Running a restaurant is renowned as being
one of the hardest businesses in which to succeed. And with good
reason - the failure rate of new restaurants is high.
Owning a restaurant is a popular and romantic dream for many
people and perhaps this is the reason many restaurants fail - some
people opening them are ill-prepared, have unrealistic expectations
and little clear vision for what is going to be a business rather
than a full-time hobby.
The guidance must therefore be - a restaurant is a business like
any other and should be run like one, and no romantic ideals should
be allowed to interfere with that.
'Be prepared' is perhaps the number one maxim. Be prepared
to invest lots of time and probably a fair amount of money to make
sure your chances of success are as high as
possible.
One of the best places to start preparation is with research -
perhaps initially looking less at demand and location and so on,
but at why exactly do so many restaurants fail. What are the
commonest pitfalls and how can you take care to avoid
them?
Like any business, cash flow is vital. Secure lines of
credit are very important, especially in the early stages. Sourcing
for quality and price within the context of projected profit
margins is extremely important. The golden rule is to keep costs
under control and in line with initial projections.
Of course, the focus of your business must be on the entire
restaurant experience. Without this focus, the business will be
certain to fail. Concentrate on food quality, the quality of
service and value for money. To do this most
effectively, finding the right people is key.
Surround yourself with people who have some knowledge of the
industry - people who have done it before - whether this is waiting
at tables, working in the kitchen or any aspect of the business of
running a restaurant.
This is traditionally a fairly low paid industry with high staff
turnover, so making staff selections can be hard. You need people
who wont let you down, who will be prepared to put in that extra
effort when needed and who genuinely enjoy what they are being
hired to do.
Be ruthless if staff are wrong. If they're not doing things the
way you want, or if their customer service skills are lacking, they
will damage your business. So, make sure everyone knows
what you want from them and be tough in enforcing high standards.
It is, after all, all about survival of the fittest, especially in
this business.
Make sure, right from the start, that you research and
understand the precise market you are aiming at. Be honest
with yourself in answering the question - is this the right market
for the location your restaurant is in? Don't get carried away and
just tailor your business to your own likes - you may like haute
cuisine, but if the location of your restaurant is all wrong for
this product, you'll be wasting your time and money, and you'll be
out of business fast. Cater for the right market.
Taking care of legal and insurance matters is a must. Running a
restaurant is potentially something of a minefield in terms of
health and safety - quite rightly, the law is there to protect
members of the public. So, you'll need to take advice on what
rules and regulations you will need to comply with. Get it wrong
and you could be shut down in a flash and your reputation will be
hard to rebuild. As with any business, you'll also need good and
adequate business
insurance. The kitchen, and the whole restaurant, is
potentially a high-risk environment.
Consider how you will market your business. Drawing up a good
marketing plan that makes use of a variety of options is highly
recommended. Use fliers, the Internet, local media and as many
channels for publicity as possible. If there's a story to tell
behind the restaurant's opening, so much the better. And,
even if there isn't a back story, make sure there's a unique aspect
to your establishment - create a brand. One suggestion to put
a business on the marketing map would be to hold special evenings
for food or wine events.
Creating a website is probably a must these days, but a poorly
designed site with out of date or incorrect content is probably
worse than not having one at all. So, it's worth making your
website part of your marketing plan and investing time and effort
accordingly.
In conclusion, the key ingredient (pun intended) is to look at
the restaurant as a whole; focusing on key aspects - like creating
great food - is crucial, but shouldn't happen at the expense of
other, perhaps less absorbing, but equally important aspects of
running a successful business of any kind.
