Starting your own restaurant in Vietnam
One of the most popular businesses in Vietnam for foreigners is catering services — restaurants, cafes and bars. It’s not surprising given Vietnamese’s Law of Enterprises which let foreigners own 100% of capital contribution to such companies without any additional requirements. A lot of people would love to have a thriving restaurant or cozy cafe. Becoming a good restaurateur is not easy, but it is possible, as always financing and personal involvement works miracles. The most important thing is to make a firm decision that feeding people is what will bring you happiness and money.
So, you made decision for starting restaurant in Vietnam, let’s sort out in detail what it takes and where to start.
As always you have to start from organizational issues:
1. First of all you need to define a concept of the restaurant (category of price range and what kind of cuisine);
2. Development of a business plan. Don’t rule out this paragraph from your preparations, make it clear to yourselves. Closely formulated tasks and their solutions. This will help avoid pitfalls occurring throughout startup;
3. Starting the company
4. Next step — to find a suitable location. Everyone knows the huge role location plays for restaurants. For example, nowadays Nha Trang is rapidly growing and developing. The North part of the city was deserted 4 years ago, but now a lot of large construction sites and new hotels are opening their doors, and the North of Nha Trang is rapidly becoming one of the most promising and interesting directions to start business. You shouldn’t dismiss the streets immediately surrounding the touristic district — center of Nha Trang. Bare in mind that the usual period the rental contract is notarized is not less than 3 years. Rental contracts provide a returnable deposit in the amount of 1-2 monthly charge and rent is paid 1 time per 6 months or 1 year.
5. Next phase for starting restaurant in Vietnam is construction — paperwork — renovation works (CPR):
- Figure out the order of project-design of future premises;
- Find a maintenance crew that will be able to realize your project. It is one of the hardest phases, you have to pave new or modify existing communications: ventilation, electricity, water and sanitation, if necessary to increase ceiling height. Depending on your concept determine zones for the guests, kitchen and office space;
- Purchase equipment, furniture and kitchenware. Furniture and kitchenware are obvious, but equipment for the kitchen invariably raises a lot of questions. What is required for the kitchen zone of a restaurant or cafe?
- thermal equipment — there are items for heat treatment: combo steamers, ovens, stoves, frying surfaces and etc;
- refrigeration equipment — deep freezers and freezers, ice machines;
- technological equipment — mixers, salad shooters, coffee machines, meat grinders;
- neutral equipment — prep station tables, exhaust umbrellas;
- dishwashers;
- scales.
This list can decrease or be developed depending on the format of your project. In order to make the right furniture and equipment choices, it is better to refer to specialists. The designer can help you with the style of tableware and furniture, chef and manufacturers with the arrangement of the kitchen.
You have to start paperwork during the CPR phase. The process of agreement, certification and permission takes up to 3 months and lasts as long as the CPR phase:
- Fire safety certificate;
- Hygiene and food safety certificate;
- Certificate of registration in the Committee for the Protection of the Environment;
- License for the sale of alcohol.
6. Next phase — recruitment and development of the menu.
As a general rule, foreigners tend to invite foreigners to the Chef position. It’s extremely difficult to find a Vietnamese chef who would be able to develop a menu and organize kitchen service in accordance with the concept of your restaurant. My own experience has shown it is possible to train a local chef over time, but to find an accomplished Vietnamese chef is almost like magic. Of course, I’m not referring to a Vietnamese cuisine concept.
You have to be prepared with recruitment of Vietnamese staff to train them for everything, including basic rules of hygiene: scrub out dirt from under fingernails, don’t comb hair in the guest’s zone, don’t scratch toes, don’t pick the nose and so on.
Be prepared for your staff not showing up for work without giving reasons — in this case it is pretty good to have few candidates to replace. All being said, when you train your staff they will be remarkable and executive workers.
7. Selection of the supplier of food and alcohol.
You have to provide an uninterrupted supply of fresh and high-quality food for successful work at your restaurant. You can reduce your operational costs if you supply food by yourself. If you want to contract suppliers you need to pay attention to their good faith, success in the market, quality of products and uninterruption in their work.
8. The final phase — automatizing the service system
Installation of POS-terminal for the settlement with customers and mobile waiter’s console. This is an optional procedure, as practice shows it would be more comfortable to you for distance checking, control purposes and also for an advertising campaign to attract visitors to your restaurant.
Now let’s provide rough calculation of seed money for starting restaurant in Vietnam:
| № | Item of expenditure | From (USD) |
|---|---|---|
| 1 | Business plan | 300 |
| 2 | Opening the company | 700 |
| 3 | Rent | 15 for 1 sq m |
| 4 | Design-project | 300 |
| 5 | Renovation “on a turn-key basis” | 50 for 1 sq m |
| 6 | Furniture | 1000 |
| 7 | Equipment | 1000 |
| 8 | Tableware | 200 |
| 9 | Certifications | 1000 |
| 10 | Automatization | 300 |
| 11 | Advertisement | 150 |
It’s important to also calculate operational costs for 1 month:
| № | Name | Number of person | Salary (USD) | Total |
|---|---|---|---|---|
| 1 | Staff wages | |||
| Waiter | 3 | 250 | 750 | |
| Cook | 2 | 300 | 600 | |
| Chef | 1 | 700 | 700 | |
| Cleaner | 2 | 200 | 400 | |
| 2 | Food and alcohol | 40% from the earning |
The restaurant considered cost-effective if it payback in 1-3 years. Payback period depends directly on quality of the kitchen and service in the restaurant and feedback from customers. Positive feedback attract more visitors and as a result revenue increases.
Read also:
Limited Liability Company in Vietnam
Accounting and tax management in Vietnam
The basic taxes for all enterprises registered in Vietnam
