How to Start Your First Restaurant: 7 Essential Tips for Success
The Rezku Team
Opening a restaurant offers many advantages as a small business. The lower startup costs, availability of loans, the ability to create a welcoming space for others and the freedom to work for yourself and be totally in control is certainly attractive to many future business owners.
However, running a restaurant can also be stressful and financially risky. 27% of restaurants fail in their first year – 60% in the first 5 years.
That’s why successful restaurant operators are consummate planners. If your dream is to open a restaurant and not be another statistic, you must be willing to carefully plan ahead.
These 7 tips will help you in the planning phase as you strive to create a comprehensive business plan and securing adequate financing.
Keep these fundamentals in mind at all times, so your restaurant vision becomes a success.
Tip 1: Start Small and Learn
Many successful restaurant owners started by working for someone else. Maybe you’re a chef, a server or even a manager. The experience you gain while working in a restaurant is invaluable.
It’s much more cost effective to make mistakes early and learn everything you can while working for someone else.
Because running a restaurant is complicated, consider limiting your risk while continuing to learn on the clock.
Opening a popup, food truck or coffee shack will give you a taste of restaurant ownership without the risk and commitment a full-size brick and mortar location requires.
What you learn operating on a small scale – and learning to make it profitable – will build your restaurant-management muscle and boost your skills for a successful restaurant opening.
Tip 2: Research Your Market Thoroughly
Product-market-fit is the term used to describe how appealing your offerings are to the people you wish to serve.
To be successful with your restaurant opening, you need to perform market research. Research helps to make sure your food, theme of the restaurant, and the prices all match the needs of the customers you want to attract.
Check the demographics in multiple areas within 10 miles of a proposed location. What is the average age, income and other factors that contribute to dining preferences?
If you’ve got a certain type of cuisine or service type in mind for your restaurant, it’s imperative that you locate in a market with demand for your services.
Tip 3: Find the Right Location
As they say, the key to success is location, location, location. Make sure the concept you’re proposing fits the needs of the area you’re thinking of opening in.
Spend time in the neighborhood observing. Are there other restaurants nearby who market to a similar demographic? Understand what they’re doing and what you can do to compete
Next, negotiate for a flexible, short-term lease agreement. You’re taking a chance on opening this restaurant and bringing business to the area. Make sure the property management company is easy to work with and excited to partner with you.
Also, don’t underestimate the necessity of visibility and sufficient parking. You may have gotten everything right but if your restaurant is difficult to find or get to it will become a major deterrent to customers.
Don’t put yourself in a location with unnecessary competition. It’s better to choose a location where the people have been craving a restaurant just like yours. Strive to be an oasis, rather than another vendor in a crowded market.
Tip 4: Define Your Brand and Niche
You can’t be everything to everyone. Nor should you want to be. Every successful restaurant has some definable characteristics.
It is one of the most important aspects of restaurant success to have a clear vision, and decisive execution for your unique brand.
This includes everything from your menu items and price-point to the decor, to how your servers dress to your logo colors.
Every choice you make should be fine-tuned to appeal to your target audience and to help you stand apart from the competition.
Tip 5: Systemize Operations With the Help of Technology
Ask any seasoned restaurant owner and they will tell you the importance of running a tight ship.
Create clear operating processes and communicate your expectations to all staff members. Everything from how the kitchen weighs ingredients to how guests should be greeted when they come in – all needs to be spelled out in detail.
Write all standard operating procedures and publish them in an employee handbook so there is no question about how things should be done.
Leverage technology to assist with scheduling, task checklists and inventory management. These systems simplify tedious processes and help staff maintain policy compliance.
Tip 6: Always Prioritize the Guest Experience
To make a lasting positive impression, pay close attention to all aspects of the guest experience. Keep customer areas clean, train servers to be friendly and attentive.
Take time to talk to your customers, especially newcomers and regulars. Smile and greet them by name.
Solicit feedback and do your best to accommodate their suggestions. Monitor social media and online reviews. Remain calm when responding to criticisms. Even though their words may be hurtful, try to understand and learn how incidents can be avoided in the future.
Tip 7: Master the Financial and Bookkeeping Side
It’s probably not your favorite part of running a restaurant, but keeping close immaculate books and regularly reviewing sales reports is one of the most significant differentiators between successful and unsuccessful restaurant ownership.
In a business with such thin margins and high upfront costs, it’s incredibly important to continuously monitor key performance indicators and sales reports.
Modern restaurant management software helps take the pain out of bookkeeping, with reports generated automatically for things like taxes and payroll.
Look to your POS for all the reports you need – giving you the power to make decisions based on facts, rather than blind guessing.
Conclusion
Opening your first restaurant can be incredibly difficult, but also rewarding. By focusing on the 7 fundamentals presented in this article you’ll stack the deck in your favor.
Rezku is an end-to-end restaurant management platform, encompassing point of sale, reporting, employee management and much more. For more than a decade, we’ve worked one-on-one with restaurants, bars and pizzerias of all sizes guiding them toward success.
We’d be happy to work with you too.