# Opening a restaurant



## Torto (Jan 4, 2014)

Hi guys
I want to open a restaurant in Cyprus(Paphos area)
The restaurant will be open every day form 11 am to 11 pm(up to 1 in the evening if there are customers).
The restaurant will offer traditional things-food ,drinks( all staff plus alcohol).
Also in some of the days,I also can hire some musicians or people to entertain customers for lunch or evening.
1)What licences are required for this ?(food,drink,music,sales.................or ?Am i have a obligated time from when to be open or close( i will not work 24 hours,juts if there are customers,i can be open up to 1 am in the evening-is it need a special permission for this) ?
2)From where i should take all the licences ?
3) How long this licences will be ready (Quick or Slow ,days,weeks,months)?
4)How much are the cost of this licences(big amount of money or small one)?
5)If i use a lawyer for licenses it will become faster or not ?
6)I am looking for suppers(for foods and drinks)-can you recommend me or where i can find them ?
Thank you in advance.


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## Veronica (Apr 5, 2008)

I question whether opening a restaurant at this time when so many long established businesses of this type have closed down in the past year.
Please make sure that you really do your homework thoroughly before investing your money into such a venture.

As for the questions you have asked I don't think that a forum such as this one is the best place to get the answers you need. 
You should consult a lawyer for all the information about licences etc.

I don't know what question 6 means?


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## Torto (Jan 4, 2014)

For the moment no-i managed to make the majority of the things alone and in the beginning i will keep my expanses as low as it is possible and it will be unwise to make significant investment in the new/beginning business,until it proves that can be profitable/produce enough cash-flow. 
For the moment i need information and advises/tricks for the new business/restaurants
But i am always looking for business oriented people to exchange ideas,ad vices,experience......for business,investments


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## Torto (Jan 4, 2014)

Veronica said:


> I question whether opening a restaurant at this time when so many long established businesses of this type have closed down in the past year.
> Please make sure that you really do your homework thoroughly before investing your money into such a venture.
> 
> As for the questions you have asked I don't think that a forum such as this one is the best place to get the answers you need.
> ...


Veronica
You have full right to be skeptical-to be more specific 90 % of every 100 business closed until end of the year.
But i made my homework..........................and i have a full confidant that this venture will be successful.
I need only information if someone of you had before restaurants.
P.S
The word is suppliers(food and drink)..................sometimes i write to fast on the keyboard.


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## Collossusx (May 23, 2014)

may I ask what makes your business so unique to give you this confidence of success?


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## Torto (Jan 4, 2014)

Collossusx
To use others money is big responsible,i don't mean only legal responsible,but moral.
If i take your money and the venture is not successful(the business fail)-I don't have a legal responsibilities(if the investment is good-you return your money and continue to receive money every month or dividend/s in the end of the year.....if not,you simply lose your money) but the moral responsibility that your are/were confident/trusted in me and i lose your money/trust.................the moral responsibilities will be bigger for me.


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## Collossusx (May 23, 2014)

I appreciate that but you didn't answer my question.


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## Torto (Jan 4, 2014)

Lets answer you with a question:
As i said 90 % of every new starting business fail until end of the year.
But 70 %(someone estimated 90 %-but to renewal a contract didn't mean that you are successful) of every new starting franchise succeed and operate successfully Why ?



> According to the U.S Small Business Administration, seven out of 10 new employer firms survive only 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more. Bureau of Labor Statistics data on establishment age show that 49 percent of establishments survive 5 years or more; 34 percent survive 10 years or more; and 26 percent survive 15 years or more.
> 
> According to previous research conducted by the IFA Educational Foundation, more than 90 percent of franchisees renew their agreements at the end of their contracts. On an annualized basis, approximately 5-6 percent of the franchisees that come up for renewal are terminated (not renewed), and approximately 2-3 percent are transferred to another owner (this may be due to a retirement, a death of the previous owner, or a multitude of other factors that have nothing to do with whether or not the business was “successful”).
> Clearly, franchise termination and transfer rates would be much higher if operating a franchise was not a prosperous way to make a living. Given that most franchise contracts have a term of seven to ten years, the data seems to indicate there is a much higher business continuation, or survival rate, among franchises than other small businesses.


Source:http://www.franchise.org/Franchise-News-Detail.aspx?id=52504
But the majority of franchise are too expansive,but if you have:
-enough money
-lack of competition to your products
-good business climate
-your target group is enough
It may be a good investment.


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## Collossusx (May 23, 2014)

You've definitely done your research and the best of luck to you. Maybe invite us all on the opening night??


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## hiatusxenia (May 6, 2013)

The report quoted appears to be American based and if so, will not apply to Cyprus....


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## PeteandSylv (Sep 24, 2008)

Statistics on business success or failure are all very well but they are only numbers.

I cannot see how you can possibly succeed in opening and running a restaurant over here when there is so much excess capacity for restaurants.

Your description is generic to the majority of places and you have not suggested any USP to make your business stand out. I noticed another restaurant that had closed after only being open a short while yesterday (Viking Grill), these can be spotted regularly especially those in locations that seem blighted such as Stroumbi Tavern.

There is something special in the running of very successful restaurants and most of us here are aware of those that always have people in them while others are almost empty.

You have not indicated that you have been here to study the market and it's requirements closely or you would already be aware of licensing requirements, suppliers etc.

If your post is a genuine one I urge you to carry out a lot more research on the island before opening your own restaurant. If you are looking at franchises, which you do mention, then I would suggest a further statistic of my own: 80% of franchises are run by crooks as an easy money making method while they care nothing for the failing franchisee. The other 20% are mediocre to excellent but require a substantial investment and must have an international brand to succeed. On this basis McDonalds, Burger King, KFC, TGI Fridays, Pizza Hut etc are all taken here making me wonder what you might have left to consider.

Pete


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## mdekkers (Jul 3, 2013)

Licenses - you require a license from the CTO, as well as a few others. I am seeing a very good friend this evening who runs a successful restaurant in Kato Paphos (he is really struggling, just like everybody else). I know that non-Cypriot owners get a very hard time from the various licensing agencies - it would really help if you knew the right people in the right places..... 

As previously mentioned, some places do well, whilst others remain empty. It is a ridiculously trying time for the hospitality business at the moment, not in the least because the majority of tourist come in on all-inclusive packages, meaning the spend less on eating out. 

I wish you the best of luck - long hours, small margins, high risk, and very hard work. 

Martijn :ranger:


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## Cleo Shahateet (Feb 23, 2009)

Hi, 
I owned 3 successful restaurants in the US and know inside out what to do and how to do it so my first question to you is - have you ever owned a restaurant before? 

Since you are starting from the ground up my second questions is - do you have a business plan? If not, I would go online to try to get started with that first off. It seems like you do not have a business plan otherwise you would know where the suppliers are and answers to the other questions you have asked. 

You need to figure out in a business plan if your numbers will add up to be successful. Without knowing your food costs and other running costs you really don't know if you will be able to make ends meet. Do you have a location? 

I could add so much more to this but, I will leave it here for now. I'd be happy to advise more but will wait for your response.


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## Torto (Jan 4, 2014)

Hi Cleo Shahateet
I haven't had any restaurant in the past...............but i have some observations on the restaurants-why some are successful and why some not,why some are very popular and some not,what the owners/managers make to attract people and what the others didn't.
Yes,i have a business plan
My business plan includes:
-Name
-Location(where should be the location and why-strong and weak points/sights
-What licenses i need(the majority i know,only need the specific details)
-What legal form to be my company/restaurant-this form that allows me to have tax advantages and lower my taxes,asset protection,possibility of grow in the future,all my liabilities will be on my legal company,but not me as a individual
-Strategy and plan,how much the food will be sell
-Food,variety of food,how much cost me every meal and drink and how much i will sell it-and how much is the difference(profit gross margin)
-All expanses are a little hire because i calculate them from Papantunio/Liddle(now i am making a negotiating with the sup-players) but even with this expanses,the numbers are working very well for me
-Financial statement-how much should be my profit gross margin or how % will cost me every meal 
a)How much people i need to survive(only to pay the expanses),how much people i need to have a little profit,how much people i need to have a good profit,how much people i need to convert this in business model,how much people i need expand the business 
b)What will be average income of every customer(i put this lower even that the indicators show differently)
c)What will be my income if i have 5/10/15/50...............100 people daily,weekly and monthly
d)What will be my expanses in 4 scenarios(low expanses,medium expanses,high expanses and ultra high expanses)
What i mean about expanses:
-Rent
-Electricity
-Social insurance
-the fee of both lawyer and accouter
-Cost of the food(it depends how much costumers you have-if you have 50 ,if you have 100.............it will vary)
-Water
-Gas bottle
-Taxes(Taxes vary from your profit-if you have 0 profit-you pay 0,if you have 10 000-you calculated your expanses and what is left you pay 12.5 % tax profit(You can be legally on loss or minimal profit-if you can beat IRS............you can beat everyone 
For example in the worst scenario(when i put my expanses very high) i need around 22 people per day to pay my expanses 
-Calculating how much are my expanses per day and how many clients should i have to have to pay the bills
-The restaurant operating as a business structure
a)How many people i need
b)What will be their functions
c)How much it will cost me their salaries(plus taxes and social insurances)
d)How to motivated them and what % of the income/sales they will receive(% for them and another % for the manager,which most important role is to increase sales and every month he will receive a personal bonus depending of the results
e)Which/what kind of people to hire..............and what to avoid............a have some people on my list already
f)How the restaurant can be operating and all income received directly to be transfer to my bank account and all expanses to be payed without needing to go there
-Charity-what % of the money to go to charity/people in needs,also idea about free food in 1,2 days in the month for the people that need
-Strategy and tricks how to attract people in my restaurant

So this is my business plan-if i miss something,i will be very happy if you have a constructive critics/miss something or something that you want to add .


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## Cleo Shahateet (Feb 23, 2009)

It seems like you have touched on everything. As long as you have the money, a reserve and a good plan then you should be ok if it doesn't go as expected. 

I would anticipate quite a few delays with the possibility of licenses taking longer then expected and many other possible delays. Timelines don't always go the way they are planned our in Cyprus ;-)

From your first post it seemed that you did not know any of the basics or have a lawyer so hopefully you do. 

Just be prepared for a lot of hard work. Good luck and let us know when it is set to open.


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## Torto (Jan 4, 2014)

hiatusxenia said:


> The report quoted appears to be American based and if so, will not apply to Cyprus....


Yes,every country is different/specific...............but the majority of the thing in civilized countries are very similar For example :
If you receive $10 000 as a worker you will pay more taxes and social contributions in comparison if you receive $10 000 as a company(choosing the right legal form)-and you have almost endless opportunities to decrease your taxes and pay almost a zero.
If you are ordinary worker you almost don't have this chance.
And all this work the same almost in the same way in Canada,South Africa,Russia and Japan.
Yes,all the countries have some small difference in their laws,but the principle is the same.
-Same with asset protection
-If someone want to sue you and he do this successfully,all your personal assets are at big risk,vice verse-if you have a company with proper legal form all you assets are protected successfully,because this is not yours(individual),but of your company.
Yes,all the countries have some differences,but the principle is the same almost everywhere in the civilized countries(From USA to Australia).

PeteandSylv


> There is something special in the running of very successful restaurants and most of us here are aware of those that always have people in them while others are almost empty.


This is the key and one of the most important questions that you should ask yourself before open a business
mdekkers


> I am seeing a very good friend this evening who runs a successful restaurant in Kato Paphos (he is really struggling, just like everybody else). I know that non-Cypriot owners get a very hard time from the various licensing agencies - it would really help if you knew the right people in the right places.....


What you mean struggle-he has less profit...............or he has not enough income to pay even his bills.-Can you say me more about him please ?
Before i see his financial statements(income and expances) i can't say much


> As previously mentioned, some places do well, whilst others remain empty


This is the key-some places do well,some not-the key is why and to understand this


> I wish you the best of luck


Thank very much-you too


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## MacManiac (Jan 25, 2012)

Perhaps a good name would be "Pie in the Sky" - I wish you good luck but we know of so many good restaurants which cannot make ends meet and will soon close.


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## Torto (Jan 4, 2014)

Cleo Shahateet said:


> It seems like you have touched on everything. As long as you have the money, a reserve and a good plan then you should be ok if it doesn't go as expected.
> 
> I would anticipate quite a few delays with the possibility of licenses taking longer then expected and many other possible delays. Timelines don't always go the way they are planned our in Cyprus ;-)
> 
> ...


Are you sure-if i miss something or something needs to be fix,correct me as much as you want-i will not me offended- I will be very pleased that i am making my plan better and better.
Say me your experience with restaurants-Where was/were the hardest thing/s,what you have learned,that you didn't know before,how months/years were needed before to convert in business model(someone work for you)
This will be very interesting not only for me,but for all the forum
1)What are your observation for Cyprus restaurants and where are the most often mistakes that they made and you will change this ? 
2)What you do to attract people in your restaurants-what kind of attraction/Technics you use ?
3)According to your observation in Cyprus how much the average tourist spent on restaurant-5,10,20.....................50 euro and what motivate him to spend more ?
4)What you do to increase sales-more promotions,free drinks,good atmosphere,live music..............................
5)How one ordinary restaurant can be transferred in a business model(to operate successfully without your presents there) ?
-How you pay your expanses (by bank transfer or ?)
-How the daily income comes to you without your present there(by daily bank transfer to your account or............)?
-Who is responsible,if there is some problem (your manager or.............?)
-How you stimulate your worker to work better and increase sales(with % of sales or..............?
How you control your people that they are correct with you and don't cheat ?
Collossusx
Of course ,all you will be invited


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## Cleo Shahateet (Feb 23, 2009)

My restaurants were in the US so it is a different market than Cyprus so I don't know what tourists in Cyprus spend or answers to all your questions regarding restaurants there since I am now in real estate. 

I do know that some people open restaurants in good locations, but they don't do well since they never get repeat business due to surly or just poor service, bad food and unreasonable prices. As well as a good location you need good food, good customer service and good prices consistently for everyone. 

As for employees, you need to have good systems in place to make sure the money matches up at the end of the day. Like anywhere, most people work better when they are compensated properly for their work and treated fairly. Not everyone will be a good fit or be able to work at the fast pace of the restaurant business even if they think they can at first. Some will just be bad seeds! I was lucky that I had very low employee turnover. I don't know what the case will be in Cyprus for you though. 

Even when the business is able to be run solely by employees and managers other than yourself I would always be ready to jump in whenever necessary. Something always seems to come up and unless you close one day a week or more in the winter there aren't really any holidays. If your restaurant is open then you will be on call. 

As for marketing, in Cyprus I would say a lot will be word of mouth, online reviews and if you are at the harbor area also walk-by traffic. Since so many tourists now go to online sites to check out where they want to eat beforehand I would start establishing an online presence. 

You can also offer a free dessert (or drink) on their next visit for those that review you on your own site or on the popular sites like Tripadvisor or another popular one that reviews restaurants in Paphos. 

I did a lot of direct mail to homes with "Buy one get one free offers" or offers of "Free Appetizer with a $20 order" for example. I was in local magazines and also had someone from our local Washington DC City paper write up an article about us - they contacted us actually since we were unique in the area. That was a great advertisement and someone at Cyprus Mail writes restaurant reviews. I don't know the procedures though to get her to review your place. I would get onto all the Social Media outlets as well as other forms of local advertising.


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## mdekkers (Jul 3, 2013)

Torto said:


> What you mean struggle-he has less profit...............or he has not enough income to pay even his bills.-Can you say me more about him please ?


He has significantly less profits, and sometimes struggles to pay his bills. He is in a prime location (not the harbor though), and although he has tough competition, he takes in most of the footfall traffic. The simple fact is that there simply are not a lot of people walking around in the evenings looking for a meal anymore. 

Martijn :ranger:


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## Baywatch (Mar 30, 2014)

The all inclusive hotels kill restaurants all the time. I really can't understand the tourists that miss a lot of local fantastic food when staying at the hotel. But I have seen it come and go in other countries. Hope it will be the same in Cyprus


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## PeteandSylv (Sep 24, 2008)

I can read in this thread a strong dream and ambition and this is admirable, however I also sense a great deal of theory and little practice and I can't help feeling this is a recipe for disaster.

Anyone can produce a business plan (although I suspect this is a rarity by Cypriots!) but that only defines the business in theory. It does not allow for the skills required in producing the right ambience, food, personality and other characteristics that I observe in practice.

The majority of successful restaurants seem to be owner run needing the personality of the owner and/or family to be present. They are plying skills learned over a long time something which seems to be lacking from your plan.

In suggesting a 22 cover break even for worst case, I would suggest that there are a great number of restaurants who would love to achieve 22 customers daily. How some of them remain open I don't know.

To some of the other discussions presented I comment:

Tax and business structure. The suggestion that the principle is the same in all countries and that company taxation is lower than personal may well be true however don't forget 2 important things: the owner needs to be paid from the company profits and pay tax on his salary and all of this is totally irrelevant if the business is unable to make profits.

Limited company asset protection disappears if, for example you need a bank loan and they require a debenture on the business or premises or even your personal assets such as your home.

I said: _There is something special in the running of very successful restaurants and most of us here are aware of those that always have people in them while others are almost empty._ and you responded:
_This is the key and one of the most important questions that you should ask yourself before open a business_ but once again this is a response in theory and you do not mention your practical observations and answers to this.

Overall I detect that you are not a restaurateur and have little actual self-employed business experience hence many of my and other comments which may read as negative but which I'm sure we all intend as practical advice.

If you continue you will be embarking on a difficult venture in a country experiencing the most difficult time in it's tourism history. This does not mean you will fail but just as you turned to statistics I believe your probability of success is very low indeed.

In the UK I ran my own sign-making business for 20 odd years and during that time met many would be entrepreneurs starting their own businesses often with with their redundancy money. They wanted their vans, lorries, shops etc signwritten for their business image. I was nearly always able to detect the ones that would fail in business because despite all their business plans, spreadsheets, suppliers and most of all their product which they had great faith in and respect for, they missed the most important thing of all in running your own business: the product is almost completely irrelevant, what matters is the market that is available and most critically whether the person has the ability to sell.

Nevertheless I wish you all the luck possible in achieving success and hope you will take my words with the good intentions with which they are offered.

Pete


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## Kalimera (Oct 19, 2011)

I wouldn't advise doing this - please listen to the valuable advice above and take a good long think about this. Perhaps, do something else/ 

Please be-careful


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## Torto (Jan 4, 2014)

Cleo Shahateet
Thank you for advises
1)I need a advice for the restaurant operating as a business structure and taking the money/paying expanses.
Yes,i will be there but lets imagine that now i am working on the third restaurant in another city and i can't be there to take the money every day.
How you can receive the daily income from the restaurant ?
I will give you a example what are doing my friends :
The manager every lunch time put the money in your bank account/make bank transfer.
The money from the evening are putted in a safe and the next day the manager put all the money in your bank account leaving only a little money in the case for a change.......................and every day the same system
To control the process:
-You hire the right men with right qualities(you choose him carefully and test him )
-You have cameras
-You have Team viewer and you can check the balance of the case in every moment 
-Every day you check your bank account and the money that are putted there-if the money are missing/they are smaller than typical......................you act immediately.
Also you pay your expanses by Paypal-taxes,salaries,rent,electricity,insurances...................... 
Is there a better way to receive your money if you are out of the city and how you do this to your restaurants in USA when you are in Cyprus ?
2)If you are resident of Cyprus,if you want to take the money of your company(as a divided) you should pay 20 % social contributions-how is possible to avoid this and pay only the profit tax(12.5 %) and taxes from your salary ?

Guys
Thank you to all of you
With all your comments(neither positive or negative;using critics or not) make may plan and observation better and better.
So i have a question to all of you-which is the most important thing in one restaurant for you:
-quality of the food
-Variate of the food
-Good and polite services
-the price of the food
-Location
-Atmosphere
-Music
-Place for the kids
...................................
Others ?
With what you can make a compromises and whit you can't ?


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## PeteandSylv (Sep 24, 2008)

Toto,

Can I ask 2 questions of your experience:

1. Have you ever run your own business?

2. Have you ever worked in the catering industry?

Pete


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