MANY Restaurants

A MANY Holdings company

A realistic, step-by-step plan for anyone thinking about opening a restaurant.

MANY Restaurants is the MANY Holdings, LLC brand for people who dream of opening a restaurant and want to see the whole job before they start. The plan below moves from concept to opening night in the order the decisions usually arrive, with the costs, permits and numbers that tend to surprise first-time owners.

Read the guideContact MANY Holdings

What MANY Restaurants covers

  • Concept and location

    Testing an idea against the neighborhood, judging traffic and parking, and reading a commercial lease before build-out costs lock you in.

  • Budget and permits

    Build-out, equipment, opening inventory and a cash reserve, plus the business, health, fire and liquor approvals that often set the opening date.

  • Menu costing

    Pricing every plate from its ingredients, working with food cost percentages and making sure the menu can pay for the kitchen, the staff and the rent.

  • Running the numbers

    Staffing, tip rules and labor law, the soft opening and prime cost, the weekly figure that shows whether a new restaurant is on track.

Opening a restaurant: a realistic plan

Good food is only half of a working restaurant. The other half is keeping rent, labor and food costs below sales and holding enough cash to last until the dining room fills, so take these steps in order and learn your numbers before you sign anything hard to undo.

Prove the concept fits the market

Define the concept in one sentence: cuisine, service style, price point and the guest you expect. Then estimate the average check, what a typical guest spends per visit, because it drives every projection that follows.

Test demand before you commit to a lease. Visit competitors within a short drive, note what they charge and when they are busy, and look for a gap rather than a crowded niche. Pop-ups, farmers market stands and catering jobs let you test recipes, prices and portions on paying customers.

Choose the location and read the lease

Visit any site at the hours you expect to be busy. Count foot and car traffic, check parking and visibility, and ask neighboring businesses how the block performs. A former restaurant space with a working hood, grease interceptor and walk-in cooler can save a large share of build-out costs, but find out why the last tenant left.

Confirm with the local zoning office that a restaurant is allowed at the address, along with alcohol, outdoor seating or late hours if you want them. Then have a lawyer review the lease, with special attention to these terms.

  • A term and renewal options long enough to recover your investment.
  • Scheduled rent increases and shared charges such as common area maintenance and property taxes.
  • Free rent during build-out and any tenant improvement allowance.
  • Any personal guarantee, and whether it can be capped.
  • An exit if permits or the liquor license are denied.

Build a budget with a cash reserve

List every cost that comes before the first paying guest: construction, plumbing, electrical and ventilation work, kitchen and dining room equipment, smallwares, the point-of-sale system, opening inventory, deposits, permits, professional fees, signage and pre-opening payroll for hiring and training.

Then add a cash reserve, the line that is easiest to underfund. Sales usually build slowly while rent, payroll and suppliers expect full payment from the first month. A common rule of thumb is a reserve covering three to six months of operating expenses, and because build-outs tend to run over budget and schedule, pad both.

Line up licenses and permits early

Permits often decide your opening date, and the requirements vary by city, county and state. Ask each agency for its process and timeline, since some approvals must happen before construction starts; many health departments, for example, review kitchen plans before you build.

Most new restaurants need some version of each of these.

  • Business registration, a local business license and an Employer Identification Number from the IRS.
  • Sales or meals tax registration with your state.
  • A health department food service permit, issued after plan review and inspection.
  • Food protection manager certification, which many places require for at least one person on staff.
  • Building and sign permits, a fire inspection and a certificate of occupancy.
  • A liquor license from your state and often your city, which can take months.
  • Public performance licenses if you play music, often from organizations such as ASCAP and BMI.

Cost every dish before you print the menu

Write a recipe card for each dish and price every ingredient, including garnish, cooking oil and the bread on the table, adjusted for trim and cooking loss. Divide the plate cost by the menu price to get the food cost percentage: a dish with $4.50 in ingredients that sells for $15 runs a 30 percent food cost.

As a rule of thumb, many operators aim to keep food cost to roughly a third of the menu price or less. Dollars matter as much as percentages, though. A $40 steak at 40 percent food cost leaves $24 toward overhead, while a $12 salad at 25 percent leaves $9, so recost the menu whenever supplier prices move.

Hire carefully and follow labor law

Plan staffing by shift rather than by headcount, and schedule paid training before opening. Complete a Form I-9 for every hire, register for payroll taxes, and carry workers’ compensation insurance, which most states require.

Tip rules deserve special care because they vary by state. Federal law lets employers count part of tips toward the minimum wage, but some states, including California, require the full minimum wage before tips. Under federal law, managers and supervisors may not keep any portion of employees’ tips, and mandatory service charges are treated differently from tips, with extra rules in some states. Confirm the details with your state labor department before you set pay.

Soft open, then watch prime cost

Before the public opening, hold a soft opening: a few days of limited service for friends, family and neighbors with a shorter menu. Use it to test ticket times, the point-of-sale system and how the line handles a rush, and fix what breaks while the stakes are low.

Once open, watch prime cost, the cost of food and beverages sold plus total labor, including payroll taxes and benefits. It is the biggest cost you can control week to week, and a widely used rule of thumb keeps it at or below about 60 to 65 percent of sales. Track it weekly, because a monthly report arrives too late to stop a bad trend.

Common questions

Does MANY Restaurants run restaurants or take reservations?

It does neither at the moment. MANY Restaurants is owned by MANY Holdings, LLC and currently publishes practical guides for people planning to open a restaurant. Business or partnership proposals should go to MANY Holdings through the contact link at the bottom of this page.

How long does a liquor license take?

It varies widely by state and city, and approval can take several months or longer. Some places require public notice so neighbors can comment, and some states cap the number of licenses, which can make an existing one expensive to buy. Apply as early as your lease allows, and plan an opening that works without alcohol in case approval runs late.

What food cost percentage should I aim for?

The right target depends on the concept. Steak and seafood menus usually run higher food costs than pizza or pasta, and the one-third rule of thumb is a starting point, not a law. Compare your actual food cost, from inventory counts and purchases, with the theoretical cost on your recipe cards; a gap usually means waste, over-portioning or theft.

Is it cheaper to take over an existing restaurant space?

Often, because a second-generation space may already have a hood, grease interceptor, walk-in cooler and accessible restrooms. Have the equipment inspected, ask why the previous restaurant closed and confirm the space meets current codes. A health permit generally cannot be transferred to a new operator, so expect to apply and pass inspection in your own name.

Do I need a lawyer and an accountant before opening?

Neither is usually required by law, but both can prevent expensive mistakes. A lawyer can review the lease, the business entity and any partnership agreement before you sign. An accountant can set up bookkeeping, payroll and sales tax filings, plus the weekly reports you need to track prime cost from the first day.

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