Starting a restaurant or café

Test the concept first

Before committing to a lease and fit-out, find out what people will pay for:

• Run a pop-up, market stall or food truck for a few months.
• Do catering or private events to test your menu and pricing.
• Talk to locals in the area you’re considering: what’s missing, what they’d come back for.
• Study the competition: who’s busy, when, and why.

A clear concept matters: who your customers are, what you’re known for, your price point, and when people will come (breakfast commuters, weekend brunch, evening dining).

Location and lease

Choosing a location

• Foot traffic and visibility at the times you’ll trade.
• Your customers nearby: offices, residents, schools, tourists.
• Parking and public transport.
• Competition and complementary businesses close by.
• Zoning and approvals: confirm with the council that food premises are allowed, and what’s needed for outdoor seating, signage and trading hours.

The lease: your biggest commitment

A commercial lease can tie you to large payments for years. Before signing:

• Understand the rent, outgoings, rent reviews and term, and whether there are options to renew.
• Check who pays for fit-out, repairs and make-good at the end.
• Ask about rent-free periods for the fit-out.
• Check for existing kitchen exhaust, grease traps, power and gas capacity. Installing them can cost a fortune.
• Get legal advice and talk to your state’s small business commissioner, which has resources on retail leasing.

The numbers that matter

Hospitality margins are thin. Build your plan around these, and track them weekly once you open:

• Food and beverage cost as a percentage of sales, for each menu item and overall.
• Wages as a percentage of sales, including your own time.
• Rent and outgoings as a percentage of sales.
• Break-even: how many customers a day, at your average spend, cover all costs.

Example (illustrative only): with fixed costs of $12,000 a month and an average sale of $12 with 35% food and packaging costs, a café needs around 60 customers a day over 26 trading days just to break even. See Financial planning and cash flow for how to build these numbers, and plan enough cash to survive several slow months after opening.

Start-up costs to budget for

Fit-out, kitchen equipment, furniture, coffee machine and grinder, point of sale, crockery and utensils, initial stock, signage, bonds and deposits, registrations and licences, opening marketing, and a contingency of at least 10–20%. Consider leasing or buying quality second-hand equipment.

Registration and food safety

Food business registration

You must register or get a licence for your food business, usually with your local council (in some states, with the state food authority). The council will typically inspect your premises before you open and periodically after that. Talk to them early, ideally before you finalise the fit-out, as premises must meet construction and hygiene requirements.

Depending on what you do, you may also need:

• a liquor licence if you’ll serve alcohol (from your state’s liquor regulator),
• approval for outdoor dining, signage and trading hours,
• music licences if you play recorded music,
• approval for trade waste discharge from your water authority.

Use the licence finder on business.gov.au to check what applies in your area.

The national food safety standards

Under Food Standards Australia New Zealand’s Standard 3.2.2A, businesses that handle unpackaged, ready-to-eat, potentially hazardous food, such as restaurants, cafés, takeaways, caterers and bakeries, must have:

1. A certified food safety supervisor appointed before you start trading, reasonably available whenever food is handled, with a certificate less than five years old.
2. Food handler training: every food handler must have completed training or be able to show the required skills and knowledge before handling high-risk food.
3. Records showing you’re controlling key food safety risks, such as temperatures and cleaning (for higher-risk “category one” businesses like most cafés and restaurants).

Your council and your state’s food authority can confirm exactly what applies to your business and how they inspect.

Allergens

Customers must be able to get accurate information about allergens in your food. Train staff, keep ingredient information up to date, and never guess.

Staffing

Labour is usually your largest controllable cost, and the hardest part of running a venue.

• Roster to demand: track busy and quiet times and adjust.
• Pay correctly: hospitality has specific award conditions, so use the Fair Work Ombudsman’s tools or get advice from your accountant or industry association.
• Train for consistency: recipes, plating, service standards and food safety.
• Look after your team: good staff are hard to find and expensive to replace.

See Recruitment: finding and choosing good staff and Workplace health and safety, which covers hazards such as burns, cuts, slips and late-night work.

Getting customers through the door

• Google Business Profile: accurate hours, menu, photos and a link to book or order. It’s how most people find you.
• Reviews: ask happy customers, and reply to every review.
• Social media: show your food, your people and what’s new. See Social media marketing.
• Local relationships: nearby offices, schools, clubs and events.
• Delivery platforms: they reach more customers, but take a significant commission, so price accordingly.
• Consistency: the same quality, service and opening hours every day is what turns visitors into regulars.