How I Would Start A Restaurant Business

If you had to open a restaurant tomorrow, where would you even start?

Most people jump straight to the menu, the name, the Instagram account. But the

restaurants that survive the first 3 years, they're making a completely different set of decisions in a completely different order. And that

sequence matters. So today, here's how to start a restaurant business. The

concept choice that determines your entire operating plan. The funding

structure that keeps you alive long enough to stabilize. The operations that prevent you from bleeding cash on day one and the first 90 days where you

either build momentum or fall apart.

Framing the concept. You'll hear that 90% of restaurants fail in the first year. That number gets repeated

year. That number gets repeated everywhere. But when you look at the

everywhere. But when you look at the data, something doesn't add up. Data

Essentials 2025 analysis shows firstear closures closer to.9%.

Other studies using Bureau of Labor Statistics data report numbers around 17%. The range is huge. So what's

17%. The range is huge. So what's

actually happening? Restaurants don't

fail because of bad luck. They fail

because of cash flow problems, cost overruns, and concepts that don't fit their market. All three of those fixable

their market. All three of those fixable if you know what you're doing. Before

you spend a single dollar, you need to answer one question. What type of restaurant are you opening? And I don't mean Mexican food or Italian. Fast

casual, full service sitdown, food truck, or ghost kitchen. That choice

isn't just a label. It's your entire operating plan. Say you're opening a

operating plan. Say you're opening a fast casual taco concept in East Austin.

That decision instantly tells you the startup budget sits somewhere between 95,000 and 400,000. You need a smaller front of house staff because customers

order at a counter. Your target check average is $12 to $18 per person. You're

competing with torches and local takiieras on speed and consistency. Now

compare that to opening a fullervice fine dining spot downtown. Your startup

budget jumps to $750,000 or more. You need full weight staff

or more. You need full weight staff silier and tableside service. Your

target check average is $60 to $120 per person. You're competing on experience,

person. You're competing on experience, not speed. Two completely different

not speed. Two completely different restaurants, two completely different businesses. Most people go in with the

businesses. Most people go in with the idea they'll open a restaurant that serves everything. Tacos, burgers,

serves everything. Tacos, burgers, pasta, so they appeal to everyone. But

vague concepts lead to scattered execution. You're ordering from too many

execution. You're ordering from too many suppliers. Your kitchen staff can't

suppliers. Your kitchen staff can't master anything. Your customers don't

master anything. Your customers don't know what you're known for. So, if

you're opening that East Austin taco spot, pick one thing and do it better than anyone else. Just like Franklin Barbecue focused on brisket, just like

Torches built an empire on tacos with a signature style. But concept clarity is

signature style. But concept clarity is just the first decision. The next one determines whether you survive long enough to open the doors. Building the

foundation. Let's talk about the money.

If you're opening that fast casual taco spot, you're looking at somewhere between $95,000 and $400,000 to get the doors open. And

here's exactly where that money goes.

The lease in Austin, commercial rent for restaurant space runs around 26 to $32 per square foot annually, higher if you're in downtown or the domain. You'll

also need to put down a deposit, usually 3 to 6 months of rent upfront. Then

there's tenants improvements. That's

plumbing, electrical, the commercial hood, and the fire suppression system.

Kitchen equipment, ranges, fryers, refrigeration, prep tables. A commercial

kitchen setup alone can run $50,000 to $150,000 depending on your concept. Additionally,

your point of sale system, initial food inventory, staff payroll before you even open, permits and inspections through Austin Public Health, insurance, and marketing for your soft launch. And

here's what most people forget. You need

a cash cushion. The goal is 12 to 18 months of runway. That means if something goes wrong, a delayed permit, a slower than expected start, a piece of

equipment breaks, you're not immediately forced to close. So, how do you fund this? Most operators use a mix personal

this? Most operators use a mix personal savings, bringing in partners, and SBA loans like the 7A or 504 programs for larger purchases. SBA loans require

larger purchases. SBA loans require documentation. They want to see your

documentation. They want to see your business plan, your financial projections, and proof you've thought this through. One more thing, you need

this through. One more thing, you need to track your monthly burn rate. That's

your fixed costs, rent, insurance, loan payments, plus payroll, plus your variable costs like food and utilities.

If your burn rate is $25,000 a month and you have $300,000 in the bank, you've got 12 months. The restaurants that close early aren't victims of bad timing. They're victims of running out

timing. They're victims of running out of cash before they've had time to stabilize. Which brings us to the next

stabilize. Which brings us to the next problem. Once the doors open, how do you

problem. Once the doors open, how do you make sure the cash keeps flowing?

Operations and people. Here's what

nobody tells you. The food is only half the battle. The other half is

the battle. The other half is operations. Every successful restaurant

operations. Every successful restaurant runs on systems. They're called SOPs, standard operating procedures. An SOP is just a documented process. How do you

prep ingredients in the morning? What's

the exact portion size for each plate?

How do you close down the kitchen at night? When you write these down,

night? When you write these down, quality stays consistent and new staff can learn fast. Because here's the staffing reality. Restaurant turnover is

staffing reality. Restaurant turnover is brutal. Industry averages sit around 70%

brutal. Industry averages sit around 70% to 80% annually. In quick service, it can be higher. That means you're constantly hiring and training. So, what

do you do? You pay competitively. You

crossrain your staff. So if someone calls out, you're not scrambling. And

you document everything, so training doesn't take weeks. Labor costs

typically run 25% to 30% of revenue. In

a fast casual model, you're saving on front of house staff because customers order at a counter, but you still need reliable back of house people who can execute under pressure. Now, let's talk

suppliers. Get two suppliers for every

suppliers. Get two suppliers for every major category. produce, meat, dry

major category. produce, meat, dry goods. You want a primary and a backup

goods. You want a primary and a backup because if your main distributor runs out of avocados the week you're promoting a loaded guac taco, you need

another option immediately. In Austin,

that might mean working with a local produce distributor and keeping a relationship with a regional wholesaler.

You're ordering weekly, sometimes twice a week, for fresh items. Smooth systems beat flashy menus. The restaurants that survive are the ones where the kitchen

can handle a rush without falling apart.

Where new hires can step in and perform and where ingredient flow is predictable. But even the best

predictable. But even the best operations mean nothing if your menu economics don't work. Menu strategy.

Let's talk about your menu. Smaller is

better. Most new restaurant owners go in with 40 items on the menu to appeal to everyone. But here's what actually

everyone. But here's what actually happens. Your food cost spikes because

happens. Your food cost spikes because you're ordering ingredients that barely get used. Your kitchen slows down

get used. Your kitchen slows down because of staff who are juggling too many recipes. And the quality suffers.

many recipes. And the quality suffers.

Compare that to Franklin Barbecue. They

serve brisket, ribs, pulled pork, sausage, and a handful of sides. That's

it. And people wait in line for hours or look at torches. They built a multilocation empire on a focused taco menu with a signature style. So, here's

how to design the menu for that East Austin taco spot. Five to seven core tacos, maybe a breakfast taco section and a lunch section. A couple of sides,

one or two rotating specials to test new ideas. Each item has a target food cost,

ideas. Each item has a target food cost, and the goal is 28% to 35%. Pick

ingredients that overlap so you're not ordering 50 different items. If you use black beans and three tacos, you're buying black beans in bulk and your per

unit cost drops. Now, let me show you two quick calculations. First, food

cost. You're selling a loaded breakfast taco for $8. Industry standard says your food cost should be around 30% of that

price. So, $8 time 30% equals $2.40. 40.

price. So, $8 time 30% equals $2.40. 40.

That's how much the eggs, tortilla, cheese, and salsa should cost you. Why

does this matter? Because that remaining $5.60 has to cover labor, rent, utilities, and profit. If your ingredients cost $4

profit. If your ingredients cost $4 instead of $2.40, you just lost most of your margin.

Second calculation, the delivery app reality. That same $8 taco gets ordered

reality. That same $8 taco gets ordered through Door Dash. The platform charges you a commission, typically 15% to 30%,

let's say 25%. That's $2 gone immediately. Now you're working with $6.

immediately. Now you're working with $6.

Your food cost is still $2.40.

So you've got $3.60 left to pay labor, rent, and make a profit. This is why restaurants can have

profit. This is why restaurants can have massive delivery volume and still lose money. The math just doesn't work unless

money. The math just doesn't work unless you either raise your prices on delivery apps or tightly control your costs. A

focused menu isn't just about controlling costs. Focused menus are

controlling costs. Focused menus are faster to execute, easier to train staff on, and they give customers a clear reason to come to you. But a great menu

means nothing if no one knows you exist.

Creating buzz. The restaurant's almost ready. You've got your concept, your

ready. You've got your concept, your money, your systems, your menu. Now, how

do you actually get customers through the door? You don't need a massive ad

the door? You don't need a massive ad budget. You need to be smart about where

budget. You need to be smart about where your customers are looking. Local

collaborations in Austin. That means

partnering with local breweries, setting up farmers markets, and doing pop-ups at food trailer parks. Short form video.

Surveys show a huge share of younger diners discover restaurants through Tik Tok or Instagram reels. Someone posts a 15-second video of your breakfast taco

getting assembled. it goes semiviral and

getting assembled. it goes semiviral and suddenly you've got a line at 8 a.m. The

catch, you need to be ready for that surge. If your systems aren't tight and

surge. If your systems aren't tight and you can't handle the volume, those customers don't come back. Delivery

apps, Door Dash, Uber Eats, they give you the reach, but remember those economics we just talked about? They're

taking 15% to 30% per order. So, you use them strategically. Community building.

them strategically. Community building.

This is the long game. You're sponsoring

a local soccer team. You're

participating in Austin food festivals.

And you're building relationships with food bloggers and local press. Marketing

isn't about advertising. It's about

telling a story that makes people want to be a part of what you're building.

But all the marketing in the world won't save you if you mess up the launch.

First 90 days, you're 6 weeks from opening. Here's exactly what that

opening. Here's exactly what that timeline looks like. Pre-opening phase,

you're finalizing equipment orders, securing your lease, applying for permits through Austin Public Health, and hiring your core team, your chef or head cook, and your manager. You're

running a soft open where you invite friends, family, maybe some local food writers. No public promotion yet. You're

writers. No public promotion yet. You're

just testing. During that soft open, you're watching everything. How long

does each plate take? Are portions

consistent? What's the complaint rate?

You're adjusting recipes, tweaking your prep workflow, and making sure your staff can handle the pressure. Week one

of the official launch, you keep the menu tight. You're not running

menu tight. You're not running promotions yet. You're focused on

promotions yet. You're focused on stability. Can you get orders out in

stability. Can you get orders out in under 10 minutes? Are customers coming back? Months 1 to three. This is where

back? Months 1 to three. This is where you're making small daily adjustments that compound into major improvements.

Maybe ticket times are too slow, so you reorganize your kitchen layout. Maybe

you're running out of a popular item every Saturday, so you adjust your ordering cadence. You're tracking repeat

ordering cadence. You're tracking repeat customers through your POSOS system.

You're locking in your supplier rhythm, and you're not chasing every marketing idea. The restaurants that survive this

idea. The restaurants that survive this phase resist the urge to do too much too fast. They fix the fundamentals first.

fast. They fix the fundamentals first.

They build a base of regulars, and then they scale. But how do you know if

they scale. But how do you know if you're actually on track? Measuring

success. Here are the numbers you track every week. Food cost percentage. You're

every week. Food cost percentage. You're

aiming for 28 to 35%. If it's creeping higher, something's wrong. Maybe portion

sizes are inconsistent. Maybe you're

over orderering and food is spoiling.

Labor percentage. Target varies by concept, but usually 25 to 35%. Prime

cost, that's food cost plus labor cost.

This should be under 60% if possible.

Covers per seat. How many customers are you serving per seat per day? This tells

you if your space is being used efficiently. Repeat rate. What

efficiently. Repeat rate. What

percentage of customers come back? This

is your loyalty indicator. Here's what

you ignore. Social media follower count.

Instagram likes don't pay your rent.

They only matter if they're converting to actual visits and orders. The

restaurants that fail are often tracking the wrong things. They're celebrating

viral posts while their food costs are at 45% and they're bleeding cash.

Starting a restaurant isn't about luck.

It's about making the right decisions in the right sequence. If you're opening that East Austin taco spot, this is the playbook. Choose one concept and execute

playbook. Choose one concept and execute it relentlessly. Build 12 to 18 months

it relentlessly. Build 12 to 18 months of runway. Lock in systems before

of runway. Lock in systems before opening. keep the menu focused and spend

opening. keep the menu focused and spend the first 90 days stabilizing instead of scaling. The restaurants that make it

scaling. The restaurants that make it aren't doing anything revolutionary.

They're just avoiding the mistakes that kill everyone else. So, here's the question. If you had $100,000 and had to

question. If you had $100,000 and had to open a restaurant tomorrow, what would you choose? Drop your answer in the

you choose? Drop your answer in the comments. If this helped, hit the like

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