Starting your own restaurant can be scary, especially when about 50% don’t make it past five years. If you have shared your dreams of opening a business, chances are you have been warned by friends and family how difficult it is to run a restaurant. If you have made it past five years, you may still be feeling like you can’t ever catch up and money is always tight. Cash flow is among the top reasons that restaurants fail followed by a lack of need for their particular market and competition. It is hard work to run a successful restaurant, but we have a few tips and strategies you can implement to help in launching and operating a successful restaurant.
Detailed Business Plan
A business plan is going to be your sounding board for everything you do moving forward, so you want it to be as detailed as possible. This will give you an idea of how much you expect to bring in each day, week, month and year and also tell you what you should expect to spend. It should be filled with research driven data that will allow you to plan accordingly and make informed business decisions. You want to know which location will work best for your particular restaurant, your market size, household income for the surrounding area and be aware of your nearby competitors. Know your marketing strategy and who your target market is. A business plan is much more than just stating your mission and goals. Even if you do not need any financial help in getting started, it is still be beneficial to write up your business plan. You can always adjust as you grow. Having numbers to work with, along with a vision and goals, will help you see what areas need improvement and what is working.
A lot of times when starting a restaurant, people want to cut back on anything that is not an absolute necessity. Unfortunately, people think that means they should wait until they save enough to invest in technology. The truth is that by investing earlier, they will likely save money in the long run by increasing accuracy and efficiency. Having a POS (point of sale) System that integrates with your back of house software will be a game changer when it comes to making informed business decisions – saving you time and money. Remember, cash flow is a huge factor in failed restaurants, so anything that can help you make more money is worth it. Making smart purchases does not mean cheap purchases.
Consistency is key from front-of-house operations to back-of-house. You want to be consistent in how you train your employees, how your dishes are prepared and checking data and reviewing reports so you can make necessary adjustments as you go. Consistency is beneficial for restaurants in a variety of ways. Customers are more likely to return when they know what to expect and employees’ roles are simplified when they know how to handle each task. In each of these, consistency can lead to increasing your bottom line.
So yes, starting your own restaurant can be scary, but it’s not impossible. Do your research, utilize technology that will benefit you, and be consistent!