The restaurant business is rumoured to be highly profitable – one that succeeds in any kind of economy... and at times that is indeed true.
It is also true that sometimes the most established restaurateurs fail. New restaurant brands may not always meet with success, and new locations for their previously successful brands may simply not work in another market.
There is no fool proof formula for success, but knowing what you should focus on helps you to be better prepared to face challenges, reduce risks and increase the likelihood of success.
You could start with creating a concept that elaborates the value proposition that your restaurant will offer in terms of food, service and ambience. Having developed this, you could then look for a location. Some prefer to start with a location first and then tweak their concept to suit it. Regardless of which option you choose, finding a space that is both licensable and affordable is important to your restaurant’s sustainability. Naturally, you can’t wait for everything to be perfect before taking the plunge... that will almost never happen. Instead, you need to weigh the pros and cons of these factors and jump in knowing the implications of your decisions.
Emotions play a great role in a start-up. Having the conviction that your concept will work despite what naysayers proclaim, is what innumerable great discoveries from the light bulb to aircraft were built on. Therefore let no one tell you what is “reasonable”, but what you must have for sure is a “premise”. A premise of why you are convinced that your concept will work. Why people will come to your restaurant and pay what you ask for... often enough to be profitable.
Planning your financials is pivotal to your success since money is pretty much the oxygen of your business. If you don’t understand finance, spend time with people who do. If you ignore it and feel that simply serving good food will take care of everything, remember those restaurateurs you may know of who had to shut down despite serving excellent food. Also keep in mind that if your money pipeline gets choked, you will not be able to follow your passion.
Besides dishing out good food and going over your numbers, you must know that it is the people you work with, who make or break your business. Your customers, partners, employees, vendors, government bodies, consultants and other associates are the ones that make your restaurant successful through their knowledge, feedback, permissions and most importantly the execution of your entire vision. Without them, your concept will only remain a dream. Unfortunately, keeping just one or a few of these people/groups happy doesn’t work. Keeping all of them happy all the time is what does. Now that might sound like a tall order, but it’s also the reason that this business is referred to as the people business.
Aiming for perfection from day one is great, but in reality this never happens. Start with a concept that connects with people in terms of value... well enough for them to forgive your early mistakes. This will allow you enough time to survive and hopefully grow. If you manage to achieve this, you will be well compensated by the market both emotionally and financially.
My formula for success in the restaurant business so far is:
A Clear Plan + Effective Action + Flexibility based on Listening to your Customers + Blessings of all Stakeholders + Good Timing + Luck = Success.