5 Keys to Success You Need to Know About When Opening a Restaurant
Opening a successful restaurant doesn’t happen overnight. It takes a lot of planning, connecting with the right industry professionals, and hard work. But there are certain steps you can take to improve your chances of success.
The Blueprint for Success: 5 Considerations for Success When Opening a Restaurant
Defining Your Restaurant’s Identity
A lot of decisions become clearer once you have defined your identity. Identity is important because it lays the foundation for the personality of a restaurant. It’s the cornerstone for defining the overall energy and vibe that a place has.
Consistency is key as it helps your guests relax and trust while visiting, and recommending your place to family and friends. People can feel when the concept and menu are inconsistent, and that will impact their experience. This information will also be necessary for your business plan and for financing.
The easiest way to define your restaurant is to ask the important questions:
- What does your target customer look like?
- Does your restaurant have a theme? What will be the ambiance?
- Will your theme make sense based on the location of your restaurant?
- What kind of service do you want to offer?
- Will you provide other value-added services for your guests?
- What type of music will be played and at what volume?
Market differentiation is what allows you to set yourself apart and be clear on what makes your restaurant special or different. You want to have a solid concept from the very start—because this concept is the foundation for your restaurant.
If you are struggling with coming up with an identity or concept, there are other options to explore. For example, you may consider getting involved with a franchise or partnership agreement. There are also business consultants that can help you create a solid strategy and they can assist throughout the whole process.
Don’t Overlook the Importance of Financing
Almost every restaurant requires some kind of financing. It’s important to leave yourself a good budget for lawyers/legal fees during the purchasing process. When it comes to fixing a place up, leasehold improvements can add up quickly. You must plan for these expenses.
Operating expenses are another thing to consider. Industry best practices suggest carrying enough cash to pay for operating expenses for a minimum of 6. This will protect you from seasonal downturns, emergencies, and other unpredictable events.
As a small business owner, there will be no shortage of vendors approaching you with their different products and services. While some of them are valuable, you must do your research before committing to any of them.
The success of your restaurant will rely on maintaining positive cash flows. Always look for ways to save money, but never at the cost of diminishing the quality of your food and the guest experience.
Choose a Strong Location
We’ve all heard the common phrase, “Location, location, location!” Restaurants are no different in this regard. Your location can make or break your restaurant. It’s important to understand the basics of lease clauses. There are free restaurants out there, but be cautious. It’s sometimes better to invest in a strong location.
Remember, all places will need love. Any location you find will require some degree of work. However, these changes are important, and they do impact the overall guest experience.
Develop a Strong Marketing Plan
You can create the best restaurant concept ever, but it’ll fail if people don’t know it exists. Marketing is one area that many restaurants struggle with. They make the mistake of believing that customers will show up on their own.
This isn’t always the case. You have to promote your restaurant if you want to increase its visibility.
Here are a few ideas to consider:
- Leverage the power of your social sphere.
- Host a sneak peek of selected menu items to create a buzz
- Create a friends and family or soft opening night for the neighborhood and invite guests to post on social media or provide feedback on Google, Yelp, and other review platforms.
Social media is a powerful tool, and an important question to ask early on is, “Are you going to handle the online/social media? Or should you hire someone?” If you try to be a jack of all trades, you risk being a master of none. Know your strengths, and don’t be shy about asking people for help.
When you think about where to market your business, it’s important to reflect on your client base. Ask questions like:
- Where are they?
- What online resources do they use and trust?
- What content will resonate with them?
- What do they look for in a restaurant?
If you can answer these questions, you’ll know exactly where to reach them and what type of content to create.
Ideas Are Great — But Execution Is Everything
Everyone wants to protect their next big idea, but we believe execution is the most important factor in your success. You must have the ability to execute your plan.
Learn to engage the right people that have the expertise you need—smart people hire smarter people! Good employees are worth their weight in gold. They are ambassadors for your business. They also engage with your customers and represent the idea you worked so hard to create.
It’s important to put a lot of thought and consideration into the internal culture you want to create and the leadership qualities that align with your vision. Turnover in the restaurant industry is high. It takes a lot of time, energy, and money to replace good performing employees who leave. Be proactive and intentional about the environment you create for your staff to prevent turnover and invest in people, they are your best asset.
Organizations like Not 9 to 5 are bringing a lot of awareness and resources to restaurant owners. They are supporting them by encouraging change that promotes healthier mental wellbeing for both employers and employees.
Poor execution of the business plan and poor operations management are the most common reasons restaurants fail. Try and take a vacation before you open as you will need to be well-rested, and don’t forget to enjoy yourself.
Ori Grad is the Managing Director and Broker of CHI Real Estate Group, a boutique real estate team that specializes in the hottest aspect of the commercial real estate game—restaurants.
We pride ourselves on breaking the mold and not being like your average commercial real estate team. We aren’t shy about sharing our knowledge, talking big ideas and new strategies to benefit the industry. In fact, we love dedicating our time to hosting informative workshops and writing this blog.
“We know that leasing commercial real estate in Toronto is often the most significant business expense for many small businesses. We truly believe that when restaurants succeed, our city succeeds” – Ori Grad
At CHI Real Estate, we have a long history of selling and buying restaurants in Toronto on behalf of our clients. We present opportunities and assist you with making confident and well-informed decisions.
Contact us today if you want to learn more about how we can help your business idea succeed.