We imagine this won’t be news to you (and if it is, you might be in trouble), but opening a restaurant is risky business. Far more restaurants fail than succeed, and those that do “succeed” often spend years teetering on the brink of closure, devouring resources, testing marriages, and causing ulcers until, finally, the weight of it all brings everything crashing down. Sound bleak? Maybe so, but we couldn’t live with ourselves if we didn’t tell you truth about what you’re getting yourself into.
Of course, there’s a sunny side to the restaurant business as well. Many restaurants do survive, and some of those even turn a consistent profit. So, what’s their secret? What do you have to do ensure your restaurant will be one of the blessed few? While we make no guarantees, we do know there are certain steps you can take to improve the odds that your restaurant will live up to your hopes and dreams.
Build a Proper Foundation
First things first: do not, and I repeat – do not, try to open any business if you are in debt. If you are not financially stable in your personal life, you most likely won’t have any luck making money by opening a restaurant. For the strongest foundation, you need three things: a compelling core concept, an excellent chef to pull it off, and a great location. Does your concept connect with the local market and offer either something new or some improvement on something old? If not, why would anyone come? Does your chef believe in your concept? Does he or she possess the culinary skill and leadership abilities to make your concept a reality day in and day out? Does your location offer visibility, ease of access, sufficient parking, and a reasonable amount of space? It won’t matter how great your concept or chef are if the location itself proves too hard to find or too cramped once inside. Depending on the atmosphere you’re going for, consider getting some board games or lawn games if you have an outdoor section.
Have Capital on Hand
When you first open, you’ll likely experience a nice influx of business. Money will come in fast as locals stop by to check out the new restaurant in town. Beware, however. This money can be deceiving. Usually business will die down as consumers decide what they think about your place and whether or not they’ll work it in to their dining routine. Ultimately, your restaurant will need more than curious one-time visitors. It will need repeat customers, and building that clientele takes time. Will you have the cash reserves to get your restaurant a chance to catch on? If you want to survive, you’ll have to. Make sure you have extra money to save your restaurant during that lull. If you’re experiencing cash flow problems, take the time to analyze what’s going wrong and find a solution to increase cashflow.
Take Good Care of Your Diners
As the old cliché goes, you’ve got to spend money to make money. This is especially true in the restaurant business. It’s not enough to serve great food. You’ve got to serve great food in a warm and friendly environment, one that makes your clientele feel respected and well taken care of. If you make everything about your bottom line and try to save too much money on the hospitality side of the restaurant business, you will lose guests and money in a hurry. Little things like the chef visiting tables to chat with diners or comped desserts or appetizers that arrive at a table out of the blue: these things create a sense of connection with your restaurant that will bring those diners back again.
Use Clever and Cost-Effective Marketing Strategies
In the restaurant business, word of mouth and the recommendation of satisfied diners really is the best marketing. And it’s free! However, in the early days of your restaurant, it can be dangerous to rely on word of mouth alone. You’ll need to spread the word yourself. And don’t get proud here. You don’t need commercials on TV or a glossy spread in local magazines (not that those things hurt). Get old school. Hand out stickers, place signs around town, or put a creative car magnet on your vehicle. In short, do whatever it takes to lodge your restaurant’s name in local patron’s minds.
Like we said, opening a restaurant can be an exciting but risky business. Good thing you can mitigate that risk substantially by following the above advice and you’ll give your restaurant a fighting chance. Take your time, make sure you have everything you will need before you open, and get to work bringing people the joy of great food!