Steps to Open Chinese Restaurant
Chinese restaurants seem almost fool-proof, no matter if they are the smaller, hole-in-the-wall places with no seating or if they have tables and chairs for people to dine in. Ask yourself if you have ever heard of a Chinese food restaurant failing, and chances are the answer is no. If anything, they are simply everywhere.
With these facts in mind, it should be obvious that there is earning potential in opening up your own Chinese restaurant. However, as any faithful foodie would know, your restaurant is only as good as the food you serve. There are other factors that will contribute to your success, as well. Read on for some important steps that will guide you on your path toward opening your own Chinese restaurant.
Start with the Business Plan
Heading into a business without a suitable business plan is like getting in your car and driving without directions: it will be confusing and you won’t know where you are headed. For this reason, it is crucial to have a literal map of where your business is going. You have a vision of where you want to end up, now draft your business plan as your guide to get there.
Within your business plan, you will want to think about the following components:
- Business concept. What is your overall idea for the business? What will set you apart from the other restaurants? What are your motives for opening this restaurant? When you figure out the “why”, it will bring you closer to the “how”.
- The Service. As stated above, some Chinese restaurants do not feature any seating. Customers simply walk up to the main counter and order their food. If you prefer this “to-go” model for a restaurant, then that should be specified in your business plan. If you wish to have customers sit and be waited on, then that also should be specified. Understand that a change in service concept affects who and how many people you employ.
- Branding. What style are you going for inside the restaurant? What is your logo? Your restaurant name? How will you make it so that they all fit together? Name and logo recognition are crucial to brand success. The logo you use on your menu, for instance, is the logo you will use throughout the restaurant and on any other takeaways people can get their hands on, such as business cards and flyers. Keep everything standard.
- Market overview. This is going to be a research-heavy component of the plan. How viable is the Chinese food market right now, especially in your area? What are the potential strengths and threats to your restaurant? What is the demand for Chinese food, and what Chinese restaurants currently exist in the location you’re looking at?
- Management. What role will you take on in this restaurant? Who will you need to employ, and what positions are you looking to fill?
- Cost Analysis. You will have start-up costs as well as recurring costs. Try to come up with a list of items that fall into either category. Eventually, you will have to tie all of these together to figure out how much you will be spending per month. This will, in turn, influence how much you charge for your menu items.
Get your Paperwork in Order
When it comes to restaurants, there is quite a bit of legal paperwork that you will have to get in order. Much of it stems from the fact that there are extreme safety measures in place to ensure that your establishment remains clean and healthy. You will want to check with local business authorities and a business attorney to make sure you’ve completed everything, as your paperwork will include (but might not be limited to) the following:
- Business License, which is granted by the locality in which you intend to open your business.
- Food Service License, which permits you to handle food and serve it to customers.
- Liquor License, should you choose to serve and sell liquor on the premises.
- Certificate of Occupancy, should you choose to buy the building you intend on opening your restaurant in. (Note that if you are leasing, then that is another set of paperwork.)
You will also have to register your business for tax purposes. There are a variety of classifications when it comes to registering, known as business entities. These business entities include:
- Sole proprietorship
- Limited Liability Company, or LLC
First, you should choose a name for your restaurant that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another store. People look for authenticity when it comes to restaurants, so if you are choosing to serve food from a particular region of China, it is in your best interest to have a name which corresponds to that area.
Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your restaurant be sued, your personal assets would be protected.
Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.
Again, it is always recommended that you work with a business attorney to ensure that all requirements are met.
Focus on the Food and Service
Chinese geography has a long and complicated history, and it is filled with provinces and autonomous regions. This, however, provides a richness to its cuisine. Food experts will tell you that there are eight main cuisines of China and they stem from geography. They are:
The Cantonese style is traditionally the most popular. Chances are, most of the Chinese food you have had has been prepared in this style. But don’t cancel out the seven others, for they are just as delicious.
No matter the style of cuisine you choose (or the combination, as you might want to delve into more than one), keep in mind that you will have to have the ingredients stocked and ready for preparation. This means finding a reliable supplier of authentic ingredients or finding a market in your area that you could form a relationship with to provide you with what you need.
As stated above, the team you assemble will have to be reliable, knowledgeable, and hard-working. You will need cooks, people to bus the restaurant, someone to work the phones and/or the cash register, and waiters or waitresses should you want to open a restaurant where people can sit down and place their orders. Take your time with the interview process here.
Decide your Location
While you do not want to purposefully put yourself in competition with any other restaurant, choosing a location with at least one other Chinese restaurant might be a good idea. This means two things: one, that there is a population of people in that area who are willing to eat Chinese food, and two, you can look to their prices as a reference for what people are willing to spend.
Of course, you don’t want to position your restaurant too close to theirs. A walkable area that also features on-site parking is ideal in attracting customers to your spot. First-timers might pop in if they are simply walking by, and loyal customers will appreciate the ease of having a parking lot instead of having to find parking on a busy street.
Finally, the nightlife of the area will determine how late you stay open in the evening. If you think people will only come in to grab dinner, then there is no need to stay open late. But if you feel from your research of the neighborhood that there will be a demand for late-night food, then amend your schedule to fit the desires of the customers.
Spread the Word
You’ve done the research, established your entity, found your location, and built your team. The last step before cutting that ribbon is to market yourself. How are you going to let people know that you’re opening your doors? If you don’t mind word of mouth and going around on foot, a great way to advertise yourself is to hand out flyers throughout the community to let people know that you’re open for business. You might also consider taking out an ad in the local newspaper or working with some of the supermarkets in town and ask if you can hang up flyers there.
Social media can also be a vital tool in getting the word out about your restaurant. Platforms such as Facebook and Instagram allow you to create a business profile where you can market your services, show off photos of your dishes and your menu, announce special discounts and promotions, and much more.