New owners of restaurants, taverns, neighborhood eateries and other food-related businesses have many different approaches to cuisine and creating an appealing atmosphere for their customers. However, the first rule always applies to every culinary operation--you're running a business. No matter how much you love food, cooking or interacting with the customers, you've got to manage the operation with sound business practices to succeed.
The best eateries make food service look easy because the owners or managers prepare as if they were going into battle. The mission is to provide a great experience to each customer, which includes generating the right dining room ambiance, encouraging camaraderie among the guests and delivering great food. Eight tips for managing your new business include the following recommendations:
1. Researching the Business Aspects of Opening a New Restaurant
There are many business details to plan before you open the doors, and it's not possible to cover all of them in a general post--especially those that would apply anywhere in the world. However, costs and location are critical everywhere. You'll need to research the legal requirements of opening this type of business where you plan to operate. Some of the key issues to research include:
- What insurance is required, and what is recommended for your particular operation?
- What permissions, licenses and registrations are necessary such as obtaining authorization to collect sales taxes, qualifying for health licenses, registering to serve alcohol and registering with government agencies?
- ERP and POS software can automate many tasks and increase sales, so you have to decide whether to automate your business or manage it manually.
- How will you manage your accounting, payroll and reporting duties?
- What security issues will you face?
- Will you serve alcohol, wine and/or beer? How will you ensure regulatory compliance and prevent liabilities?
2. Choosing A Theme and Culinary Concept
Choosing a recognizable theme, concept and mission statement will help to attract your preferred customer profile regardless of whether it's the casual diner, club-hopping urban singles, sports aficionados, neighborhood residents, family diners, food connoisseurs or the business crowd.
3. Promoting Your Business on Social Media
Today's food-related businesses face new challenges to encourage word-of-mouth referrals, which have been a staple for dining establishments for generations. These referrals are often made digitally today, and customers consult dining-review websites, social media and third-party platforms to decide where they'll dine. That's why your business should establish a strong online presence.
4. Providing Customer-Friendly Ordering Options
Customers today often research dining establishments on their phones, so posting your menu online is critical. Establishing a special area for placing outgoing orders can also streamline operations and speed service.
More restaurateurs now offer expanded ordering options such as taking Internet orders, phone orders and tableside orders. The more ways that customers can order, the faster your revenue will grow.
5. Keeping Current with Culinary and Marketing Trends
Many new owners have a clear culinary concept in mind, but to repeat the first rule, your culinary operation is a business. At a very basic level, your business success will depend on satisfying a range of customers because dining parties include people with different tastes.
That means a savvy restaurateur will include items with different prices, healthy dining alternatives and special orders for patrons with special diets.
Dining trends evolve rapidly, and today's diner often demands healthier menu items, custom preparations and information about where the food originates. The farm-to-table trend is important, so try to find local suppliers when possible. You should research national, international and local dining trends to find the best options for your concept, space and customer profile.
Find out what dining options are available in your area, and try to design a menu that resonates with locals but offers something unique that your competitors don't or won’t offer.
6. Creating an Organized Operation
Your dining establishment--regardless of cuisine or dining concept--often operates on a razor-thin profit margin, so it's critical to control inventory, waste, theft, portion sizes and mismanagement. Each item on your menu needs to be broken down by ingredients and priced according to current prices. Gradual price increases can effectively turn profitable items into items that lose money if you don't update your costs regularly. Small increases in prices are easier for customers to accept than larger, infrequent price boosts.
Minimizing waste directly affects your business because every bit of waste reduces your profit directly. It's impossible to avoid all waste, but it's critical to monitor the situation to find out how waste is generated. If your chefs, cooks or kitchen staff are making too many mistakes or serving portions that are too large, corrective action becomes necessary.
Organizing your operation can make marginal business profitable and top-grossing businesses enormously lucrative. Ongoing organization is essential because culinary trends evolve so rapidly. That's why accurate accounting, efficient inventory management, portion control and waste and theft detection are so important.
Proactive management techniques can also reduce payroll costs by scheduling employees more efficiently and cross-training staff so that fewer workers are necessary.
7. Managing FOH and BOH Staff
Managing staff is often the biggest ongoing problem that a restaurateur will face. That's why it's important to establish a chain-of-command for both the front-of-the-house (FOH) and back-of-the-house (BOH). Successful restaurateurs understand that their staff members are critical because they interact directly with the customers and prepare their food.
Your staffing needs will fluctuate depending on the season, special events, weather, local festivals, number of tourists and other factors. Finding and training the right staff, hiring seasonal staff and arranging for temporary workers in emergency situations could be necessary to build a successful culinary business.
There are also the technical details of salaries, benefits, health insurance and scheduling to consider. Contact your local restaurant association for tips on scheduling, managing payroll and meeting employee regulatory requirements.
8. Building Alternative Income Streams
The number of seats, turnover rates and the speed of fulfilling customer orders often limit food service operations and their income potential. That's why so many food entrepreneurs create other income streams for their businesses. These include:
- On-and off-premises catering
- Carryout orders
- Previously prepared foods for quick pickup such as boxed lunches, sandwiches, etc.
- Bottled, canned and packaged food items
- Delivery services
- Restaurant-operated food trucks
- Merchandise sales that might include culinary supplies and equipment, clothing with the company’s logo, tourist memorabilia, and local sports team items
- Hosting parties, meetings and special events such as food and wine tastings
- Food trucks to circulate in different neighborhoods and expand your reach
- Sale of pastries, desserts and bread
These are just a few of the critical areas that you need to consider when opening a new restaurant. You can't do everything yourself, so you'll need to put in place accounting and software systems to automate keeping records, filling out reports and monitoring business performance.
It's important to identify competent staff members to delegate management responsibilities in both the front- and back-of-the-house. Welcome to the Restaurant Success blog where you'll be able to find critical information about opening and managing your business.