If you are attending culinary academy there’s an excellent chance that you dream of someday owning your own restaurant. A 2014 Ohio State University study reported that 60 percent of restaurants go under in the first year. Hence, it’s wise to gather as much information and advice as you can can before trying your hand as a restaurateur. Here are five tips that may help you to beat those odds and make your establishment a success:
1. Develop a sound business plan
If you are going to get your restaurant off the ground and you are not spectacularly wealthy, you will probably need private investors as well as a small business loan. To obtain funding from either source, you will need a detailed and compelling business plan. Your plan should instill confidence in potential investors or loan officers that you are someone who understands the industry and has realistic expectations for success.
Bplans recommended including information such as a description of your target consumers, a survey of the competitive landscape, your plans for marketing and, of course, a projected budget. Be sure to consider all the employees, supplies and construction necessary to get your restaurant up and running. Research what insurance and permits are necessary in your area.
2. Choose your location carefully
According to the old adage, location is what matters most in any real estate deal. It’s certainly a major consideration when deciding where to start a restaurant. You should look for a space that is the right size, perhaps with room for expansion, and an appropriate ambiance.
What is around the restaurant can be just as important Visibility and foot traffic are major concerns when a new restaurant owner is attempting to build a base of regular customers. Chef’s Blade explained that you must also take into account the businesses and residences in the area and local costs for utilities and trash collection.
3. Market what makes your restaurant unique
A restaurant needs a great chef, competent and hardworking cooks and an efficient, friendly front-of-house staff. In many cases, though, hiring the right people and making quality meals may not be enough.
Food service consultant Brandon O’Dell argued that the biggest reason why so many restaurants fail is that their owners fail to market properly. Each restaurant must establish a unique selling point to ensure people hear about it through a targeted strategy. Food and service are important, but customers return to experience a particular feeling or atmosphere not possible elsewhere.
4. Strategize pricing and spending
Successful restaurant owners are as thoughtful about their money management as they are of food preparation. Always consider how your pricing structure and expenditures will balance out to make for a profitable business. Investing in services and equipment that make guests happy is always a good idea, but you must also make sure you charge enough to cover operating costs and make a profit.
Chef Tyson Cole told Inc. to start off with the capital necessary to keep the restaurant running for six to nine months. After all, unexpected costs may occur and could be ruinous if you do not have additional funds. Even if the venture does well initially, hang onto that money so the doors remain open even if there is a downturn later in the year.
Keep the menu short and focused on items that fit the identity you are building for the restaurant. That way customers understand your brand and you also avoid the increased costs for inventory and equipment that a longer menu requires.
5. Maintain emotional balance
Starting a new business is a huge responsibility and can be highly stressful even when things are going well. Thrillist pointed out that running a restaurant tends to consume one’s time and attention to the exclusion of any social or family obligations. However, if you allow yourself to be overwhelmed by the pressure your restaurant will not succeed. Paul Abrahamian of Sticky’s Finger Joint in New York City explained to Thrillist how a restaurant owner can find fulfillment in this lifestyle.
“At the end of the day, there is only one type of success, and that is to be able to live your life your own way on your own terms,” Abrahmaian said. “One cannot think in terms of the monetary. One must think in terms of the pursuit of happiness”