A light-hearted look at starting a restaurant. Print out this check list.
Try to answer the questions. Go for first impressions. What's your gut feel?

1. Reality Check

• Why do you want to start this restaurant?
• It's my dream!
• I want to be my own boss!
• I'm tired of making money for somebody else.
• I want to semi-retire.
• It's a cute location.
• One restaurant owner/consultant is more direct...
• Are you crazy!
• If yes, do you have a passion for restaurants?
• How do you know?
• Have you worked in one before?
• What are you going to do?
• Buy an existing restaurant
• Buy a franchise
• Start from scratch
• Will it be your career, or just a job you own?
• Will it (must it) provide you with a family income?
• Or will it be just an expensive hobby where lose money every month?
• How much money do you have?
• How much money can you afford to lose?
• How much cash money is it going to cost you to start?
• The norm is about $60,000 for an average eatery.
• $30,000 for leasehold improvements
• $30,000 for equipment and inventory
• Then you still need money for working capital!
• Will you require a loan or partners with money to invest?
• Most banks will not lend to a start-up restaurant!
• What else could you do with this money?
• Invest in gold, stocks, bonds, mutual funds, real estate...
• For some it will be better to go to Vegas!
• They'll lose their money anyway, but they'll have more fun!
• Are you quitting a job/career to start this restaurant?
• What benefits & support are you giving up?
• salary or wages, 40-hour week, colleagues, staff
• insurance, vacation, sick days, expense/milage account
• office, equipment, utilities, advertising

• Have you worked in a restaurant before?
• Do you have a degree/diploma from a culinary institute or formal program?
• If not, have you considered working in a restaurant for at least 90 days?
• All positions: diswasher, busboy, waiter, cook
• How many true and tested recipes do you have?
• Who will run the "front?"
• Who will run the "back?"

• What type of food will you serve?
• How do you plan to decorate the inside and the outside of the building?
• Both should be inviting and memorable!
• Table service
• A la carte, buffet or both
• To go service (take orders by phone/ fax / e-mail)
• Delivery service

• What part of town have you chosen?
• What zip codes surround your site?
• Demographics (numbers of people, income, education, ethnicity)
• Psychographics (values and life styles)
• What major employers (or large concentrations of people) are nearby?
• Streets
• Traffic counts (from ODOT)
• Traffic speed limit (from ODOT)
• Too fast and nobody will see your place as they speed past!
• Concrete dividers
• One-way traffic only
• Convenience to drivers--they won't stop if it's a hassle to reach you!
• How visible is your site?
• How hard  is it to enter your site?
• How hard is to leave your site?
• Are you on the "going to work" side of the street?...or
• Are you on the "coming home" side of the street?
• Was this space previously a food service establishment?
• If yes, then how much usable equipment is already in place?
• Why did the previous place close?
• Are the utilities all electric or both electric and gas?
• How nice is the storefront; does it have "curb appeal?"
• How's the parking?
• Are there other tenants with long parking times?
• Movie theaters, fitness centers, departments stores, discount stores
• How is the foot traffic?
• The leasing agent should have a detailed report of the property's business patterns.
• Verify these numbers through your own research.
• Sit in your car and count traffic at various times of the day.
• How many people come and go and which businesses are patronized.
• What types of cars are in the parking lot?
• New / old
• Lexus / Yugo
• What renovations do you want to make?
• New paint, new carpet, new curtains, new signage, new lighting, etc.
• What renovations will you have to make due to government regulations?
• Handicapped access, emergency exit, fire alarm and suppression
• How many tables do you plan to have?

• Prior to signing any lease or buying property!
• Make an appointment with the city or county planning department.
• Take a blueprint of the premises.
• Have your menu ready.
• Have the executive summary of your business plan handy (1 to 2 pages).
• Have your list of major equipment handy.
• Inquire about possible watershed ordinance fees and traffic impact fees.
• Pay attention to renovations that will be mandated to meet new building codes.
• Handicapped access ramps (or elevator!), rails & bathrooms
• Emergency exits & lighting
• Sprinklers & alarms
• Wider entry doors (36-inch wide may have to be changed to 42-inch wide!)
• If not in place already: fume hood & ducts; several kitchen sinks; grease trap
• Ask about signage fees, regulations and codes.

• Food / Raw materials
• Do you know about portion control?
• Do you know how to handle, store and manage perishable inventory?
• Who will be your vendors?
• What terms will these vendors grant?
• Equipment costs
• New equipment w/service warranty
• Used equipment as-is
• Don't use household appliances nor furniture.
• Your insurance will not cover you for losses due to non-commercial equipment.
• Labor costs
• Wages
• Benefits
• Social Security
• Workmen's Comp
• High staff training costs due to high personnel turnover
• Other overhead costs
• Rent
• Utilities
• Insurance (you must use approved equipment!)
• Advertising
• Finance charges
• Shrinkage
• Spoiled food
• Destroyed inventory
• Theft

• How much cash in hand do you have?
• Equity (your home or/and marketable securities)
• Remember, most banks will not lend to a start-up restaurant!
• Lease agreement
• Beware of triple net. Here you pay rent, repairs and taxes.
• Beware of paying a premium 2 to 5% of gross per month.
• Just because the lease is printed, very pretty and ready-to-go, doesn't mean you have to sign.
• Has your attorney reviewed the proposed lease and suggested counteroffers?
• Negotiate with landlord or agent
• Rent, terms, free rent during construction of leasehold improvements
• Who will pay for leasehold improvements?
• Or how much will landlord pay toward the total cost of leasehold improvements?
• Is lease assumable by a third party?
• Lease escape clauses for events like...
• "Going dark," where an anchor tenant closes...or
• Landlord's insolvency
• There are no oral contracts in real estate; everything must be in writing.
• How much will you have for working capital after opening day?
• Are your household expenses covered for at least the next 6 months?

• Name registration with the state
• Sole proprietor, partnership, LCC, corporation, S-corporation
• Local business license...or
• Vendor's or sales license
• Food handler's license
• Alcohol sales license
• Alcohol handler's license

• Use your demographic and psychographic study to determine the following.
• Who is your target market?
• How many people are there to draw from?
• Where do they live, work, shop, play?
• What will you serve them?
• How much can they afford & how will they pay?
• Cash, checks, credit cards
• Style of cuisine
• Breakfast
• Lunch
• Dinner
• Advertising
• What will your menu look like?
• Fancy, photocopied, chalk board
• How will you reach your target market?
• Signage, direct mail, ad in local media, web page
• Will you have specials?
• Will you use coupons?
• Will you use premiums? (Buy one, get one free)
• Customer service
• Kitchen staff
• Wait staff
• Attention to detail
• Queue management (manage people who are waiting)
• Order management
• Competition
• head-to-head
• substitute service
• proximity
• couponing (a weapon of choice)

• How much must you make per day just to breakeven?
• $600 to $1,000 / day is the norm
• Return-on-investment
• For every dollar invested, how many will you get back?
• Time-to-pay back
• How many years is it going to take you earn back your initial investment?
• Opportunity cost
• Could you be doing something more profitable?
• Present job or business
• Invest your cash in the stock market
• It takes 5 years to amortize the start-up costs
• Don't forget to depreciate equipment & leasehold improvements