The success of a restaurant is dependent on hundreds of variables, and it doesn’t come without hard work, dedication, and preparedness. Here are some components to expect in this highly volatile, yet supremely rewarding business.
Owning a Restaurant is Demanding
Starting your own restaurant has the potential to be one of the most empowering, fulfilling, and lucrative endeavors. As such, a restaurateur needs to be resilient, organized, and exceptionally hard-working in order to have a shot at success. In the beginning, you need to be prepared for little to no free time.
You Will Need a Business Plan
Opening a successful restaurant allows you to reap the benefits of prestige and see your creative vision come to life. However, be aware that the status of owning a restaurant largely comes from surviving this fickle business. Concocting a clear, educated, and specific business plan greatly increases the likelihood that your restaurant will be a profitable success. Thriving in this industry comes from being educated about the market and mapping out a business strategy to lead to prosperity.
Know How to Streamline Your Plan
Your business plan should have every goal and deadline outlined, while still providing solutions to daily and long-term challenges. A successful business plan will streamline your operation. As Bennigan’s CEO Paul Mangiamele says, “[In a restaurant] there are a thousand moving parts, and you need to be knowledgeable about all of them.”
To bring together a clear and effective business strategy, decide on a distinct market, restaurant concept, and niche. Your business plan should include detailed financing information, income and expense outlooks, menu and pricing information, and hiring and training procedures.
Plan to Obtain Financing
In addition to mapping out the road to your restaurant’s success, a business plan makes securing proper financing a much more attainable goal. If you are able to realistically outline how you plan to keep your restaurant profitable, you will be more likely to attain investors and loans at affordable interest rates.
Before starting a restaurant, understand various financing options such as investments, loans, business lines of credit, and business factoring.
Consider Business Factoring
Business factoring is selling the accounts receivable (customer payment invoices) to a company, who then makes these funds immediately usable for business operations, at a discount. Instead of providing you with a loan that must be paid back later, you are selling an asset (the invoice) in exchange for money.
According to New Century Financial (www.newcenturyfinancial.com), this is an effective financing option for many businesses, especially for restaurants that are just starting out. Instead of having to wait for payments, a new restaurant owner can use the money to generate growth. Since business factoring is not a loan, it won’t require you to put up your personal assets as collateral.
Prepare to Hire Employees
Finding and keeping reliable, hard-working employees is one of the biggest challenges that restaurant owners face. You need to be able to rely on your chefs, managers, and waitstaff, so take the extra time to properly screen applicants. Create detailed job descriptions, and make sure potential employees fully understand what is expected of them. It pays to take the extra time to thoroughly interview candidates, and to perform background and reference checks.