The industry
Walk down any high street in the country and you can be almost certain of finding at least a small selection of restaurants. Not only has eating out become a staple leisure activity for the UK population, but it’s also one of the most popular dream businesses. Individuals who ordinarily wouldn’t have the slightest inclination to run their own business are drawn to the glamour of the restaurant trade, either through a passion for cooking or a love of playing the host.
The reality of running a restaurant is a harsh one however. Make no mistake, it’s extremely hard work. And with so much competition around, if you don’t get the founding principles spot on, you’ll struggle. But if the idea of being surrounded by food, providing excellent service, seeing people enjoy themselves and being at the heart of the community is your idea of heaven, then the restaurant trade could be just right for you.
Research from the British Hospitality Association (BHA) states that, in 2009, there were 27,502 restaurants across the UK, 350 more than in 2008; furthermore, there were 31,000 fast food outlets. Given that many other retail sectors have been ravaged by recession, these figures indicate that the ‘eat out’ industry remains robust and widely popular.
Of the 27,500 restaurants trading in 2009, almost 10,900 (42%), were classed by the BHA as ‘ethnic’ restaurants; this predominantly refers to cuisine from the Middle East, central and South America, Asia and the Indian sub-continent. Indian and Chinese food remains hugely popular; indeed these two cuisines accounted for a quarter of all new restaurants opened in 2007.
So what’s this industry worth? The British Hospitality Association estimates the number of meals served in UK restaurants to have reached a total value of £716m in 2009; for fast food outlets, the figure passed £2bn.
So while there are a few words of caution to be taken from these statistics, there’s also the suggestion that it’s a big enough pie for you to have a small slice.
For a more detailed guide to starting a restaurant check out the Startups.co.uk book Starting Your Own Restaurant, available from Crimson Publishing and Amazon
Who is it suited to?
No doubt you have eaten out yourself and have your own ideas about what makes a good restaurant, whether it’s the food or the atmosphere. However, being a great cook doesn’t qualify you to run a successful restaurant. Celebrity chefs such as Gordon Ramsay highlight all too well just how many dream projects can run into trouble. Sitting in a restaurant dining room is a whole different experience to working behind the scenes.
Ian McKerracher, former chief executive of the National Restaurant Association, says many people fall into that trap. “People tend to go with what they enjoy rather than what there are the right resources for. Too many people say ‘I know what I like’ when it’s rather more a question of marketing and the quality of your product.”
In fact, it is less about being front of house and more about knowing the other face of the industry. That’s what Steve Cox, owner of fashionable London restaurant Prego, did: “Work in one first and get experience, both back and front of house. Wash the pots. I’m a chef by trade and I came through the mill and nobody can pull the wool over my eyes.”
If you think you’re escaping the ‘9 to 5’ or ‘the rate race’, think again. Forget the idyllic movie representations of business people enjoying long lunches, days on the golf course or at the beauty spa. Gordon Ramsay is probably the most successful, if not the most famous restaurateur, in the UK; indeed it is thought that he is currently worth around £76m. But he works incredibly hard to maintain that level of success; the pace doesn’t slow down just because he ‘made it’ in the restaurant industry.
For at least the first two to three years, put the holidays on hold and expect to work longer and harder than you are now. Expect to make sacrifices with family and friends who, no matter how much you explain, won’t understand why you’ve turned into an obsessed bore who ruins dinner parties and nights out with obsessive rants on the price of asparagus or the worsening quality in cuts of meat.
The average price of a restaurant meal is now between £12 and £20, and these figures continue to escalate in accordance with monetary inflation. So it’s important that you value your product properly, and don’t under-sell yourself; many customers actually prefer to eat in more expensive restaurants because of the feeling of class and exclusivity they convey.
Who is it suited to?
No doubt you have eaten out yourself and have your own ideas about what makes a good restaurant, whether it’s the food or the atmosphere. However, being a great cook doesn’t qualify you to run a successful restaurant. Celebrity chefs such as Gordon Ramsay highlight all too well just how many dream projects can run into trouble. Sitting in a restaurant dining room is a whole different experience to working behind the scenes.
Ian McKerracher, former chief executive of the National Restaurant Association, says many people fall into that trap. “People tend to go with what they enjoy rather than what there are the right resources for. Too many people say ‘I know what I like’ when it’s rather more a question of marketing and the quality of your product.”
In fact, it is less about being front of house and more about knowing the other face of the industry. That’s what Steve Cox, owner of fashionable London restaurant Prego, did: “Work in one first and get experience, both back and front of house. Wash the pots. I’m a chef by trade and I came through the mill and nobody can pull the wool over my eyes.”
If you think you’re escaping the ‘9 to 5’ or ‘the rate race’, think again. Forget the idyllic movie representations of business people enjoying long lunches, days on the golf course or at the beauty spa. Gordon Ramsay is probably the most successful, if not the most famous restaurateur, in the UK; indeed it is thought that he is currently worth around £76m. But he works incredibly hard to maintain that level of success; the pace doesn’t slow down just because he ‘made it’ in the restaurant industry.
For at least the first two to three years, put the holidays on hold and expect to work longer and harder than you are now. Expect to make sacrifices with family and friends who, no matter how much you explain, won’t understand why you’ve turned into an obsessed bore who ruins dinner parties and nights out with obsessive rants on the price of asparagus or the worsening quality in cuts of meat.
The average price of a restaurant meal is now between £12 and £20, and these figures continue to escalate in accordance with monetary inflation. So it’s important that you value your product properly, and don’t under-sell yourself; many customers actually prefer to eat in more expensive restaurants because of the feeling of class and exclusivity they convey.
For a more detailed guide to starting a restaurant check out the Startups.co.uk book Starting Your Own Restaurant, available from Crimson Publishing and Amazon
Rules and regulations
Owning a restaurant means there are a mountain of regulations you must abide by. Your kitchens must adhere to strict rules concerning hygiene. The Food Standards Agency (FSA) is the body appointed by government responsible for all food safety standards.
The organisation can provide you with advice on all food hygiene matters and has a publication called ‘Safer Food, Better Business’ which will help you comply with the law and make your premises safe for the public. The publication covers key areas on serving food including contamination, cleaning, chilling, cooking, management and keeping a food diary. To order this book contact the FSA on 0845 606 0667 or email foodstandards@ecgroup.uk.com
Currently, there is no law that states you must undertake formal training to open a restaurant. However, you must ensure that you and anyone else working with food at your business has the appropriate level of training and/or supervision to do their job properly. The legal responsibility lies with the business owner, so make sure you have all the information you need.
You are also required to register your premises with the environmental health service at your local authority at least 28 days before the first meals are served, and if you’re planning to sell or supply alcohol you will need to apply for a licence.
Food hygiene law is rigorous and anyone setting up in business in catering will have to think very carefully about where they set up and what equipment they buy. Remember that environmental health officers make regular inspections of food businesses and have the power of closure if they think you are not up to scratch.
Mechanical and electrical ventilation systems are compulsory. Refrigeration systems need to be digitally controlled. Steve Cox explains: “You can’t just buy a couple of old domestic fridges. It’s really what you can’t see in the restaurant that actually costs the most.”
In addition, the amount of electrical and gas powered equipment required by most restaurants means it’s easy to fall foul of health and safety at laws unless you impose strict controls. The building and wiring must be safe and your kitchen must be a reasonable size to cope with the restaurant.
You also need to make sure your premises has the right commercial classification. Restaurants need an A3 classification, which is often the hardest classification to obtain. You will find this also has a bearing on the rental or purchase value of your chosen premises. Simply put, premises with the A3 classification cost more.
Up until 2005 the A3 classification covered all food and drink establishments including restaurants, bars, pubs and take-aways. However, in April 2005 the classification was split and is now as follows:
A3 – Restaurants, snack bars and cafés
A4 – pubs and bars
A5 – take-aways
This means if you ever decided to change your A3 classified premises from a restaurant to a pub or take-away you would need planning consent. However, changes from pub or take-away to restaurant do not need prior consent as long as the permitted development rights have not been excluded in relation to your specific property.
For a more detailed guide to starting a restaurant check out the Startups.co.uk book Starting Your Own Restaurant, available from Crimson Publishing and Amazon
How much does it cost?
There are some basic costs that will apply to almost any restaurant. Clearly your shopping list will include tables, chairs, cutlery and crockery, kitchen and cooking equipment, toilet facilities and ventilation.
For his restaurant, which seats 40 people, Stephane Luiggi, owner of the French Living restaurant in Nottingham spent £5000 on kitchen equipment, some of which was second hand, and £5000 on tables and chairs.
As well as ovens and fridges, your kitchen equipment will include dishwashers, storage units, scales and don’t forget the all-important fly killers. The sky’s the limit in terms of equipment costs. It really depends on the size and scope of your restaurant. One way of saving money is to lease some of the equipment rather than buying. This can free up valuable capital during the early stages which can be better spent on marketing and recruitment.
Property costs will vary greatly according to where you are located, not just in terms of regions, but also the type of property you want. The high street will obviously cost more than a residential area. However, you may need the footfall that a prominent position provides in order to achieve a high enough turnover. All this will have to be weighed up before you make a decision on how much you should spend on property.
Aside from property, staff will be of your biggest fixed cost. If your establishment is open seven days a week, you’ll need more than one chef. The average head chef commands a salary of between £20 and 30,000 , while full time waiting staff salaries will start at around £15,000. Steve Cox warns that staff shortages in this field are critical; at one stage, he even had to advertise in Australia and New Zealand to attract good staff.
For a more detailed guide to starting a restaurant check out the Startups.co.uk book Starting Your Own Restaurant, available from Crimson Publishing and Amazon
Useful contacts
British Hospitality Association
Tel: 0845 800 7744
www.bha.org.uk
Catering Equipment Suppliers' Association
Tel: 020 7793 3030
www.cesa.org.uk
Food Standards Agency
Tel: 020 7276 8829
www.food.gov.uk
For a more detailed guide to starting a restaurant check out the Startups.co.uk book Starting Your Own Restaurant, available from Crimson Publishing and Amazon