Setting up a restaurant can be extremely challenging - but rewarding results speak for themselves! Even with the blow, it sustained during the pandemic, The National Restaurant Association (NRA) forecasts that restaurant industry sales will reach 898 billion dollars in 2022, growing by 12.4% from 2021. However, the difficulties encountered while implementing a new restaurant business idea can’t be denied. Data shows that one in three restaurants won’t survive their first year.
This article will cover a few ways new restaurants can avoid these odds and aim for long-term success. Like every new business, restaurants need the Five Ms: Manpower, Money, Materials, Machinery, and Methods. However, the magic begins with a clear business plan, carried out carefully and effectively.
Here are the steps to implementing a restaurant business idea:
1. Lay the Groundwork
Before breaking ground on a new restaurant, it is advisable to first conceptualize the idea. The devil is in the details, so delving deep will pay off. From themes, aesthetics, cuisine, menus, seating layouts, location, and supply chains, planning every aspect of the new venture makes it easy to implement. Many of these factors directly affect others. For example, when opening a fine dining restaurant, a storefront in a business district or city center would attract the right clientele. At the same time, a family-friendly space would do well near residential or school zones.
It also pays to invest time in a thorough market research analysis to understand competitors in the same space. It can help owners identify their unique selling points, which they can leverage to draw in their ideal target customers.
2. Calculate the Costs and Raise Funds
Once the key ingredients of the business plan are finalized, the approximate cost of the venture can be calculated, keeping in mind the overheads, like utilities and staffing. The next step is to find options for restaurant funding. With the help of a seamless, transparent, and easy funding process, restaurant owners can access enough working capital to reach the next level of their business. Restaurant funding can help transform older establishments, boost marketing plans, galvanize expansion schemes, or help owners get their businesses off the ground.
3. Get the Green Light
Before restaurant dreams become a reality, owners must ensure they have all the paperwork they need to serve guests in their dining areas. Here are a few essential licenses and approvals to help them start a restaurant in the country. These may vary depending on the establishment they are opening, whether they plan on serving alcohol or have a food truck, entertainment options, or home delivery facilities.
- Business name registration
- Business License
- Certificate of occupancy
- Sign Permit
- Foodservice license
- Employer Identification Number (EIN)
- Food handler’s permit
- Building health permit
- Liquor license
- Live entertainment and music license
- Resale permit
- Sales tax license
- Dumpster placement permit
- Seller’s Permit
- Valet parking permit
- Foodtruck permit
4. Teamwork Makes the Dream Work.
“The strength of the team is each member. The strength of each member is the team.”~ Phil Jackson
Like any business, restaurants need the right workforce to get them through the ups and downs of the hospitality industry. From partnering with the right vendors and suppliers to arranging for an efficient team to work in the kitchen and dining areas, restaurant owners often struggle with getting the right team in place. In 2021, restaurant operators reported that staffing was one of their top challenges. 78% said they were understaffed and did not have enough employees to meet customer demands.
The National Restaurant Association says that the U.S. food service industry workforce is forecasted to grow by 400,000 jobs, employing nearly 14.9 million people by the end of 2022. Having robust interview and onboarding protocols for new partners and employees can lead to an efficient and successful restaurant business plan.
5. Boost Efficiency with Technology
In today’s world, smart and automated systems make consumer interactions simple and convenient. Installing the right technology in the right restaurant environment can work wonders for customer satisfaction. For example, studies show that free Wi-Fi increases the likelihood of customers returning to restaurants, and mobile QR code scanners are expected to grow with 99.5 million users in the US by 2025. Even on the backend, using automated inventory software in hospitality businesses can save up to 100 billion dollars in food waste.
6. Reach the Right Audience
To ensure that restaurants establish a continuous revenue flow, it is essential to maintain marketing efforts, even when business is good. In-person events have always been popular because they give diners new experiences while eating their favorite food, for example, game nights or trivia nights at a local bar, or a special tasting menu at a high-end restaurant.
Aside from physical or print ads and flyers, restaurants can benefit from establishing a solid social media presence. For example, 72% of customers take a peek at comments on Facebook to make decisions about ordering from restaurants. In addition, brands that engaged more actively with customers on social media saw a 40% increase in customer spending.
Well-thought-out subscription models, discount offers, and new menu options can keep loyal consumers coming back for more!
7. Identify Loopholes
Before opening their restaurant doors, owners should invest time in trial and error. Hosting a soft launch before the opening day gives owners, investors, and staff a chance to study what could go wrong by identifying gaps in the processes and finding solutions.
The global restaurant industry learned some tough lessons due to the pandemic. Today’s restaurant owners are more aware of sudden emergencies that can drastically affect their businesses, which is why they are always ready with backup plans and safety nets. A solid restaurant business idea should also make room for risk assessment and alternative solutions when faced with unexpected circumstances. The ability to pivot and adapt to the trends in the restaurant business is an essential skill. It can provide a great return on investment for owners who craft and implement a strategic business plan!
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