A plan for building your restaurant will need to include an estimate of star up costs and ongoing expenses. This is the most important item, after obtaining required permits and a tax ID number. If you want to start from scratch it can cost you $300,000 or more. This means you will need to buy everything, from stoves to chairs. You will need to check the reliability of any equipment included in the price, and negotiate the lease price before you can figure the cost of start up.



A plan for building your restaurant will also need to include? a budget for money collection and accounting, advertising, stock and necessities like triple sets of linen, utensils, dish and glassware for every seat in the house. You know that you want your restaurant well equipped, but will you really need to purchase all those new pieces of stainless steel equipment to open your restaurant? Or will you be able to get by with existing or used equipment until your restaurant shows a good cash flow?

A plan for building your restaurant will also need to consider ongoing expenses. Depending on the size and concept of your restaurant, the cost of food will set you back about 25% to $40% of your revenue. Paying your employees will take another 20% to 25%, and rent or payments will be at least 8%. After taxes and other necessary expenses you will be lucky to end up with a clear 5% of the profit.

Even if you don't think you will need to use it, it may be a wise move to open a line of credit with a local bank. This will help you establish credibility when you do need to purchase bigger items or open another restaurant in the future.

The three most important performance metrics that need to be included in a plan for building your restaurant are cash flow, the percentage of repeat customers, and staff turnover.

Cash flow should be checked as often as weekly. If you wait to perform this monthly you may have a problem. You will need to put out money for fresh inventory and take care of employee tips daily. You may want to keep track of how your specials are selling and it takes constant

Vigilance to keep track of what works best.

Three quarters of your sales will come from repeat customers. The most profitable restaurants work to get at least 60% of their customers to come in at least once a week. This is usually accomplished by the use of coupons, specials, contests and other gimmicks to keep the customer happy. Choosing personable, energetic servers is the biggest key to getting the customer to come back often.

There should also be a policy for keeping your best employees happy when you are making a plan for building your restaurant. Staff turnover can be a huge problem when running a restaurant. Keep an eye on how your staff interacts with the customer. If they have an unpleasant or abrasive attitude, you will definitely lose more than a few customers. While you cannot afford to keep a staff not suited for the public, you most certainly not be able to afford to lose those with an outgoing and positive attitude. These energetic and friendly employees are responsible for a great deal of your repeat business, and should be offered special incentives to keep them working for you and keep the reputation of your restaurant up to your customer's good standards.