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A buffet restaurant is one where customers can fill their plates with a variety of food for a set price. Normally buffet restaurants pick a particular theme, such as Mexican or Chinese, and then choose different variations of standard dishes to offer. Buffets help communities by exposing them to different types of food without making them buy a full plate of something they may not like.
Who is this business right for?
This business is good for someone who loves giving customers a unique experience at a restaurant and wants to open up people's eyes to new forms of cuisine. Owners should also have an interest in food patterns, and how to get the best seasonal ingredients for the cheapest prices.
What happens during a typical day at a buffet restaurant?
A buffet restaurant owner may complete any of the following tasks in a given day:
- Selecting buffet options
- Maintaining buffet/cooking equipment
- Hiring and managing employees
- Completing safety inspections
- Advertising the business
What is the target market?
Owners profit from families and individuals who see the benefits of buffets. Those who are big eaters can choose an All You Can Eat (AYCE) option. Those who have a difficult time deciding on a meal can instead try whatever they want, whenever they want it. Finally, many people use buffets as a way to try new foods. Most people won’t cook their own lobster or order an expensive meal in a restaurant, but they may choose a tail to try when they’re at a buffet to see if they like it.
How does a buffet restaurant make money?
Profits at a buffet restaurant (or any restaurant) can be slim. In fact, the high-end Vegas buffets typically lose money with their expensive menu options like Alaskan King Crabs and Wagyu beef to encourage gambling. Owners who don't work at a casino should price their buffet margins at about 70% or so to cover the cost of what’s on the plate, meaning if the cost of the food on a plate is about $3, then the customer should be paying about $10 for their meal. The additional 70% goes toward maintaining the restaurant’s daily operations.
What is the growth potential for a buffet restaurant?
Growth potential is possible with a steady clientele. Many of the most successful buffets are gathering places in communities, somewhere to go after church or on Fridays after a long work week. Loyal customers encourage newcomers to try your buffet offerings, and provids valuable word of mouth too.
What are some skills and experiences that will help you build a successful buffet restaurant?
Prior experience in buffets will be a huge help. There is a psychology behind buffets, and it helps to understand how people eat and what they want exactly. Buffet owners should also be extremely organized, as the organization and flow of people will need to be carefully considered before a final layout is decided upon.
What are the costs involved in opening a buffet restaurant?
The median cost to open a restaurant (without buying the land) is about $225,000, but there are ways to cut your costs. Because buffets can be successful regardless of the neighborhood you’re located in, you may be able to find an affordable location and furnish it with used equipment and supplies (e.g., tables, chairs, decor, etc.) to save money.
What are the steps to start a buffet restaurant?
Once you're ready to start your buffet restaurant, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your buffet restaurant is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your buffet restaurant keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a buffet restaurant?
The first thing you'll need to do is obtain the proper permits to both move into your chosen building, and to handle food. This will require going to your local authorities and health department to find out more about what's required in your area.
Many people are afraid of opening AYCE buffets simply due to the amount of food a person is likely to consume. However, there are plenty of tricks to getting people to eat less, both to save you money and to keep people from feeling uncomfortably full (or even ill).
Restaurant owners should keep their plates small, and their water glasses large. The more people fill up on drinks, the less they’ll fill up on food. Many of the buffet offerings should be extremely cheap foods that can be purchased in bulk. For example, carrots and potatoes only cost a few dollars for a 50 pound bag. These cheaper side dishes should be placed prominently around high priced offerings to encourage people to vary their diet. Consider using cheaper cuts of beef or fish, and focusing on the quality of the cooking.
You may also want to consider franchising opportunities, such as Golden Corral. When you franchise, you sacrifice some power over menu options in return for a trusted name and free nationwide advertising to help propel your success.
How to promote & market a buffet restaurant
Check to see how other buffet restaurants are promoting themselves in the area, and consider how well they’re faring at bringing customers in. You should be filling some type of void in a neighborhood, so you’ll want to focus on what you can offer that others can’t. Some people do care about quantity of food over quality (and vice versa), so ensure you understand what a community is looking for before deciding on a marketing strategy.
Consider doing traditional promotions, such as early bird or senior citizen, as a way to get people in the door. However, be careful not to price your menu options too low. The cheaper the price, the more likely it is that people will think the food is cheap too.
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How to keep customers coming back
Keep customers coming back by offering them the most popular menu items available, yet also switching out options for more variety. If customers feel like there's more to discover, they’re more likely to get excited about coming in. Owners should find ways to incorporate fresh, local, seasonal ingredients whenever possible.
How and when to build a team
Building a strong team should be done as soon as possible. Management staff will need time to learn the various tricks and strategies you plan to employ for your restaurant so they can impart the plans to employees.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a buffet business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Certificate of Occupancy
A buffet business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a buffet business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your buffet business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
How much can you charge customers?
A standard homestyle buffet costs about $12 for dinner, while a Chinese or Indian buffet may keep the price closer to $10. Calculate the price of the menu items you offer, and then do research on what other buffets are charging in the area before setting the final price.
What are the ongoing expenses for a buffet restaurant?
Owners should factor in the following costs for a buffet restaurant:
- Restaurant equipment costs
- Cost of food
- Rent/land maintenance
- Marketing costs
- Employee salary
How much profit can a buffet restaurant make?
Like all restaurants, owners need to be extremely conscientious about waste. Streamlining the ordering and pricing process can greatly impact your bottom line. Many people will not end up eating nearly as much as they think they will, and even if they do overdo it, the potential for profits is still available. Still, margins can be as slim as 1 or 2%, even considering these facts. Assuming a 2% profit margin, a buffet restaurant would need to sell about 90 meals every day at $12 a piece in order to make about $8,000 worth of profit a year.
How can you make your business more profitable?
Buffets are all about choices for the customers, so consider offering more ways for your customers to get what they want. For example, you may want to do student nights on a slower day of the week, or a themed buffet such as Taco Tuesday. In addition, try offering people meals prepared fresh, either at a cooking station, or as a separate part of the menu. For example, BD’s Mongolian BBQ (a chain buffet restaurant) would offer customers the chance to do one trip to the buffet as a lunchtime offering rather than the standard AYCE.