Mistakes New Restaurant Owners Should Seek to Avoid
Opening your first restaurant can be an exciting and deeply rewarding venture. However, as is the case with any other small business, restaurant ownership isn’t without its risks, and decisions made during the first year can mean the difference between long-term profitability and prompt closure. That being the case, it’s in every fledgling restaurateur’s best interest to do their homework and avoid making a litany of all-too-common rookie mistakes.
Setting Up Shop in Unprofitable Areas
Location is vitally important to any business, and restaurants are no exception. As an experienced restaurateur can attest, your choice of location has the power to make or break your business. That being the case, it’s in your best interest to put genuine thought and effort into selecting the right location for your restaurant.
When scouting out prospective locations, there are several factors you’ll need to consider. First off, is there ample demand for the type of dining experience your restaurant is offering in this particular area? Secondly, how many restaurants of this type already exist within a certain locale, and how much demand is there for them? You should also do some research into rental rates for local restaurant spaces, as this will help prevent you from getting locked into an unfair lease and overpaying in rent.
Failing to Prioritize Proper Health Practices
Proper health and sanitation practices should be among the foremost priorities of every restaurant owner. Failure to prioritize the aforementioned practices can compromise the health of your patrons, resulting in the prompt closure of your restaurant and potentially even land you in legal trouble.
To prevent such undesirable consequences, take care to study proper sanitation, food storage, and meal prep practices. Furthermore, make sure to impart these lessons to your staff, and make it clear that team members who fail to uphold said practices are likely to find themselves disciplined or fired. You and your team should also strive for the highest possible marks from health inspectors, particularly if your municipality utilizes cutting-edge health inspection software.
Not Focusing or Managing the Financial Side of the Business
Oh no, your restaurant business or a tuck shop can never earn you millions of dollars even though you are the best cook in town. There are other aspects of the business as well; the chief among them is the financial side of the business. A culinary genius alone cannot pay you dollar bills or your strongly delicious menu never fulfills the financial needs of your business. You can never be a successful businessman overall unless you handle this side of your business properly. There is no second option available to you to run your business profitably.
Managing the financial side of your business is dire to pay your rent, utility bills, and salaries of your staff, buy the raw material for your finished products, etc. Your keen attention to your restaurant business will keep you aware of your primary cost of various food items and, hence, will enable you to set their proper selling price to earn the required amount of profit to meet your expenses smoothly. You must keep doing so permanently. Unfortunately, not many do that while running their business and many of them have closed their doors just because they ignored this crucial factor about their business. Hopefully, you would never like to be one of those unlucky ones. So better be vigilant about the financial side of your restaurant business whether or not this is your first or last restaurant.
Leaving Everything in the Hands of Your Managers
It’s no secret that owning and operating a restaurant requires a tremendous amount of work. Many restaurateurs rarely find themselves at a loss for tasks to undertake. To provide themselves with some breathing room, restaurant owners often recruit dependable managers. After all, having the know-how to open a restaurant doesn’t mean you’ll be equally adept at running it.
However, while reliable managers can effectively relieve you of many burdens, this isn’t to say you should leave everything in their hands. Should you adopt a completely hands-off approach to restaurant management, you may very well find that you and your manager(s) have different approaches to managing a business. Needless to say, if your managers’ views on the matter run counter to your own, this is liable to place your business in a precarious situation.
In the interest of preventing such an outcome, make sure to take an active role in the management of your restaurant, even if you opt to entrust most of the heavy lifting to your managers. This will help ensure that everyone remains on the same page and that there’s never any question as to who’s truly in charge.
Skimping on Customer Service
As customer-focused businesses, every restaurant should prioritize good customer service. Many patrons are surprisingly amenable to forgiving shortcomings in other areas as long as they’re treated with the utmost courtesy and respect. Furthermore, in the age of instant feedback, lackluster customer service is liable to get your restaurant dragged online, and a single unfavorable review from someone with a large following can do tremendous damage to your professional reputation. So, if your and/or your staff’s approach to customer service leaves a lot to be desired, it’s in your best interest to get on top of this immediately.
You’re likely to experience a whirlwind of emotions when opening your first restaurant. From intense excitement to all-consuming anxiety, such a venture can prove equal parts exhilarating and exhausting. While there’s no way to completely do away with the risks associated with restaurant ownership, there are several easy steps you can take to keep said risks to a minimum. By understanding some of the most common mistakes made by fledgling restaurateurs, you can start putting effective measures in place to avoid them. Budding restaurateurs looking to achieve lasting success will be well-served by steering clear of the missteps outlined above. I wish you the best of luck throughout.