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Opening a New Restaurant? Don’t be Unprepared!


“HE THAT IS PREPARED HAS HALF WON THE BATTLE.” – CHINESE PROVERB


It is a very exciting and optimistic time when one decides to open a restaurant. You have specific ideas, make your own decisions, design your own menu, plan your own décor, run your own business, and most of all – you’re doing something that you love! How much more perfect could it be?

Of course, it is rarely so simple and ideal. Whilst there will always be challenges that you’ll discover and deal with along the way, some challenges are better to be prepared for ahead of time:

1. Finding the perfect location for your business that actually fits your theme and appeals to a broad range of customers. To do this right, make sure you:

  • Do your own surveys
  • Check out competitors
  • Plan, review, plan again, and review again. Take enough time to do this.

2. Financial challenges: The most likely mistake for new owners is to underestimate the starting capital needed to open and run the restaurant. Ensure you have a solid business plan and some cash surplus or a good relationship with the bank. On top of that, ensure you have enough capital from Day One for:

  1. Stock costs
  2. Wages costs
  3. Emergency equipment repair/replacement
  4. Time for business to take off with a good profit
  5. Recession or other unforeseen problems

3. Staff Problems: There is a very high staff turnover rate in the hospitality industry. Part of your business’s success depends on the frontline staff as well as the retention of at least some of your key staff. Otherwise, this will impact not only on wage costs, but also on the quality of service and products.

  • Make it a high priority to spend time choosing staff and train them well.
  • Employ both skilled people as well as trainees and apprentices. This will help for balancing labour costs.

4. Marketing: A start-up, small to medium independent restaurant faces more challenges than the big chains or well known operators.

If you keep doing the right thing by your customers, delivering good products and service, you’ll eventually achieve a loyal clientele – but it can actually take years to achieve this. Financial constraints mean that for now you’ll need to start advertising and promoting your business in some way.

Deciding the best way to advertise your restaurant is crucial, as advertising can often become an expensive and ineffective exercise. It is wise to have a marketing budget and to seek help from professional marketers. Here are some ideas:

  • Use websites and social media.
  • Maximise your signage.
  • Engage in local issues. E.g. Sponsor local schools, sporting clubs or senior clubs.
  • Introduce your new business to the local people. Seek a review/editorial or advertising in the local paper.
  • Join your business association, catering or other and nominate your business for the awards in your category.
  • Engage in PR. One mistake small business owners make is that they get too engrossed in their own operations and have no time for joining trade discussions, forums, etc. This stops them from knowing what is going on outside of their own business and keeping ahead of trends.

5. Legal requirements: The business owner needs to keep themself updated with his legal responsibilities.

  • Subscribe to Hospitality journals and associations. They usually keep information on new legalities.
  • Industry associations can offer services on employment contract writing or conflict resolution.
  • Hire the services of a solicitor for advice. Prevention is cheaper than cure.
  • Ring your local council health inspector and ask questions.
  • Search the websites and/or newsletter of:
  1. Workers’ compensation board
  2. Liquor licensing
  3. Industry awards

The more prepared you are before opening a restaurant, the more chance of success you will have. And once you’re prepared, you can then enjoy all those fun parts of being a business owner even more.

—-Article by Dominique, a Redmako Learning Ambassador

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