Buying a restaurant would be an intricate task itself, but it adds to your headaches if you have no idea about the complete process of starting a new restaurant in Dubai, Al Ain, or Abu Dhabi.
A couple of days back I read a post from a foodie blogger from UAE, who was looking for some advice on starting up his restaurant business. It was quite interesting to read that post and there were many comments by other people in the same situation. I did reply to that query but it also got me thinking about writing an article on this topic.
So, what should you know or contemplate before starting up a new restaurant in the UAE?
1. Market Research
You need to do extensive market research about the location you are planning to open your restaurant at. You also need to look for availability of labor in that area and how you can manage them effectively because one of the biggest problems with the majority of restaurants is controlling the staff.
You should conduct thorough research on your competitors, keep an eye not only on which types of cuisine they serve but also their customer service, business strategies, marketing techniques, etc. Identifying what works for them could help you decide what would work for you too. It’s better if you could acquire reliable data like sales figures annually so that it becomes easier for making any conclusion or decision about starting up your own restaurant.
2. Cash Flow Analysis
You need to prepare a cash flow analysis for your restaurant business. Identify how much money you would need for initial investment, then choose the right type of funding (be it bank loans, personal loans, or investors). You should make sure that you are able to generate sufficient cash daily to take care of your operating expenses until your business settles down. Operating Expenses include rent & real estate costs, labor costs, everyday expenses like electricity bills, telephone bills, etc.
3. Location Research And Lease Agreement
It is never too late now to look at the Dubai market for opportunities because now the market is crawling with many unbranded restaurants that could not survive due to a lack of quality food and poor service levels. Many restaurants are now opening up in the traditional locations which offer higher margins.
If you are opening up your restaurant at a location with high rentals, then it is highly possible that you might not be able to afford good chefs and other staff. It’s better to focus on low rental areas where you could hire the best people for the job who would help you establish your brand faster.
When it comes to signing lease agreements, there are certain clauses that every restaurateur should know before they go ahead and sign anything because if they miss any of these points it could cost them a huge amount of money (mostly in monthly installments).
4. Department of Labor
All labor-related issues should be handled by the department of labor-free zone establishment only. So, when you are starting up your restaurant in Dubai (or any other emirate), make sure that you approach this department and get all the required documentation like NOC (No Objection Certificates), work permits for chefs, waiters, etc.
5. Restaurant Insurance
I would recommend all restaurateurs to take a separate insurance policy for their restaurant because it is very important and one of the mandatory requirements from the department of the labor-free zone. It will also help them in protecting themselves from litigation or any legal problem arising out of a food poisoning case.
Hope that this article will help you!
Blogger, traveler, Tech Enthusiastic and content writer.