According to a recent Ohio State study, 1 of every 4 restaurants close their doors within the very first year of operation. That comes to a failure rate of just about 60%. Many of us food lovers and chefs can attest to finding that one perfect restaurant that seems to have everything going for it; great food, a great atmosphere, nice location, great prices and yikes! Less than a year later they’re shuttered and we’re left asking ourselves “What happened?”
Well, here are 8 tips that should help you make the most of your dreams and your dollars.
1. Have Vision – Having a clear vision of just what your restaurant will look like, the kind of food you will serve, the types of patrons who will sit at your tables can help you make judicious decisions when you have to wade through the onslaught of choices from furnishings to procuring contracts with local purveyors, to advertising in the right publications. Do this well before you find your location and hire your staff. You need to be able to communicate your vision to potential investors, real estate agents and your very first patrons. If your vision is something others can believe in, you may be surprised with just how quickly your plans gain real traction. Bear in mind, any solid vision or “concept” for a restaurant must be tested to see if it’s wanted/ needed/appropriate to the area it serves. Do your research!
2. Sufficient Capital – this rule is as true for restaurateurs as it is for anyone starting a new business. Sufficient capital is essential for covering all your costs and the losses that are to be expected during the first and sometimes second year of business. Many very successful restaurants have slow starts. Plan accordingly. Do not be discouraged. Unlike other businesses, there are a fair amount of restaurant investors out there. You can also raise money, get contributions from friends and family and even go on Kickstarter. Though conventional bank loans can be hard to get for first time restaurant owners, keep that credit solid and apply for the best loans with the lowest rates first. Of course, any investor or banker considering your application will want to see your finished concept (pics included), complete business plan and the research you’ve done to see your proposed site will bring those hungry patrons to your door. Do not skimp on raising enough capital! This is where many restaurateurs go wrong and many a great restaurants end up closing before they’ve had the chance to hit their stride.
3. Yup, Location, Location, Location – that old cliché rings especially true for restaurants. Sure, we all know those hidden haunts that serve great food and have a loyal base of diners but that’s the exception, not the rule. Plus, many of these restaurants made their mark when the competition wasn’t so fierce and demographics were probably different in their area. To get people in to eat you need to be visible to many a-passerby. Lots of foot traffic by the kinds of people likely to patronize your restaurant is the #1 most desirable thing you need to be on the lookout for. Second to that, look for locales which offer high visibility on a busy street, preferably with ample parking. Sure, prime real estate is well, prime. But setting up in a relatively cheap on a small side street, even one that’s near the busiest part of town can hurt you. Be sure you’re going to get ample traffic. Let’s say it again, shall we? Location, location, location!
4. Know What You Need – at restaurant should run as finely as a Swiss made watch. Having the right tools, adequate “people power” with the right talents, the right ingredients and even cleaning supplies, all of these things work together to ensure a relatively smooth run on a busy Friday night. Researching the POS (point of sale) systems you’re considering can save you tons of strife down the line. Running through various procedures can help you see into the tools you need to do the work more efficiently. Make lists of what you need and keep accurate inventory. Many restaurants buy too much, others buy too little. Plan on having to make extra orders once your doors open. Make sure your food suppliers and purveyors are aware of this to avoid surprises down the line.
5. Test That Menu – because it’s the key factor in your restaurant’s success. Sure, you have amazingly creative and delicious dishes you’re just dying to serve but that means nothing if your patrons aren’t biting. When building that first menu, test out those dishes on as many people as you can. Getting honest feedback can be difficult so set the stage so that your tasters can feel comfortable with sharing their thoughts. Handing out notecards or short questionnaires that do not ask for the person’s name is one way to get more accurate responses, as is removing the chef (or yourself) from the environs and having a very personable server ask questions and write down the various responses. All chefs have found some of their most beloved dishes don’t test well. Don’t take it to heart if this happens to you. Try again in a year or two. It’s not worth losing the money or labor hours on a dish that simply won’t be popular. You can take heart knowing often those on the inside of the culinary world are a bit more adventurous than their patrons. Also, aim at having something for every taste but limit the number of dishes you have on your menu. This will keep your food cost relatively low and help you maintain fresh and high-quality food.
6. Menu Copy – is how you entice your patrons so do not overlook the power of the word! That warm bread, served just out of the oven will do plenty to spark your patron’s appetites but not as much as the phrasing on your menu. Without going overboard, aim to have your menu descriptions stimulate the senses as much as they inform the mind. Emphasizing how your dish is prepared can be a good way of doing this by using phrases like wood-smoked, pan-fried, slow roasted, hand-cut, house made, etcetera. With the move towards locally produced foods and terroir, describe where the various ingredients you use come from, even mentioning the farm or purveyor if you think that will add to the dish’s appeal.
7. Service – is as important as the quality of your food. With the advent of Yelp, Trip Advisor and other online review sites, consistently good service is more important than ever. When you hire your staff you need to make sure they understand how key their role is in the success of the restaurant. Never let your patrons feel like their satisfaction and business is not important to you or your staff. Even when they are incorrect, try to accommodate them promptly and courteously. This can be quite trying at times but bear in mind, one positive dining experience will generally yield a maximum of three recommendations while a negative experience will usually lead to a whopping seven shared complaints via word-of-mouth. Add social media into the mix and you see what a serious liability one bad review can be.
8. Hire The Right People – Your servers, busboys, hosts and FOH (front of house) staff members interact most with your patrons. Because of this, they must be properly trained and equipped with the right people skills to do the job well. Having clear standards and ways for dealing with returned dishes and other complaints or otherwise lackluster reviews is essential. Hire people who like serving food and who are into what they’re doing. From there, educate and empower your staff to ensure they abide by the standards you have set. Of course, your BOH (back of house) team from your Head Chef to all the various chefs and cooks are your magic makers. Never underestimate how important it is to acknowledge the work these people do. While famous chefs have no shortage of praise, up and coming chefs and cooks thrive off of recognition. Sure they do it because they love it, but they need to know someone out there “gets it” and appreciates them.
Honorable Mention – Social Media – with words traveling at the speed of light, it’s essential that any aspiring restaurateur knows how to engage their base via Twitter, Instagram, Facebook, Yelp, Foursquare etcetera. Tweeting time-sensitive and delicious information like “hot croissants just out of oven” can get them lining up at your door. Post daily specials on your Facebook page along with pics of the staff and the chefs hard at work. People love the stories that go into making great food. Bring your base into the experience of cooking, sourcing, eating and having fun as much as possible. Sharing in this responsibility with trusted staff (while monitoring it) can free you up to post just a couple of entries a day and still have a very active presence on Social Media. It’s also the best way to advertise your business for little to no money.
Use these tips while you build that dream of yours and with just a little luck and a whole lot of work, vision and determination you can make that sweet dream of yours one delicious reality.