Over the years I have met an amazing number of people from diverse backgrounds who, regardless of their personal wealth or success, say they’d like to set-up a restaurant one day. Home-makers with culinary skills, corporate executives with contacts, celebrities looking for an investment, landlords with space, restaurant mangers or chefs with industry experience, industrialists who would simply like a place to host their associates & friends, and all sorts of other people who dream of having their own restaurant.
After all, how hard can it be? All you need to do is arrange for a good space, good food & good ambience, market yourself well and there... you could make some good money and even a name for yourself, right? Sure! But try getting down to doing it and you will find, it isn’t that easy, not even for the most experienced restaurateurs.
We’ve all heard of instances when even experienced restaurateurs have failed, and people with no experience in the industry, succeed in their venture. So we know somewhere deep within, that it doesn’t necessarily matter whether the restaurateur has industry experience or not. What really matters in a restaurant’s outcome is the restaurateur’s willingness and ability to prioritize certain tasks and attitudes over others.
Some people are convinced that like all retail businesses, location is the key to a successful restaurant. Being in a location where the kind of customers you’d like to serve, can conveniently visit your restaurant or at-least see it, is certainly advantageous, but location by itself just isn’t enough.
The concept must be good. That is, it must connect with the consumer’s heart, mind and wallet. This is equally, if not even more important than location. Take the example of the popular Mumbai seafood eatery “Gajalee”, located in a very humble neighbourhood in Vile Parle East – a rather average location by any standards. The fact that customers from various parts of the city, beat a path to their door, proves that a strong concept that connects with the guests, can overcome even a locational disadvantage.
There are situations when even a beautiful concept and great location aren’t enough. Remember “The Salt Water Grill” at Marine Drive? Despite having both these strong advantages, it unfortunately had to shut down... possibly because it just wasn't financially feasible without liquor, permits for which authorities were unwilling to grant at that location.
Managing relationships is the toughest and most crucial part of the restaurant business, which is why it is sometimes called the people business. Looking after people doesn’t only mean your guests and team members, but also the neighbouring community, licensing authorities and the media. As you may recall, Shilpa Shetty’s “Royalty Restaurant”, due to start in Bandra, has been on hold for quite a while because the licensing authorities & residents are concerned about its possible negative impact on the neighbourhood. In fact, all of these groups of people who have a stake in your restaurant one way or another, can actually help you make or break it.
Of the many questions I am often asked by people hoping to convert their restaurant dream to reality, it is the food related ones that come up most often – “I’m quite a foodie you know” or “I enjoy eating in various parts of the world” or “I have some terrific tried-n-tested family recipes. Doesn’t this qualify me to succeed as a restaurateur?” My answer? “While these will help to an extent, true success really needs a well-rounded business approach.”
A husband-wife team may choose to cook and serve their restaurant guests themselves, but if you’d like to run your business more professionally, it is very important to hire good people. People with the right attitude and skills will make all the difference in the experience your guests have. I once ran a catering company in which I cooked and served guests myself. I was the system. When I fell ill, the system failed. Be clear about which tasks you will do yourself, which you will hire people for and what your back-up plan is.
When starting a restaurant, you must plan your work and then work your plan. Put down all your ideas and try rationalizing them, ideally with someone who can be an objective bouncing board. Remember to be flexible, because things inevitably go wrong and rarely according to plan. Be willing to change things, based on customer needs and habits and also based on the need of the hour, sometimes at very short notice.
Calculate both your one-time start-up costs and your on-going monthly costs. Be prepared that until people get to know and like your restaurant, you may not make enough money to cover all your expenses, so put aside some extra cash for that. Many restaurateurs run out of money because they didn’t budget for this working capital. At the end of the day, a restaurant like any other business must be profitable enough to justify the investment of time and money.
Decide on which type of customers you intend serving and how you intend reaching out and letting them know about your restaurant. Also, know who your competition is and why customers should choose your restaurant over another.
Put yourself in your customer’s shoes when deciding on food, service, ambience and also most importantly, what you will charge and how much food will be offered in each dish. Remember that even the wealthiest consumers expect good return or value for the money they spend. A restaurant that consistently delivers on all these fronts, at a level that matches or exceeds customer expectations, undoubtedly tips the odds of success in its favour.
So, as you can see there are many factors working simultaneously for and against the success of your restaurant. Each individual restaurant, whether part of a chain or not, is unique and comes with its own destiny. Even Pizza Hut, despite the overall success of its brand across many parts of India, may be forced to close down in a particular location, for many possible reasons.
There is no magic formula, but the closest I can think of is this: A Clear Plan + Effective Action + Flexibility based on Listening to your Customers + Blessings of all Stakeholders + Good Timing + Luck = Success.
Not every restaurant that succeeds, delivers excellence on all fronts from the day it opens. But you need to do well enough on most fronts, to an extent that the customer will be wiling to forgive your early mistakes long enough for you to survive. If you can show him that you truly listen, always act upon his complaints and often even his suggestions, the marketplace will reward you with the deep sense of pride and achievement that only a restaurateur can know.