If you’re thinking about opening a restaurant business, there are some important facts you need to face first. Being honest about the reality of restaurant ownership, and tackling challenges head-on will spare your dream of starting a restaurant from becoming a nightmare. Take a hard look in the mirror now and become prepared, to ensure a successful restaurant startup venture in the future.
Learn From Experience
If you have little or no restaurant experience, it’s going to be harder to understand what restaurant staff and management do. It would be a good idea to take a job in the type of restaurant you imagine opening. Learn how everything works first hand - by really doing it! This is the best way to understand what goes on in a restaurant. You’ll get an education from those who have real restaurant management and ownership experience in exchange for your time.
Think Small Before You Go Big
Another thing to consider before you decide to open a brick and mortar restaurant is to start small and develop your concept while gaining valuable experience and raising capital. If you have a great idea for a new type of food or service, start small. Food carts, food trucks, pop-up restaurants and catering businesses are a great place to start before investing your hard earned money in an expensive restaurant location.
Find out what people think of your menu while you learn how to manage food cost and deal with suppliers. Learn what menu engineering means. Discover creative ways to cut costs and negotiate with suppliers. Raising capital through a successful food cart or catering business before you invest in a restaurant means you can take on fewer loans or outside investors as well.
Serve the Local Community
Your passion for a unique restaurant concept drives you, but it should not blind you. Remember that your primary goal in opening a new restaurant should be to create amazing guest experiences. That means understanding your target customer and giving them what they want. Not what you "want them to want."
The majority of your restaurant sales will come from the people living in the immediate area around your restaurant - 10 miles or less! If your concept is about your passions and tastes but isn’t grounded in the reality of your target customer’s lifestyle and needs, they simply won’t come.
This is one of the coldest truths; It doesn’t matter how great of a job you’re doing or how creative and amazing it is. If people in your neighborhood don’t want it or understand it, you’re simply not going to have enough guests to drive sales.
For this reason, if you have a unique concept, do your market research carefully and choose your location wisely. It is critical to your success to meet the needs and expectations of the locality.
“It’s important not to make an overly rosy sales projection to look good or cover a gap between projected cost and projected sales. Sales projections need to be researched, based on sound data and regularly updated.”
Be a Leader
A leader gets out in front of a problem and makes plans. The set a personal standard of greatness and have high expectations. Additional characteristics of a successful restaurant owner are a strong work ethic, and being open to new learning and personal growth. Key skills of successful restaurant owners are outgoing and the ability to negotiate, paying attention to the numbers, systems-oriented thinking and the ability to inspire others through their conduct. This means being grounded, paying attention to accounts, developing processes and leading staff by example.
You can learn the skills and characteristics through growth and training. You just have to be open it and spend some time learning. Consider taking courses in business, accounting, management and organizational leadership. Many choices for courses of this type are available at local colleges and online.
Understand the Challenges
The primary challenge in the restaurant business is that it’s highly competitive. There are so many restaurant choices for guests, and margins are thin. Many factors can “make or break” your restaurant success so you must be operating at the top of your game at all times.
Second, the restaurant is a fast-paced labor-intensive work environment that employs primarily untrained and, low-paid workers. This makes finding good, reliable people for your team difficult. Embrace your role as a leader and look for those individuals with a good work ethic and a willingness to learn. Develop processes and procedures that take the guessing out. Remind young employees that they are gaining valuable work experience that will make a lasting impression on the rest of their lives.
Third, nothing is constant. The environment inside and outside a restaurant is ever-changing. Workers are coming and going, equipment malfunctions, vendors change prices - it’s always something! Nothing is stable for a restaurant. To survive, you have to embrace the dynamic of change and be able to creatively pivot when the landscape suddenly alters. If you don’t deal well with a rapidly changing environment, perhaps restaurant ownership is not for you. However, if you enjoy adapting quickly to new challenges in a constantly evolving environment, there is nothing quite like a restaurant!
“To survive, you have to embrace the dynamic of change and be able to creatively pivot when the landscape suddenly alters.”
Ask the Experts
Restaurant business owners are gracious open people who are willing to mentor and share their hard-fought wisdom with those who share their passion for excellence. Learn from the mistakes of others and avoid an “it can’t happen to me” attitude. Prepare now or it certainly may!
If you’re not learning from those who have come before you in the restaurant business, you’ll miss a huge piece of the puzzle. Nothing replaces experience. Additionally, if you’re not keeping up to date on new trends and technology that help you be more competitive, you aren't as efficient as you could be. But filtering through it all on your own can be difficult when you already have a lot of things on your plate.
Join trade organizations where you can network with other local restaurant owners and attend a restaurant trade show every year. The NRA (National Restaurant Association) has many resources for restaurant owners and provides great networking resources to meet others in the business. Join state and local restaurant organizations as well. Knowing the other restaurant owners in your town will go a long way to helping you stay up to date on current events, and trade shows will keep you in the loop on new technology developments.
“If you’re not learning from those who have come before you in the restaurant business, you'll miss a huge piece of the puzzle. Nothing replaces experience.”
Owning a restaurant can be incredibly fulfilling and rewarding, but taking a casual approach or having your head in the clouds, expecting things to work out on their own is not a safe way to run a restaurant business. Take stock of yourself, your resources and your environment. If you want to be successful in opening a restaurant startup, being realistic about the challenges you'll face is a huge part of it.