Have experience in the restaurant business. Do not assume that just because you have eaten out in restaurants and can cook at home you are able to open your own restaurant. Obtain schooling in restaurant managing and take on a job in a restaurant with the same food concept in which you are interested to learn tips that may not be readily available from outside sources such as books and the Internet. According to BusinessWeek, Jordan Busch, a successful co-owner of a thriving buffalo wing eatery in Portland, Oregon, worked as a fry cook in a wings restaurant in Denver, Colorado, before opening his own establishment. An important tip he learned working there was to purchase a small space of about 1,200 square feet to keep costs lower and focus more on takeout and catering, where the real profits lie.
Scout the area. The restaurant must be easily accessible to customers. Network with other restaurateurs in the area and acclimate yourself with local trends, such as adding non-meat options if vegetarianism is popular in the city.
Target your marketing to your customer demographics and their buying behaviors, and design a menu that offers choices, convenience, and value.
Have quality food, quality service, cleanliness, and sound execution. According to the Canadian Restaurant and Foodservices Association, “you’re only as good as your last customer interaction, and you’re only as successful as your last meal.”
Understand the preferences and needs of your customers and encourage feedback with immediate action to any negative responses.
The association also recommends having empowered staff, a realistic financial formula, menus designed to yield optimum gross margins, and maximizing your buying leverage through one-stop shopping and volume management. It also emphasizes the need for effective capitalization:
“A restaurant’s life cycle is generally five years. In year one, you build the business; in years two and three, you fine-tune the business; in years four and five, you maximize earnings. After that, you must re-invent the business to create new excitement for your customers. Don’t forget that in the first year you need at least six months of working capital to build the business.”
A January article from O’Dell Restaurant Consulting’s weblog details how running a restaurant is not just like any business where you purchase a product, mark it up enough to make a profit, and hire effective salespeople.
“A restaurant is so much more complicated than that. First, you are more than a retailer. You are running a warehouse. You have to have the same skills a good warehouse manager has, including a system for checking everything in and out of inventory, protecting your product from theft, knowing how to keep your vendors honest in their pricing and their service, tracking and recording all your purchases and usage. All of this for a 200 item inventory of perishable goods, not just pieces that can be stored indefinitely,” says the article.
The article also illustrates how restaurant managers have to be manufacturers (filling orders for various types of products at an incredible pace), delivery servicepeople, supervisors of sales teams, service providers, and custodians to their own buildings and all of their equipment. Restaurant managers also have to have skills in graphic design, human resources, real estate, bookkeeping, and marketing. In addition, they have to be constantly involved and present at the restaurant to create effective leadership.
