Sometimes, the dream of operating your own restaurant can guide you to start a new business but it can hide the real problems and obligations running such an operation entails. If you are inexperienced in the industry you can have real issues crop up in the first year. With many restaurants not surviving beyond the first 12 months, it is imperative you do everything you can to ensure the same fate doesn’t befall you. If you are aware of the common reasons you will pay attention when you see red flags. Starting a restaurant means hard work, long hours and 100% dedication, you will have to take the responsibility in both good times and bad.
New restaurants fail at an alarming rate According to recent studies the highest level of failure in the first year recorded so far has been 26%. Let’s look at some of the common mistakes made by new restaurateurs that may lead to failure.
The capital startup is low
Not aware of your competition
No proper restaurant promotion
Poor staff management and wastage
No real authentic ideas
These are important points and valuable lessons to take note of. Opening a restaurant means you require a good capital. If you have insufficient money for your startup you will run into financial difficulty, because the first year is all about breaking even. Here’s a tip. Do not buy unnecessary furniture and new equipment. You can always buy used equipment which is considerably cheaper. You have not won the lottery to be throwing money around. Most restaurateurs start off a new operation with borrowed money, bank loans or investments. Use it wisely and carefully. You need good cash in reserve for all the expected and unexpected problems that may crop up in the first year.
A market research is essential if you plan to open a new restaurant. When you conduct a market study it will increase your knowledge of the competitors. Starting a new restaurant is more than choosing a location, renting a space, designing the interior and taking on new staff. There are multiple elements that need to come together like the perfect fit of a puzzle before you are to succeed at getting through the first year of business.
Location is vital when starting a restaurant. What is the environment like? Who will be your target audience? Will they like this spot? Is there parking available? Will people who walk by be able to see it? Consider your competition when picking a location, they shouldn’t be located too close to you. For instance, if you want to open an intimate place, choose a quieter setting. If you plan an urban and trendy restaurant then a crowded place is ideal.
A restaurant consultant will help promote your restaurant. With digital information available at your fingertips, there are no more excuses to not promote your restaurant on websites, blogs and social media platforms. You can also go the traditional way and distribute flyers, put up menu boards outside the restaurant and use word of mouth marketing.