The very first factor is the mindset. Restaurant business or any Hospitality business is not a quick buck format. The common perception is you can’t go wrong in the restaurant business and that it has highest ROI than any other industry. This may have been somewhat true a decade ago. The current market competition is fierce and input costs are escalating. Needless to say the margins are under tremendous pressure. One needs to prepare for adverse situations before entering into any business format in this Industry. Whether you are an Investor or an aspiring entrepreneur, you need to be in this for the long haul.

Market Study

Once one has developed the mindset for entering this business, the next step is to conduct a detailed market study with respect to the consumer demographics, competition, cuisine types, supply chain requirements and several other factors.

Format & Cuisine Selection

One has decide on which format and cuisine is to be finalised post the market study i.e., whether to go for a Veg Restaurant / Casual Dining / Fine Dining / Bar & Restaurant / Cafe / Bakery / Sports Bar etc., will it be a single cuisine / multiple cuisine format. The most critical part to factor in the decision making is whether this is a one off venture or it needs to be replicated across locations. Various aspects are dependant on this. Once this is zeroed in, a prospective menu is designed.

Business Plan

Once the format & cuisine is selected, the next step is to develop a business plan which details space requirements, property purchase / rental format, manpower requirements, kitchen requirements (design & equipments), civil / interior designing, frontage designing, cutlery and crockery, licensing requirements, electrical requirements, area selection, supply chain setup, home/online delivery strategy, branding strategy, organic & digital Marketing strategy, costing, pricing strategy, financial projections, funding requirements etc.

Business Location

The business location is to be selected carefully and one that meets all the requirements. Legal & operational aspects are to be critically evaluated and the property is to be finalised.

Systems & Practices

Post selection of the location, and while the civil work, equipment procurement, manpower hiring & licensing is underway, one needs to develop appropriate systems and practices to run the show day in day out. Business cannot run without methodical designing and implementation of processes.

Food Trails & Launching

Once the restaurant is setup and ready, food trials have to be conducted to finalise the recipes and other operational aspects. Banding & Marketing strategies are to be deployed methodically and the restaurant is to be launched.

Close Monitoring of Operations & Financials

Once the launching is done, focus needs to be on daily operations, maintaining / enhancing product quality & taste, customer feedback, marketing, ensuring that the processes are followed, controlling wastage, identification and fixing of any revenue leakages, material procurement, cost control, portion control, packaging, consumption levels / food cost monitoring, hygiene, customer service, banking, monthly financials, mapping the monthly financials against the budgets, conducting variance analysis, controlling overheads, meeting sales targets etc.

Financial Feasibility Reassessment

Six months to Eight months into the project one needs to reassess project feasibility and if all is working out according to the plan, keep going and check for further optimisation. If it is going excellent, move on to another project while maintaining a overall watch on the current project. If heavy losses are being incurred, stop immediately. This means something is going horribly wrong. Identify the problem. If there isn’t any solution which can substantially reduce the loss, stop the loss, shut the business and look for another project opportunity. Remember, maintaining loss making business for pride takes a financial toll. Loss incurred in maintaining status-quo could be utilised in another project which can generate a profit and can coverup for the unsuccessful venture.


Though the list is not exhaustive, it covers up the most critical aspects and approach to setting up and operating a restaurant. If you are interested in setting up one and require someone who can plan and implement it, connect with us. We have varied range for hospitality solutions with best of resources and partners having decades of industry rich experience which can immensely boost your success probability.

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