Tips on Opening a Successful Restaurant
According to the National Restaurant Association, the restaurant business accounted for $604 billion in sales in 2011 and the industry, as a whole, has an economic impact of $1.7 trillion dollars annually. Success in the restaurant business, though, is no sure thing. According to a report published through Cornell University, 26 percent of all independently owned restaurants fail in their first year, and this figure is modest compared to some of the other percentages floated around over the years. While there is no strict formula, factors such as location, menu, and service go a long way in determining a restaurant's success.
Location
o According to a study reported by H.G. Parsa and published by Cornell University, the number one reason for failure -- and conversely, the most crucial element to success -- is location. While finding a prominent location for your restaurant might seem obvious, landing the perfect place may not always be so simple. The best locations offer qualities such as convenience, ease of parking, street visibility, and proximity to a large number of people. Yet, securing those locations can prove difficult with issues such as budget and competition hindering many restaurant owners from finding the premium location for their restaurant. As a compromise, a restaurant might open on a side street or the site of a recently failed establishment, hoping to make the site work. Compromising location, though, could prove lethal to your business since restaurants rely on foot traffic and word of mouth.
Cash Flow
o The restaurant business, possibly unlike any other, is cyclical, even within a single week, with lucrative nights, such as a Friday night, and slow periods, like midweek, when cash is scarce. Surviving the fluctuating cash flows of a restaurant business is another key to keeping your doors open. The restaurant business, according to a report in "Restaurant Start-up Growth Magazine", has high variable costs such as cost of food and labor. Keeping a lid on the variable costs will help get your business through the troughs and leave you enough working capital to meet the demand that you know will be coming, either in a few nights, or in a few weeks.
Service
o Nothing is more frustrating to a patron of your restaurant than poor service. Service, whether it is good or poor, can impact your business. Good service can keep your restaurant running smoothly and growing as happy customers usually become regular customers. Bad service whether resulting from a surly wait staffer or a slow service can result in unsatisfied patrons and lost business. Hiring competent and cheerful employees is a must and having contingencies in the works when someone calls off or is sick makes a difference too.
Menu
o Ultimately, people decide whether to visit your restaurant based on the quality of the food and the type of menu you present. Deciding on a menu or a theme is not only a personal choice based on the food you like to cook, but also is a business decision. Choose your menu based on your region, your neighborhood, your patrons and your competition. If three Italian restaurants are opened within three blocks of your new site, for example, consider another location or a different style of cooking. Set your menu apart with some unique house specialties, whether they be homemade desserts, special combinations or offering locally grown foods
Article by: Maria
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