Fast casual restaurants are gaining popularity as an affordable option for dining out while still offering the quality and variety one can expect from a dine-in restaurant. Their comfortable atmosphere and affordable but high-quality food options make it a top choice among younger adults and families.
If you’re interested in joining the restaurant business, fast-casual restaurants are a profitable option. Fast-casual restaurants are more likely to have lower starting costs, lower food costs, and fewer employees than high-end restaurants.
Below we’ve made you a guide on opening your fast-casual restaurant and starting your restaurant off on the right foot.
What is a Fast Casual Restaurant?
“Fast-casual” is a newer term that describes restaurants with more of a sit-down, casual atmosphere while also offering food typically associated with fast food. Fast-casual restaurants are usually independent restaurants or smaller franchises instead of big-name fast food chains.
Fast-food restaurants are more likely to focus on speed and offer options like a drive-through, whereas a fast-casual restaurant prioritizes inside seating and food quality. Fast-casual restaurants also tend to have more diverse menu options beyond the traditional burger and fries found in fast-food joints.
Create a Business Plan
The first step to any successful business is to create a business plan. Business plans help you, as the owner, prepare for the day-to-day struggles of your business and develop goals for a successful future.
A business plan will also help you build capital. Most loan sources, such as banks and venture capitalists, will require one before giving you a loan.
A business plan should include the following:
- Executive summary
- Restaurant description
- Menu
- Management, employee, and ownership structure
- Marketing strategies and competition analysis
- Financial projections
Find your Target Audience
Once you determine some of the details of your restaurant, you’ll have a better idea of who your target audience will be. Finding a target market can help you focus your marketing strategies efficiently and maximize sales.
Fast-casual restaurants most commonly attract young adults and parents as their primary audience. Adults in their 20s and 30s spend more on food than their older counterparts and are more likely to eat out throughout the month. Parents and families are also frequent consumers of fast-casual restaurants as a convenient option for their hectic lives. When marketing to parents, you can expect a focus on health and convenience for their food choices.
Choose Your Location
Having a clear picture of your target audience and a business plan means you can move on to the next step, choosing a location.
Your target audience can help you determine which areas of town will have the clientele you want, while your business plan can help you determine your costs.
Pay attention to factors like affordability, foot traffic, and parking accessibility when selecting a location to get the most bang for your buck.
Create a Brand Identity
Developing a brand identity is a crucial part of running a successful business. Creating a brand that resonates with your clientele. A good brand identity will help your business become easily recognizable to your audience and make your restaurant a default for your target market.
Your brand determines the style of your restaurant, informing choices such as employee training, restaurant decor, and menu design. For example, fast casual restaurants often benefit from a focal point for their menus, such as pizza or burgers.
Consider your brand identity and your menu focal point when selecting colors, fonts, and structure on your menu and in your restaurant. To create a menu without breaking the bank, choose a subscription based option like MustHaveMenus. MustHaveMenus also offers a selection of their templates for free, making menu design simple and affordable.
Secure your Finances
Opening a brick-and-mortar business is an expensive endeavor. RestaurantOwner.com found the median cost of opening a restaurant to be $275,000. Here are some of the most likely expenses you should prepare for when creating your budget and raising capital.
Expected Costs
Professional Fees: Starting a business requires fees all by itself. You’ll need to pay to set up an LLC, rent a space, acquire necessary licenses, and hire professionals like lawyers or accountants to help you through the process.
Building Renovation: Your leased location will likely require a little bit of renovation before it’s ready to update. You’ll have to go through and check the plumbing, electrical, and general construction. You’re better off if your location was already a restaurant. Niche-specific needs like hoods for your stoves will likely already be installed.
Restaurant Equipment: If you don’t plan on buying the building for your restaurant, one of the most expensive upfront costs you’ll likely have is restaurant equipment. Your best budget option is to look for gently used equipment from restaurants that go out of business instead of buying the appliances brand new.
Food Costs: Develop a relationship with your vendors to get the best food prices. Food costs will be a massive part of your monthly expenses, so finding local farmers to source from can help keep food costs low and protect your bottom line.
Staff Costs: Staff is a necessary expense for a restaurant to run smoothly. Here are a few different types of employees you can expect to hire:
- Head chef: This person will keep your kitchen running smoothly. They’ll be in charge of food production, kitchen staff training, and dish development
- Line Cooks: Your kitchen team will prepare the dishes each day.
- Waitstaff or food runners: Food runners are the more likely pick for fast-casual restaurants. Instead of a waitstaff, food runners will bring orders out to diners and clean the tables without the extra service expected of a waitstaff.
- Counter staff: These employees man the cash register. They’ll be taking orders and handling payments from clientele.
Signs and Advertisement: Before your grand opening, you’ll want to develop a presence in your area. Begin advertising early and get your outdoor signage set up in advance. You may also want to budget for any grand opening events you’ll want to hold.
Reserve Capital: The general rule of thumb is that a business doesn’t make money at all in its first year of operation. You need to have enough reserves to keep up with recurring expenses, paying your staff, possible repairs, and what you’ll need to live off for the year.
Gaining Capital
Three main methods for getting the capital necessary to start a restaurant are self-funding, investment funding, and franchising.
Self-funding: Business owners use their savings to fund their restaurants. This method is considered very risky and poses a lot of complications. A business can expect not to make any money in the first year. With that in mind, as the business owner, you would have to save enough to cover upfront costs like rent, equipment, supplies, legal fees, licenses, and paying staff for a year while still having enough to live off without paying yourself.
This method requires a lot of financial discipline and is not for everyone, but it does have a positive side. Self-funded businesses are entirely independent. You are your own boss without having to report to investors down the line.
Investment Funding: Investment funding uses outside funds from investors or a bank in addition to the owner’s capital. This option is going to be the more realistic choice for most people. With a solid business plan, you can get much more from investors or a bank than you can easily save. The downside for some entrepreneurs is investors often want to be involved in large business decisions. Having someone to answer to can feel counterintuitive when your goal is to be your own boss.
Create an Effective Marketing Plan
Marketing for your business is essential for success. When marketing your restaurant, you’ll want to explore your options. Find where your target audience is active and how best to get their attention.
Social Media Marketing: Advertising for your restaurant on social media websites like Instagram is the easiest way to catch your audience’s attention. The visual nature of these platforms lends itself well to restaurant ads, and social media allows your brand identity to thrive. In addition, you can use social media for advertising special deals or link to a digital menu (like these options from MustHaveMenus) for consumers to check out.
Email Marketing: Emails and newsletters may seem old school, but they can work wonders for your business. Email marketing works best with customer retention rather than attracting new clients.
Reviews: Seek out positive reviews for your restaurant to increase your online presence. You can put links to popular review sites like Google or Yelp on your digital content, such as social media or newsletters, or you can put up a poster or a QR code in your restaurant.Loyalty programs: Keep your customers coming back with a rewards program. Loyalty programs encourage repeat customers by offering them promotions and special deals for their regular patronage. Use a digital system or a punch card to keep track of visits and set up discounts for your regular clientele.