The Pros & Cons Of Setting Up A Home-based Restaurant Business

Have you considered establishing a restaurant business but are on a budget? Setting up a home-based restaurant is a capital-intensive affair, and utilizing the space available at home can be an important factor in saving precious funds while following your passion for food. Though we believe setting up a commercial food business at your residence can be a lucrative option, the venture is a mixed bag and comes with its fair share of both advantages & disadvantages. Read on as we discuss the various pros and cons associated with establishing a culinary business from home.

The Pros of Starting a Home-based Restaurant Business

The advantages of setting up shop at home include:

1. They Require Low Startup Costs

One of the biggest advantages of operating out of home is the money you save. Choosing a retail space and setting up a commercial kitchen can cost you several thousand dollars right at the initial investment period. Continued costs include rent, utilities, and services. You have the opportunity to avoid paying rent or mortgages at two different locations while saving up on utilities since you will get a common bill for both business and domestic purposes.

2. Not a High-risk Venture

Home-based commercial kitchens allow you to test the waters of the food business and provide leeway in experimenting with a variety of products. Since your investment capital remains relatively low, the risk quotient decreases when compared to a dedicated retail-based food business. You can test products and new recipes with friends, family, and even host tasting events in your neighborhood to know what people think of your cooking before you go all-in.

3. Flexible Work-schedule

A home-based restaurant offers a flexible routine. You can work for as long as you would like. If you have prior experience in the field, start by managing the little aspects of your business before undertaking more responsibilities. If there are days when you have personal responsibilities to get to, you can always work extra, either before or after your appointments, to make up for lost time.

4. A Comforting Experience

Working from home allows you to remain in an environment you’re familiar with and work within the confines of your personal spaces. You avoid commute times, the expenses associated with it, and the time lost while settling in. This also translates to higher revenue since it gives you more hours to work at your commercial kitchen.

5. There’s No Dress Code

Home-based restaurant businesses allow owners to work in clothing they’re comfortable in. You can wear casual clothing on nearly all days, except for situations where you need to meet with customers or clients. This provides a greater level of comfort while working on what you love.

The Cons of Starting a Home-based Restaurant Business

While there are many attractive advantages of working from home, home-based commercial kitchens also come with disadvantages. Here’s what they entail:

1. The Lack of Benefits

Since you’re working on your own, there’s no need for upper management to provide benefits and perks for the work that you do. Self-employment also brings about higher tax brackets, so it’s important to consult with your accountant or tax advisor before you go about operating your home-based restaurant business.

2. Customer Trust Comes With Difficulty

Due to limited in-person time with your customers, establishing trust might be a challenge in a home-based food business. You might have to spend more on marketing your business while also creating quality food to ensure customers accept your establishment and come back for more.

3. Making Changes to The Kitchen

While you might be able to use existing domestic utensils and small appliances in your commercial kitchen, you might have to institute a few changes to make your kitchen ready to deal with the inflow of orders. The changes you need to make might include both the layout and the type of equipment you use.

4. Distractions

It’s easy to get distracted at home. Productivity and focus may take a hit due to other family members, such as children, easy access to food & entertainment, and the generally relaxed atmosphere at home.

5. Security Issues

All home-based businesses come with a certain level of security risk. This could include data or even the business material you store at home, since it’s considered valuable. Don’t forget to assess what your security needs are before setting up a home-based food business.

Is restaurant equipment viable in a home-based commercial kitchen?

Commercial kitchen equipment can provide a lot of flexibility for your home-based restaurant. Equipment such as commercial ice maker machines can help you cut costs, such as procuring bagged ice and its transport. You could also consider options like commercial ranges, fryers, and sinks to help you with the day-to-day. Be sure to check for the best deals when buying industrial ice machines and other commercial kitchen equipment.

Conclusion

While a home-based restaurant might have its own set of challenges and advantages, we believe the benefits outweigh the risks as you have the opportunity to experiment, explore, and implement what you learn along the way directly into your business. Be sure to weigh your options and get in touch with consultants for solutions while setting up your home-based food business.

Author BIO: Damon Shrauner, Senior Sales Consultant and VP of B2B Sales at CKitchen, working in the food service equipment sector since 1994. With his expertise in market analysis, product placement, sales, and project management, he will always tell you what to do for the best of your business.