Cost Of Starting A Restaurant Business In Nigeria

Starting a restaurant business in Nigeria can be very fulfilling. The restaurant business also known as the eatery business can be very difficult to maintain especially during the first year of getting started. When starting a restaurant business there are many things to put into consideration. Capital, business plan, location, and marketing plans are some of the considerations that should help you prepare ahead of time. Seeing your business successful is every joy of a business owner. However, with the right planning and finance, you can own a successful restaurant in Nigeria. You can keep your business at a great start if only you plan out your strategies carefully. A restaurant business is a lucrative business to start in Nigeria. And there is still a large number of households that would prefer eating at restaurants most especially in the morning and in the afternoon because of the nature of their work. This is to show that there are a lot of profits to make daily. In this article, you will know the basic information needed to start up a restaurant. How To Open A Restaurant In Nigeria 1. Learn how to cook different varieties of food. This is the starting point. Nevertheless, you can learn from a catering school or a caterer. 2. Come Up With A Business Plan A plan mostly is a guide away from failure. A business plan guides you through the journey of knowing and identifying relevant, irrelevant, and excesses. After all, growing a business is a process, it is never an immediate achievement. Therefore, a good plan from the start gives you clear visions, confidence, and focus. There are two methods of writing your business plan, the traditional business plan method, and the lean business plan. The traditional business plan: This is mostly used or needed by a detailed business owner or investor, this is mostly the best option as it is detailed. The traditional business plan contains: √ Business name √ Your mission statement √ Your services √ Your business leadership team √ Your employees √ Where your business is located. √ Your Target market √ Your Market Analysis √ Your SWOT (Strengths Weaknesses Oppositions Threats) Analysis √ Your Organisation and management structure with a chart if possible √ Marketing and sales strategy √ Funding requirements and duration √ Business yielding Potentials √ Credit Histories √ Permits that would be required √ Licenses that would be required The lean business plan method: This is a direct-to-the-point type of business plan, it contains: √ Mission Statement √ Major Partnerships √ Resources that would be used to create services √ SWOT (Strength Weaknesses Oppositions Threats) Analysis √ Sales and Marketing Strategy √ Target Market √ Revenue Streams 3. Conduct A Market Research You must understand the system of your market because you will be needing it. First and foremost, understanding your market gives you a great insight into what the value you are providing is worth, it's target and the competition. Additionally, you can conduct market research on the strength and weaknesses of other restaurants, what you are going to do differently or what you are going to improve on to provide a better service. What you need to make the difference or improvements, what it will cost you to startup. During your market analysis, you take a SWOT analysis of your business. 4. Improve Your Business Plan With the knowledge from your market analysis, you improve your business plan, let go of the excesses and add to the plan the necessities to be the shift in the market. This stage in starting your restaurant business can be regarded as the final plan stage. At this point, a clearer picture of your business and a modification of your mission statement is done. So as you go about putting things in order, you have a clear perception of what you are doing. 5. Raise Capital For Your Business As there are several means of raising capital, a lot of negative information is out there about taking a loan. Taking a loan depends on the business plan and structure, if you are confident enough about the potential of your business, a loan is no bad idea. LOAN: Loan is a certain amount of money lent to you by the bank over years and the interest rate and monthly payments are fixed in terms. Other ways to raise capital include: √ Personal Savings: The money you have put aside to start a business. This is not gotten from anyone else but you. √ Selling stock of your business: This refers to liquidating your asset for money. Your investor buys the share and gives you cash, most times it is advisable you keep over 50% of your stock as the investor has the exclusive right to re-sell his share and that might affect your ownership of your business. The highest shareholder is the owner of the business. These are the things to consider when starting a business. √ Partnership: You partner with someone or an organization of like minds. Where the other party who contributes to the capital is given a percentage. In partnership, they share in the profit as well as the loss which would mostly be aligned to their contribution of capital and overall growth of the business. √ Sponsorship: You can write a business proposal to individuals, organizations, or companies. If validated and approved, these individuals, organizations, and companies will raise the capital. In this case, they may not be interested in any percentage of the profit but might be requiring a steady report on the growth process. On the other hand, they may require a given percentage (most times a little percentage. for Example, Non-governmental organizations) but will not take part in the loss of the business. √ Friends and Family: This is contributions from close relatives and friends. it could be a place to start, it could be facilities but mostly cash. The business owes no obligations to these persons. 6. Choose A Business Structure In starting a restaurant business, having done the fore analysis, the next consideration is the structure of your business if it will be a sole proprietorship, partnership, or limited liability company. While choosing a business structure, you must consider the following: • The tax and legal standing: Tax is a mandatory contribution, levied on business owners by the government. It could be at a national level or state level. It can also be on both levels. • Cost of start-up From your market analysis, having explored the possible ways of raising an income and the potential of your business, you would know the right business structure to erect. • Profit sharing: It is just in sole proprietorship that you do not share the profit and loss of the business. In every other business structure, profit and loss are shared based on the agreement of both parties. 7. Choose A Business Name Your business name is like your gateway to investors and customers. So in picking a name you should know and consider that: 1. It is almost like the full essence of your business in one word or two, so keep it simple and intentional. 2. It is your business identity, it should therefore be in alignment with your services provided or the satisfaction intended. 3. Business name should not take a lot of energy to pronounce or needs special attention to memorize. It should ring a bell such that even a layman can relate with and relate to the name. 4. Trademark issues should be put into consideration while choosing a business name. 5. In as much as it should be simple, make your business name unique. If possible, a name not found in the dictionary. 8. Register Your Business A registered business gives you legal standing. Your registration is your proof of authenticity. A registered business is recognized as a separate entity on its own, separate from the owner. It has its rights, values and identity recognized. Reasons To Register Your Restaurant Business: √ Protection from Legal Authorities: When your business is registered, your business name is protected and cannot be used by any other business. The authorities protect and preserve your business name and slogan. √ Business Account: Having a business account is very important for every business. A business that is not registered cannot get a corporate account and this is not good for possible investments and business transactions. Hence, using a personal account in running your business limits the potential of your business. √ Business Trips and Conferences Outside Your Country: A registered business makes it possible for you to travel outside the shores of your country for business deals and business transactions. Only registered businesses can gain international recognition thus you can only leave the country for business purposes when your business is registered. √ Hiring Employees: rules and regulations are guiding every business. When a business is registered, it makes the rules more valid, this applies also to the hiring, paying, and maintenance of employees. It is easier for a registered business to hire employees as the individuals know that they will be properly protected and are operating under controlled management. This breeds the best from both the employees and the employer. √ Continuity: A registered business name assures you of a lasting legacy. Even after the Business owner is no more, the business can still run on its own. it does not die with the owner. Therefore, registering your business is as good a solid foundation as Posterity. √ Getting Loans: Banks and other corporate bodies give loans to Registered businesses. When your business is not registered and a loan is applied, there will be an alarm for investigation of fraud. This makes the process longer than necessary as you would have to prove beyond doubt that you are genuine and most times not get the loan until you are registered. √ Reputation:: A registered business is trusted by your customers. Your registered business entails permanence and shows effective management. This builds confidence in your investors and patronizers alike. √ Incorporation: When your business is registered it will now be recognized by the corporate bodies (The body responsible for the registration of businesses). This recognition gives your business a legal stand and is an advantage against other restaurants that are not registered. √ Legal protection from risks: Your Registered business is an entity of its own. So if your business runs into debt or liability of any sort with the bank, so far you did not guarantee such debt on a personal basis, nothing related to you would be affected. it is outrightly that of the business to deal with. √ Financing: Most investors will not put their money in a business that is not registered. A non-registered business has so many disadvantages in this regard as it can not be regarded as a separate entity. Therefore many investors will not accept it as having a legal and working structure that can be accountable for their money. So, a registered business keeps you open to opportunities for investment and growth. 9. Find A Good Location Location is paramount. Restaurants has its customers. However, you can be offering the right services but with the wrong people, and this is mostly an effect of bad location and all efforts on the plan and structure will be a waste. In choosing a location, your target market is majorly considered. You do not run a restaurant business in an area where it is not needed but in an environment where it can be accessed. The economic policy of the environment too should be considered. 10. Open A Business Account We do not mix pleasure with business as much as we do not mix personal affairs with business. A business account is vital and different from your account. Most business accounts require multiple signatures thus relieving the business owner of the stress of every aspect of management, business accounts also generate income as interest. Having a business account makes it easy for you to prepare taxes and also makes it easy to keep a proper book record of your expenses and your income. A business account presents the management as organized and effective to investors. This can offer you credibility. 11. Obtain Necessary Licenses And Permits Registering your business is not the only guarantee you need to kick off. As a result, restaurants have their license or permit of some sort and this is dependent on your location. Business permits regulate the structure and safety of the business community. 12. Get All The Needed Equipment, Tools, And Facilities Ready Starting a restaurant business with borrowed facilities can work perfectly fine till you get yours, depending on your budget. Getting all the facilities at once might not work and should not stop you from starting if you can borrow. Depending on the size of the restaurants, you will need the right equipment for your business. Here is the major equipment that you will need for your restaurant business: Kitchen equipment like mixers, sinks, refrigerators, utensils, slicer, ranges, ovens, etc. Then tables, chairs, fans, and other necessary equipment. 13. Apply For Business Insurance For unforeseen loss and risk management, you will be needing business insurance. Business insurance protects from theft, fire, medical expenses, compensation towards workers, etc. Find a good licensed insurance agency and they would help you articulate the best insurance policy for your business. 14. Employ Staff A general saying "If you want to go fast, go alone but if you want to go far, go with someone". A very important aspect of a business is employing staff. A properly trained one who have the knowledge of restaurant services will do a greater good. Also, good training for a newbie will promise loyalty to your business. You can not raise your business structure and do all the work and produce high efficiency, even if you do, it will take a longer time. The time that would have accomplished one or two more tasks. So, no department or aspect of your business suffers, a staff is a must. If it is a small-scale business, basically two or three for a start is enough. 15. Promote And Market Your Business We are a most fortunate generation with the internet, where almost everything is possible including Promoting and marketing your business. Key effective ways are: Make Videos: The selling means of advertising your services is video making. The video first should be short but detailed. If you cannot deal with the creative, you hire the services of a content creator an accurate one at that. Make Reviews: You can render your service to some persons for free or a little token, and get honest reviews from them. They would spread the word for you. Social Media Ads: Run Facebook, Instagram, or Twitter Ads. For this, you would be needing a good copywriter. This would bring your business to the limelight, people from all works of life would see it and a good percentage of these people will click on it. Have A Website: A website properly developed with a very good user interface and an articulated blog post, where potential customers can come and know everything about your service is necessary, so when you run these Ads, it takes your potential customers to your website and expose them really to your services. Create Business Social Media Handles: Create business social media handles separate from your handle, post your services daily, and have a social media manager who has great skills in copywriting or content creation. You ask for honest reviews from customers and re-post on your social media handles. This will encourage and boost the confidence of other potential customers. Collaborations: When bigger industries are hosting events and call for sponsorship or partnership, this is a good strategy to sell your services as you will be featured either as a partner or as a sponsor, as much as this might bring about financial responsibilities, it can also be as free and simple as volunteering, it can also be donating assets that can be gotten back after the event. Offline Advertisement: You can promote your business offline through word of mouth, sharing your business card, billboards, and flyers. Offline advertisement is one of the best ways to promote your business & reach your potential customers (target market). Cost Of Starting A Restaurant Business In Nigeria The cost of starting a restaurant business can be estimated by calculating the cost of business registration, equipment, shop rent, staff salary, and marketing cost. With our analysis, you can start a restaurant business with ₦950,000 on a medium, and ₦300,000 on a small scale. Final Thought If you decide to start a restaurant business today, then do proper research to identify some of the difficulties and challenges faced by restaurant owners. And as well as the possible solutions you can use to overcome those challenges. It is easy to start a restaurant business in Nigeria but it takes a good plan & finance to succeed faster.

Tag: Cost Of Starting A Restaurant Business In Nigeria

Requirements And Cost Of Starting A Restaurant Business In Nigeria