How to setup a restaurant business in Nigeria (Costs & requirements)

A restaurant is a place where you eat a meal and pay for it. In restaurants, food is usually served at your table by a waiter or waitress. Restaurant business has become one of the fast income earning business in Nigeria as over 60% of populations eat outside their home daily.

How to start a Restaurant Business in Nigeria

courtesy: 280 degrees African restaurant

Restaurant business is mainly meant for those who are good at art of cooking and have decided to go commercial. So, if you’re such a person and you’re living in Nigeria; you’re very lucky! Below is detailed information on how to start restaurant business. So, if you’re actually in interested in starting a modern Buka restaurant or any type of restaurant in Nigeria, this article is designed to show you how to set up and run a restaurant business in any locality in Nigeria.

The restaurant business in Nigeria and many other places around the world is one of the most lucrative business ventures. It is one of those businesses that will always generate huge profit if it is properly managed. One of the major challenge of restaurant business is getting a good cook or chef.

Before I go into how to start a restaurant business; let’s explores the different kinds of restaurants you can set up.

Different Kinds of Restaurants 

There are different kinds of Restaurants which you can start today depending on your knowledge and expertise;

  • Fast food restaurants – In this kind of restaurant, the emphasis is on the speed of service. This kind of restaurant range from small-scale street vendors with food carts    to multi-billion dollar corporations. They sell food that can be taken away or eaten at tables provided within few minutes. Crunchies and Mr. Biggs are good examples.
  • Barbecue restaurant – it include; chicken barbecue, meat barbecue, fish pepper soup etc. Food are prepare here in barbecue-like style-smoke and roasted food.
  • Ethnic Restaurants -these restaurants serve food from specific ethnic group or culture only. The culture can foreign or local. Examples of Ethnic restaurant are Chinese restaurants and Efik restaurants in Lagos, Nigeria
  • Quick Service Restaurants – They are fondly called as Bukas and mama put. The speed of Service similar to that of fast food but their menus is more flexible and cheaper than fast foods. They mostly found around street corners, parks and factory sites.
  • Casual Dining Restaurants these kinds of restaurants are more advanced than fast foods, they have flexible menus and a relax atmosphere where customers can take their meals at comfort. They hardly render take away services unlike Fast food restaurants.
  • Fine Dining Restaurants this is a high class restaurant. Our politicians eat in this kind of place. This kind of restaurant is meant for elite customers. They aim at providing unique dinner experiences similar when you’re eating at the comfort of your home. They treat their customers with dignity and respect and offer excellent menu items at affordable prices. They also provide warm and friendly services with the aid of professional waiters and staff to ensure absolute customer satisfaction. They also provide warm and friendly services with the aid of professional waiters and staff to ensure absolute customer satisfaction. Utazi which is located at etim inyang crescent, Victoria Island Lagos is a classical example of a fine dining restaurant.

Read also: 4 major challenges in running Restaurant Business in Nigeria

How to Set up a Restaurant Business in Nigeria

Here are steps to follow to set up a Restaurant business:

Study the Restaurant market

The first step towards starting a restaurant business is to study the restaurant market in your locality. This is very vital when going into restaurant business. Studying the market for restaurant business can take several months but it is normal. This will help you avoid necessary costly mistakes. While the business might seem simple and easy to start, there are rules guiding business you must know if you want succeed in the business. And you get to know these rules by studying the market for this business.

Register your restaurant

The next step is to your register your  restaurant business. To help you build your brand and stand out among your competitors, you need to register you restaurant name. In Nigeria, Corporate Affairs Commission is in charge of business name registration and you can register your business name online. Don’t make the mistake of starting your restaurant business without first registering your business. Some other person can register it and take over the brand name you’ve suffered to build for years.

Put down a detailed plan 

Your business plan will serve as the road map from which your new restaurant develops. No matter how much thought you’ve put into your concept or how many trusted friends that have assured you of business greatness, you absolutely must write a business plan. Your plan will help guide you on path to follow when your business begins to grow.

Find out who are your target customers

You need customers who are going to eat at your restaurant. What do they do for a living, how old are they, and what’s their average income? These are questions you need to answer when starting a restaurant business. Your restaurant business will flourish very if you know your target customer and niche market well. You can scan for them or produce handbills and share for attracting them.

Find a suitable Location  

Another step is to find a good location for your restaurant business. A highly densely populated and easily accessible part of your locality is one of the best location for a restaurant business. Of course, you should know that it best to site the restaurant near colleges, motor parks, institutions and work offices complex. These are areas, you have high number of categories of people that will patronize your restaurant.

Find out restaurant’s tax rate in your locality

Again you need to find out the restaurant tax rate in your locality and know if you will be able cope with that. There are number of compulsory taxes for all businesses in Nigeria, for example Companies Income Tax, Education Tax, Value Added Tax, etc. However, in certain States in Nigeria there are additional taxes which have been imposed on restaurants. For example in Lagos, the Lagos State Government imposes a sales/consumption tax of 5% on services provided in restaurants within the State. Before setting up a restaurant therefore it is important that you get a lawyer who is familiar with the tax implications on your business and can ensure that you do not fall foul of the relevant laws.

Obtain Restaurant Sales Permit and necessary License

  In order to commence your restaurant business in Nigeria, you will need to obtain a variety of licenses and permits. In some cases, the licences you will need to obtain will be at the Local Government office, in other cases it might be at an agency of the State Government. Ensuring that you have the appropriate licences and permits is critical to your setting up of your restaurant business in Nigeria. The types of licences and permits vary by location, and so it is important that you seek out professional legal advice in the restaurant set up phase. Also, if for instance your restaurant will sell alcoholic beverages, there is a certain license that will be required. If your business will be open at night time, or potentially past midnight, there is a specific permit that will need to be obtained. Getting the right legal support is therefore critical to starting your restaurant business on the right footing from a licence and permit perspective.

Raise capital for the start-up

After researching, planning and deciding, you should have an idea of how much it will cost you to start up your restaurant. One of the most requirements for starting restaurant business is capital. So, you need to raise capital for the business. Your capital determines your business entry level – small, medium or large scale business. It is okay to start small and expand later as you gather experience and monetary returns because growth is a continuous and steady process.

Read: Cost of Starting of A Restaurant Business in Nigeria

Create your Menu List

The menu is the most important touch-point of any restaurant’s brand. Your restaurant should feature daily specials and Prix Fixed Menu. Your Menu list should also include prices for each menu. You can create your menu price list by checking out what other restaurant in your locality collect for a plate of meal they serve their customers.

As a new beginner in the business, the price for a plate of meal you offer may be a bit lower than what others collect for the same plate of meal to help you build a good customer base. As a chef and lover of food art, you must have your special recipes and a variable menu at a reasonable price to establish credibility and to give your restaurant an edge over others. Your menu is the life wire of your business; ask yourself why customers should keep having meals at your restaurant? If you can honestly answer this question then you are good and ready to build a lasting restaurant. Make arrangement to obtain food stuff and special condiments at regular and affordable prices by locating and connecting with people who supply you at wholesale prices.

This reduces the stress of finding and purchasing some food items that may be seasonal, scarce or limited in market supply.

Purchase necessary restaurant equipment

The equipment necessary in any restaurant includes; Cooking utensils, Tables, Washing materials – hand washer and plate washer, Desks and chairs, Networking Cables, Inverter, Air conditioner, Fans, Generator plant, Tv set, Dstv / local antenna, Audio Music player etc for entertainment

Furnish your restaurant

You also need to Furnish your restaurant. There are so many ways to do this but it all depends on your taste. Use Fresh flowers to adorn each table and the contemporary hand-sculpted brass work overhead to enhance the exquisite atmosphere of your restaurant.

Employ good chefs and waiters

Employ experienced waiters and staff who are passionate and understand the need for optimum customer satisfaction in the sustenance of restaurant business. Your staff will determine to a large extent your ability to retain and capture new customers. Meticulous attention to detail and the use of the freshest seasonal ingredients and products of the finest quality should be the watchword of your chefs.

Create and Organize your Management Team

Create and organize your management team. You need manager who manage the business for you so that you can have time for some other things. Organize Waiters and Waitress who will serve your customers, financial accountant for accurate financial update etc. (chief chef and other staffs).

Establish Health and Safety standard of practices

The restaurant business is a very sensitive business; this is because restaurants are all about people eating food.  You should expect that your restaurant will be subject to regular monitoring and inspections by the local government or State government to ensure that you are keeping up to the relevant health and safety standards. Inspections may cover not only the food itself, raw and prepared, but also refrigeration systems, cooking equipment, and waste dustbin.

Promote your restaurant business: This is one of top priority in this business. This is because it doesn’t matter how good a chef you are or how excellent your services are if people don’t know about your restaurant. It doesn’t matter the kind of restaurant you choose to run, you need to publicize it. Use Social media platforms for excellent quick service restaurants. Traditional media is very suitable for fast foods, casual and fine dining restaurants but this is not a restriction. You create a website and make it available online and utilize the cheap advertising rates on the internet.

With huge popularity of football fans in Nigeria and many other parts of Africa, if you add big-size screen TV to display football game, more customers of different classes of people will be attracted to your restaurant. During the weekends you can hire live bands to provide entertainment for customers. For detailed information on how to promote restaurant business; read the 12 Effective Ways to promote a new Restaurant business

Study your Competitors and outshine them

Finally, to succeed in this business and make more money in this business, you have to study your competitors and outshine them. The competition is always high in this kind of business, so you need to know what and what your competitors are doing and over-take them.

Is Restaurant Business Profitable?

Yes! Restaurant business is one of the most profitable businesses in Nigeria. A research I conducted in Port-Harcourt, River state of Nigeria last month shows that an average medium scale restaurant makes nothing less than N25000 per day as profit. Restaurant business is one of most fast growing and flourishing business in Nigeria especially in most big cities like Lagos, Onitsha, Abuja, Port Harcourt, Aba, Enugu,  etc where people are highly busy during the day and never find time to cook food themselves even at night. If you want to make money in restaurant business, you have to offer take-out and food delivery services together or offer only take-out and outdoor services. It all depends on your capital and level of entry.

 Cost of Starting a Restaurant

Restaurant business can be started in small scale and then grow into big corporation like Crunchies, Mr. Biggs, Emile’s restaurant, Emily restaurant, etc. . Emily restaurant was initially started in low scale but has now grown into a large scale business. The company is doing quite well in Enugu-southeast part of Nigeria In a low scale, restaurant business is not capital intensive. With small amount of capital  like N100000, N150000, N200000, etc you can start a restaurant in a small scale. The two most important things necessary to succeed in this business are neatness and ability cook nicely

Things to consider when starting a Restaurant

If you are about starting new restaurant business in your locality; these things should be taken in considerations;

  • Your passion for the business
  • Experience of your Chef or Cook
  • Location of your Restaurant
  • Your target customers
  • Your capital
  • Your Backup financial plan
  • Your Competitors

These factors can either make or mar your Restaurant Business

 

In summary, the above are steps to a start a restaurant business in Nigeria, how profitable it is, cost of starting and things to consider.  You can choose start the business in  small or medium scale entry level and then end up as a large scale business enterprise. Follow the steps to the business and you will definitely succeed.

 

2 thoughts on “How to setup a restaurant business in Nigeria (Costs & requirements)”

  1. Am starting a restaurant business in Abuja. I need a professional African restaurant consultant in abuja. My contact number- 08060040797

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