Are you thinking about getting into the restaurant business? It is one of the toughest businesses around, and your chances to survive are slim. Most restaurants close in the first year.
Even the most successful chefs have failed and have had to close down restaurants. It’s competitive and you always have to be at your best.
You have to know how to run a restaurant before you even think about opening your doors. It’s up to you to develop systems, understand finances, and marketing. You have a lot on your plate, which can lead to long hours and eventually burnout.
Do you want to start and run a restaurant that thrives without killing yourself in the process?
Read on to find out how to build a restaurant and get tips to make it thrive.
1. Develop Your Concept
Everything starts with an idea. You might have had a moment of inspiration that woke you up out of a deep sleep. Maybe you got an idea to start a food truck or a high-end restaurant.
You want to take the time to develop your concept. This will be the core of the restaurant that forms the brand and dictates the look of the space.
You want to decide what kind of cuisine you’ll serve and whether or not you’ll have a limited menu or a broad range of choices.
It’s important to have an idea of who your ideal customer is. You want to get inside their mind and understand why they would want to go to your restaurant.
2. Focus on the Customer Experience
In your restaurant, the customer is everything. You have to consider every single experience a customer has with your restaurant.
Everything from looking at a social media post to paying the check is part of the customer experience. Your job is to ensure that each and every experience that the customer has is absolutely flawless.
That means that coffee cups can’t have lipstick marks or that
Go through your marketing and visit your restaurant like a customer trying your place out for the first time. Make a note of each touchpoint and how each area can be improved.
You can also find ways to reach people after they’ve left by encouraging them to post on social media, leave a review, or sign up for your email list.
3. Understand the Competitive Environment
You already know that the restaurant industry is competitive. You don’t want your restaurant to come across like every other restaurant. It will only get lost in the crowd.
You need to identify your top 5 competitors and research them. Look at their social media accounts, websites, and have a meal there.
Look for things that they do well and for opportunities where you can do things even better. For example, you may have a concept to open a sandwich shop.
You visit the other sandwich shops in the area and find that they’re informal and don’t offer anything special. They have the same meatball subs and ham, salami, and capicola sandwiches.
What can you do differently? Offer high-end, handcrafted sandwiches made of slow-roasted beef brisket and other ingredients.
You can follow that up with tasty sides like mac n’ cheese instead of the standard fries.
4. Hire Right the First Time
People may not remember what they eat at your restaurant, but they’ll be sure to remember the service. The level of service that’s delivered is often the deciding factor in having a great customer experience.
It is critical to hire the right staff who can deliver. You want people who are professional and upbeat. You want them to fit in with the culture of your restaurant, too.
5. Work with Great Vendors
Your restaurant is only as good as the suppliers you work with. Your vendors are important partners in your business. They may be just as important as your investors.
You need to think about more than price when it comes to choosing vendors. You want to make sure that their values are similar to yours.
Take the time to shop for the right vendor. Sample their products, visit their warehouse or farm. Find out how they work to make sure your ingredients are fresh and always top quality.
If you have a liquor license, you’ll need to find good distributors to work with, too. You want to offer the best wine and beer pairings with your food.
6. Develop Vendor Management Systems
One of the most embarrassing things for a restaurant to have to do is to cancel a popular item because you ran out of ingredients.
It’s like a bar running out of Budweiser. You just don’t want that to happen. A big part of knowing how to run a restaurant is knowing your inventory and when to place vendor orders.
There will be nights when you get more business than usual, and they may happen. You don’t want to make it a regular occurrence because of poor planning.
The best thing you can do is have a system that saves time and money when it comes to placing restaurant orders.
7. Learn Everything You Can About Financial Management
Restaurants are difficult because they usually work within the slightest profit margins. You have to be an expert in managing those margins.
You have to manage your cash flow so you can meet payroll and vendor payments. You don’t want to get behind because it will send the signal that the ship is sinking, even though your restaurant is always packed.
Word could get out that you’re in financial trouble and people will stop going to your restaurant.
You have to learn how to manage money and learn about finances. If you don’t want to do that, hire a bookkeeper that can help you manage your books.
8. Develop a Culture That is Inspiring
There is massive turnover in the restaurant industry. It’s hard to be on your “A-game” every single day, and it can wear people out after a while.
The way to overcome that is to create an inspiring culture that makes your team want to deliver their best work every day.
You might think that you can call your team members names or be rude to them because you saw a famous TV chef do it.
That only creates a culture of fear, which is deadly for any business. Your employees will be held back from trying new things or doing their best work. The thing is that no one wants to be abused or yelled at because they made a mistake.
You need to be a leader who can bring your team together, not a power-hungry dictator that everyone loves to hate.
9. Write a Creative Menu
People are dying to be impressed when they go into a restaurant. They want to know where their ingredients came from and they want to feel good about what they’re eating.
Instead of saying what the menu items are, go on to describe what makes them appealing. For example, a Beef Barbecue dish can be described as “Locally-sourced beef from XYZ farms, slow-roasted to perfection and served with house-made North Carolina Style barbecue sauce drizzled over it.”
That type of description makes it more appealing because it’s more descriptive. It starts to tell the story about the dish, which makes people a little hungrier when reading it.
10. Pick a Top Location
Your location is your most important business asset. If you don’t get this right, there is a very good chance that your restaurant will fail.
That doesn’t mean that you need to be in a swank new neighborhood. That can come with crushing rents that your business simply can’t afford.
You also don’t want to be in the middle of nowhere because the rent is cheap. There simply won’t be enough traffic to support your business.
On top of that, you have to make sure that you can realize the concept of your restaurant. There has to be enough space to store inventory and have enough tables to make a profit.
Take your time when you’re choosing the location. Enlist the services of a commercial real estate agent and have a list of must-have items like parking, space, and alterations.
Before you settle on a space, ask what other businesses existed there in the last 10 years. You may find that there were 5 other restaurants there that all failed. Stay away from that location because people will only think that your location is doomed to fail, too.
11. Know What Sets Your Restaurant Apart
The danger of having a restaurant along with so many other places is that you run the risk of sounding just like every other restaurant.
Why would someone go to your Mexican-inspired restaurant when there are 10 others in the area to try out? What makes your place so great?
If you can’t answer that question in one sentence, you’re toast. You want your restaurant to stand out. You may have to revisit the competitive analysis you did to make sure you position your restaurant in a way that people can understand and want to try.
12. Use Social Media to Your Advantage
As a restauranteur, you have a great appreciation for food. You understand how it can be used to connect and break down walls between us.
Social media was created to connect us, too. That’s why food pictures are perfect for social media. Food pictures are the most popular images on Instagram.
Take advantage of that by highlighting your incredible creations on social media accounts. Instagram and Facebook are made for these types of posts.
To make them a part of a successful marketing plan, you want to plan out your posts to align with events in your area. You also want to take the time to do research on hashtags in your local area. That will help people nearby discover your restaurant and try it out.
13. Be a Master in PR
People are willing to try out a restaurant when they read about it in the local paper or in a magazine. How do you get coverage? Reach out to local reporters.
You need to do a little research on the local food writers in your area. Pick up a stack of local papers and magazines. Find out who the food and business writers are. You can follow them on Twitter and get their email address, which is usually available.
Reach out to these writers and let them know about your restaurant and what sets your place apart. Maybe there’s a local connection that you can exploit, such as you went to culinary school at a local community college.
From a business perspective, you can give business writers a story by mentioning how many people you’re employing or how you plan to be involved in the community.
The key to good PR is to get to know the writers first. Understand how they work and what their deadlines are. Then try to pitch a story.
How to Run a Restaurant That Beats the Odds
Running a restaurant is hard work. It’s a competitive environment where even the best restaurant owners don’t always make it. One mistake or bad customer experience can turn into a downward spiral.
It’s not easy to learn how to run a restaurant the right way. You don’t want to wind up on Kitchen Nightmares, after all.
Thriving restaurants all have some things in common. They start with a great concept, focus on the customer experience, and have a talented staff that delivers outstanding service. They also have sound financial management and systems in place to make every transaction smooth.
That helps you deliver memorable meals and experiences time and time again, creating a restaurant that goes beyond just surviving.
Do you want more tips to run your business? Check out the business and finance section often for more amazing articles.