Orlando is a famous city in Florida. As per the statistics and survey, it has been found that it is the second most populous city in Florida.
Florida is the Sunshine State with many food and dining sectors and earns high revenue in a year. Orlando is considered the fourth largest city in Florida and currently has a population of over two million. The Orlando restaurant sector is said to generate US$272 million in revenue in 2022.
If you are planning to plot your ideas and open a new restaurant in a city with tourism and beautiful food areas, take your idea and start your venture to earn profits of millions. It is always said, “Planning is the key to success”. So, if you have planned well and systematically kept all its advantages and disadvantages in mind then you should go ahead to be successful in your plans.
Some of the things that need to be clarified are the right location, whether to lease or buy the space, the licenses and permits required to open a new restaurant, insurance of the property and life of the employees, and some financial formalities.
Planning Your Restaurant
Planning is always important at every stage of a start-up. It is always a dream to find the right place that will make or reduce your dreams into reality. If you find the right place, the next process starts with building and modernizing the restaurant with inside-out beauty.
Getting and speaking a word is easy but building a new empire is complicated. This is because little detail has to be provided for the best output. Time is needed to test your plan practically and not get carried away by emotions to ensure everything is on the right track.
There are several things that you should think about and take a closer look at-
- The location of your restaurant
- Accept the decision to rent, lease or buy it.
- What financing options are available for a particular segment of business in that area?
- Determining the concept behind opening a new restaurant and its cuisine
- Fine-tuning and finalizing restaurant menus
- Insurances, licenses and permissions required
Building a team-
- Whom to add to your restaurant team?
Let us understand each point one on one:
The location of your restaurant– Orlando is the best place and theme park located in the heart of Florida. It is a centre of tourist attraction. This highly-rated city is full of life and is estimated to attract over 55 million tourists every year. When it comes to finalizing the area or locality of the restaurant, one can get confused due to the number of options available to you at this point of time.
So to reduce this factor from confusing yourself and making the right choice, ask yourself questions about the idea of opening a restaurant, what type of restaurant you want, what class of customers you want to target, is the sector in line with your expectations, does the sector you are entering have a sufficient average net income, etc.
Once you can answer these types of questions, you will be able to understand what kind of space you are expecting and what kind of area can fit in your pocket and budget.
It is very important that you match the plotted idea with the vibe you wish to cultivate in your restaurant so that you can always be happy with the restaurant and work for it. So the tip before choosing a restaurant area can always be to analyze the locality and set your heart on the most precious spot that can serve your objectives behind the restaurant.
Locality analysis can help you take a closer look at the restaurant and adds an advantage for the future in terms of profitability.
Accept the decision to rent, lease, or buy it- Buying a property and then starting a new business is not that easy. This is because of the risk that can be associated with restaurants as well as the diversification risk. So the chances increase to either lease it or rent it. Once your location is decided, it is of utmost priority to see this decision through.
Always take out time from your schedule to take this decision very seriously and accept the rental property or leased property after reading the terms and conditions thoroughly.
There are a few things you should be aware of before agreeing. The most basic and important thing is that you have decided to pay rent. It can be a fixed amount of payment every month and it can be agreed upon at 5% of sales or 10% of sales. This is because many assume the restaurant will earn more, so they keep it constant as a percentage of total revenue or sales. But we can’t predict what your restaurant will be like in the future.
One must read the terms and conditions of the rental property twice carefully to better understand what is included in the rental agreement. Ideally, the amount should include taxes, costs and property insurance.
If you are not able to match the vibe of the property which comparatively you find low in rate, then get ready to make some adjustments in your pocket and take the risk of climbing the ladder to create that unique concept that is on your mind. All this happens after the planning is done and the property is finalized within your parameters.
You can easily get property through various channels like property dealers, brokers and also through various websites available on the internet.
Financing options available in that area for a particular segment of business- This is the third step after successfully planning and finding a good property for your restaurant. Now is the time to look at the finance available to finance your business idea. Investing all your resources and money in one part of the business is not that easy as it takes a huge amount of money.
When starting a new restaurant in Orlando, it is usually expected to spend millions of dollars. This is part of the money that was raised before the restaurant opened. So coming to the point, where to get the money?
This question is usually asked by everyone. But there are many options available to you who are interested in financing your business in Orlando. Such as your friends and family, lenders, investors, banks, crowdfunding, venture capitalists, etc.
Let us take a close look at each option available:
- Friends and family– If you have a large group of friends and family, consider them first and prioritize them to borrow money. They will ideally be the ones who will be your first customers at your restaurant. Financing your restaurant with this group will allow you to avoid high-interest payments and certainly put up any assets as collateral security.
But it is always advised to save your relationship and always make your agreement in writing to avoid any related dispute. This will not hinder your relationship and the other side will be clear enough to have clear expectations.
- Networked lenders– This type of financing option is similar to the way banks operate but the difference comes only from the physical existence. Networked lenders operate virtually through online mode. Anyone interested in borrowing from networked lenders has the option of filling out the application only online.
Once the application is reviewed by the networked lenders and agrees to avail a particular amount, the funds are transferred directly to your account. This will save energy and of course time. It is much faster than the traditional banking system.
- Banks– Banks considered lending to restaurant owners a non-performing loan and a highly risky investment. So this financing option is not readily available to you in financing your restaurant in Orlando. The only possible criterion comes when you have an asset as collateral for the security to receive money or cash in return.Also, the chances of getting a bank loan approved come when you have an excellent credit CIBIL score. For further processing, you need to fill out an application for the amount you wish to receive.
- Crowdfunding- As the word suggests, this platform is based on many collective investors. Funds are raised through the efforts of friends, family, any individual investor willing to invest, etc. Several platforms deal in crowdfunding and have helped millions of people open their restaurants in Orlando. Some of them are Indiegogo, Seed Invest, etc.
- Venture capitalists- These are the investors who provide equity funding to the start-up by evaluating your plan and seeing whether it will give profits shortly. These investors have huge funds and they are good at assisting the investors at their agreed rates. They only provide support to restaurants or businesses that they feel have high-income potential. They don’t provide the service for free, there are management fees and of course, interest is charged on the amount you borrow.
- Private investors- These types of investors are those who provide large amounts of loans. Banks are also not in favour of giving such a huge amount. But in exchange for private investors, you have to share a part of the equity rights with them. Hence a part of the ownership will be shared with private investors. This is most common in Orlando.
Determining the concept behind opening a new restaurant and its cuisine- The next very important step is to think of naming the restaurant and giving it a brand name. And this can only be done if you know what style or type of restaurant you will be in, what types of foods you will be serving, and your name should match the restaurant’s ambience.
Once you have a restaurant name, you will need to determine and narrow down the cuisine you will offer. Check if you are going to offer Caribbean, Vietnamese, Italian, Thai, etc.
Fine-tuning and finalizing restaurant menus- Once the dishes are decided, the next task is to finalize the restaurant menu in Orlando. Take a survey of what people love the most in dishes who are living in Orlando and try to make something crazy out of it. Every restaurant has its way of preparing and designing the menu. With the same location as the restaurant, try going a little extra and making your restaurant’s menu unique.
Insurances, taxes, licenses and permissions required-
Insurance is very important to secure the life of a person, vehicle, property, business etc. This is because investing a huge amount at one go and you will be faced with the stress of refunding the bill if anything goes wrong with your restaurant. Paying bills in full will put pressure on your financial condition.
Hence it is very important to choose the right policy for your restaurant that covers all aspects of unfortunate circumstances. There are certain policies you have to go through while opening a restaurant in Orlando.
- General Liability Insurance– This is the insurance that will cover and protect your restaurant from bodily injury. This insurance only covers damage that may occur during the course of your restaurant’s business operations. It can be a bodily injury to a third party, damage to third-party property, loss of reputation and advertising injury. This type of insurance does not cover employee illness, damage to own business property or any lapse in rendering professional services.
- Property Insurance– This is the insurance that will cover and protect the property of your restaurant from any damage caused due to a particular accident like fire, theft, natural calamity etc.
- Liquor Liability Insurance– This insurance will cover any losses that occur due to liquor. It includes any losses that occurred from the employees being drunk and working on the premises, or any crime committed in a drunk state.
- Workers Compensation Insurance– This type of insurance covers incidents that happen to employees during working hours on the premises. Any accident to the employees during working hours is covered under this insurance.
Apart from these insurances, there are a certain number of insurances that should be ideal to get rid of unfortunate losses. Such as additional liability insurance, business owner’s policy, off-premises insurance, etc. Contact a good insurance broker for a better understanding.
The owners are forced to pay taxes on their income to the government. Many taxes have to be paid to survive the laws. Calculating and paying taxes is not that easy, so you may need a taxation specialist on your restaurant team to ensure taxes are paid on time to the government. Listed below are a few to consider as essential components before opening a restaurant in Orlando-
- Income Tax– A business owner has to file a return based on the restaurants he has. Different categories of business owners have different avenues for filing income tax returns. For example, a business owner who operates his business under a sole proprietorship must file individual taxes, while a business that is a corporation must file business taxes.
- Payroll taxes– This type of tax is levied on payments made to the employer by way of salary, allowances, commission etc. It is under two sections- one is the amount deducted from the salary of the employee and the other is the tax paid by you for the employee.
- Sale Tax– This is the most common tax that is levied on gross sales or individual sales. Taxes are included in any billing done on orders received. This tax is imposed by the government in Orlando. The tax you receive on each bill is in turn transferred to the government. In Orlando, food and beverages are subject to a sales tax of 6% plus any additional taxes that apply.
- Tax on Tips– In Orlando, employees working on tips and earning more than $30 per month should be charged to tax. Their tips are charged as taxable income because their amount exceeds the prescribed limit and should be claimed. If tips given on the bill are taxable to the restaurant, on the other hand, if mentioned on the bill as gratuity then it is not compulsorily taxable.
No restaurant can be allowed to open at any level and anywhere without completing the formalities. One needs to obtain a license from the government regulatory bodies that handle the business divisions of hotels and restaurants. To get the license, you have to follow and fill in the following:
- Food service menu review– This is an important art to master before proceeding with the construction of your restaurant to avoid heavy fines and modification costs. Under this, you will have to provide them with a copy of the sketching and decided menu.
- Application Form– It is advised to fill the form with the type of restaurant you are coming with. If you will be serving alcohol at your location, check with your restaurant’s legal to apply for a liquor license.
- License Fees– Submitting all the required application forms and food service plan is not free. You need to pay the applicable fee to get the license.
- Sale tax registration– Before opening the restaurant, it is necessary to register your restaurant in the Taxpayer Service Center or Revenue Department so that if there is a need to claim exemption, it can be possible with valid proof.
- Investigation– Before opening a restaurant, one needs to contact the Department of Business and Professional Regulation for inspection. These inspections will provide comments or ratings to your business based on what’s wrong and what needs to be fixed.
Whom to Add to Your Restaurant Team?
This is the most important step to building and taking your restaurant a step ahead. Everyone expects himself to convert his dreams into reality. And the second dream is to make your dream successful by earning more profits. Building a team for a restaurant is not that easy, but without them, it is not possible to run the operation successfully.
Your good team makes sure that things run smoothly with the proper process in the organization. Also, the team helps the restaurant to complete the work in a given time frame without any delay.
Below are some of the designations of restaurants that you will need to complete in your team. Every individual has their own identity and individual roles.
- Restaurant Consultants
- Restaurant Insurance Broker
- Restaurant Real Estate Broker
- Restaurant Accountant
Consultants play a vital role in planning your restaurant from start to finish. The consultant will help you with all your restaurant-related tasks, whether it is developing a plan, deciding the types of dishes, and what the menu will be, deciding on the location, creating systems in daily operations and finally training the staff.
An insurance broker can help you protect your restaurant from unfortunate losses. They will make sure to find the best insurance policies needed for your restaurant. In addition, they check the need for insurance coverage for restaurants according to legal rules and regulations updated by the Orlando government.
The real estate agent will make it easy for you to find the right place for you, keeping in mind the plan you have and the type of space you are looking for. In addition, agents may search and access some privately owned property that one might not even think about.
Accounting is massively important to organize your business and keep proper track of your finances. Accountants not only do this but also prepare budgets and do financial analyses. Also, they make sure to pay taxes on time without any delay.
Note– Follow the above tips to know how to be a successful restaurant owner in Orlando. Opening a restaurant takes time but if it is on the right track with the law and does not follow any unethical practices, then the time is worth it. Right planning with good strategy never fails.