By Salar Sheik, Foodable Industry Expert
Many types of people become restaurateurs, from the everyday person working the 9 to 5, to chefs, celebrities, retirees, or business developers. Some are willing to learn the ropes, while others are willing to invest in someone’s expertise to aid them in becoming the restaurateur they envision. The rush to success for many lies in multiple reasons from profit, passion, or a status symbol of their achievement. No matter who you are, however, there are a few things you should know before you start writing checks and cutting ribbons.
1. Don’t think one size fits all.
Just because you think everyone loves gourmet burgers doesn’t mean all burger restaurants are going to fill the seats and your bank account. Can you say that your restaurant vision has two items or qualities that stand out from the others? Restaurants need a niche to make them stand out. You may then ask, “What is that niche?” Think about what you envision: Is it quality, value, speed, ambiance, or location?
Look at how many car makes there are and how many models of cars you can choose from one maker. You know before reading the price tag that this car maker is known for its value, reliability, comfort, or luxurious options. Similarly, a restaurant needs an identity that is unique but familiar at the same time.
Yes, some out-of-the-box restaurants do become successful, but they still have one or two familiar qualities. If you can recall, sushi was far from popular in the '90s, but now everyone from around the world from any age bracket knows what a California roll is. Sushi restaurateurs knew they had to develop an item that was unique but familiar, so they looked around and found crab and avocado and then added their unique sushi style, which is now mainstream and accepted by the masses.
2. Develop a business plan beyond a template.
You can find many templates of business plans and pro formas online, but an honest viewpoint of cash flow and speed bumps is needed if you plan on being around longer than a year or two. Even if you have been on the worker or management side of a thriving restaurant, you many not be aware of many other items that need to be taken in consideration such as, state tax, payroll tax, or the types of insurance from liability to workers comp. The best thing to do is seek a CPA and restaurant consultant with a proven track record of successfully opening restaurants that last longer than your IKEA chair.
Marketing is a must in your business plan. Take the time to research other restaurants that market in the area and how they attract customers. Social media will have to play a role in your business plan. Executing a successful social media marketing plan has to be more than just an iPhone for every manager to Snapchat or Instagram your special of the day. Social media has changed the face of restaurant marketing and setting a budget for outsourcing it will be money well spent.
3. Know the back office side of it.
The back office for many of the restaurateurs I work with has been a long learning process that some grow to love or just end up hating. The more you know now, the less time you will spend on the speed bumps of trial and error. Here are some key points to know:
It is more than likely you will have more than one employee, and with staffing, there are a ton of new laws and regulations you need to know. Some overlooked items in HR might cost you big in the long run. Many well-known restaurateurs have failed because they failed to invest or learn about HR issues. It can be something as simple as not having an updated write-up policy that might cause a lawsuit followed by a bankruptcy. There are many classes and resources to educate you on the topic. Just take your time and ask a lot of questions to people that have experience in this field.
A CPA will help to place numbers on the table, but you will still need to understand basic accounting and what numbers fit and what they mean. Knowing what food and beverage costs are inline for your type of restaurant is the key to growth, including how you will be able to collect this data though inventory management. A QSR will have a much different number than a fine-dine restaurant with valet parking. Knowing a daily number that will be needed to break even should not be overlooked, as sales most likely will be inconsistent at different times during the year depending on your location and a break-even point must always be known for adjustments to be made.
4. Understand your role, duty, and lifestyle.
What your role is as a restaurateur is important, as many duties need to be assigned to you or management. Some restaurateurs like to take a backseat approach and seek answers from their management and weekly or monthly reports. Others like to take a hands-on approach and work the floor and sometimes the kitchen, building rapport and work relationships with their staff and management. Just remember that you’re the leader and micromanaging is like a dog chasing its tail. Building a strong management team is a must if you want to take a day or week off. The staff and management need to know they have your trust with a watchful eye.
One of the first questions I ask a new restaurateur is, “Do you have a family and do you know the time you will need to invest in your restaurant?” Most often they say, “Yes, I do,” but the part they don’t know is that even during the time you’re with your family, you will most likely have some type of attachment and duty to fulfill for your restaurant. This might be a new lifestyle for many that have never had their own business. Some do well, but others find this lifestyle lonely. Knowing that you must be the go-to person might be too much for some, but many find it rewarding knowing that at the end of the day, staff and customers appreciate their vision and relentless dedication.