Dubai has been at the forefront of the food and beverage sector in the United Arab Emirates for years thanks to the high inflow of tourists and the presence of numerous globally renowned brands. In 2019 Dubai retained its position on the MasterCard Global Destinations City Index as the fourth fastest-growing global destination. And the growth seems to continue in the future. But a restaurant is not just for the tourist, locals alike enjoy partaking in the food business.
Are you thinking about opening a restaurant in Dubai? Yes, the food scene in Dubai is quite competitive and it takes more than just a great idea or a local sponsor, but if it’s done correctly – you have the necessary licenses, a business plan, offer unique customer experience, you have a professional restaurant POS software and provide quality service in every aspect – you’ll be likely to succeed. In this article, we’ll take a look at what is needed to open a restaurant business in Dubai’s bustling food industry and provide the insight you aspiring restaurateurs can benefit from.
Short overview of the F&B sector in Dubai
Dubai is a trendy destination and tourists play quite an important role in the wide variety of cuisines that are offered. Nevertheless, for starting a restaurant it’s important to know that locals are also very keen on dining out. According to the GCCFood and Beverage Report, 2019-20 by KPMG the demand in the F&B sector remained strong in 2019, with 78% of consumers surveyed continuing to eat out as much or more compared to 2018. And similarly, 83% spent the same or more on eating out versus 2018, a consistent trend over the last few years. Of course, the global pandemic left its mark, but the outlook is still optimistic for those planning a business setup.
How has the pandemic influenced the restaurant business?
Over the past few years the COVID pandemic saw consumer behaviour undergo a dramatic shift both in the Middle East and globally– a lot of people had to replace dining out with ordering in which greatly impacted the restaurant sector. Nevertheless, KPMG states that over 50% of the respondents plan to resume pre-pandemic dining out habits by early 2021, setting the stage for an active Dubai restaurant resurgence.
So, if you are planning to open a restaurant in Dubai, it about time to take on the challenge and bring your restaurant concept into reality!
What does opening a restaurant in Dubai look like?
So, how to start? No matter if you plan to open a fine dining restaurant, a café, bakery, or run a food truck, the process includes applying for a mandatory restaurant license in Dubai to commence business setup. In order to go into business with your restaurant, you need to acquire two separate licenses: a trade license and a food license. It will also become important to factor you restaurant license cost within your business setup plans.
Understanding the different types of restaurant license
Trade licenses and the DED
This is the basis of starting a business. The trade license in Dubai can be applied for via the Department of Economic Development (DED), or via a free zone and that’ll allow you to open for business. This will include among other things the nature of your company, the corporate activities that the company is engaged in, designating a legal status for your company in the UAE, and registering the name for your company.
Getting your food license from the food safety department
When you have been approved for the trade license, you can go on and apply for a food license. The Food license in Dubai is issued by the Dubai Municipality Food Safety Department. The importance of the food license is to make sure that your restaurant has proper food processing and food storage areas, ventilation, food processing, and washing equipment, the floor and roof should be washable, etc. After getting the license you must adhere to the Food Code that includes food and safety standards, the last thing you want is issues with the Dubai Municipality Food Control Department. Having food and safety regulations is common in Dubai and other Middle East cities as well many of which also follow the food code enforced by their own food control department.
How to open a restaurant in Dubai?
If you have previous experience in the food business, that’ll give you an upper hand as you navigate the competitive business sector in Dubai. Managing a restaurant includes dealing with financials as much as people and finding a point-of-sale system that allows you to keep track of inventory, work schedules, sales, and million other details. Make sure you think through all the different aspects of starting and managing a business.
Here are some of the important aspects that you would need to think about when you want to open a restaurant business in Dubai.
Unique concept
In order to be a successful restaurant business in Dubai, you need to do is come up with a unique concept for the restaurant. This plays a vital role in helping you stand out from the restaurant business crowd when starting a restaurant in Dubai. The city is quite international, there are people from all over the world, people who travel a lot and probably have many experiences when it comes to dining out. So, the bar is high but it is recommended to map out the competitors and find a niche that will set you apart from the rest. You’ll need to find a sweet spot between what is unique for the customers and what excites yourself as well.
Understand your customer
Whether you are opening a restaurant or cafeteria, it is important to have a very clear understanding of your target customers – who they are, what are their dining habits, how often they go to restaurants and how much they usually spend on a meal, what they value the most in a restaurant. This way you can create an experience for the customers. Something that they will enjoy and will talk to their friends about. You can create a solid concept for your restaurant business if you know who you are targeting.
Location, location, location
When you have come to an understanding of your target audience, decide on the most suitable location for your restaurant. A restaurant in a popular location helps you to draw in the customer. You can change the menu or staff or interior, but the location is one of the most important decisions that you’ll need to make, so take extra time and have many options available before making a final decision. Prime locations are costly, but they are popular for a reason. Finding the perfect location should be one of the top priorities when opening a restaurant business in Dubai.
Marketing and branding
Marketing and branding are also something that you should think about before you open for business. What is the image of the restaurant? What and how you’ll communicate to your customers? What is the reason they should dine there? What is the pricing and discount policy alike? What are your signature food items? Food businesses can live or die by their commerce marketing and also by overlooking their target market. Launching a new restaurant in Dubai from the scratch requires a decent initial investment in marketing, so make sure you have that planned out. In order to keep a new restaurant afloat financially, include both positive and negative scenarios in your business plan.
People
It’s often said that people make the business. Especially in the competitive restaurant business of Dubai, hiring the right staff and offering them training is a very important part of your business as these are the people that serve customers directly. They influence the customer service that you’ll provide and the experience that diners will leave the restaurant with. In Dubai the restaurant scene is competitive, and especially when you go into fine dining, you need to find the best people for the job. You should also think about how you’ll support your staff, help them grow with the company and provide them with the necessary food equipment. Waitressing positions tend to have very high employee turnover, but as a manager, you should want to keep the people that you’ve spent so much time on training and find them other positions within the company.
Set up the point-of-sale system
The final leg of opening the restaurant or cafeteria in Dubai is choosing the right technology and other supportive equipment. Having a simple, easy-to-understand POS system uae with a user-friendly interface helps you to make customer service and the overall experience more seamless. It is important both for the salespeople and customers alike. It’s important that the waitresses can take payments both at the table and also at the counter.
When opening a restaurant in Dubai, you must take into account the vast variety of tourists. There are many payment methods nowadays, so make sure that you use a credit card machine that accepts both debit and credit cards, mobile payments, etc.
It’s wise to choose a best POS system in UAE that allows you to take orders, manage inventory, serve loyal customers with extra care and discounts, create custom reports like shift reports, stock movements, sales, and payments. At the end of the day, this helps you to analyze and improve the service you offer. A point-of-sale system is one of the most used features for your salespeople, so make sure to choose a good one.
Conclusion for opening a restaurant in Dubai
There is no one secret ingredient of how to open a business. To be successful, you’ll need to think about a variety of different small aspects.
The restaurant business in Dubai may be one of the most competitive business sectors of the city. So, if you are planning to open your restaurant in Dubai, make sure you have a clear understanding of the process of applying for the trade license via the Department of Economic Development (DED) or free zone and know the food and safety regulations.
Next, for opening a restaurant, you need to create a solid business plan. To be successful, you need to have an understanding of your customers and competitors before you start a restaurant. The better you understand your customer, the easier it is to choose the location, menu, pricing, decor, and other aspects of the restaurant.
Offering quality service is a must. Both tourists and locals in Dubai enjoy dining out. Having dinner at your Dubai restaurant should give them a memorable experience. From the moment they step into your restaurant to the moment they have to pay the bill and go on with their day should be pleasant. It is not just offering good food, it is a full service that you just don’t get outside of the restaurant business.
Citations:
https://assets.kpmg/content/dam/kpmg/kw/pdf/insights/2020/11/GCC-Food&Beverage-report-web.pdf
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