Operating your own restaurant business can be profitable or highly problematic, costing you thousands if not millions of dollars to run. So how do you create a concept that leads you to success instead of struggle? If you’re an aspiring restauranteur, you will need to consider several aspects of your business before financing the endeavor. Here are some essential tips to consider as a future entrepreneur.
Who Is Your Customer?
You must consider the surrounding town demographics if you decide to open in your local area. What are your city’s tourism attractions? Who are the tourists that visit your area? Are they extravagant travelers or budget seekers in town for affordable experiences? Do you have a notable international community that might crave food from their home country? Perhaps your area of choice is heavily populated by a specific migrant community catering to those global needs. Maybe you are considering a fancy high-end restaurant in a blue-collar neighborhood. These choices may not be sustainable with a population not interested in seeking your offerings. Whatever it is you choose to develop, it is crucial to study the area demographics so you may fulfill a need and not saturate a readily available market.
Research the Current Dining Market in your Area.
Review operations at surrounding businesses and notate what they do well. Draw inspiration; however, steer clear of repetition. If your area already has several ramen shops, opening a ramen shop to compete will be challenging. It is not to say that you can’t test it. If you offer what is already available, you must provide something new and improve upon the current saturated competition. Even the most unique ideas must be cautious of opening in a flooded market, consider opening in another area or modify the business model to fit the communities needs.
What are the major risks?
Of course, no one wants to imagine their business failing, but it is something to consider in staying ahead of factors that are likely to put your business at risk. Common risk factors are:
- Unreliable partners in business
- An abundance of competitors
- A lack of viable suppliers
- Drug and crime issues
- Infrastructure problems
- Natural disasters
- Unreliable tourist industry
- Local beliefs and prejudice
- Drastic population shifts
It is not to say that you cannot open given one or many of these risk factors; this is meant to help determine the means of operation if said risks factor into your business. For example, suppose your area has a lot of crime and drugs. You may consider closing earlier in the evening, not offering outdoor dining, and doing your best to ensure safety and security to staff and guests. Your restaurant will take a lot of time, effort, and money, so assessing any risk that may detrimentally affect your business is critical.
Size DOES Matter…
If you plan to offer a wide variety of menu items, you must consider your restaurant’s kitchen design. A broadly varied menu will require many preparation stations and some bulky and expensive equipment. Depending on the size of your restaurant, there may not be enough space for dining or an appropriate area for the back of the house required for the desired menu. It would be best if you contemplated reducing the menu to reduce the amount of equipment and space needed. Factor the cost per square foot of your restaurant. What is financially required to accommodate the space?
Budget your Business
Opening a restaurant will be a financial undertaking that many cannot afford. It is of paramount importance to consider the financial requirements needed to open. By estimating your operational costs ahead of opening, you can make smarter decisions when developing your menu, hiring staff, and purchasing equipment. Working with a reputable consultant may offer insight into operational optimization not considered by a new restauranteur. This expertise can help you secure financing and stay on top of development as the opening process permeates its way into your every waking moment. This type of support can spearhead construction, design, menu costing, recruiting, and training to name a few. Therefore, it is essential to factor startup support into your initial budget. It can be challenging to stay on track, make smart decisions, and see progress, so reach out to Synergy today. With over three decades of industry experience helping hundreds of brands, Synergy can help you bring your concept to life.