Jul 03, 2019
The reasons for many people who want to start or open a restaurant business are either that they have a good location and starting capital or menu items and recipes so great that they think their restaurant will sell well, make a good profit and become popular.
But do you know that there are also lots of other details that you should think about to ensure that your restaurant business survives and create profits consistent with your objectives?
But do you know that there are also lots of other details that you should think about to ensure that your restaurant business survives and create profits consistent with your objectives?
We invite you to the 10-item checklist of the things that restaurant owners should consider before opening restaurants.
1. A Good Location Is A Battle Half-Won, But You Need an Attraction if Your Location’s Bad
Every restaurant and business textbook puts location at one of the top items on their lists of things you should pay attention to. But what should you do if your location’s good, but you can’t handle the price or if all the good locations are already taken? Well, the answer is create a different attraction for your restaurant.
For example, you could open a “hidden” Thai food restaurant and invite people to take pictures as they check in, and you could serve delicious and unique dishes that people feel the need to press onward and reach you.
Every restaurant and business textbook puts location at one of the top items on their lists of things you should pay attention to. But what should you do if your location’s good, but you can’t handle the price or if all the good locations are already taken? Well, the answer is create a different attraction for your restaurant.
For example, you could open a “hidden” Thai food restaurant and invite people to take pictures as they check in, and you could serve delicious and unique dishes that people feel the need to press onward and reach you.
2. Know Your Target Customers or Groups
You need to survey your customers as you survey your competitors. You need to know the genders, age groups and occupations of the people who visit your competitors. You need to know when people eat and what they like to order. The more you know about these details, the less likely it will be that you will make a mistake. That’s because different customer groups might think and decide differently. For example, you get a location in front of a high school where kids like to buy simple but modern foods at affordable prices. If you opened a fine dining traditional Thai cuisine restaurant there, you might have to exhaust yourself with marketing and trying to attract outside customers because the target groups nearby don’t like your restaurant. So, make sure to really get to know your customers or target groups so you can serve food that match their preferences.
You need to survey your customers as you survey your competitors. You need to know the genders, age groups and occupations of the people who visit your competitors. You need to know when people eat and what they like to order. The more you know about these details, the less likely it will be that you will make a mistake. That’s because different customer groups might think and decide differently. For example, you get a location in front of a high school where kids like to buy simple but modern foods at affordable prices. If you opened a fine dining traditional Thai cuisine restaurant there, you might have to exhaust yourself with marketing and trying to attract outside customers because the target groups nearby don’t like your restaurant. So, make sure to really get to know your customers or target groups so you can serve food that match their preferences.
3. Know Your Competitors to Win 100 out of 100 Fights
Survey the restaurants near where you want to open your restaurant. What do they sell? They sell at how much? When do they have a lot of customers? What are their decorations and atmospheres? Find all of this out, especially in restaurants that sell well, because these pieces of information can help you know what the people in that area eat or don’t eat. No matter how good your restaurant is, you could still lose to a competitor that is stronger and more prepared. So, you need to know who your competitors are. You need to know the strengths and weaknesses of your competitors. And you need to close any gaps by making your restaurant better than the rest.
Survey the restaurants near where you want to open your restaurant. What do they sell? They sell at how much? When do they have a lot of customers? What are their decorations and atmospheres? Find all of this out, especially in restaurants that sell well, because these pieces of information can help you know what the people in that area eat or don’t eat. No matter how good your restaurant is, you could still lose to a competitor that is stronger and more prepared. So, you need to know who your competitors are. You need to know the strengths and weaknesses of your competitors. And you need to close any gaps by making your restaurant better than the rest.
4. Really Know Your Own Products
Some products appear as part of a trend and then disappear. People line up for only a moment and then they’re gone. That kind of sales might be good for people who aren’t looking for long-term profit. However, if you want your restaurant to last a long time, you need to create your menu items in a way that makes them stand out, and you need to really know about what you want to sell. You need to maintain flavor consistency and meticulousness in every step of preparation to ensure that customers are fond of your food and return time and time again.
Some products appear as part of a trend and then disappear. People line up for only a moment and then they’re gone. That kind of sales might be good for people who aren’t looking for long-term profit. However, if you want your restaurant to last a long time, you need to create your menu items in a way that makes them stand out, and you need to really know about what you want to sell. You need to maintain flavor consistency and meticulousness in every step of preparation to ensure that customers are fond of your food and return time and time again.
5. Costs and Sales Prices
Everyone needs to have delicious food recipes, but this robust flavor must be accompanied by acceptable prices and reasonable cost. So, it’s good and appropriate to survey the prices that your competitors set as you set you set your own prices. But don’t forget to also calculate your own costs and determine whether or not your sales prices and costs are consistent. Don’t forget that when you observe your competitors you could only know their prices up front and could never know whether or not they buy ingredients at the same prices. This is because passion alone is not enough for your business to survive. What will help your business survive in the long-term is knowing your real costs, whether they are your constant costs or your ingredient costs, including the funds that you circulate in your restaurant, before you set your sales prices appropriately and in a cost effective and profitable manner.
Everyone needs to have delicious food recipes, but this robust flavor must be accompanied by acceptable prices and reasonable cost. So, it’s good and appropriate to survey the prices that your competitors set as you set you set your own prices. But don’t forget to also calculate your own costs and determine whether or not your sales prices and costs are consistent. Don’t forget that when you observe your competitors you could only know their prices up front and could never know whether or not they buy ingredients at the same prices. This is because passion alone is not enough for your business to survive. What will help your business survive in the long-term is knowing your real costs, whether they are your constant costs or your ingredient costs, including the funds that you circulate in your restaurant, before you set your sales prices appropriately and in a cost effective and profitable manner.
6. Plan Your Expenses Well; Everything Must be Verifiable and Measurable
Before opening a restaurant, what many people neglect to do are calculating their break-even points and planning income and expenses in advance. They have no plans in place to determine how much to charge for the food that they sell to be consistent with the rent and employee expenses that they pay, including variable costs such as food, water and gas costs. Without planning or predicting the future, it’s like starting business while blind. When there’s no profit, people won’t know what to do, because there’s no plan in place.
To walk along the right path, you should manage your finances behind the restaurant effectively. Everything must be billed and verifiable. Otherwise, you’ll run into the problem of having nothing left for profit after checking your totals even if you sold well. Most certainly, paying attention to the details about ingredient prices and daily expenses is a necessary task that restaurant owners should not overlook.
Before opening a restaurant, what many people neglect to do are calculating their break-even points and planning income and expenses in advance. They have no plans in place to determine how much to charge for the food that they sell to be consistent with the rent and employee expenses that they pay, including variable costs such as food, water and gas costs. Without planning or predicting the future, it’s like starting business while blind. When there’s no profit, people won’t know what to do, because there’s no plan in place.
To walk along the right path, you should manage your finances behind the restaurant effectively. Everything must be billed and verifiable. Otherwise, you’ll run into the problem of having nothing left for profit after checking your totals even if you sold well. Most certainly, paying attention to the details about ingredient prices and daily expenses is a necessary task that restaurant owners should not overlook.
7. Restaurant Decoration Style
In an era in which everyone holds the media in their hands, you can publicize your restaurant for free. However, in addition to tasty menu items, restaurant decorations are equally important. The more the restaurant stands out, the more customers will come. It’s an effective way to boost your revenue.
In an era in which everyone holds the media in their hands, you can publicize your restaurant for free. However, in addition to tasty menu items, restaurant decorations are equally important. The more the restaurant stands out, the more customers will come. It’s an effective way to boost your revenue.
8. Preparing Promotions
It’s undeniable that when you actually enter the field of business sales will be disappointing sometimes. Because of that, it’s necessary to occasionally create promotions to help. So, when calculating your food costs, you should leave a gap for playing around with promotions sometimes. Promotions also don’t always mean creating new menu items. Sometimes you can just pair existing menus or offer discounts for some items to attract your customers and produce good results. Creating special promotions to attract customers during special occasions or time periods when there are few customers is also popular and always well-received. You can also organize menu items into sets to make them easy to order. Even though profit per bill might be a little lower, your sales totals will surely increase.
It’s undeniable that when you actually enter the field of business sales will be disappointing sometimes. Because of that, it’s necessary to occasionally create promotions to help. So, when calculating your food costs, you should leave a gap for playing around with promotions sometimes. Promotions also don’t always mean creating new menu items. Sometimes you can just pair existing menus or offer discounts for some items to attract your customers and produce good results. Creating special promotions to attract customers during special occasions or time periods when there are few customers is also popular and always well-received. You can also organize menu items into sets to make them easy to order. Even though profit per bill might be a little lower, your sales totals will surely increase.
9. You Need Clear Marketing Plans
Good foods don’t speak for themselves. As a restaurant owner, you have to announce clearly to the people about your marketing and promotions even before you open your restaurant. Nowadays, you can market online and offline. You could hand out flyers or use Facebook advertisements. It all depends on which type of advertisement reaches your target groups better. Most importantly, don’t forget to prepare a marketing budget. If your restaurant performs well, lots of actual users will give their reviews and help promote your restaurant without needing you to pay much at all.
Good foods don’t speak for themselves. As a restaurant owner, you have to announce clearly to the people about your marketing and promotions even before you open your restaurant. Nowadays, you can market online and offline. You could hand out flyers or use Facebook advertisements. It all depends on which type of advertisement reaches your target groups better. Most importantly, don’t forget to prepare a marketing budget. If your restaurant performs well, lots of actual users will give their reviews and help promote your restaurant without needing you to pay much at all.
10. Have a Good Work Team
You can have a good work team when you coincidentally get some good people or you can develop or forge your own people in the way you want. You can clearly divide work responsibilities, provide training and offer good compensation to get employees to fully dedicate themselves to customer service. Eventually, that will lead to good sales, service-mindedness and good first impressions, and good first impressions are one of the reasons for customers to return to your restaurant.
You can have a good work team when you coincidentally get some good people or you can develop or forge your own people in the way you want. You can clearly divide work responsibilities, provide training and offer good compensation to get employees to fully dedicate themselves to customer service. Eventually, that will lead to good sales, service-mindedness and good first impressions, and good first impressions are one of the reasons for customers to return to your restaurant.
