Google returns a billion pages to the request “how to become a restaurant owner”.
Indeed, owning a restaurant sounds like a fun and lucrative idea. Why wouldn’t it be? Everyone needs to eat, while many people do not share the excitement of cooking. Then, there is the atmosphere that you, as an owner, create for your guests. Seeing them enjoy your work is always satisfying.
In reality, though, about 80% of restaurants close within their first five years. Common reasons are the wrong location, inadequate financial resources, lack of organization, and inexperience. Still, as the saying goes: failure is a state of mind. So, let’s see what you can do to get off on the right foot starting a restaurant business.
Who is a restaurant owner?
Many tend to confuse running a restaurant and running a business. Are you going to sell food and drink? Or maybe it is entertainment and consistency? A slight shift in vision makes a significant difference in a manager’s approach to business — and the requirements that good restaurant owners should set for themselves.
A leader has to juggle 1,000 things. If you wonder how to become a restaurant owner, prepare to take the following duties and acquire certain skills.
Duties of a Restaurant Owner
- Your clients expect the best service — and it’s your duty to exceed their expectations by inspiring a customer service mindset in your employees. To achieve it, you have to create a coherent team by ensuring healthy communication between team members and being transparent about your business goals and strategy;
- Your employees rely on you for salary, comfortable working conditions, and place for self-fulfillment. 3To provide your team with a reliable workplace, track monthly fixed expenses, keep spending under control and alter your expense management strategy quickly throughout challenging times;
- A successful restaurant isn’t just a place to eat — it is a place for experiences and entertainment. Research the market regularly for new ideas on the latest trends to incorporate into your business.
Skills of a Successful Restaurant Owner
A restaurant business is about people — those who receive service and those who give. Therefore, a restaurant owner needs to have the skills to lead a team of people effectively. Some of the crucial skills for those seeking how to become a successful restaurant owner are:
- Emotional intelligence. An emotionally intelligent leader has a high level of empathy which helps in employee conflict resolution. They also can recognize their own emotions and manage their behavior to gain the respect of their employees.
- Multitasking and delegation. Between the front- and back-of-house, there are a million things that need your attention as a restaurant owner. But you can’t do it all by yourself. A top priority should be hiring people you can trust to delegate different areas of the business. Create an atmosphere where all your employees can expect to get help from their colleagues when they need it.
- Organization. Running a restaurant keeps you on your toes, and there’s often no time to think. As a leader, you have to create a system that will work when you’re out of the office. Staying organized is the key to keeping your business running smoothly.
- Operational skills. You might not be a good chef, but you should know the ins and outs of your back-of-house operations. With these operational skills, you’ll have more confidence when it comes to ordering supplies or planning out a menu and pricing.
- Marketing and sales. Competition is fierce in the hospitality sector. The key to success is in leveraging marketing across your various owned channels including your website, social media, Google, review sites, and more. Additionally, you have to train your team to provide excellent service and sell your most profitable menu items.
Now that you’ve completed the self-audit let’s move on to what it takes to become a successful restaurant owner.
6 Tips for Becoming a Restaurant Owner
1. Wear many hats
The best way to prepare for starting your own restaurant is to work in one. Books and courses are great, but it’s even better to have practical experience. One of the best ways to gain this experience is to work in different types of foodservice jobs. Armed with this operational knowledge, you will be able to jump in and handle any issue at any time.
Apart from having this technical knowledge, you need to stay in the know with everything going on within your restaurant. You have to motivate your team, speak to your operations and strategy fluently, be a good coach and possess authority combined with diplomatic tact.
2. Research the industry
Market research is your first step to writing a business plan. More specifically you should focus your investigation on local demographics and begin market testing your ideas. In a demographic analysis, you want to know more about the people living close to your restaurant. What is their income, age, gender? Did they graduate from high school or college? What is their ethnicity? Using this data, you can estimate what tactics would best appeal to your potential clients.
A good idea is to do quantitative research by conducting polls and surveys to directly ask your target audience about their expectations. After you create your target customer profile and compile the data, it’s time to test and learn within your market. Recruit a focus group to ask about their food preferences, estimate their readiness to try new cuisines, see how they react to a dish, or interview them about design, location, and so on.
3. Create a concept
Any kind of restaurant — from fast food to family-style to fine dining — was designed to meet the varied needs of different types of guests. Most often, the area the restaurant is located in determines the style of service and the cuisine.
That being said, as a restaurant owner, you are the person who decides what your restaurant will serve. Choose the style of food that inspires you the most and a service type that best compliments your menu. For example, Italian cuisine is often served family-style, but expensive seafood justifies a fine-dining environment.
4. Calculate the costs
Budget is a crucial factor as the style, type and location of a restaurant requires different investment sizes. As a restaurant owner, you should know the cost of setting up a kitchen, kitchen equipment, rent, food/supplies, decor, employee salaries — everything.
As you start your business, there will be one-time expenditures on construction, equipment, and licensing; and recurring expenses involving payroll, utilities, insurance, food inventory and marketing.
Your market research will reveal loan rates, average rental costs and utility payments in your neighborhood. At this point, you should count your prime cost to understand how profitable your restaurant business will be. It’s also time to invest in restaurant software to help you manage costs and run your operations smoothly.
5. Hire staff
Start hiring around three weeks before opening. This will give you enough time to get to know your new team members and see if they are the right fit for your business. Extensive training should also be done at this time to get your team comfortable with the ins and outs of your daily operations.
Work with a company or develop your own internal training program to enable your team to be successful in their roles. A well-trained team has the added benefit of helping with employee retention. 54% of millennials said they would leave employers who didn’t provide a motivating and stimulating working environment, while 55% said they would leave if development through training and mentors wasn’t prioritized.
In a post-COVID era, finding well-qualified staff is harder than ever. One way to find talent is to leverage your network and reach out to those who you’ve worked with in the past. Traditional job boards are another way to hire new talent, like those found via Harri or Culinary Agents. Post your jobs across these sites, and don’t forget to offer incentives like strong benefits or a signing bonus. Every little bit counts in a competitive job market!
6. Start marketing before you’re open
You can’t stake your restaurant’s survival on customers finding you by chance. Not only does early marketing get you recognition, but it also gives you insights into who your customers are to help you tailor offerings accordingly.
Use marketing tools to build brand awareness, communicate your uniqueness and convey the experience your guests are going to get. Feature stunning food photos, collect feedback and seek sources for inspiration. Reaching out to food bloggers and editors of online outlets and print magazines; a post with optimized content can double your advertising effort.
Ensure your restaurant’s Google My Business listing is set up properly with address and open time details, as well as direct booking and online ordering links. All of these pieces help optimize your listing to show up prominently on Google Maps. You should also consider working with a marketing agency to ensure your website is SEO-friendly. This will help you show up more regularly and consistently on Google search.
Plus, don’t forget about local marketing. Old-school flyers work to share your news within the neighborhood to drive more awareness with locals.
A restaurant is an exciting and challenging business to run. You can never know whether it will be a success until you get it off the ground and start building a customer base. At the same time, being prepared minimizes risks for failure. Check and double-check your estimated costs, know your strengths and choose your tools wisely.
Planning to take reservations, host a virtual waitlist or offer your menu for delivery or pickup via online ordering? A platform like SevenRooms can help you increase revenue and retention by leveraging data to build direct relationships, deliver exceptional experiences, and increase repeat visits & orders. Reach out today to learn more.