Plenty of people think they have the culinary skills and acumen to open a restaurant. But given that 60 percent of all new businesses in the restaurant industry fail within a year, it’s clear this isn’t the case. The reality is that the restaurant industry is exceptionally cutthroat, incredibly challenging, and difficult to succeed in.
However, that isn’t to say it’s impossible. Far from it, in fact. The truth is that if you have a good plan and the dedication to pull it off, you stand a chance of success – if you can answer some serious questions beforehand. Let’s take a look at the big questions you need to consider before opening a restaurant business and running into major problems.
Are You Ready?
First and foremost, a lot of people drop out of the restaurant business within the first year for a very good reason – it’s hard work. Forget about working 40-hour weeks, it will be more like 100 hours for a long time until you get up to speed. Not only do you have to be around for service, cooking hours and cleaning up, but you also need to deal with all the paperwork, ordering and scheduling that is involved with running a restaurant business.
And here’s the thing – even if you accept you will have to do all these hours, you need to think carefully about how it’s going to affect your life. Will your family life be impacted negatively? Are you ready for trading in the vast majority of your social life? Can you imagine not taking a vacation for the next few years? These are all huge considerations that you need to be aware of before you even start the planning process – which we will move on to right now.
Do You Have the Right Plan?
Your business plan will be critical if you are planning on opening a restaurant. It’s vital to get up to speed with your financials, first and foremost. If your figures don’t look right – either too high to be realistic or too low to be appealing – you will struggle to raise money through borrowing from banks or investors. You’ll need to work out how much money you need, your sales projections, and everything from your break-even point to your benchmarks.
But that’s not all your business plan needs. You’ll need to put everything from your unique selling point and competitor research, through to your inventory checking plans and ideas and costs of staff numbers. If you are struggling, a business advisor or an accountant should be able to help you construct a solid business plan.
Where Will Your Location and Premises Be?
You also need to have a big old think about location, as it could make or break your business before you even launch. Choose the wrong place in town – either too remote or too competitive – and you will struggle to get walk-in customers through the door.
It’s important to plan your premises, too. What will your floor plan look like? Will you rent or buy the property? How much will your premises cost you in rent, utilities and restaurant insurane? What kind of permits will you need – and do you have the qualifications to apply for them?
Do You Have a Mentor?
Do not underestimate how tough things will be if you go it alone. The truth is that most restaurants fail because they aren’t ready, and that includes not having the right advice or even a mentor. Having someone you can rely on who has been there and done that is going to be a huge help moving forward. Do you have a friend or a family member who has enjoyed success in the industry? Is there anyone in your circle of friends that could point out in the right direction?
It’s also possible to hire help, of course. As we discussed above, a business advisor or accountant with lots of industry experience can be incredibly helpful. An attorney will be useful, too, to ensure you are ticking all the boxes of your legal requirements, and even help you discover potential new avenues.
Can You Find a Good Team?
Have a long think about the kind of numbers you will need to keep your restaurant running efficiently, without overloading yourself with high wage payouts every month. Will you need a kitchen manager, cooks and chefs, waiters, wine waiters, and bartenders? Don’t forget that back of the house, either – do you want to have a sales and marketing team?
Establish how many people you will on board need to open, and where possible advertise your available positions as early as you can. It can take a while to find the right people in this particular industry, and you will also need to train everyone up on things like your cash register technology, ordering systems and basic customer service.
Where Will You Get Your Supplies from?
Finally, don’t forget to consider your equipment. What kind of ovens will you need – and do you have plenty of space to hold enough refrigerators and freezers? Also, where are you going to store your food – and all the equipment that you use – safely and conveniently?
It’s also important to establish good relationships with suppliers. Many restaurant customers are ‘eating local’ these days so it might be worth looking at finding a supplier that can get you your ingredients sourced from nearby.
As you can see, there is a lot to deal with when you plan on opening a restaurant. And all of this needs to be thought about – or discussed with your partner or team – thoroughly before you even start a marketing campaign. And the truth is that even if you get everything in place, success in the restaurant industry is hard to come by. However, it will be impossible if you don’t manage to get the basics right – it’s that simple.
Are you planning on opening a restaurant soon? Or perhaps you have plenty of experience you would like to share with newcomers? Why not share your thoughts in the comments section below?