The hospitality sector has experienced some significant challenges in recent years. In particular, the onset of the Covid-19 pandemic created serious problems for businesses in this sector. Regional and national lockdowns were introduced at the height of the pandemic when many governments were attempting to slow the spread of the virus to protect key healthcare systems from overload. Thankfully, in 2023, most countries have lifted their restrictions on public movement and congregations, and businesses in the hospitality sector are starting to experience a resurgence in demand for their services. If you are an entrepreneur who likes the idea of providing first-class food, drinks and service to a local clientele of food fans, then you may have already considered running your own restaurant. A popular restaurant that delights its customers has the potential to generate significant levels of revenue, which can make it a lucrative investment idea. However, as with any small business, it is important to consider a wide range of factors before setting up your new restaurant. In this article, some of the key top tips for creating and running a successful restaurant will be explored in detail.
Create a solid business plan
Any business that seeks to cultivate long-term profitability needs to have a solid and professionally researched business plan. In 2023, it is widely recognized that 60% of all new restaurants will fail in their first year of trading. This is a far higher failure rate than for other small businesses, which tend to have a first year failure rate of around 20%. One of the key reasons for restaurant failure is not having a clear idea of the target market you intend to serve. Put simply, if you plan to create a fine dining experience serving world-class cuisine and boasting premium wines and spirits, you must ensure that the local population has sufficient disposable income levels (and a love of fine dining) to fund regular trips to your establishment. When creating your business plan, it is vitally important to undertake market research and learn about the demographics of the population that your restaurant will serve. You will need to know the average income levels for the local community, as this will give you a clear idea of the levels of disposable income that they have for eating out and socializing. In depth market research will help you to determine the level of demand for your restaurant and will help to shape the design and overall concept of the premises to appeal to your intended target market. Today, there are a wide range of online sites that can be used to gain market research information that will shape your business plan. Here are some of the best market research sites in 2023.
Restaurant theme and concept
Your in-depth market research will be instrumental in fully understanding the target clientele that you intend to serve in your restaurant. This information will then be invaluable in helping you to decide on the theme and concept of the restaurant. For example, if your research indicates that the local population enjoys dining out on Italian cuisine and the local area is not well served by such establishments, it may be wise to focus on an Italian themed restaurant. The next step is to conduct further research on traditional and modern Italian restaurants to determine the designs and concepts of such premises. If you are aiming for a high class establishment that is modern in terms of its design, you may seek to adopt a minimalist design ethic that focuses on striking designs and lots of open space. Conversely, a traditional style of design concept may include the incorporation of old fashioned fittings and furniture for an authentic theme and restaurant layout. It can be beneficial to use focus groups from your intended target market for this stage of planning. Invite a small group of the public (who you expect would like to dine at your premises) to join a research and feedback session. Incentivize this by paying them for their time and thoughts. At the focus group session, bring several restaurant design and concept ideas and ask for the groups opinions on what they like and dislike in each plan.
Decide on the menu
After you have decided on the theme, design and overall concept of your restaurant, it is now time to start planning the menu. A key consideration in the dishes you choose to serve will be the overall cost of each dish. For a premium, fine dining restaurant, the guests will expect to pay a high price for their meals, if they are of the highest quality and use the best ingredients. Conversely, a small family restaurant that serves tasty but inexpensive dishes will not have the same ability to buy in the best ingredients whilst ensuring that prices remain low. It is of paramount importance that you accurately cost each plate of food that you intend to serve on your menu. Work out accurate portion sizes and determine the total cost of all the ingredients on the plate. This will allow you to factor in your total costs (staff wages, heating and lighting, rent and rates etc.) and price each plate of food so that it generates a suitable profit based on the volume of food that is expected to be sold. One of the key benefits of buying your raw ingredients for use in a restaurant is that you can buy in bulk and enjoy lower unit costs due to economies of scale. For example, it is possible for restaurant owners to buy bulk garlic, store it appropriately and then benefit from lower prices on this when it is added to each dish. For more information on costing dishes, click here.
Hire the best staff
It is vitally important to hire top quality staff for your restaurant. All staff members should have suitable experience in the hospitality sector and should be highly trained in their chosen field of work. Your type of restaurant will have a direct impact on the type of staff you need. For example, a fine dining establishment will need to have a team of highly skilled chefs who specialize in certain parts of meal creation (such as sous chefs) and are experienced in creating the highest quality dishes. Regardless of the type of restaurant that you create, front-of-house staff (i.e., the waiting staff and restaurant management) should have excellent customer service skills and a pleasant and friendly demeanor. When selecting staff, look closely at their work experience and research the restaurants that they were employed at to see if they are popular venues. Avoid hiring staff who have moved from job to job in a short period of time as this may indicate that they may not stay on at your establishment for long and this will lead to increased recruitment costs.
Strive for perfection with every dish
As a final point, it is incredibly important to ensure that every dish that leaves your kitchen is the best it can possibly be. Put simply, every customer should be delighted by what they eat in your restaurant and all dishes should be of a consistent high quality. Remember that customers will be fully prepared to leave good (and bad) reviews of your restaurant on various review sites. These reviews can play a huge part in the long term success of the business as they will be instrumental in creating an overall public perception of your establishment. Strive for perfection with every dish and aim to exceed the expectations of every customer.