Opening a restaurant can be a dream for some, but still seem like a nightmare to realize. From concept planning, to financing, to finding suppliers and hiring staff, there is a lot to consider! If you have a love for food and a keen eye for business, opening a restaurant in Toronto could be just the challenge for you. Our expert Commercial Renovation Advisors break down the 4 biggest hurdles to overcome when opening a restaurant.
1. Your restaurant concept and business plan
If you want to open a restaurant in Toronto, the first step is the most obvious — concept design. It could be a wine bar, vegan takeout counter, or even a fusion restaurant. It’s important to have a clear vision: everything you need to get your business up and running will have serve it.
A business plan is also essential to keep you on the right track. It also shows potential investors and partners that you have taken the time to understand your goals and mapped out the business needs. The Small Business Support Centre of the city of Toronto has online tools to help build business plans, as well as understand the regulations, zoning laws and building codes you need to take into consideration when opening a restaurant.
2. Financing your restaurant
For first-time restaurant owners, securing capital is the riskiest, but the most essential part of the process. Because it can be difficult to make a restaurant profitable in the first few years in business, traditional financial institutions like banks can be hesitant to approve a loan. More likely sources of financing can be found in private investors.
Some common types of financing for a project like a restaurant are as follows:
This stage of your project is not only where a good business plan is important, but also good business relationships. If you have experience in the food service industry, or the financial industry, utilizing connections is the most direct way to secure investors. People who understand not only will see the value in your business plan, but have first- or second-hand knowledge of the skills you bring to the business, will be more comfortable investing in such a high-risk venture.
There are also public or private funds that could be accessible to you. Committed to funding the success of otherwise disadvantaged communities, funds like the Aboriginal Business and Entrepreneurship Development or Rise Asset Development make capital and business development support more accessible for those in need.
3. Finding and developing the perfect location
Choosing a space
There’s a reason the expression “location, location, location” is one of the most popular in real estate — location really is everything! When choosing where your restaurant should be, it’s important to consider not only what will highlight your concept, but where your concept will fit and add value to the existing neighbourhood. Even though you may find an inexpensive space in a hipster neighbourhood, you may not find success there if your project is an upscale fine-dining restaurant. Existing businesses and restaurants, as well as the overall demographic of its residents, will help you get a clear idea of what type of people live and frequent that particular neighbourhood. Unless you are lucky enough to have a culinary reputation that precedes you, it’s best to work to find your clientele, rather than assume your clientele will find you.
Renovating your space
Once you’ve found a location that fits your plan, you need to evaluate the work that needs to be done to it to not only to make your vision a reality, but also be a functional and efficient space for preparing and serving food. For this, you may need to hire a Commercial Architect, as the space you choose may not already be retrofitted to accommodate a restaurant. While it’s important to create an inviting ambiance for diners with décor, understanding where to invest your money is the first thing to establish. Anything that will need to meet provincial or city code requirements, be it for safety or health standards, are a better investment than buying brand-new, high-end chairs or tables. For example, the HVAC system of a restaurant, if not already up to code, can cost a restaurateur tens of thousands of dollars to replace or update.
Choosing a contractor for your renovation
Choosing the right Commercial Contractor will also make the process of turning your dream into a reality much easier. Having the expertise of an experienced and trusted professional working with you will not only give you the peace of mind that your money is being invested in the right places, but allow you to focus on following your business plan, and working on the post-construction details — finding suppliers, interviewing staff, marketing and promotion, and the rest.
In the case of Asa Copithorne, owner of MUGI, the location was once a clothing store, so it required a complete renovation to allow for a restaurant to safely operate. A 360° Verified Commercial Contractor was able to update the space with the necessary electrical and plumbing work, paint the space according to the owner’s vision, install a fully functional kitchen, as well as a small dining area.
4. Permits and inspections
Understanding the permit process of a restaurant is a complex task, but is a good way to get insight into the many layers of the restaurant business. From construction permits, to food and liquor licenses, there are a lot of regulations to follow and maintain at every step of your restaurant’s development, as well as its operations once it’s open.
City inspectors will want to make sure your renovations not only are following regulations of the Ontario Building Code, but also that you have the necessary equipment to safely operate a restaurant. Because food is being prepared and served, your space must meet certain standards to maintain food safety laws before you can open your doors.
Your best bet to ensure you have all the correct permits and licenses would be to contact your city, once you have your business plan in hand. They will be able to give you the best insight into the costs and approval timelines of the permits, and allow you to adjust your plan and budget if need be.
Start renovating today
Each step of opening a restaurant is as complex as the last, and the timeline to get it all done can change in an instant. From losing investors, to waiting for inspections, to searching for that perfect location, there is not a shortage of things to keep track of! Thankfully, with the help of an experienced Commercial Renovation Advisor, you can have one less thing to worry about. At RenoAssistance, we can find you up to three Verified Contractors to submit quotes for your project, and help you compare the quotes to pick the right contractor for your needs and your budget.