Regardless of industry, in business, there are always two types of stories – successes and failures. You’ve seen a restaurant startup suddenly gaining popularity and instant success while others shut down before their first anniversary. Opening a restaurant isn’t as easy as ordering a take-out meal at McDonald’s, it involves a huge amount of work, patience, passion, and on-point strategies.
With the increasing number of restaurant businesses trying to take a piece of the pie, it’s no secret that the food industry is challenging. Breaking into the competition is tough, but there are things you can do to ensure that your new restaurant business doesn’t end up failing.
Location is everything
It’s always been said that location is the key to every business. No matter how great your restaurant concepts are, or how delicious and appetizing your food looks, if it’s not located in the perfect spot things won’t turn out well. Location can make or break your business, and that one spot can either bring in lots of money straight into your pocket or drag you down in debt.
Just because it’s a busy street or populous corner doesn’t mean that it’s the perfect spot for your restaurant. There are food shops located in hidden areas that still manage to gain success. Whether you decide to build a small food shop in your backyard or pay rent to secure that one premium site, location is one of the biggest considerations you’ll have to think about.
- Make sure to visit multiple sites before finalizing the best location for your small business.
- Size isn’t an issue as long as your restaurant has an adequate kitchen, dining room, etc.
- Assess your neighbors and don’t be afraid to negotiate the lease and reconstruction costs.
Having a solid business plan – and a plan for funding
If you want your food service to take off successfully, you should have a great business plan and backup strategy for funding. A business plan should be solid and detailed, but simple enough to be understood by everyone. Also, opening a restaurant won’t be possible without taking into consideration your financial resources. If you exhaust all your means right away from the beginning, it’s game over.
A strong business plan should include all the components of your restaurant business. It serves as the roadmap for your venture and it will lead you on the right path. If things go off track, it will show you how to divert and ultimately reach your destination. Check out these tips on how to implement a proper business plan.
- From the front of the house to the wait staff and utilities, factor in your management team.
- Don’t forget to include your target markets, your main customers, and alternative clients.
- Understand the local market, economic conditions, and publicity strategies.
Test menu items
You may think that your baked mac and cheese is the best meal in the world, but what’s mouthwatering to you might just be okay to others. Keep in mind that it’s not you who will be eating your food but your customers, so while your opinion matters, theirs is significant. Takeout and even dining restaurants should always test a menu to determine the dishes that will grace your carte du jour and those that you’re better off cooking for family members.
The ideal restaurant menu should include a balance of unique recipes and old-school time-tested favorites. Likewise, it should be quick and easy to prepare in the kitchen without sacrificing cost and quality. Here are some tips on how to choose the right menu for your restaurant:
- You can experiment and tweak classic dishes, but avoid food fads as much as possible.
- As responsible business owners, try to buy local menu ingredients to help out the community.
- Avoid food spoilage by making your meals versatile, use ingredients in a variety of dishes.
Insure your restaurant business
Equally as important as every step in how to start a restaurant is to protect your business from possible risks and liabilities. Food-related illnesses are common these days, and consumers are getting braver in filing legal charges against establishments. But food-related illness isn’t the only thing that could hurt your restaurant. Small businesses should also think about accidental slips and falls, employment issues, food spoilage, natural disasters, and much more.
What if something happens to one of your customers and you’re left with a major responsibility that could drain your financial resources? What if a storm wipes away all your equipment and restaurant furniture? Or if there’s a fire in the kitchen that spreads to nearby establishments? Consider these policies made especially for restaurant businesses, depending on the service you are providing:
- Food contamination insurance to cover all expenses related to spoilage.
- General Liability to protect you and your customers from bodily injury, property damage, and advertising or personal injury.
- Workers Compensation, which is required in most states for utmost employee and employer protection.
Here you can find all information about proper restaurant insurance.
Love what you do
Food will never go out of style, and will always be a necessity to mankind. The restaurant industry can definitely make your life comfortable. However, this is where most restaurant owners fail – when they prioritize making money instead of showing the passion they have for the industry. Running a restaurant isn’t all a bed of roses, but if you don’t love what you do, the light of success may not be on your side.
Starting a restaurant is doable, but maintaining it through ups and down is another story altogether. Your intention will transcend your products and services. From the food you cook, restaurant decorations, customer service, and ambiance, your customers will feel your main motivation.
- Ask yourself if setting up a restaurant is really your passion, T, this is a lifelong commitment and not just a phase.
- Be realistic, and go slow, always do what is feasible, and don’t get emotionally carried away.
- Challenging times will come, but hold on to your passion and don’t let it get lost along the way.