Restaurant business is one of the fastest rising business in Nigeria, especially with the rapid urbanization, rising incomes, increasing technological advancements and working population.
When considering how important the restaurant industry is, you might want to explore the basic human needs; food, shelter and clothing. They are very important things that we need in our daily lives.
When you open a restaurant, you won't only be creating a source of income to yourself but also be solving man's most essential need. Yes, we can stay for months without buying clothes, stay for years without changing your house but no man can stay for two days without eating.
Online food delivery Dublin is getting popular with the advancement of the internet and you too can join the bandwagon.
No matter how busy we are, we must try squeezing out a little time to feed our tummies. This explains the reasons the boost in restaurant businesses, even during the times of recessions when other businesses might be lagging behind.Tips To Starting A Successful Restaurant Business In Nigeria
When you consider the massive opportunities and profit potentials in the Nigerian F&B industry, you won't want to waste any further time but rather dive into the lucrative business.Below are the steps involved in launching a lucrative restaurant business in Nigeria:
• Choose a restaurant idea
The first thing you should put into consideration while venturing into a restaurant business is the idea. Factors like your choice location and capital available will place a major role in choosing the type of restaurant you want to start.Another factor that comes into play is your personality. For example, if naturally, you're a kind of person that enjoys hanging out with people, then starting a restaurant will be a good fit.
In the other hand, if you're not really comfortable interacting with a lot of people, you might consider starting a bakery instead. In this case, you'd be largely be concerned with the management of the business, while your employees offer direct services to your customers.
• Evaluate all the costs involved in starting a restaurant
Just like every other business, you will definitely be needing some funds to set up your business. From rents to buying of raw materials and even the kitchen equipment will be taking some parts of your funding.Let's explore some of the significant costs involved in launching a restaurant business in Nigeria:
- Rent: This will be covering a significant part of your budget and will be affected by your choice location. Rents in the urban areas are relatively more expensive than the rural areas, as you should already know, you'd be generating more income if your site your business in a developed city. Your rent should however, not exceed 10% of your total revenues.
- Food costs: This will include the cost of all the raw materials used in preparing the dishes, from the main food to the seasonings. If possible, the food costs shouldn't exceed 40% of your menu price.
- Kitchen equipment: The next very important thing that you need to include in your budget is the kitchen equipment. Endeavour you go for the quality utensils, even if they may be slightly more expensive. In the long run, you'd thank yourself for that. If you don't know how to differentiate between the original ones and the others, I'd suggest you check out many sellers on Jumia. From the reviews from other buyers, you'd know who to patronise and who not to.
- Interiors: You'll also be designing the interiors to suit your taste. While doing so, consider your budget, you can always go for a simple design and upgrade later.
- Marketing: This involves the money you'd be setting aside for advertising your business. Try exploring both online and offline methods of advertising, as you advance, you'd be able to figure out what works best for you.
- License: You should also get the required licenses from the regulating authorities to avoid running into issues in the future. This off course will definitely be requiring some money too.
• Get business funding
Having seen some of the significant costs involved in launching a restaurant business in Nigeria, you must have been thinking of how to raise enough money to set up your business. To start with, your budget will be affected by the concept of your restaurant, plus your business location.Some ways of raising money for your restaurant for include:
- Self-funding: This will include your savings and other means. You can also sell off your properties or old business to raise enough capital.
- Loans: You can also consider securing a loan from a bank or other financial institutions. One thing your should know is that you might have to present a collateral, or someone to underwrite the loan.
- Investors: Getting an investor as an early startup might not be very easy, especially if it's your first business. A typical investor will want to explore your restaurant venture’s growth potential, quality, and the scalability of your business model. In order words, the investors will be taking into considerations, your performances in your few years of running before agreeing to put their funds.
You can find out some other ways of raising capitals for your business here.
• Choose a business location
This is also another very essential factor that will determine your business growth in the later run. One of the things you should look out for while choosing a location is your potential competitors. Try identifying any, gauging their progress and if possible, their business model.You shouldn't just be assessing them in terms of cuisine, but also the type of dining experience they offer to their customers.
Factors you should put into place while choosing a location for your restaurant business include:
- Accessibility: Your restaurant should be located in an easily accessible area, which is easily visible. Also note that upper floor locations are not considered suitable for your business since they generally have low visibility.
- Parking space: Your choice location should also have an available space for your customers to park their vehicles.
• Register your business name
You'll need to acquire all relevant documents including your CAC certificates from the relevant bodies. They're very essential, especially if you'd be applying for funding in the future.Registering your business name will also prevent other individuals from snatching it in the future when your business gets established. You can explore other benefits of registering your business name or see a step by step guide on how to register your business with the Corporate Affairs Commission (CAC).
• Employ good hands
At this point, you've sorted out almost every other thing, but without good and devoted employees, your business will still be facing some major challenges. Go for people that will treat your business like theirs and would be really interested in its growth.Before setting up the hiring process, list out the traits you want in your employees and only focus on them in the recruitment process.
The three types of staff that you'd be needing are:
- Kitchen staff: They'll be in charge of the whole food preparation processes, from cooking the supporting other staff.
- Service staff: This will include the waiters, busboys and housekeeping staff. They should possess good communication skills since they'd be directly interacting with the customers.
- Management staff: The management staff will include your restaurant’s manager, cashier and store manager. They need to be educated as well as experienced in the field.
• Design a menu
A menu is a list of food and beverages offered to customers and the prices. Having a smartly designed menu can positively impact your restaurant's growth. Your menu should also be designed in a way to lure your customers to spend more, off course, that's why you're in the business.One thing you should always keep in mind about the menu is that it will set you apart from your competitors. For instance, McDonalds is know for their burgers, KFC is known for their crispy chickens and Dominos is known for their pizzas. What will your brand be known for?
• Build a relationship with suppliers and vendors
Having a healthy relationship with your supplier and vendor is very important for a smooth functioning of your business. Having multiple vendors is also very essential as it'd help you in comparing prices, and serve as a backup in a situation where one becomes unavailable.• Take your business online
You can even beat your competitors by opening a portal for your customers to book meals online. Online food delivery is getting popular with the advancement of the internet and you too can join the bandwagon.You can get an official website for your business at a very affordable price, put in your address/ contact details and start leveraging the power of the social media, search engines and internet as a whole for more sales.
Challenges of running a restaurant business in Nigeria
Some challenges and factors that might affect the growth of your restaurant business in Nigeria include:• Lack of enough startup capital
• Inconsistency
• Unstable menu pricing
• Hiring of unqualified staff
• Competition
• Poor inventory management
• Not choosing a good location
• Not keeping up with the market trends
Conclusion:
Having good business management skills and being consistent will help you go far in this business. Research well on restaurant businesses in Nigeria and understand the pros and cons, plus the challenges you might be facing in the future and how to overcome them.What did we miss? You can drop them as comments below and don't forget to share to your friends. You can check out our previous article on 5 profitable businesses you can start without capital in Nigeria.
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