How to Start a Restaurant Business in Nigeria

by Counseal Team

Updated April 21, 2024

From people who buy lunch at the office to the ones who stock their freezers with ordered food or even the friends that just want to hang out over a meal, your chances for a good profit in the restaurant business in Nigeria is solid.

If you are passionate about starting your own restaurant business in Nigeria, this is a guide to help you have a profitable restaurant business.

Step 1: What does it cost to start a restaurant in Nigeria?

Starting a restaurant business in Nigeria involves understanding the costs associated with it. The amount needed to open a restaurant can vary depending on various factors, such as location, size, concept, and equipment needs.

A small-scale restaurant may require a budget of around ₦2,000,000 to ₦5,000,000, while a larger one may require up to ₦10,000,000 or more.

Essential startup costs include equipment, rent, utilities, furniture, licensing, permits, and inventory, Staff salaries and marketing expenses.

It is important to understand all the costs involved in opening and running a restaurant in Nigeria to ensure that you have enough money to sustain your business and stay afloat in the competitive industry. A good budget plan is essential for a successful restaurant business.

Step 2: Choose a Restaurant Concept and Brand in Nigeria

You need to research on identifying your target audience. This will help you choose a restaurant concept and brand. 

You can get creative here.

Uniqueness has to be spotted in your cuisine, theme, atmosphere and overall vibe of your restaurant. 

These are some questions you must answer in building a unique concept for your restaurant: Do you want to focus on local Nigerian dishes or offer a fusion of different cuisines? Will your restaurant have a casual or formal atmosphere? 

It’s also important to develop a strong brand identity that sets you apart from the competition. Your brand should carry your restaurant’s unique personality and values. This includes creating a distinctive logo, selecting a colour scheme, designing menu templates and deciding on music and decor. A well-executed brand can help attract customers and create a loyal customer base.

Step 3: Write Your Nigeria-focused Business Plan

Your business plan is a roadmap for your restaurant business. It will help you identify potential roadblocks before they occur. It should include everything from your restaurant’s concept to your marketing strategy, financial projections, and staffing requirements.

Start by outlining your restaurant’s concept and branding. What kind of food will you serve, and what kind of atmosphere do you want to create? Consider your target market and competition as you develop your concept. You’ll also want to include your menu, pricing, and costing plans in this section.

Next, include a thorough analysis of the market, including demographics, competition, and trends. This will help you identify any potential obstacles and give you a better understanding of how your restaurant will fit into the market.

Include financial projections and a detailed marketing plan. This will include information on how you plan to reach your target market, whether it be through traditional advertising, social media, or other means. Be sure to include a budget and timeline for your marketing efforts and a projection of your restaurant’s financial performance over the next 3-5 years.

Step 4: Choose a Location

In starting a restaurant business, choosing the right location is key. Your restaurant should be  accessible and visible to your customers. Hence, look for areas that have high foot traffic and are accessible by car or by public transport.

The location should also match the concept and theme of your restaurant, for example, a beachside location for a seafood restaurant or a trendy neighbourhood for a hipster café.

Before settling on a location, research the local competition and population. Are there already several similar restaurants in the area? What is the target market and income level of the community? You should take these factors into consideration when selecting a location for your restaurant. 

It’s also important to consider the cost of rent or purchase of the space, and any potential renovations that may be required. A well-chosen location can make or break a restaurant’s success, so take the time to research and choose.

Step 5: Funding Your Restaurant is vital for turning your dream into a reality. 

A restaurant business requires good capital. This is because of the costs of kitchen equipment, dining supplies, rent or purchase, marketing, and staff salaries, etc. 

There are several ways to fund your restaurant, such as finding investors, approaching banks for loans, or crowdfunding. Before choosing your funding source, research the terms and conditions, interest rates, and repayment schedules. You should clearly understand the financial risks and benefits of each option.

Once you have secured funding, it is essential to manage your finances. Keep track of your income, expenses, and profits to ensure that your restaurant business remains stable and flourishes in the long run.

Avoid overspending by creating a realistic budget and sticking to it. Remember that maintaining cash flow is crucial to keeping your business afloat. With careful planning and smart financial management, you can fund your restaurant business and watch it thrive in the competitive culinary industry.

Step 6: Find Equipments and Food Supplier

It’s time to find equipment and food suppliers. You will need to equip your kitchen with the right tools, such as cooking equipment, refrigerators, ovens, and utensils. Research the latest trends in commercial kitchen supplies that are energy-efficient, easy to clean, and up-to-date. 

Don’t forget to budget for installation, delivery, and maintenance costs when purchasing these items.

Besides equipment, choosing the right food supplier is crucial. You want to find a supplier who provides quality ingredients at reasonable prices. Some suppliers may specialise in certain types of food, shop around and compare prices before deciding. 

You also want to ensure that the supplier can meet your delivery needs and have excellent customer service. Developing a good relationship with your food supplier is essential to maintaining a successful restaurant business.

Step 7: Hire the Right Staff

One of the important steps in starting and maintaining a successful restaurant business in Nigeria is hiring the right staff. This requires a careful selection process that involves assessing the skills, experience, and attitude of potential employees. 

When hiring, it is important to look for individuals who are passionate about food and customer service, and who have a strong work ethic. A good mix of experienced and entry-level employees can also create a diverse and dynamic team, bringing fresh ideas and perspectives to the table.

Apart from skills and experience, it is also important to ensure that your staff embodies your restaurant’s culture and values. This means having a clear understanding of what your brand stands for. 

Training programs and ongoing performance monitoring and evaluation can help to develop and maintain a positive team environment, leading to improved customer satisfaction and revenue growth. By hiring the right staff, you can build a reliable and efficient team which can help you achieve your restaurant business goals.

Step 8: Create Your own menu

This could be the most exciting part of the process as you get to showcase your craft and vision for your restaurant. Be sure to consider the cuisine type and target audience when designing your menu. This will help you decide on the ingredients, format, and pricing. 

It’s also important to keep in mind the cost of the ingredients and the kitchen equipment you’ll need to prepare each dish. Build your menu around signature dishes. And, make sure the dishes are unique enough that others can’t copy them.

Note, creating a menu isn’t a onetime job, as you’ll likely need to adjust it as you get feedback from your customers and make seasonal changes. 

The menu should be well-organised and easy to read, with descriptions and appealing visuals. Try different strategies for showcasing your best dishes, such as highlighting customer reviews or having pictures of them on your website or social media pages. Your menu is your showpiece and should represent the vision and branding of your restaurant. 

Keep your menu updated with new dishes, special offerings, and seasonal promotions. A well-executed menu can be a great tool for attracting loyal customers and growing your business.

Legal processes can be complex and time-consuming, but it is essential for the smooth running and longevity of your business. 

One of the first things you need to do is get all necessary licences and permits, including a business licence, health permit, alcohol licence, and zoning permit. These requirements can vary depending on your location, so it’s important to research and comply with local regulations.

Another important legal issue to consider is creating contracts and agreements with suppliers, vendors, and employees. This can include lease agreements, supplier contracts, and employment agreements. It’s crucial to have these agreements in place to protect your business and ensure everyone is clear about their rights and responsibilities. Working with a lawyer or legal advisor can support you in ensuring you meet all legal requirements.

Step 10: Advertise Your Restaurant

To have a successful restaurant business, you need to advertise it. There are several ways to do this, including traditional advertising methods such as print ads, billboards, and flyers. You can also take advantage of digital marketing channels like social media, email marketing, and search engine optimization (SEO) to reach potential customers.

Besides advertising your restaurant’s menu and ambiance, it’s also important to promote any special events or promotions you’re offering. This could include happy hour specials, live music performances, or chef’s tasting menus. By promoting your restaurant through various channels, you’ll attract new customers and keep existing ones coming back for more.


In conclusion, starting a restaurant business requires a lot of dedication, hard work, and patience. However, with the right strategies and mindset, you can establish a successful business in the culinary industry. This article has provided detailed steps on how to start your restaurant, from conceptualising the branding to creating a menu and calculating costs. 

It is important to always stay up-to-date with industry trends, evaluate and improve your business to meet customer needs. With persistence and attention to detail, you can turn your passion for food into a thriving business that brings people together over delicious meals.

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