As more and more people want to dine-out or order home delivery, businesses in the food industry has skyrocketed in the last few years. But there is still room in the market for you. There is a popular perception that there is a lot of revenue in the restaurant business, but what they fail to notice is the various steps involved into make the restaurant a successful one. You don’t have to worry as we have a checklist that will guide you to your dream of being a successful restaurant owner.
The three most important things to consider before opening a restaurant is location, location and location. Location plays a major role in determining the success of the restaurant. People only travel great distances for the unique and most delicious food. If you’re not one-of-a-kind, you have to choose a location where there are a lot of footfalls from your customer type. You need to evaluate the market potential of an area through primary and secondary research, and if you can’t afford market research, the sales potential can be broadly estimated with logical deductions. For example, if 1000 families are living in the chosen area, the average spending of eating outside for each family can be Rs.1000 per month, which accounts to Rs.10 lakh per month.
Once you have the location finalized, you have to register your business with the local municipality and get an approval from the FSSAI (Food Safety and Standards Authority of India). With all the excitement in planning other aspects of starting a restaurant, you may tend to forget or delay registering. Trust me when I say this is a very important step.
There are three major service styles – Quick service, Mid-scale and Up-scale. Quick service restaurants are the fast food chains with a limited menu and fast service. Mid-scale restaurants are the ones that offer a variety of meals at prices that customers perceive as value for money. These restaurants offer a range of limited and full service options.
A full service is where the customer is seated first, then the waiter takes their order and the food is brought to the table. A limited service is when the customer orders at a counter and finds a table, and the food is then served at their table. Up-scale service is usually found in the star restaurants where the hospitality, service and ambience is concentrated on as much as the quality and taste of the food. It is a little on the expensive side but is more of an experience than just a meal.
Hiring the chef and waiters for your restaurant is a costly endeavour. Most of them do not have a notice period and your restaurant opening date can get pushed due to various reasons. So, it’s safe to plan one month’s salary as back up for your staff.
Do not try to cut costs when hiring people as they are the touch points and the face of your restaurant for your customers. There is a notable difference between an indifferent waiter taking the order and a cheerful one who suggests items from the menu.
Positioning is all about how you want your target customers to perceive you and your business. When you visualize your restaurant, what do you want people to remember and keep talking about? For example, it can be for the value for money prices of the food or a particular type of food, such as biryanis or kebabs.
After deciding on the positioning, it is time to determine the menu of your restaurant. Sit with your chef and come up with an incredible menu, while considering the location, the target segment and the positioning you have chosen for the restaurant.
It’s a difficult task to put an exact price on the cost for starting a restaurant. It all depends on so many factors that each person will come up with his/her own vague answer. But, the major cost aspects related to opening a restaurant are:
- Staff Salaries
- Interior Designing
- Kitchen Equipment
- 8 months’ rent as deposit when you rent a place
- Raw Materials
Taking these factors into consideration, you can draw up a pretty accurate cost estimate for your working capital. You should also have 6 months’ working capital as a buffer when you start your business.
The POS system is a very essential piece of technology that will help you track and improve restaurant sales. The platforms which are currently available for restaurants will give you full control over the restaurant, as many of them have in-built inventory management, recipe management, CRM and feedback modules which will help you organize and control your business growth better.
Proper marketing is the key to the success of your restaurant, so make sure you have a big launch by creating prior buzz via social media and other marketing medium. Marketing doesn’t end here; you have to constantly keep in touch with your customers, update them on any menu changes, wish them on birthdays, loyalty programs, and provide offers during festivals and other special occasions. In order to keep up with the requirements, you may to hire a dedicated person specifically for that. But, the modern restaurant management system will help you do all these activities without having to invest on an additional resource.
Have a good mechanism to help you plan your raw material purchases so that you buy only the optimum amount required. People are tempted to buy materials in bulk so that they get a discounted price, but they seldom consider the wastage at the end of the day. In order to control that, you need to track the daily wastage and customer consumption patterns in different seasons. It is difficult for a person to make these notes every day, but there are platforms with inventory management modules which will help you evaluate these stats and you can plan ahead very easily.
Regularly take feedback from your customers. Taking the feedback is only helpful when you act on it. When a customer writes a bad review, you should contact them and assure them that you have worked on their feedback. This will make them feel important and they will give you another chance to serve them. And when you thank the customers who wrote a good review, they feel happy and in turn become your loyal customers.
If you follow these pointers and strive to make your business, an excellent one, you will have a very profitable restaurant business.
Picture courtesy – Internet