About 60% of restaurants fail in their first year and around 80% close down after five years. With these statistics, you may be wondering why would one even bother opening up a restaurant? Well, if you’re able to run a successful location, it could become a lucrative source of income and a catalyst for further business expansion. For many entrepreneurs, this reward makes the initial struggles of opening up a restaurant well worth it. But perhaps more than the financial incentive, running a restaurant or cafe is an extremely appealing lifestyle for many people.
So, how do you make sure that you don’t become part of that 60% that fails?
As a restaurateur, it’s important to understand a number of fundamental principles. In this blog, we’ve listed five things that you need to consider before opening up a restaurant. We’ll go through the basic aspects of running a restaurant such as ensuring that the establishment is safe by using safety equipment. We’ll also discuss larger ideas such as potential business plans and marketing strategies.
- The concept
When coming up with a restaurant theme or concept, it’s a good idea to start with the name. A great name grabs people’s attention and provides the customers with important details about the establishment.
For example, the food chain Burgertory gives the customers two key pieces of information just through their name.
First, it lets people know that they serve burgers. Now, one might think that this is too on the nose. However, it can be argued that smaller restaurants can actually benefit from having a name that spells out exactly what they do. Indeed, having a clear name will let unfamiliar customers know what type of food your restaurant serves.
The second thing that the name reveals is their concept. The play on the word purgatory suggests that Burgertory has a hellish theme that focuses on devilishly delicious and decadent burgers.
Plenty of restaurants nowadays pushes their concept and theme as the main marketing attraction. So, if you’re planning to open up a restaurant, be sure to plan out your theme as much as possible. The best way to decide on a concept is to think about what resonates with the customers but also feels authentic to you. Additionally, it’s better to have a simple and clear concept rather than a complex one.
- The location
Another thing you should consider is the location of your restaurant. Will it be easily accessible? Is there enough parking? Can people walking by see it from the streets? All of these factors are crucial to the success of your business. No matter how good the food is, the restaurant isn’t going to be successful if no one knows where it is.
You should also consider the type of customers that you’re targeting. Are you targeting students or individuals who are willing to pay a little bit more? Depending on your target audience, certain locations are going to be more beneficial than others. For example, if you’re targeting students with a lower budget, you may want to target locations close to universities.
- Business plan
If you’re getting into the restaurant business, you need to make sure that you’re doing the right things better than most other locations. In order to do this, you need a proper business plan.
A traditional business plan can have a variety of different elements. However, the main aspects are as follows:
This will be the skeleton of your business. It will outline how your business functions at the most fundamental level. For example, you might outline how your restaurant will take orders, bookings, deliveries, and so on.
- Products and Services
Of course, you also need to figure out what you will be serving. What cuisine will you specialize in? Is it fast food or fine dining?
- Market and Competitive Analysis
You will need to identify your target market and direct competitors. After this, you need a plan outlining how you’re going to cater to your chosen audience and how you’re going to stand out from the competition.
- Sales and Marketing
Last but not least, you need to find a way to connect with your target audience. How are you going to attract customers? Will it be through your unique restaurant concept? Will your restaurant have a strong social media presence? Whatever it is, you need to ensure that it gets through to the audience.
- Using the right technology
An integrated POS system is vital for any restaurant. Gone are the days of delivering hand-written dockets to the kitchen. Modern POS systems are not only used to place orders, but also to store bookings, track and process bills, and even manage inventory. With a single integrated system, you can have a clear view over just about every aspect of your business.
Making sure you’re visible online is also vital for the success of your business. Set up a professional website and social media accounts that properly embody your brand. You should also look to integrate an online booking system into your website and social media accounts.
As a person conducting a business or undertaking, you must make sure that your restaurant complies with the Model Work Health and Safety Act. If your restaurant isn’t safe, your workers aren’t going to be comfortable and your customers aren’t going to be able to enjoy themselves. Without the satisfaction of those two groups, your restaurant will most likely fail.
A busy restaurant will inevitably have a lot of hazards. But perhaps the most overlooked hazard is the floor. Indeed, in places of business, the floor is often vulnerable to slipping and tripping hazards. Because of this, you need to be vigilant and keep your floors safe at all times. Use warning signs when you need to, apply anti-slip tape in the necessary places and install high-visibility tape in poorly lit areas.
Starting up a restaurant is a difficult endeavor indeed. However, if you’re able to get the basics right, you’ll be putting yourself in a good position to run a successful and lucrative business.