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Setting up and operating restaurants is a daunting task. Restaurants are capital-intensive businesses that require a lot of effort, resources and planning to sustain. With a high initial failure rate, several business owners tend to make mistakes early on in their operations, jeopardizing their establishments and future possibilities. However, the restaurant industry is still one that sees consistent demand and growth due to the ever-evolving expectations of people and their love for food. There exist time-tested tips and tricks that are sworn by industry experts to help you make your restaurant startup a successful venture. We discuss 9 important steps you should undertake so that your restaurant is assured of profitability and growth in both the short and long term.
9 Steps to Starting a Successful Restaurant
- Outline the Concept of Your Restaurant
Defining the concept of your restaurant is one of the most important steps to undertake before starting your restaurant business. Try to understand what you think will make your commercial food business unique, and what sets it apart from its competitors. Define your target audience, and settle on a unique selling proposition that makes your establishment stand out. Your restaurant’s concept should be applied to nearly every aspect of your business, to ensure that your customers sense the message you’re sending through your services.
- Choose a Name that Sticks
Your establishment’s name is integral when it comes to sending a message to potential customers. A bad name can cause disinterest, and fail to draw the attention of your target audience. Shortlist several names that speak to your target audience and also elicit the core concept of your business. Take input from partners, family, and even potential customers to decide on a catchy name that will resonate with your patrons.
- Draw up a Business Plan
Business plans are the guide books that will help you once you open up for business. Include the executive summary of your business, the profile of your restaurant, details you have gathered by studying your market, and the strategies you have for implementation. These details will help you gain investor trust. Also, draw up a detailed financial plan after consulting with an advisor to help you chart the expected costs and progress of your business over time.
- Select the Right Location
Location affects the overall marketability and profitability of your restaurant business. Starting a high-end restaurant near a university campus is bound to fall short in revenue. Similarly, a fast-food restaurant in an upscale locale is not going to see much business. Study the location, footfall, and the neighboring businesses before you settle on a particular commercial site.
- Applying for Permits & Licenses
Commercial kitchen businesses require several permits and licenses to function. These include the health, food safety, business, and local area permits. Failing to acquire these permits before opening can lead to hefty fines and penalties. Get in touch with an advisor to understand the application processes for these permits and licenses.
- Buying the Right Equipment
Commercial kitchen equipment is one of the most important areas of investment for a potential food business owner. Working with the right equipment is bound to enhance the final product you offer to your customers. Since these machines are expensive, investing in equipment that isn’t right for you can be loss-generating. Undertake extensive research to understand what you want to offer to your customers, the number of people you want to serve, and the size of your kitchen before you purchase restaurant kitchen equipment for your business.
- Hiring & Training the Right People
Understand how many workers you need to run your establishment smoothly. Hiring too many people can create problems for you as labor costs can add up on the list of monthly expenses. Hire skilled staff and train them in your ways to help them manage the restaurant based on the concept you envisioned for it. Try and create materials like employee handbooks, training guides, concrete job positions, and job descriptions to streamline the workforce you hire.
- Perform a Competitive Analysis
Understand the competitors in your area and their marketing strategies. Try to understand what other commercial food businesses in and around your location are offering and their prices. This allows you to estimate the amount of money the average customer in a locale would be willing to pay for a particular dish. Also, try to understand their rates of footfall and customer outreach to better understand their operational methods.
- Engage with Your Customers
Once you open for business, be sure to ask for customer feedback and opinion. Also, encourage your staff to ask for customer input and suggestions. Not only does this help you improve upon the dishes you’re offering, but also allows your customers to feel heard. Implementing customer suggestions will help you grow further and build a better rapport with your patrons.
Why Do So Many Restaurants Fail?
At least 60% of newly opened restaurants fail in the first year of their operations. The number grows to an even higher percentage as the operations enter the third and fourth years. From bad investments & business plans to not understanding the target market, several business owners tend to commit critical errors when operating their businesses. The best way to avoid restaurant failure is by adapting to the challenges you face along your journey. While you must follow your business plan and projections, incorporating changes to areas you see aren’t working is just as integral.
Starting a restaurant business is one of the most challenging business undertakings. Since the costs involved are large, and the stakes just as high, it’s important to remain cautious and pay attention to every detail right from the start of your business to make it a successful venture. Don’t forget to seek out professional guidance and assistance wherever necessary.