Did you know that Scotland has had an annual restaurant failure of seventy-three percent for the past years? This just shows that a restaurant startup is a risky business. It’s not just about having everything in place, but it is also about knowing everything that will take place.
As a restaurant owner, you are well aware that the restaurant industry is very competitive. There is no rest for the competitive spirit. The number of ideas that are created each day to pique consumer’s interests is endless.
It is not a trivial task to start a business in the industry. The road toward success requires a great deal of effort, time, and resources. Even though no one solution works for every business or operation, it is important to keep in mind that your startup cannot afford to make mistakes.
To increase the success of your startup business, here’s a list of what you should have at the beginning of your restaurant management journey. These are the non-negotiables when it comes to business planning with a restaurant.
Table of Contents
Startup for Restaurants – Must-haves
Establishing a restaurant is not the same as developing a restaurant that will persist. As a result, you may end up being just another statistic if you do not follow the correct strategy for your concept.
Several people still hold to the “build it and they will come” mentality about the restaurant business. To differentiate themselves from their competitors, restaurants today need to excel in multiple areas at the same time.
Concept and Theme
Due to the wide range of dining options available and the sophistication of the current restaurant market, you have to be prepared to go the extra mile. Sometimes, it takes a bit more than just the food to make it happen. To please everyone, other restaurateurs might do everything and sometimes go for variety rather than focusing on what they do best. This, however, is a grave mistake.
Take advantage of your strength and give it the prominence it deserves in your restaurant. Providing vegetarian options on your small menu is all you need. This will facilitate purchasing and hiring and enable you to focus more effectively.
Secured Funding
As with every business, make sure you know how much money you need to get your restaurant off the ground. Ideally, you have to establish three pools of cash flow to sustain your startup.
- First Pool – One-time payment like equipment, furniture and fixtures, and tools.
- Second Pool – This is where you’ll get the cash that will support your startup for the first six months.
- Third Pool – This should be used to cover your business and personal bills for at least six months.
It is important to provide yourself and your management a room for error and a cushion of six months. This is when you can balance your expenses against your income properly.
Just ensure that you plan for every bump you may encounter. Having just the right amount of funding support, without allowances, just increases the risk of failure for your startup.
And once you’ve started operations, keep an eye on your food and waste cost. Keeping track of your inventory, cooking well, avoiding waste, and maintaining competitive prices will let you stay above the competition. This is where you have full control of everything that’s why your focus on it will be worth it.
Well-researched Restaurant Business Plan
Yes, not everything goes as planned, but your business plan will serve as your ultimate guide and backup. Whether you are expanding or measuring your progress, consider your business plan as a dynamic document you review periodically.
This document will have all the essential information about your restaurant. All the licenses, permits, and certificates that are needed will be secured in this document.
This is where you will present a comprehensive analysis of your target market. Additionally, it will enable you to determine how well your competitors are doing. You are better able to make business decisions with this document in hand.
Smart Location
Some restaurateurs possibly may not be able to get the area of the restaurant they want and try to position themselves instead as local dining destinations. However, a restaurant’s location success lies in its accessibility.
You may market your business as a local dining spot but consumers might have a hard time trusting your brand when no one’s going at it. There is accessibility to popular restaurants on all levels, from price to brand to location, and it should also be your goal to offer that to guests.
Qualified Employees
When we say qualified, it doesn’t mean that your employees should have outstanding resumes and experiences. Your business will benefit from hiring essential staff. You know your concept best, therefore you also know what type of support it needs.
If you’re just planning to add a bar, then you can hold the idea of hiring a bartender. Having just enough staff streamlines your operations, at the same time it helps you minimize your cost for labor.
Additionally, you must ensure that the staff you’ll employ are the ones who believe in your business philosophy. Through this, you can avoid internal conflict in the long run. Creating a healthy working culture and environment is a must, especially in the service industry.
Don’t be afraid to invest in training your employees. Have a handbook ready, and ensure that all lines of communication are open for them. Properly motivated staff are the most powerful tool a restaurant can have.
Strong Marketing Plan
While repeat business is a great way to secure your income, it is not ideal just to rely on it. You should continuously look for ways on how you’ll get your brand out there. Working on your marketing efforts is one of the most basic tasks you’ll work on as a restaurateur.
As the industry pushes through digitization, creating different online marketing campaigns is the smart way to do it. Establish strong online visibility through social media marketing, optimized website, and local SEO.
Online listings such as Yelp, Google My Business, and TripAdvisor are also a great way to expand your customer base. Just make sure that all information and details about your restaurant are updated and easy to comprehend to avoid miscommunication between your restaurant business and your customers.
