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Many people dream of owning a restaurant; it seems like a fun and exciting business in which you can make a lot of money.
Unfortunately, this is far from the truth. In actuality, operating a successful restaurant is difficult even for seasoned food industry veterans. This is because trends change, and competition is unbelievably tough. It’s not all about cooking delicious meals all day long.
Before you get serious about your endeavors, there are some things that may seem like common sense, but many people overlook. Read on for some things you need to remember before you open your doors.
It will Cost More Than You Think
Once you’ve decided you want to open a restaurant, you need to figure out how much it’s going to cost. Once you start looking at figures, you may be shocked to learn how much it costs to open even a small restaurant. You may be even more shocked to know that it’s going to cost more than you think.
It can be easy to figure out opening costs. You’ll know how much your rent and utilities are and how much equipment costs. It doesn’t end there, however. Ongoing costs are what are going to kill you if you’re not careful. Payroll, employee uniforms, and food costs are all varying costs that can creep up on you fast. In addition, you will have a piece of necessary equipment break, you’ll have several employees quit at once, which means additional training costs, and you’ll lose money to food spoilage. These things are inevitable, no matter how much you try to minimize them.
For this reason, it’s important to not only be careful about every dollar you spend, but also have access to emergency funds in case you need them, whether that be your personal savings, investors, or at the very least the ability to take out a loan if necessary.
Most Restaurants Fail Miserably
Restaurants are one of the riskiest business ventures out there. Competition is fierce, diners are fickle, and an unstable economy can shoot costs through the roof.
Before you open your restaurant, make sure you know why you’re doing it, and have a plan for how you’re going to succeed. If you love cooking, have a unique idea and plan to be involved in the day to day aspect of the business, you are more likely to succeed than someone who simply wants to buy a restaurant because he wants to make a killing.
It also pays to understand all aspects of the business. You not only need to know how to cook, but also how to get customers in the door, and most importantly, keep them coming back. You need to know how to manage food costs, hire employees, and manage payroll. In addition, you’ll be dealing with the health department on a regular basis, so knowing food safety is a must.
Owning a Restaurant Isn’t Fun or Glamorous
If you’re considering opening a restaurant because friends and family continue to tell you how much they love your cooking, stop!
Being able to cook is, sadly, a small part of operating a successful restaurant. For starters, cooking in a home kitchen for a family, or even for a larger party is not the same as cooking many dishes for dozens of people every single day. It’s not a laid back Sunday family dinner; it’s getting delicious food to hungry diners as fast as possible so that you can pay the bills.
In addition to the difference in cooking, you have to have a good business sense. Think about all the successful restaurants out there today. Many are not successful because someone knows how to make unique and delicious food. Instead, they make money because they appeal to a certain part of the population.
Most restaurant owners work really long hours for little pay, especially in the beginning. It can take several years before you are able to take a paycheck for yourself, so you need to factor this into both your business and personal budget. You will be tired, and you will often wonder if it’s worth it. Know this before going in so that you can manage your expectations.
Location Matters
Unless your business is going to make money from delivery, you need to really think about the location you’re in. Ideally, you want to be in a high traffic area, and you want the type of restaurant to fit the locale. You wouldn’t open a five star restaurant in a neighborhood that can’t afford to eat there, and a vegan restaurant in a town known for BBQ probably wouldn’t go over well.
The best locations are going to be expensive, but you will make more money. For example, you can open almost any type of restaurant in a place like Times Square because the sheer volume of foot traffic will push people in your doors no matter what. Of course, the average entrepreneur can’t afford that kind of location.
If You Don’t Know Who Your Customer Is, You Won’t Have Any
Part of choosing location is figuring out who your customer is. For example, McDonald’s knows their average customer is someone that wants consistently reliable food quickly, and that’s who they market to. They don’t take out ads in health in fitness magazines, and they aren’t marketing to those looking for a luxury meal.
No matter what type of restaurant you open, you aren’t going to appeal to everyone, so it doesn’t make sense to try. Before you open your restaurant, make a list of what you think you know about your customer. You can then focus your marketing tactics on getting that person through the door.
It’s Easy to Let Your Menu Get Away From You
It’s a common misconception that diners want as many different menu options as possible when they visit a restaurant.
Having a large menu with a lot of selections is rarely a good idea, and very difficult to do well. Instead of trying to please diners by offering everything under the sun, focus on a few dishes that you know you can do really well. Not only will you continually get practice making your well-known dishes, you will also save on food costs.
The more items you have on your menu, the more you have to have on hand in case someone orders something. If you offer a wide variety of different menu items, you will constantly be throwing out food that your customers aren’t ordering.
Your Staff is Important
A successful restaurant depends on much more than good food to be successful. Customer service is just as important. In order to offer the best customer service, you must have well-trained, happy to work for you staff on hand to make a guest feel welcome. Remember this when you’re going through the hiring process, and whatever you do, don’t hire family and friends because you think they’ll do a better job. The opposite is more likely to be true, and you can quickly ruin relationships when you become the boss.
Since your employees essentially are your business, you want to hire those that will look professional, and do the job well. Remember, even though your Executive Chef may wear a nice chef’s jacket, he’s not the only important employee in the place.
Don’t overlook the importance of a well-qualified, well-trained staff that shares your ideals and understands what kind of company you want to be.
Conclusion
Opening a restaurant can be an exciting experience, but if done wrong, it can be stressful, overwhelming, and financially devastating. Make sure you know what you’re getting into before opening your doors and you’ll greatly increase your chances of success.