Whether you run a smart gourmet eatery or a no-frills fast food joint, as a restaurant owner you’ll face your share of challenges on the road to success. There are likely to be financial obstacles to overcome, staffing issues to be resolved and battles to be fought with competitors who want a slice of your action – not to mention the legal and regulatory hoops that need to be negotiated.
So what are some of the most pressing problems and how can you steer a course through choppy waters?
Making Your Mark
You want to stand out from the crowd so you’ll need to focus on establishing a unique identity that will appeal to your target market and, hopefully, set you on the road to creating a loyal customer base. When developing your brand, consider what makes your business special and pour your energies into communicating your proposition clearly.
Successful restaurant owners develop a restaurant theme and attract customers who are drawn to their proposition. You can’t be all things to all people, so don’t worry about trying to make your business fit as large a demographic as possible. Branding doesn’t need to break the bank but it will take commitment and thought.
Keep the Customer Satisfied
Once your brand is established and your reputation forged, you’ll need to work hard to maintain it. A few bad months and a few dozen disappointed customers (not to mention poor reviews) are sometimes all it takes to destroy the business you’ve worked so hard to build, so make consistency your goal. Customers will return time and again if they know they can expect a great experience each time without fail. If guests are happy, they’ll not only continue to give you their custom, but they’ll recommend your business to others.
Aim for Excellence
A good menu isn’t necessarily one that includes everything under the sun. In fact, many diners may mistrust extensive menus as they believe – quite rightly – that quality and freshness suffers when a chef is trying to deliver too much choice. By contrast, a smaller menu suggests attention to detail and a focus on fresh and seasonal ingredients.
Instead, consider showcasing a limited menu that requires a smaller number of ingredients and that you’re confident can be produced to an excellent standard even when the pressure’s on. Price dishes fairly and rotate choices regularly so customers are always tempted by fresh options.
- Create tempting descriptions of the dishes and their key ingredients
- Always present clean menus – no worn or tatty specimens!
- Put your menu on the website so customers come primed and ready to order
Know Your Margins
Many restaurants operate on razor-thin profit margins because labour and ingredient costs usually account for 60%–70% of gross sales. If you keep a sharp eye on costs, though, you can trim these figures by reducing expenses, switching brands, resizing portions or raising menu prices by a small amount. Portion control is crucial, as it optimises supply costs and helps reduce waste.
Although it’s important to have happy, motivated staff, it’s also often possible to make savings by scheduling shifts more efficiently. Knowledge is the key to success, here, so stay on top of your operating costs and make it your business to understand where every penny is spent.
Build a Great Team
The hospitality industry is notorious for high attrition rates but having to deal with the constant headache of recruiting and training new staff can deflect you from the business of establishing a successful restaurant. Spend time hiring staff that are a good fit for your business, train them to your standards and remunerate them accordingly to avoid losing your best assets.
It’s good practice to cross-train staff so they can fulfil a range of roles if other employees don’t turn up for their shifts or if you need to scale back on numbers. Make sure everyone understands their value to the business.
It’s important to market your restaurant as effectively as you can to your preferred customer base, with the budget you have available. By targeting your efforts carefully, you can get the best ‘bang for your buck’ and won’t waste time and money on trying to appeal to everyone.
Think about the publications your customers are likely to read, where they hang out online and if there are other brands and businesses they patronise. Cross promotions with other, non-competitive business can work well, as can email marketing and loyalty schemes.
Rise Above the Debate
Online review sites are becoming the bane of many restaurants as some contributors appear to rejoice in posting poor reviews, while others appear to deliberately ‘troll’ establishments towards which they bear a grudge.
Whatever posts appear, it’s always good practice to respond with tact, courtesy and good humour wherever possible. People usually go away with a good opinion of those businesses that rise above the mud-slinging and are seen to deal with dissenters with good grace.
Balance the Books
Probably the most pressing problem facing restaurateurs is maintaining sufficiently liquid cash flow. The restaurant sector is seen as high risk by many traditional lenders who will most likely want to see a solid business plan and a good financial track record before they commit funds.
However, unforeseen costs will always arise, so it’s worth having a contingency plan even when times are good. Budget generously for any new developments and always maintain a slush fund or reliable capital source, so that unexpected costs won’t drive you out of business.