If you have the dream of opening a restaurant, you may feel that nothing can hold you back. Even those staggering statistics that are not in your favor. The whole “60% will close in the first three years of business” thing. (Oh, that.)
Beth Casey, restaurant owner and manager says that you have to qualify for the following before you open a restaurant:
- Passionate about the business
- Have investors
- Get ready to rock and roll
- You live the job
- You live the job
- You live the job
We will go into further detail on each of these points. Rather than getting discouraged, get prepared. Armed with the tools and information for success, you can be in the 35%. Heck, you can be in the 1%!
Before you open your restaurant, here are some things to consider:
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Knowing Your Responsibilities – As nice as it would be, restauranting is not all food and games. We certainly don’t want to shut down that dreamy look in your eyes, but we also want to get practical. Food Woolfe, which gives an inside peek at the hospital and service industry advises: “It takes a very special person—the kind of person who loves the rollercoaster rush of not knowing what’s going to happen next, enjoys making very little money, loves people, is calm under pressure, thrives in chaos, thinks a twelve-hour workday six days a week is reasonable, and feels more comfortable taking care of others than themselves—to survive the life of a restaurant owner.” If your dreamy look has not clouded over, then read on.
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Deciding on A Concept – This is a little different from a theme party and it will definitely determine how you move forward. You have to consider who your customers will be. According to Agile Solutions, the age and income level of your preferred customers will point you in the right direction for your concept.
Allfoodbusiness.com goes one step further, encouraging you to know the main product line of your menu. This can help to determine the decor, or at least help you figure out your concept, which broadly fit into the following categories: Quick service, mid scale, upscale.
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Choosing A Location – We chose the Seinfeld diner as our photo not only because of the TV fame but also the location: 2880 Broadway. It’s all about location, location, location. This could potentially be the most important detail of your start-up.
Entrepreneur.com suggests that you look over details such as demographics and neighborhood traffic. Getting away from competition is actually not advised: “Quite simply, the best place to be is as close to your biggest competitor as you can be,” says Greg Kahn, founder and CEO of Kahn Research Group in Huntersville, North Carolina, and a behavioral research veteran who’s done location research for Arby’s and Subway and other major and minor players.
You can take advantage of your competition’s marketing and foot traffic and turn it to your benefit. Sneaky, but everyone does it.
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The Business Plan – No one likes writing a business plan, but it is part of the journey. It also doesn’t have to fall directly on your shoulders – there are plenty of online resources (many of them free) that might help you get through the nitty gritty.
The purpose of a business plan is to help you understand the details. Don’t just read it over once. Business coach Darren L. Johnson suggests reading “over your existing business plan like you read the menu at your favorite restaurant.” Easy enough when your business is food.
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The Paperwork – Arriving at the bank, you have to have more than that business plan in hand. Personal income taxes, tax returns and anything else that can put you in good standing may help you to secure a loan. Only 40% of startup restaurants manage to get a loan, according to Businessweek. Most are backed by personal guarantees and personal property, such as equity in a home. Plan B: call Mom.
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What’s In A Name?– As you can see by the above example, not every restaurant name is appealing. It deserves thought and care. A unique spelling could be a drawback if people can’t easily Google it. Rebecca Hardy of The Guardian writes that “a restaurant’s success can hinge on the right words.” In the same article, Mark McCafferty at Captivate Hospitality says that a good name “stands the test of time and works in different locations.”
So what exactly is this perfect name? Think about drawing your customers in through their senses. Neuromarketer Roger Dooley says that sensory memorable names may be successful because we are so sensory deprived.
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Writing Your Menu – We are approaching the details you probably like best: the food. If you have a dish that is not easily understood or translatable, you might want to get wordy, like Andy Ricker at Pok Pok in NYC (unless you know what Pik Kai Op Krob Khing Lae Si Ew Kap Sauce Phrik is). High minded restaurants often get minimal with their language. Your concept will help to steer you in the right direction.
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Hiring Your People – The staff you hire is supremely important, not only for the success of your restaurant but also for your own daily enjoyment. Bench Marque, a hospitality and event recruitment publication, weighed the pros of attitude versus skills. They came to the conclusion that if it must be a choice, attitude is the most important factor because “It is relatively easy to train staff in new skills, but it’s incredibly difficult to alter someone’s personality.”
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Buying Your Supplies – Equipping your kitchen will likely be your biggest cost when opening your restaurant. You can buy used or new restaurant equipment and there are pros and cons to both. If you do decide to choose used, bizenergy.ca suggests finding out how hard the equipment has been working, if the equipment is energy efficient, and what it looks like and if it can be repaired quickly and easily: “Since 30% of restaurants fail within their first year, and an additional 30% will fail within two years, gently-used equipment is often easy to find.” Gulp.
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Taking A Deep Breath – The American Institute of Stress recommends deep breathing as a natural way to elicit the body’s natural relaxation response. And to remind yourself that you can do this. You’ve got this.
Now the real work begins. Are you ready?