Eight critical restaurant start-up mistakes you need to avoid
If you have dreamed of starting a restaurant since you were a child, then why not turn that dream into a reality? Starting a restaurant isn’t an impossible task, even if you don’t have any business experience.
That being said, you do need to make sure that you avoid these mistakes. If you don’t, you may find that your restaurant fails before it has even had chance to take off, and this is the last thing you need.
To help you avoid that fate, here are eight critical restaurant start-up mistakes you need to avoid.
1) Not having enough money
Starting a restaurant can be expensive. It’s very easy to overspend and you may even find that things sneak up on you. It’s also easy to burn through your start-up capital before you have bought everything you need. This can set you months behind schedule, which will impact your profit even more. If you want to do something about this, then make sure that you form a solid business plan.
Diligent and detailed budgeting is also imperative to your success. Before you go ahead and execute anything, you need to make a list of all the expenses you need to pay for. Research the costs of starting a restaurant as well. Ideally, you need to make sure that you have enough money to last you for the next 12-18 months. At a minimum, you should have your rent covered, but if you can save up more then this is great.
It’s also a good idea for you to establish a strong relationship with your vendors ahead of time. The main reason why you should do this is because it will put you in a much better position when it comes to negotiating. Little things like this can cut down your expenses considerably.
2) A complex menu
Restaurants often cater to very hungry customers. The last thing someone wants, when they are starving, is to read through a 10+ page menu. Sure, you do want to provide enough options for your customers so that they can choose something that suits their dietary requirements, but at the same time, you need to avoid going over the top.
It’s better to have a smaller menu so that you can focus on quality, and so you can keep customers coming back time and time again. The main thing to remember here is that if you have a longer menu, your customers will take longer to decide. This can lead to a lower turnover rate with tables, which will eat into your profit.
One way for you to work around this would be for you to make sure that your menu is small, and that it caters to the strengths of your small restaurant brand. Focus on what you are good at and don’t push the boundaries too soon. The time will come when you can, and your customers will be excited to try your new menu.
3) Overlooking licensing
Every restaurant has to have a permit. It doesn’t matter what industry you work in either. The process for applying for a license can be easy, but at the same time, the permits can vary depending on the industry you are working within.
It’s easy to lose yourself in the chaos that comes with licensing, but you have no chance of being allowed to legally stay open if you do not obtain the right permits. If you want to stop your business from falling victim to this then one thing you need to do is make sure that you do your research. Find out what you need to get, how much it is going to cost and how long it is going to take.
Most of the time you can find out what you need by going online, and by doing this, you can be sure to make the best call for your business.
4) Not training your staff
Your staff are the backbone for your business. They will make or break your venture. If you have staff who are very talented, but at the same time, are rude toward your customers then your business won’t stay open for very long.
Opening a restaurant is stressful, but you do need to choose the right team. You also need to make sure that you are setting them up for success. Think about all of the tools your team will need to do their job. This includes a chef uniform kit, notepads or tablets to take orders and even training.
If you can document all of your expenses and if you can set your team up for success then this will help you out a lot in the future, and it will make it easier for them to do their job well.
5) Ignoring the data
Contrary to popular belief, success is not a goal. It’s too broad, and it is not measurable. Let’s say you open up a pizza restaurant and you hand out free slices of pizza to people in the street. This is a great marketing tactic, as it draws people to your location and it also gives them a taste of what you can do.
That being said, the only way you have of knowing if your tactic has worked or not would be for you to look at the data. Data is the measure of success, and you can interpret it however you want. Data can be intimidating, but there is tech out there that can make your life easier.
It may be that you track how many clicks you had on your social media page or that you record the foot traffic to your restaurant over the next few weeks. Things like this contribute to your success and they are measurable figures, so use them to your advantage. By using data, you can also find out if what you are doing is working or not.
6) Not using social media
A lot of restaurants believe that they don’t need social media. Why? Because social media is a great way to generate online traffic, and restaurants don’t rely on this very much.
With that in mind, social media is a powerful tool and you should be using it to your advantage. First impressions are everything. People like to find out as much as they can about a restaurant before they visit. They may look up the menu online, get a feel for the dress code and even want to know the busiest times.
If your restaurant isn’t on social media then you are missing out. People often spread the word when they have received a good experience, so make sure that you are active on social media so you can be tagged. It doesn’t take much effort to create a profile and if you don’t have time to manage it then you can hire a marketing company to do it for you.
Your social media page also gives you the chance to showcase any new dishes you may have coming out as well, which will help you to increase your restaurant’s foot traffic.
7) No concept
The restaurant industry is highly competitive. Offering a service is not enough. The industry is saturated with food places, so you need to make sure that you go niche where possible. People want to have a unique experience, and they don’t want something they can get just about anywhere.
The age of trying to cater to absolutely everyone is over. You need to be clear that what you offer is different to your competitors, and you also need to stand out from the crowd. One way for you to work around this would be for you to work on your elevator pitch. This will force you to refine your concept.
8) Not choosing the right location
You have to make sure that you open your restaurants in the right location. If you don’t then this will work against you more than you realise. Having a restaurant that is a bit out of the way isn’t a bad thing. The main reason for this is because people usually drink when they visit a restaurant. This usually equates to them driving or getting a taxi.
If you are opening a place that serves lunchtime sandwiches, however, then this could work against you, as people will often visit on the way back to work, or when running errands. If they have to go out of their way, then they’re likely to not visit at all. When it comes to your restaurant, it’s a good idea to make sure that you focus on the competition.
If you are opening a steakhouse in an area that is home to a similar restaurant then you have direct competition and it will be harder for you to draw customers away from their local favourite. If you were to open an Italian however, or if you were to open a Chinese then this would work well. Even though there are other restaurants in the area, you at least know that they are not in direct competition with you.
You also give people options as to what dining experience they are looking for. Location is everything, so don’t overlook it when opening your new venture.
