, or £6.6 billion, to a value of £17.8 billion.
  • Another takeaway from the Lumina report is that the top branded restaurants will see sales of £3 billion this year, topping that of 2019.

So, where are we now?

The UK government’s Eat Out to Help Out plan successfully brought pubs, bars, and restaurant groups back up to, or pretty close to, pre-pandemic levels. In 2021 and 2022, the gradual but steady easing of lockdown restrictions boosted revenue within the UK restaurant industry, and we will continue to see a gradual rise in revenues during 2023.

However, restaurants have all been suffering major hits to operating costs due to the energy price increases (luckily these are forecasted to start easing as the year progresses). There’s also been some major challenges with other inflationary pressures, such as cost of stock, staff wage increases, and more.

Despite the challenges, the restaurant industry is known for its resilience and creativity. Many restaurants have found innovative ways to increase revenue streams and connect with customers, such as offering virtual cooking classes and hosting outdoor events. Many restaurants have kept these business pivots in place due to their success, while also ensuring a successful strategy is in place should future lockdowns occur.

The future

While nobody can say for certain what the future will hold, what we do know is that it will come with both new challenges and new rewards. 2021 and 2022 have been years of major adjustment, and we can expect this period of change and flexibility to continue for the next few years.

Ultimately, the status of the industry will depend on a variety of factors, including the course of the pandemic, economic conditions, and consumer preferences.

Despite the many challenges that the restaurant and hospitality industry faces, some experts predict that the industry may rebound now restrictions have eased and consumer confidence returns, particularly as many people have missed the social aspect of dining out during the pandemic.

Restaurant market research and target customers

In order to launch a successful restaurant, you need to know what the demand and competition is like in your area, and who you’re selling your food concept to. If you don’t know who your customers are, what their budgets are, their values and preferences, what they look for in a restaurant experience (etc), then there’s no point opening your doors.

This stage is essential before developing your concept and menu, as you need to understand how you’re going to serve that one demographic. Trying to appeal to everyone or assuming a certain cuisine is popular in your area are big business no-nos. Conducting market research to understand exactly what local demand is like, what the growing trends are, etc, will help you build a strong foundation from which to grow your business.


How start a restaurant

Coming up with a restaurant concept

You’re then ready to develop and decide on your concept. Once established, go back to your local food scene and analyse it with your concept in mind.

  • What’s the competition like?
  • Speak to your target customers, what would they be willing to pay for a meal at your restaurant?
  • What would convince them to try your restaurant over a competitor?
  • What do they value most from customer service?
  • What would they be looking for in additional services, such as a takeaway option? Vegan options? Will you be offering fine dining, or casual dining?
  • What food concept is in high demand? Is it well-catered for in your area? Or is there a gap in the market, which you could fill?

These are just a few questions you need to ask yourself to create a clear vision for your restaurant. Having a clear concept and goals will help you make decisions about everything from menu design to marketing strategy. Understanding the preferences of your target audience and the competition will help you create a unique concept that will stand out in the market while ensuring your offering supplies an already existing demand.

Download: Restaurant business plan

Having a clear restaurant business plan is similar to having a map – so you know exactly where you’re headed. It’s also an extremely important document to have in place when looking to raise funds. Yes, it can take time and energy but going through this exercise will give you the clarity you need to plan and launch a well informed, viable business.

Not sure where to start or how to write a business plan? We’ve got a downloadable template you can use below. 


simple business plan template uk

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Choosing a restaurant location

Choosing the right location is crucial for the success of your restaurant, and it requires careful consideration of a range of factors to ensure that you can attract the right customers and compete effectively in your market. For example:

  • Accessibility

    A restaurant that is located in a busy area or close to major transportation hubs such as airports, train stations, or bus terminals will be more accessible to potential customers. If your restaurant is difficult to reach, it may deter customers from visiting, especially if there are other options nearby that are easier to get to. If you are a little more remote, is there suitable car parking?

  • Demographics

    The demographics of the surrounding area can also affect the success of a restaurant. For example, a restaurant that caters to families with young children may do well in a residential area with many families. In contrast, a restaurant that caters to businesspeople may do well in an area with many office buildings and corporate headquarters.

  • Competition

    The location of your restaurant can also affect the level of competition you face. If there are already many similar restaurants in the area, it may be harder to attract customers. On the other hand, if there is a gap in the market for a particular type of cuisine, locating your restaurant in the right place could give you a competitive advantage.

  • Suitability

    Do the premises you have in mind have the correct planning ‘use class’, or would you need to apply for a change of use to operate as a restaurant? Similarly, does the nature of the space/building allow for the installation of the various equipment, ducting etc that your kitchen is likely to require?

  • Visibility

    Finally, the visibility of your restaurant can also affect its success. A restaurant that is located on a busy street or in a high-traffic area is more likely to catch the eye of potential customers. On the other hand, a restaurant that is hidden away in a back alley or on a quiet side street may be harder to find and attract fewer customers as a result.

Develop your menu

Your menu is the heart of your restaurant, so it’s important to put a lot of thought into it. It should reflect your concept and goals and appeal to your target audience. Offer a variety of dishes that cater to different tastes and dietary preferences.

When creating your menu, consider the cost of ingredients and pricing strategies. Keep in mind that pricing too high or too low can affect the profitability of your restaurant. You also need to factor in staff training and kitchen equipment necessary to prepare the menu. Seasonal produce also needs to be taken into account. A lot of customers enjoy eating food that’s in season, and given the recent shortages of non-seasonal produce such as tomatoes and peppers, focusing on more seasonal produce can help alleviate future issues.

Legal requirements to open a restaurant in UK

Before opening your restaurant, you need to acquire the necessary licences and permits to ensure you comply with the relevant regulations and laws. The requirements for these licences and permits vary depending on your location and the type of restaurant you plan to open. For example:

  • Food Business Registration

    All food businesses in the UK must register with their local authority at least 28 days before starting operation (if you don’t do this, you might be fined or even imprisoned for up to two years). Food Business Registration is crucial for your business as it is meant for any activity related to preparing, storing, cooking, serving, handling, distributing, selling or supplying food. You can register for your new restaurant business here. After the registration, you need to prepare yourself for the inspection, which is conducted by the Food Standards Agency, to (hopefully!) get a five-star rating in health and hygiene standards.

  • Food Premises Approval

    All restaurants apart from strictly vegan restaurants are required to obtain this approval. It is applicable to every restaurant that handles meat, fish, egg and dairy products. If your restaurant handles any of these items, it is mandatory for you to get yourself approved by the local council. Apply for this licence here.

    You also require this licence in order to sell outside the county you are registered in. In order to apply, contact your council for an application form or directly apply online from their website. The displaying of the approval of the licence varies from council to council. Running unauthorised food premises is a criminal offence and prosecutable by law.

  • Licenses and certifications

    Premises Licence. This is required if you intend to sell alcohol or provide entertainment, such as live music or dancing. You can apply for a premises licence from your local council.

    Personal Licence. If you plan to sell alcohol, you or a designated member of staff will need to hold a personal licence. This licence can be obtained from your local council.

    Health and Safety Certificate. You will need to have a health and safety certificate from a local council environmental health officer.

    Waste Disposal Licence. You may need a waste disposal licence if you plan to dispose of commercial waste.

    Events Licence. Events licences are required if your restaurant serves alcohol only on special occasions or events, and not regularly. Whenever you plan to hold an event in your restaurant that is likely to serve alcohol, you should apply for a Temporary Events Notice (TEN) at least 10 days before the event. The licence covers everything that a premise licence covers, just on a temporary basis, i.e. the permit to sell alcoholic beverages, live music and dancing, sporting events and the permit to serve hot drinks. 

    Music Licence. Music is important in a restaurant (no-one wants to hear the table next to them chewing, do they?!). To legally play music in your restaurant, you need to apply for a music licence from the PPL PRS, which is the UK’s music licensing company. The licence is essential to reimburse the owners and performers of the track for its use in the restaurant. While you can choose not to pay for a licence and opt for royalty-free music, you might struggle to find a free track list that matches your ambience.

    Food hygiene certificate. All restaurant staff, from servers to kitchen staff, must be given proper training in food hygiene. Whilst there’s no legal requirement for food handlers to have a food hygiene certificate, there is an obligation in law to provide proper food safety training.

  • Fire Risk Assessments (FRA).

    An employer, owner or occupier of commercial premises has a legal duty to complete a Fire Risk Assessment, identify fire hazards and ensure the business has effective fire protection. You must carry out and regularly review a fire risk assessment of the premises. This will identify what you need to do to prevent fire and keep people safe.The person carrying out the FRA must have suitable training to make the right judgements about risks and how to reduce them. For larger, more complex businesses a professional fire risk assessor is recommended to ensure regulatory compliance.

    The main fire safety law that restaurants must comply with, is the Regulatory Reform (Fire Safety) Order 2005 (FSO). Under the FSO, your premises must reach the required standard and all employees are provided with adequate fire safety training. If the premises have five or more people, a written record is required. By understanding the risks and taking precautions to reduce or eliminate it increases the likelihood your business would recover from a fire. FRA guidelines can be found A helpful guide can also be found here.

  • Planning Permission

    If you are planning to make significant changes to the building or use of the premises, you may need to obtain planning permission from your local council. You will also need the plans and any fitting out works to be checked off by a Building Control inspector in accordance with the Building Regulations.

  • Insurance

    Besides licences, you also need to insure your restaurant. These business insurances are mandatory to cover legal and compensation costs in cases of mishaps. These include:

    Public Liability Insurance. This insurance covers the cost for instances when a customer goes sick or injures themselves on your restaurant premises.

    Employer’s Liability Insurance. A similar insurance that you need is the Employer’s Liability Insurance, which covers the legal costs of employees getting injured in the workplace.

    Buildings Insurance. Also known as Business Property Insurance, it covers the cost of damage to the restaurant building and everything inside it. It is usually taken care of by the landlord, but it wouldn’t hurt to check.

    Again, seek advice from a professional advisor when organising your insurance.

Restaurant recruitment

Opening a restaurant is a big undertaking for any entrepreneur. Running and managing it once it’s open can be considered even more difficult. There will be a lot on your plate. This is why you need to be sure of where your strengths and weaknesses lie, and which skills gaps you need to fill when hiring staff.

If you have zero or limited experience of running a restaurant, you need to have an honest discussion with yourself in regards to your skill set. You then look to hire staff to fill in these skills gaps. For example, if you’re a chef but haven’t run your own restaurant before, you need to think about the type of business advisors you might need in place, and a front of house team. Or, if you specialise in the business side of things, you need to spend time looking for a quality Head Chef that understands what you’re looking to achieve with your restaurant, and shares the same values so you’re both on the same page. If you’re not great at managing people, you need to consider hiring a Restaurant Manager. (A quick watch of Ramsay’s Kitchen Nightmares will demonstrate how quickly things can go sour if you don’t have the right team in place.)

Depending on your restaurant’s scale, concept and requirements, you may need to recruit the following roles:

  1. General Manager
  2. Head Chef/Chef de Cuisine
  3. Sous Chef
  4. Line Cooks
  5. Kitchen Assistants/Prep Cooks
  6. Front-of-House Manager
  7. Host/Hostess
  8. Servers/Waitstaff
  9. Bartenders
  10. Baristas
  11. Dishwashers
  12. Bussers/Runners
  13. Cashiers
  14. Marketing/PR Manager
  15. Administrative Staff

Stocking your restaurant

This is an important task, which requires careful planning and organisation to ensure that you have the necessary supplies and ingredients to prepare and serve your menu items.

  • Develop a menu

    Before you start purchasing supplies, it’s important to develop a menu that reflects your restaurant’s concept and brand. This will help you determine the ingredients and supplies you need to have on hand. When you put together your menu, you should keep in mind your ingredient costs. If you can, try to avoid buying too many specialty ingredients that are only used in one dish and try to base much of your menu around common, affordable and available ingredients.

  • Create a supplier list

    Research and create a list of reliable suppliers for your restaurant. This may include wholesalers, distributors, and local farmers or producers. It’s really important to choose your food suppliers carefully. You’re not just running the risk of late deliveries – unhygienic packing and transportation of perishable food products could pose a real health risk to you and your customers. Questions to ask include:

    • Are they registered with the local authority?
    • Do they have any certification or quality assurance?
    • Are they recommended by other local restaurants?
    • Do they store, transport and pack their products in a hygienic way?

    It’s also a good idea to carry out your own spot checks on temperature and quality to make sure produce is suitable.

    You are legally required to keep a record of all food products you’ve bought, where you bought them from, how much you bought, and the date of purchase. Keep this information safe in case it ever needs to be presented to an inspector or enforcement officer.

    Read more: Finding the right suppliers

  • Manage your ingredients (quantities, storage, purchases)

    Estimate the quantities of supplies and ingredients you will need based on your menu, the number of customers you expect to serve, and the frequency of deliveries.

    Set up storage areas in your restaurant to store supplies and ingredients. This may include a dry storage area for non-perishable items, a refrigerated storage area for perishable items, and a freezer for frozen items. 

    Purchase supplies and ingredients. Purchase supplies and ingredients from your selected suppliers. Be sure to compare prices, quality, and delivery options to get the best value for your money.

    Track inventory. Keep track of your inventory levels to ensure that you always have enough supplies and ingredients on hand. Consider using inventory management software to help you track and manage your inventory.

    Rotate stock. Implement a first-in, first-out (FIFO) system to ensure that older items are used first and to avoid waste.

    By following these steps, you can effectively stock your restaurant and ensure that you have the necessary supplies and ingredients to serve your customers.

    Read more: How do I do a stock take?

  • Equipment

    Let’s be honest, restaurants need a lot of equipment. For example, you’ll need to think about cooking, cleaning and hygiene, uniform, crockery, glassware, cutlery, tables and chairs, safety signs, pest control, bins, fridge, freezer, etc. Don’t forget that the food you’re planning to serve can affect the type of equipment you need.

    You can often rent kitchen equipment instead of purchasing it outright. Many commercial kitchen equipment suppliers offer rental options for items such as ovens, refrigerators, and fryers. This can be a cost-effective solution for restaurants that are just starting out or for those that need additional equipment for a short period of time. It’s important to note that rental agreements may vary depending on the supplier, so it’s always best to research and compare options before making a decision.

How to market your restaurant

Marketing plays a crucial role in attracting customers to your small restaurant. Here are some of the ways you can market your restaurant:

  1. Social media: Utilise social media platforms such as Facebook, Instagram, Twitter, and LinkedIn to promote your restaurant. Create engaging content, share appetizing food photos, and interact with your audience. Consider running targeted ads and promoting special offers or events through social media advertising.

  2. Local advertising: Explore various local marketing options to reach your target audience effectively. This can include placing ads in local newspapers, magazines, radio stations, or even on billboards. Consider sponsoring community events or sports teams to increase your visibility within the local community.

  3. Online directories: Ensure your restaurant is listed on popular online directories, such as Google My Business, Yelp, TripAdvisor, and OpenTable. Optimise your listings with accurate information, appealing photos, and positive customer reviews. This will improve your online presence and make it easier for potential customers to find and learn about your restaurant.

  4. Word of mouth: Encourage positive word of mouth by providing exceptional customer experiences. Train your staff to deliver outstanding service, serve delicious food, and create a welcoming atmosphere. Consider implementing a loyalty program or offering referral incentives to motivate your existing customers to recommend your restaurant to their friends, family, and colleagues.

  5. Online reviews: Encourage customers to leave reviews on platforms like Google, Yelp, and TripAdvisor. Positive reviews can significantly impact the perception of your restaurant and attract new customers. Respond promptly and graciously to both positive and negative reviews to show that you value customer feedback and are committed to providing the best experience possible.

  6. Partnerships with Local Businesses: Identify complementary local businesses with which you can form partnerships. For example, you could collaborate with nearby hotels, theaters, or event venues to offer special discounts or packages. Cross-promotion can help expand your reach and attract customers who may not have discovered your restaurant otherwise.

Remember, an effective marketing strategy is a combination of various tactics tailored to your target market and local community. Continually monitor and evaluate the results of your marketing efforts to make data-driven decisions and optimise your approach over time.

Read more:

How start a restaurant

Design your restaurant

Designing your restaurant is not just about aesthetics; it’s also about creating a functional space that meets the needs of your customers and staff. Here are some considerations when coming up with restaurant design concept ideas:

  • Define your concept and brand.

    Before designing your restaurant space, it’s important to have a clear understanding of your restaurant’s concept and brand. This will help guide your design decisions, from the overall layout to the decor and furnishings. Ensure this style is mirrored in your marketing.

  • Consider the flow of the space.

    The layout should be designed to ensure smooth and efficient flow for customers and staff. Consider factors such as the location of the kitchen, bathrooms, and bar, as well as the seating arrangement and traffic flow.

  • Lighting

    Lighting plays a key role in creating the atmosphere of your restaurant. Use a combination of ambient, task, and accent lighting to create a warm and welcoming space. Dimmer switches can also be used to adjust the lighting level for different times of the day.

  • Materials and finishes

    These can have a significant impact on the overall look and feel of your restaurant. Choose high-quality, durable materials that are easy to clean and maintain. Consider using a mix of textures and materials, such as wood, metal, and glass, to create visual interest.

  • Seating

    The comfort and layout of the seating is crucial for customer satisfaction. Choose seating options that match the style and concept of the restaurant, and ensure that there is enough space between tables for customers and staff to move around comfortably.

  • Decor and branding.

    This should be consistent with your concept and brand. Consider using artwork, graphics, and signage to create a cohesive and memorable visual identity.

  • Accessibility

    Ensure that your restaurant space is accessible to customers with disabilities, including wheelchair users. This includes features such as wheelchair-accessible entrances, bathrooms, and seating options.

  • Health and safety

    Keep in mind your employer responsibilities for health and safety when planning your design – from your kitchen to your seating areas. For example when it comes to fire safety, all escape routes must be unobstructed, planned out and clearly marked. Here’s a a specific catering health and safety resource from GOV.UK. Always seek professional advice when designing your restaurant to ensure health and safety and compliance.

Keep learning

Once launched and customers are coming through the door, don’t get complacent. Keep monitoring your business and make adjustments as needed. Keep learning by tracking your finances, listening to customer feedback, and assessing the performance of your staff and marketing activity. Use this information to make data-driven decisions that can help improve your restaurant and increase profitability.

To conclude, it’s important to acknowledge the elephant in the room when it comes to starting a restaurant. Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and customers who simply can’t afford to spend as much as they used to.

You also need to have a good think about your goals, resources, and risk appetite. It’s essential to weigh the potential rewards against the risks and challenges and make an informed decision based on your unique circumstances.

If you really want to follow your food dream, but are hesitant to commit to high street premises during these turbulent times, you might want to consider opening your own food truck or launching a food business from home first. Starting small offers the opportunity for greater flexibility with your budget and menu (see it as an approach similar to eating tapas – little and often!). This will help you test out and refine your offering rather than committing to a large premises and biting off more than you can chew.


*Please note the above information is not an exhaustive list and does not constitute any form of legal advice.

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