There are not many things more exciting than the notion of starting your own restaurant. Maybe you’ve been working for a different owner for many years learning the trade and have finally decided to strike out on your own. Or perhaps you’re leaving a corporate job to follow your dream of starting a tiny place and eventually get to do something new.
Regardless of what your reason is, there are some things to bear in mind in regards to starting a restaurant. In the long hours and stressful times to tracking stock and making certain overhead costs stay low, ensuring that your restaurant is successful will likely become more than a fulltime occupation.
The amount of restaurants which fail in their first year is about as large as you may think. According to Rory Crawford, co-founder and CEO of Bevspot, about 60 percent of new restaurants fail within three decades. More frightening, he notes that the percentage rises to approximately 80% over the course of five decades. With over 1 million restaurants currently working in the U.S., the margin for error is lean. But with a little luck, plenty of sweat and some wise decision making, your restaurant may be the talk of the town long after its grand opening.
You Are Going into Function… A Lot (You’re Going to Want a Great Deal of Money, Too)
Like any new venture, you are likely to be sinking a huge amount of time and money into getting the place up and running efficiently. If you choose to handle the restaurant yourself, expect to be the first person in the building every day and the last one to leave. Generally, a restaurant manager will operate a lot more than a conventional 40-hour work week, including rush hour times, late at night and throughout the weekend.
Most managers that are hired to conduct restaurant places work between 50-60 hours per week. To get a new owner, you might be working even more than that. Some days may be easier than others, and at times you might be working 16–hour days with enough time to go home, sleep for a bit and return into the restaurant. You’ll also likely need to handle angry customers, stressful work changes and the occasional drunk client. But if you are enthusiastic about your work and wish to grow, the long hours might not feel that bad in any way.
Long days likely will not be your sole concern, either. From the busboys to your cooks and everyone in between, 1 thing is for sure; they all want to get paid. You also still probably have to afford rent and utilities, and cover all of the components, plating, silverware, décor and promotion you are likely doing. That is why it’s important to get lots of cash on hand, especially during those first first months and years.
Johan Engman using the Rise & Shine Restaurant Group says,”When beginning, whatever sum of money you feel you want, triple it. When you are up and running, stick with it and do not get discouraged if it does not remove from day one. It’s imperative that you believe in yourself and utilize this confidence sensibly to keep you inspired. Bear in mind that if it was easy, everybody would do it!”
When it comes to owning a restaurant, your food is most likely going to sell your story over the amazing décor, provocative advertising strategy or pricing. According to Le Cordon Bleu, creating a comprehensive menu may be a double-edged sword, especially when it comes to turning a profit.
“Providing a selection of choices on the menu means you increase the probability of consumers finding a dish to suit their taste,” the culinary institute states. “By appealing to a wider audience, you improve the probability of customer satisfaction. There’s a danger, however, in adding an excessive amount of variety to your menu. American psychologist Barry Schwartz describes this as the “paradox of choice”. When presented with too many choices, consumers can feel they’ve undergone’missed opportunities’, affecting their level of satisfaction.”
As soon as you know what you intend to serve your clients, you will want to price it in a manner that makes it an attractive buy but still turns a profit. Le Cordon Bleu suggests marking your dishes up 300 percent to pay the cost of ingredients, but also the lease, your employees and utilities, along with other costs.
Another fantastic means of pricing out your menu is by breaking down how much each ingredient costs and adding up those numbers to receive your final menu item complete. According to Matthew Ling, Principal of the Orion Restaurant Group, understanding exactly what it costs to make your menu items can help you appropriately compete on the industry.
“Every menu item needs to have a recipe card detailing each ingredient used in its preparation and the amount used,” Ling said. “Additionally, each ingredient’s corresponding price ought to be broken out and totaled to provide an accurate cost of this menu item. The most often used pricing calculation is that the”variable” method. This procedure is based off meals cost only and doesn’t account for labor costs. This is calculated by taking the whole cost of the menu item’s components and dividing by the goal food cost percentage that you want to attain. Because of fluctuating food prices, this should be performed at a minimum twice a year, and at the end of each quarter.”
You can not run a restaurant without a point of sale system, but do not just select the first POS solution that catches your attention. Take stock of everything you want it to do and then find a system that supports those requirements.
By way of example, you may want your data stored off-site. That means you will probably be looking for a cloud-based solution. Maybe you’re searching for a POS which includes online ordering, loyalty applications, kitchen display systems and offline capabilities. Based upon your requirements, you can settle for a less expensive option that provides a meat-and-potatoes experience or try to find a solution that supports third party integrations.
Having the ideal POS system in place can completely change the way that your restaurant operates. By connecting your inventory monitoring to your POS, you can know precisely how much of any ingredient you’ve got and immediately remove menu items when they sell out. Labor monitoring and scheduling can be more effectively planned out as you will understand when your peak times are and how a lot of people will be required to pay for the restaurant. All that may be kept by your point of sale.
Saying you have the best Italian restaurant in town is one thing, but with other people spread that message for you is completely different (and, honestly, far more effective). When advertising your restaurant, you will want to consider what makes you unique and how you can exploit those gaps to delight your clients and turn them into raving fans.
Take advantage of geofencing and geotargeting to reach out to the audience you wish to target. Try different promotions and see what works. Begin a loyalty program! The trick to correctly promoting a restaurant, or anything for that matter, is to always be sure that the customer gets the right message at the perfect time but can also be rewarded for doing the things you want them to do.
By way of instance, if a person is a regular customer of yours and signs up for your loyalty program, they are not only giving you their money daily — they are offering you invaluable data you can use to fine tune your restaurant’s offerings. In return, offer them exclusive deals or other perks that they can benefit from.
Restaurant Ownership Could Be Rewarding
Despite plenty of work, long hours and wearing many hats, owning and operating a restaurant is an experience unlike any other. You get to meet an assortment of interesting people, work with gifted chefs and cooks and build your own little at-work family. But bear in mind, it is still going to be an uphill struggle.
“Even with an remarkable idea, terrific food and top-notch provider, this is a trying company to become profitable in,” Ling said. “By always reviewing the numbers which are critical to success, you’ll have the ability make educated decisions that will set you up for growth and sustainability.”
With appropriate preparation and a generally sound comprehension of the market, you can beat the odds and make money for years to come!