Jump to Main Content
USA flagAn Official Website of the United States Government



7 Tips for Starting a Fast Food Business; It's not Just Fries, Subs and Pizza Anymore!

Comment Count:

Comments welcome on this page. See Rules of Conduct.

7 Tips for Starting a Fast Food Business; It's not Just Fries, Subs and Pizza Anymore!

By Caron_Beesley, Contributor
Published: May 17, 2010 Updated: March 28, 2013

The take-out and fast food industry in the U.S. continue to boom, despite related health risks. Yet perceptions about what constitutes fast food are changing. According to a recent study by food industry consulting firm Technomic;Consumers are expanding their definition of fast food-:

Consumer' perception of fast food is no longer confined to quick-service, drive-thru restaurants and convenience stores. Instead, a dual concept has emerged, consisting of traditional fast food, and of'food fas' served quickly with a greater emphasis on flavor, quality and ambiance. (The)... idea of places offering'fast foo' has expanded...to include fast-casual restaurants such as Panera and full-service restaurants offering carryout and curbside service'

What does this perception-shift mean for entrepreneurs? More opportunity but also more competition!

Starting a restaurant (fast food, food fast or fast-casual) is a hugely popular entrepreneurial dream, yet the reality is far from dreamy. The restaurant business in notoriously tough' Gordon Ramsay would be out of a job if it were't - but where there is a will there is often a way.

While vision and ingenuity are key to any start-up ambition, turning that ambition into success requires research, planning, capital (not always as much as you think), business acumen, and perseverance.

So how do these all tie together? Here are some tips that can help entrepreneurs start, operate and grow their fast food or take-out business successfully and within the law.

Research, Research, Research

Because the fast food business is so competitive, it's vital that you do your research. Start by talking to someone who has done this before. Business networking events (such as those operated by Small Business Development Centers, SCORE and local Chambers of Commerce) offer a great venue for picking the brains of fellow business people. Try to find out what works, what doesn't, and what they would do differently. If you are aware of restaurants that have failed, try to identify why (online community forums are a great way of gauging market need and customer opinion about local food service businesses).

Knowing what works and what doesn't will help you to define your target market and the niche opportunity that you can justifiably build a strong business case for going after. Whether it's specializing in authentic Chicago hot dogs or freshly made cup cakes - focus on providing a unique and quality product - don't try to be all things to all people.

Above all, take your time. Try to objectively determine what price points your customers will tolerate. What is the competition? Do the local demographics support your venture (now and in the future)?

Likewise, research potential locations. While city locations may attract walk-in traffic, many suburban locations offer a higher concentration of lucrative 'family-oriented' fast-food opportunities. Get more advice and tips from Business.gov on choosing a business location.

And for more market research tips check out Business.gov's Market Research Guide which includes free access to demographics and consumer data.

Consider Starting Small

You may dream of gleaming marble counters, a top notch kitchen, and a prime downtown location, but starting small can often be the best first step into fast food restaurant ownership. Not only will it give you a view of the basic fundamentals that apply to the business, but it also requires less capital and therefore less risk.

Small sandwich shops or food concession stands can provide a taste of the food service business with minimal overhead. Alternatively, fast-food franchises might be an option worth considering for entrepreneurs who are not quite ready to make the leap into full business ownership.

These articles provide insight into some of the options for starting small:

Build a Business Plan

A business plan doesn't have to be an overly formalized document, but going through the process of building and constantly tweaking your plan will help you match the strengths of your business to the opportunities the market presents. It can also help you better deal with threats as they emerge.

A business plan is also essential when it comes to communicating with others - such as customers, partners, and investors - if you want any of these to believe in you, you must be able to convince them that you know what you are talking about when it comes to your business.

Drawing from industry experts, Business.gov offers small businesses tips and advice on writing a business plan.

Seeking Investment

Not all businesses need investors to get started, particularly if you start small. However, there are a range of options from very small microloans that can help smaller fast food outlets get started, to more comprehensive small business loans such as the popular SBA 7(a) and 504 loan programs.

If you are seeking investment, plan it out. Use your business plan as the basis of a loan proposal or investment plan. Investors and lenders will want to know everything about your business idea or venture. Also, be realistic about how much money you need. You can save lots of capital just by buying local produce and purchasing surplus equipment.

Read more about the ins and outs of finding and applying for a loan or other capital on Business.gov's Small Business Loans and Grants Guide.

Take Care of the Regulatory Steps Involved in Starting a Business

Whatever your business type, you must take care of the fundamental regulatory and legal steps involved in starting a business. Read 10 Steps to Starting a Business from SBA.gov to make sure you take care of all these requirements - from registering your business, getting a license or permit, to being a responsible employer, and so on.

Running a Restaurant within the Law!

From labor laws to food safety laws and new regulations such as no smoking laws, understanding and achieving compliance with legal and regulatory requirements can have a big effect on the success of a restaurant operation.

Read Operating a Restaurant within the Law: A 101 in Compliance Part 1 and Part 2 for guidance on the laws that apply to minimum wage, tips, overtime, youth labor, immigration, food safety and taxes.

Don't Go It Alone - Free Advice is Out There

Last but not least, don't go it alone. Talk to your local SBA office, SCORE, or Small Business Development Center (SBDC). They can give you unrivalled, objective, and FREE advice about the local market and the process of starting a successful business. Find one near you here.

Additional Resources

For a more general overview of federal regulations that affect this industry, check out the resources on Business.gov's Restaurant and Food Service Business Guide or visit www.foodsafety.gov.

Related Articles

* Note - Hyperlink directs reader to non-government Web site.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!