Costs and How to Start Restaurant Business in Nigeria

Food is one of the basic needs of man as such its profitable business to sell food. If you are looking to establish your restaurant either for passion or for income, then you have chosen right.

How to start restaurants business in Nigeria

Establishing and owning a restaurant is one of the most rewarding experiences of your life.

Aside from the fact that it is enjoyable, you are liable to earn a lot from this business even at an early stage.

Also, the food business is easy to set up and is sellable regardless of your location.

Under the right conditions, as a food seller, you would always make profits.

But, just like every profit-making business, there are protocols, tips, and tricks to become more successful in the food business.

That’s why I have written this article to help you understand the cost and then how you can start a food business here in Nigeria.

Restaurants or eatery business in Nigeria is a very good investment.

This is because of Nigerian’s large population snd diverse culture.

While it costs significant amount to start standard restaurants business in Nigeria, it’s return on investment is huge and commendable.

So, the idea of setting up restaurants business in Nigeria is a lucrative and profitable one provided right steps are taken.

Steps for Setting up Successful Restaurant Business in Nigeria

Here are some of the tips for starting an eatery / restaurant business in Nigeria.

1. Decide on the Concept of your Restaurant

The first thing to consider when starting a restaurant business is deciding on the idea.

You must take into account many things before deciding on a concept, of which one is the amount of capital you have to invest.

The average capital available for starting the restaurant will highly determine the state of take off of the restaurant.

The concept of the restaurant will help decided both the location, food menu and type of facilities to be installed.

Once you have decided on the concept, you must consider the theme and cuisine of your restaurant.

Interiors should be in sync with the theme of your restaurant.

Next, you need to prepare a business plan for your restaurant.

2. Obtain Capital to Finance your Restaurant Business

The dreams of most aspiring restaurateurs never come to light due to lack of funds, and this is one of the most important things to consider when thinking of opening a restoration business.

First of all, depending on the concept of your restaurant, you must define how much capital is required to start a restaurant.

You can start a small restaurant business with as little as N150,000.

The most common ways of raising capital which include self-funding, loans, grants, and sponsorship.

However, most top and decent restaurants in Nigeria will require capital in the region of N1.5 million to set up.

3. Assess all Restaurant Costs Involved

Restaurant costs are an important part of running a restaurant and must be carefully evaluated and planned.

Below are the significant costs involved in starting a restaurant business:

Food costs: The cost of food is the cost of all the raw materials used to prepare a dish.

Ideally, the cost of the meal should be around 30% of the menu price.

You must determine the suppliers to source the raw materials in advance to ensure a smooth supply of ingredients in stock.

Also food items should be bought in stock and large quantities to be able to get good price bargain.

Labor Costs: Labor cost is the second-largest restaurant cost added to the expenses of opening a restaurant.

You have discussed the manpower you need to start a restaurant in detail, ahead of time.

Deciding on the number of staff to join in operation and running the restaurant is very necessary.

The final number of workers needed will be determined by the size of the operating restaurant and the number of expected customers.

Overhead Costs: Overhead costs are other expenses that are not related to food or labor. These include:

Rent: Rent covers a significant part of your restaurant costs and is profoundly affected by the location of the restaurant.

However, the rent should never exceed 10% of your total income.

Interiors: You can decide the interiors according to the concept and theme of your restaurant, and your budget.

Kitchen equipment: Buying the right quality equipment may seem heavy on the pocketbook, but they always pay for themselves in the long run.

Learn about the various types of essential equipment without which you cannot run a successful restaurant.

POS: New age and modern POS technology can smooth your restaurant operations like never before.

The price of the POS depends on its characteristics and functionalities, which must be chosen taking into account the needs of your restaurant.

4. Decide the Location of your Restaurant

Location is an essential factor to consider when discussing how to start a restaurant business in Nigeria as it can determine the success of your restaurant.

When choosing your restaurant location, it’s a good idea to identify your competitor in that area, measure their progress, and understand their business model this will help you do more snd better.

The competition should be evaluated not only in terms of cuisine but also the type of dining experience they offer their customers.

5. Get Labor for your Restaurant Business

Hiring the right chef is extremely important for your restaurant, as your food is what will attract your customers.

In addition to cooking, your chef also designs your menu, taking into account the available ingredients, and trains and directs staff to prepare and present the dish.

Therefore, an experienced chef is a must for your restaurant.

Before starting a restaurant business, you should also remember to train your staff not only regarding their job but also how they should serve your customers to provide stellar customer service.

There are three types of staff required in a restaurant:

Kitchen staff: Your kitchen staff includes cooks, food preparation staff, support staff, etc. Most of them will be unskilled labor.

Service staff: Waiters, cleaning staff, busboys, etc. They are your service staff. Since they have to interact with customers, they must be good at communication and must receive proper training.

Management staff: The manager, the chef, the cashier, the store manager, etc. of your restaurant make up the management staff, and they should be educated and experienced.

6. Design a Stellar Menu

The next step in starting a restaurant is to design a menu.

A smartly designed menu can have a significant impact on your restaurant’s food costs.

The menu should include items that can be prepared quickly and use local or readily available ingredients.

It is advisable to serve dishes that use similar ingredients, which will help you reduce your total food cost and the extent of waste .

7. Organize Suppliers and Vendors for your Restaurant

A healthy relationship with your supplier and vendor is essential to the smooth running of your restaurant.

You must have at least two or three providers in each category.

This would help compare prices and also serve as a backup in case of any problems.

I hope you found the article helpful. Please ensure that you share and comment below.


The Author


My name is Olamide Samson. I am a cyber security enthusiast with certification almost complete. I take interest in creative writing, videography, video editing and speaking.

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