Restaurateurs often find it a big challenge to explore business opportunities in the restaurant industry. With competition in the restaurant industry getting fierce every day, starting and running a restaurant is a herculean task filled with roller-coaster rides. This risk discourages several aspiring restaurateurs. But, if you are well prepared with industry lessons, your business is likely to be saved from early closure.
Several factors that determine a restaurant’s success are actually not in the control of a restaurant owner. However, avoiding such common errors can be life-saving and also increase the likelihood of restaurant success.
Accurately Estimating Funding And Start-Up Costs
Since getting a conventional bank loan is becoming a big struggle for start-up food businesses, restaurateurs have begun seeking financial help from other funding sources. Restaurant owners must start by drafting a proper financial analysis and budget to determine the initial capital. Overestimating the initial costs is advised and one is prepared in advance for higher costs than originally anticipated.
Restaurateurs must have a realistic expectations of expenses and profits over time and plan the financial aspect more specifically.
Location plays a vital role in the success of the restaurant business. The restaurant must be highly visible and have the ability to attract target customers. Aspiring restaurant owners tend to settle for locations that are off the beaten path because of lower rents. But, this will result in a loss of potential customers.
A restaurant’s location should be an ideal balance between cost-effectiveness and great visibility.
Investment In Social Media
The internet is a powerful tool for any business, particularly restaurants. Studies cite that one of the industries with great online searches is restaurants. It is important to catch customers where they are actively operating. So, the need to have a stunning online presence becomes obvious. Restaurants must run paid promotions and campaigns online. They must also stay active on various social media platforms, initiate conversations with customers and address their online complaints as soon as possible. All these efforts contribute tremendously to building an enduring relationship with customers. They also start trusting the brand much more than ever.
Keep An Updated Menu System
The first few months are always trying for any restaurant start-up wherein it experiences stagnant or dwindling sales. During this period, it is essential to check the menu for outdated menu items and understand the customer’s preferences. Also, using a robust feedback system will be of great help during the initial stages. During dull phases, restaurants should also invest in a POS system with integrated management features for efficient updation of menus and inventory on a regular basis.
Focus On Proper Employee Training
Restaurant owners must give top-notch training to every employee as it minimizes the risks of losing customers and ultimately, revenue. At the same time, staff should also be granted some autonomy to make decisions that can enhance the diner experience. For instance, they should have the freedom to offer a free drink or some other complimentary item to customers even when the restaurant owner is not around.
Keeping Track Of Inventory And Accounts
Most restaurant start-ups do not have a well-organized accounting system which leads to mismanagement of resources and also wastage of capital funds. Only a system that tracks and categorizes revenues and expenses of the restaurant with accuracy is an efficient system. In order to generate meaningful financial reports, all these must be integrated with the POS systems and inventory. This will help restaurant owners keep track of data and numbers all the time.
Sell Less To Make More Money
Many restaurant owners have an impression that selling more leads to faster growth. But, most often, that does not work in their favor. Several menu items only create a burden on the kitchen. It is important to analyze the cost of goods, the customer’s demands and ease production. This will result not only in a better bottom line on existing sales, but also improve the sales overall.
Soft Skills Of Successful Restaurant Owners
Apart from managerial and financial skills, restaurant owners must also possess a set of soft skills in order to lead a team of people. Soft skills also define the leadership style and relationship management of restaurateurs.
Soft skills are personal traits that determine a person’s character. They help a person cultivate and maintain interpersonal relationships.
Some of the important soft skills that restaurant owners need to possess are:
It is quite normal for people to get irritated when hungry, tired or when the staff is underperforming. However, good restaurant owners must be a pro in navigating human behavior. They actually enjoy engaging with people. Restaurant owners must develop an appreciable level of emotional intelligence, wherein, they listen more than they speak. Restaurant owners need to be masters at conflict resolution. While staying firm, they also need to provide motivation and constructive feedback to their staff. Without emotional intelligence, gaining the respect of the team members becomes difficult.
Collaboration And Multi-Tasking
Collaboration and multi-tasking are like the two sides of a coin while managing a restaurant. There are several tasks to be done and the restaurant owner cannot get everything done on his own. Running a restaurant involves staying aware of the latest trends, hiring the right people, paying rent on time, renewing the lease, supporting the front house and back house work and ensuring smooth running of operations. So, a restaurant owner needs to trust his staff to help him accomplish all vital tasks.
Restaurant owners must plan their work and also work out their plan. At the same time, they must also be ready to bring changes to the plan if necessary. The restaurant industry is now experiencing curveballs, business disruptions and changing requirements like never before. Restaurant owners must always be open-minded and willing to make necessary adjustments. They should not falter or hide but deal with issues during crunch time and move on to the next stressor.
Restaurant owners should always be organized people. Only when things are organized at all times, problem-solving can be quick. When the staff is in a hurry, things can be retrieved at once. Business processes and inventory must not only be properly organized but also managed ahead of time.
Soft skills can be developed and evolved over time. All it takes is practice to get them perfected.
This blog would have been an eye-opener for restaurant owners seeking help in learning industry lessons and gaining knowledge of the hard and soft skills that they need to possess in order to stay successful in a highly competitive restaurant industry. For more digital marketing assistance for your restaurant, get in touch.