What Type of Business is a Restaurant

Some restaurant owners think that this type of business is related to manufacturing and merchandising.

Did you know that it’s neither of the two? What type of business is a restaurant, anyway?

Take a look at manufacturing first. This pertains to the conversion of raw materials into certain products. Unless you farmed your raw materials like corn, chicken, and vegetables, the restaurant business does not fall under this category. The other option is merchandising. With this business, you will be purchasing pre-fabricated items or products from suppliers and you will sell them as is to targeted customers at a higher price to earn profits. In a restaurant, you don’t serve raw meat, right? So this means that your business is not under this category.

In a restaurant, you’re selling products as well as intangible services like cooking, table service, nice table, marketing, etc. The income is derived from the food items you’re serving to customers. With the ability of cooking and serving delicious foods, you’re making some money. With this in mind, you can now classify the restaurant to be in the service business.

Basically, the restaurant is in the food service industry. You will be purchasing raw materials and with the skills of competent cooks and service crew, you can deliver/serve tasty foods. Just think of it this way – your skills will be worthless if you don’t have the raw materials for cooking; on the other hand, the raw materials can’t be eaten unless someone cooks them. Each aspect is vital and will contribute to the success of the business.

If you want your restaurant to thrive, you must look for reputed suppliers to have a regular source of inventory. You should also have competent staffs like cooks and waiters to help you in delivering only the best food items to customers.

5 Comments

  • richard said on August 28, 2010
    i would like to write a business plan for setting up restaurant
  • Maida said on June 23, 2011
    after reading this i am still confused, so what type of business would a restaurant be? Could it be both manufacturing and service?
  • maame serwaa Boateng said on October 19, 2012
    i am in Ghana and this is my number +233 235 554 679. please call me because i'd want to talk to you and find out about the restaurant as well as the service industry.
  • Nathan said on September 9, 2015
    Restaurants are considered to be catering business, as a restaurant is a cater setting. Therefore, catering companies, such as McDonalds, Burger King, Wendy's, etc. are considered to be caterers.
  • Prince sojitra said on September 10, 2016
    I want to start small restaurant. Please give me instructions for start restaurant.

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