While a restaurant meticulously prepares several flawless recipes, the fact is that there is no specific recipe that guarantees restaurant business success. It is purely with keen observation and careful analysis that one can identify the right path that leads one’s own restaurant to success. This helps one derive the critical elements of a successful restaurant business.
Restaurants must possess certain key traits to ensure business success and profitability. A good restaurant does not differ from a regular restaurant. It is just that successful restaurants recognize these characteristics and work accordingly.
Understanding The Restaurant Business
Statistics state that 25% of restaurants shut down within the first year of operations. This is because of a lack of understanding of the business. First-time restaurant owners have big aspirations but do not possess the business acumen to run the business efficiently. Restaurant owners must know to compare food costs, labor costs, gross margins, and profits. One must also conduct thorough research before opening the outlet. From settling accounts with vendors to managing the staff and executing restaurant operations, one must have a clear understanding of how the business runs.
This is of course a no-brainer. Great food is a vital feature for any good restaurant. Food is the primary factor that draws customers to a restaurant. It is not necessary for the food to be exclusive or unique. If you can prepare food better than your competitors, that would automatically ensure that your restaurant flourishes. Having a great chef and signature dishes are characteristics of a successful restaurant.
Location is another crucial element that is characteristic of a successful restaurant. Only a business that is located in a popular area sees better footfall when compared to those operating in remote areas. The location must be determined based on the restaurant concept and target audience.
Smart Menu Planning
A well-designed menu does wonders for a restaurant by drawing attention to high-profit items and boosting sales. What differentiates a successful restaurant from a less busy one is most probably its menu design. Even if both restaurants serve the same kind of food, the successful one is most likely to have efficiently tapped the menu for greater profits.
Customer service is inclusive of politeness and helpfulness of the staff and the service. The experience turns memorable or otherwise based on how soon the food arrives, the price of the dishes, and the ambiance of the restaurant as well. Successful restaurants always treat their customers well, leaving a deep impression on their minds.
Observe any successful restaurant and you will find the owner’s personal involvement in the business. Despite recruiting professional managers to handle operations in the case of multiple outlets, it is also essential for the owner to oversee all operations either personally or through digital means.
Word of mouth alone does not suffice in these modern days. A successful marketing plan is essential to flourish. Marketing can be done even without spending money, by using social media and the restaurant’s website to one’s advantage. Combining online and offline marketing strategies is sure to pave the way for more sales and profits.
If you are a first-time restaurateur and you are lucky enough to find a seasoned partner who is already running a few restaurants, it would be really great. This reduces risks of loss and also provides you with a great platform to learn important lessons about restaurant management.
It takes an efficient, loyal team to ensure the success of a restaurant. Only happy staff can be productive. Successful restaurants invest in staff satisfaction just the way they invest in customer satisfaction. This is because the dissatisfaction of the staff is likely to be reflected in their work.
Strong Grasp Of The Key Metrics
Restaurateurs must not look at terms like cash flow, profit, and loss, prime cost, etc. as mere jargon. One must be well acquainted with these to understand, grasp and actively work towards goal achievement.
Strong Tech Stack
A strong tech stack is necessary to properly assist your staff in completing tasks seamlessly and guaranteeing success. Restaurants must adopt the right technology to make the online food ordering and payment process seamless. A great tech stack would include point of sale, online ordering systems, inventory management, payroll management, staff management, vendor payment management, etc.
Duties Of A Restaurant Owner
Running a restaurant is, without any doubt, a daunting task requiring one’s full attention. A restaurant owner must not only be aware of the following duties but also follow and perform them diligently to streamline the entire business and steer it towards profitability.
Money is the lifeline of any business. So, it is imperative to have a competent accountant to help you manage the restaurant's finances. Remember that no business starts yielding profits from day one. So, a restaurant owner must know how to manage the fixed costs until the restaurant reaches its breakeven.
Communication Amongst The Staff
A restaurant owner must keep his employees happy to reduce the employee turnover rate. Unless this is achieved, the restaurateur must engage in the hiring process again and again ultimately increasing overall expenditure. Maintain transparency and inform employees about future developmental plans. Involve staff in the decision-making process to make them feel that they are an integral part of the restaurant’s success and growth. Rewarding them regularly and considering their views will help build a group of loyal employees.
While managing everyday operations can keep a restaurateur busy, he should also stay on the constant lookout for new trends that are revolutionizing the industry and competitors are embracing. Harnessing such developments will help you formulate concrete plans for the future. Watching your competitors and learning from their failures will help you make quicker decisions.
Monitor Restaurant Reports
A restaurateur must always monitor the operations and stay updated about inventory, billing, sales, employee and vendor satisfaction, etc. Technology can assist a restaurateur in this regard. Using a robust POS provides comprehensive reports of the total sales, stock and inventory, CRM, total bills generated, and also comparative reports in the case of multiple outlets.
Socialize With The Restaurant Community
Restaurateurs must take active steps to create their own space in the industry. This can be done by socializing with industry veterans. This will help if you are new in the industry. Be a part of various restaurant owners' meets and improve your contacts within the circuit. Increasing your connection with the industry people will make more people aware of your existence and popularize it. Such meetings and events are also great venues to get in touch with investors who are interested in your next big venture.
Soft Skills Of A Successful Restaurant Owner
Restaurant owners must know a lot and do a lot to make their business a success. They also need to possess a set of soft skills that are crucial to defining leadership style and relationship management. Just like hard skills, soft skills too can be developed over a period of time with regular practice.
The top soft skills that a restaurant owner needs to possess are:
Successful restaurateurs should know how to navigate human behavior and quirks like a pro. They are masters at conflict resolution, listen more than they speak, and know how to be resolute when providing feedback to their staff.
Collaboration And Multi-Tasking
Since a restaurant owner has to manage several tasks simultaneously, he must be good at multitasking, collaborating, and prioritizing tasks. By hiring the right people, he can get assistance in handling all operations.
Restaurant owners must be organized people in order to solve problems quickly and manage things ahead of time. They must always know how to keep processes and inventory organized so that busy schedules can be managed ahead of time.
Restaurant owners will always have a full plate. From finance to sales to people management, he always must deal with conflicts involving a lot of stress.
This blog would have been a great read for restaurant owners looking for professional guidance about what they should do if they are to guarantee business success. In case you are looking for more assistance in restaurant website building, digital marketing, and restaurant management, get in touch.