Idea in a Nutshell
Thinking of starting a hamburger business? Need some tips on opening your burger shop with the right equipment list? There’s so much more to master than burger supplies – find out with turnkey specialists Raqtan how to set up shop right and make the most of your burger business ideas.
Is a burger business profitable?
The simple answer is: yes. As the proud owner of a burger business start-up, you can expect to make a profit margin of 3-5% once you get going (whatever your burger business concept).
A typical revenue split for a new burger business might look like:
That leaves a potential profit margin of 5%, with 2% often lost to waste. This slim margin is in line with most other types of restaurants, including gourmet fine dining; across the board, restaurants make you work hard for your money. Achieving even this financial surplus usually involves marking up the cost of your ingredients by around 300% – and remember too you will have substantial one-off start-up costs.
Successful burger business owners compare their ideal food cost percentage with their actual food cost percentage to identify inefficiencies in their day-to-day operations. Read Raqtan’s step-by-step guide to ideal and actual food cost percentages here.
Efficiencies of production are particularly important in the burger business. That’s because making a burger – whether fast food or gourmet – involves a large number of standard operations in a production chain (from laying out the patty on the grill at the start to putting on the top part of the bun at the end).
If this is a sloppy process, your business will waste time and money EVERY time. But, through good organisation and staff training, you can tighten up these chains to save you money over the long run. ‘Lean management’ is the perfect management style for a burger business, and you can find plenty of resources about it online.
How should I plan my
Plan your business around a single idea that makes your burgers stand out. For example, you may have heard of burger restaurant I’m Hungry, in Jeddah, Saudi Arabia: its selling point is that it is officially the largest burger restaurant in the world with an area of over 30,000 square feet. That’s a great selling point because it is memorable.
As a new burger maestro, you may have to think smaller (!). But you should, like I’m Hungry, be just as focussed on a single idea – because single ideas work in marketing. And, let’s face it, the burger sector is crowded with ideas internationally, many of which could take off in the GCC area. You need to have a cutting edge proposition to slice through the rival commercial offers of your competition.
What’s the one thing about your burger service that stands out? Maybe your stand-out point is that you use organic beef? Maybe your specialty is an exotic twist on the usual burger formula? Maybe your brand story makes people feel great? Maybe you simply offer the best value burger for miles around. Whatever your burger business concept, make sure you can explain it to potential customers (and investors) in a single sentence.
What types of burger businesses are there?
Burger businesses are split between those which are independently owned, and those which are part of a franchise (see below for burger franchising).
A step up from a fast food outlet, fast casual venues offer more burger options and a nicer experience – but customers generally still order at the counter.
Upscale burger outlets usually boast a strongly-branded venue and menu, as well as a wide range of sophisticated burger options, including health-conscious choices like organic and gluten-free.
Holding the ground at the very top of the market, gourmet burger restaurants offer top-quality beef, high investment in decor, a massive range of exotic burger options, and a big signature idea.
Small and mobile, burger trucks offer the independent-minded owner the freedom to stamp their own mark on the burger trade – as well as snap up locations with great footfall. Burger trucks started cropping up in Dubai and the Kingdom from 2015 onwards and are now well established. If you handle the permit side of this business model right, and get access to a high-traffic area such as a tourist attraction or popular mall, it can be lucrative.
What makes a successful business planfor a burger start-up?
Experts say that location is the key factor with a burger outlet. That’s because a bad location means low footfall. And, without any customers, your business is doomed – however excellent your burgers!
Aside from ensuring your new burger business is located where your customers are, the other key factor in your business plan is the efficiency of your production processes. Preparing burgers is labour-intensive, and the margins are too slim to allow any waste. In your business plan, be sure to include plans to:
Need help getting started on your burger concept business plan? Read Raqtan’s detailed guide to writing a restaurant business plan here.
How does franchising a burger business work?
If you have some experience, going into partnership with a big burger chain might just be the hand up you need in the business. But, to be entrusted with a big brand, you will need to have run your own burger outlet first. And, you will need substantial funds upfront, usually including liquid access to millions of Riyals. Franchising is not a budget option.
Check out our exclusive webinar with Nawaf Al-Fouzan, CEO and co-founder of leading burger chain Humburgini.
What start-up capital do I need for my new burger business?
One rule of thumb in the restaurant industry is that each square foot of venue space will cost you between SAR 375 and SAR 3000 to open. That figure varies so much because it encompasses the entire market, from budget to gourmet outlets.
Leasing and equipment costs are two key start-up costs for your new burger venture:
You need to spend as much as you can afford on the right venue. That’s because your new restaurant business centres on flipping burgers – and the burger business model only works with plenty of customers coming in the door. That means you need high footfall. And, because many retail businesses compete for high footfall, rents where your start-up needs to be are bound to be expensive (if your rent is not expensive, are you sure your burger business is in the right place?).
You can try and base your kitchen processes around second-hand/inferior equipment. But, as seasoned suppliers to commercial kitchens, we would not recommend it! A key financial factor that is often overlooked by new start-ups is the ongoing cost of repairs, maintenance and replacement for your equipment. There are ways of managing costs in a way that will suit your particular business model, and expert tips in this area come free of charge – but whatever you do, do not leave your maintenance strategy to chance, as you will regret it in years to come.
What is the best location for my burger outlet?
As a budding businessman in the burger sector, your bricks-and-mortar venue needs to be visible, affordable and as expensive as you can afford. That’s because, unless you are planning to sell gourmet burgers in a gorgeous venue and can therefore expect customers to come to you specially, your new burger venture needs to be located somewhere with intense footfall. That means loads of potential customers. And that costs.
To maximize your trade, you need to be in the thick of it – particularly because burgers is a high-turnover operation and, also, often attracts a lot of impulse purchases. You want to be flipping burgers as quickly as possible. Look around for leasing opportunities near tourist attractions, universities, shopping malls and markets.
What licenses and permits do I need for my new burger business?
For such an important question, there is a very simple answer: requirements will differ depending on region, municipality and country – but expect plenty of food safety legislation and a raft of measures in other areas, including utilities, health and safety, and staffing.
The key thing about compliance with legislation is to get it all sorted out before you start serving customers. You don’t want to be shut down half way through your grand opening!
As suppliers of kitchen equipment to a range of high-end burger brands (like California Burger in Jeddah), here at Raqtan we have heard too often of startup burger businesses going wrong because the owners did not get the necessary permits managed correctly from the beginning.
If you are just starting out in the burger trade, the best thing you can do is to talk to an existing owner of a burger venture and access their hard-earned experience. Learn the ins and outs of the paperwork. Do not rush it. Stay in constant touch with your local authorities and use networking groups online to keep abreast of recent legislative developments.
What is the best layout for my burger outlet?
Layout in retail F&B outlets is divided between behind-the-counter and front-of-house.
The first thing to get right with the layout of your burger venue is compliance with building codes (emergency exits, lighting, water, air and fire safety) and disabled access requirements. Think safety first, to look after your customers and staff. (Read about ways some companies have successfully dealt with special Covid requirements here).
Because burgers is a high-turnover business, you want customers in and out of your premises as fast as possible – so make sure there is plenty of space between the front door and the counter area.
Apart from store rooms and other service areas, the behind-the-counter area of a burger venue is made up mostly of the kitchen.
The floorplan of your kitchen is critical to the success of your burger restaurant. And that is the case from the smallest (burger cart) to the largest (burger chain). In such a labour-intensive business, you need to lay equipment out correctly to avoid staff wasting time EVERY time they perform a task in your supply chain.
If you are new to the burger trade, you will need to take layout advice from a professional, and here your equipment supplier can help. To design your burger preparation and cooking area yourself, you need to have worked behind the grill yourself. Only then will you know exactly where everything needs to be.
You will also want to maximize the use of space to save money, given your need for high footfall means your leased venue is likely to charge expensive rent.
What is the best menu design for my burger restaurant?
You do not need to re-invent the wheel when it comes to menu design. There is plenty of science in this area, and it points to design factors that you have probably already spotted in successful mass market burger venues: simple photographs of the product amidst bright colours (particularly orange, as this colour makes people hungry) and generally a lot of upbeat energy.
Nothing complicated (or expensive) is required … unless you are pitching your venture up-market. In this case, the success of your business will depend to some extent on the strength of your branding. Make sure you use a professional designer and marketer to help you design your menu and menu displays.
How much does it cost a restaurant to make a burger?
Costing any portion in the retail F&B sector centres on totting up all ingredients involved to arrive at what is known in the industry as the total ingredient cost.
The cost of ingredients will differ, depending on the quality of ingredients used and the country of operation – so you will have to consult with your suppliers, and tot up the figures yourself to arrive at your total ingredient cost:
Note that the average mark-up on burger ingredients is roughly 300%. So your retail price for a single burger should be roughly 3 times more than the total ingredient cost.
SAR Beef patty+bun+iceberg lettuce+tomato+mayonnaise+mustard+ketchup+onion.
What equipment do I need for my burger business?
Look in every burger kitchen and you will see plenty of stainless steel. Stainless steel is a Raqtan speciality: certified to premium ISO 9001 2015 standards and CNC-engineered for durable high performance, our Miran stainless steel range centres on some essentials of the burger business: exhaust hoods, work table, dishwashing tables, shelves (8 different types!), sinks, mop sinks, cabinets, heated cabinets, trolleys, rack trolleys, barista stations, bain maries, salad counters, dump stations, ice bins, cup dispensers, floor grating units, grease traps and wall cladding. As a new burger business owner, you will need almost all of these items – and plenty more.
Whatever equipment you get, make sure that fire suppression and water filtration are priorities. Unless you get these basics right, your whole business is grounded on dicey territory.
Plan your brand new kitchen here with Raqtan’s Solution Selector. With a few clicks, you can get us up to speed on what you are planning – and our new app will email you a full breakdown of the equipment you need as well as full costings AND the name of the Raqtan expert who can offer your discounts.
A sample list of equipment for a new burger kitchen would include:
stainless steel equipment ( storage shelves, prep tables and cabinets), charbroilers, convection ovens, griddle and accessory, the all-important fryers (complete with stainless steel hood and fire suppression system), countertop warmer and display cases, freezers and refrigerators, holding and proofing cabinets, toasters and panini grills, microwave ovens, food processing equipment, cooking equipment, fruit, vegetable and salad preparation equipment, ice makers, strip warmers, burger packaging (and appliances), food blenders, slicers, meat and seafood preparation equipment, dough mixers, dough sheeters, dough pressers, water treatment/filtration, washing and cleaning equipment (dishwashing units, chemicals, sanitizers), trash cans and containers, and all necessary faucets, grills and fittings.
Phew! Now do you see why a little free expert advice might come in handy?
What is the best POS software for my burger restaurant?
You will be glad to hear that, when it comes to Point-of-Sale tills and software, your new burger venture does not need anything complicated or expensive. The advantage of you being in a well-developed market sector (burgers) is that there are plenty of inexpensive, dedicated POS solutions available – for as little as SAR 200 a month. For your small, start-up business, check out what is available from market leaders like Toast POS, Epos Now and Touchbistro Restaurant POS.
What is the best way of training my burger restaurant staff?
Avoid the temptation to hire too many staff early on. This is a classic start-up mistake. But be sure that you are not expecting yourself to be flipping burgers all the time. You will need back-up, as well as plenty of time to run the whole business (rather than the kitchen).
The best way of all to train your burger restaurant staff is to get enough experience yourself so that you can pass on Best Practice habits.
How should I plan my burger business grand opening?
Here are five tops from the industry on your burger start-up grand opening:
Thank you for reading Raqtan’s guide to starting a burger business. We hope you have found our industry insights useful. In the area of pricing, for example, you will have to keep working on solutions yourself: how do you set a price for your product? How do you calculate price generally? It all depends on your individual circumstances. Pricing your burgers is one area where you will have to stay reactive and keep experimenting.
But in the key area of equipment – which will make or break your efficiency as a burger kitchen – you do not have to go it alone. If you have any burning questions about your new burger kitchen, talk to a Raqtan consultant here. And don’t forget you can try out our powerful new Solution Selector app online: with a few clicks to show us what market niche you are in, you can see for yourself what your particular business requires in the way of equipment.
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