With big enough dreams and a bit of confidence, anyone can start running a restaurant. Seems like a fun adventure, right? But, if you’re planning on making it big, you do not want to be just another average restaurateur with an average restaurant.
Because many restaurants fail, and the average restaurant is not one of the few that survive.
This was almost the case for Kitchen Nightmares-featured restaurant owners Lisa and Rita of Boston’s North End. Since they grew up waiting tables at their parents’ restaurant, they thought they had what it takes to run their own.
They opened their Italian restaurant, La Galleria 33, just a few hundred meters away from their parents’ restaurant, and experienced a little bit of success in the early stages. Unfortunately, not long after, productivity started to decline and the restaurant started to deteriorate from the inside out. If they hadn’t been featured on Chef Gordon Ramsay’s Kitchen Nightmares (KN), they might have already run out of business.
It’s important to note that even though they were featured on the show, their problems weren’t at all special.
Take a look at these not-so-secrets to your restaurant’s success!
Be the Menu
It’s a no brainer that the food is an integral part of building a restaurant. What’s surprising is that a lot of people don’t actually realize that the whole business must build itself around the food.
You’ve probably already thought of the food you want to have in your dream restaurant. What are the food choices that you want in your menu? Give yourself a good pinch if you’re still coming up with dozens and dozens of items, unless, of course, you’re planning on starting a buffet restaurant.
It’s time to get real.
The food choices in La Galleria’s menu pre-KN were pretty much covered under one cuisine, which is good in terms of consistency. But, there was just too much in the menu and the kitchen couldn’t handle it. Their inventory went bad, food had to be frozen, or worse, bought ready from outside! The quality of their food was severely affected by the poor content choice.
So you see, at least during your startup years, a smaller menu will get you farther in the business faster. Think about it. You don’t want a lot of choices that will make your customers go, “Eh.” You want a focused set of food that will make your customers dream about your restaurant in their sleep. You will want to keep improving the quality of your food, and that just doesn’t seem economical when you’re dealing with pages and pages of recipes on the clock. Having chaos like this in the kitchen will have you lose your money on restocking and waste faster than you make it.
Build a menu with good variety, test it out, and keep the 20% or so that sells the most and the 20% that should make the most profit.
Target Your Market, Market to Your Target
Now that you have a pretty focused menu, you’re a step ahead of your competitors. But, that won’t be enough. You may have the right food, but to whom will you sell it? “To everyone who will walk by my restaurant, right?” WRONG! Selling isn’t just about flaunting your product to everyone who has eyes, being strong enough to take thousands of rejections, and clinging on to the thought that someone will eventually give in. The key to selling big is knowing whom you should sell to.
This, again, emphasizes the fact that, in this business, it’s just not possible for you to please everyone. So, what you want to do is to identify your target market, i.e. the people who will most likely pay for your food, and focus on selling to them.
“But how do I know who these people are?!”
You begin by knowing what a market is. A market is the set of potential consumers of a product. In your case, the market is the set of people who may consider your restaurant a place to eat in. This should give you a pretty big group consisting of incredibly diverse people. This is not yet your target market.
What you must do next is to segment that market. This is a very crucial step in the process because it will allow you to clearly distinguish those people based on their similarities and differences. The common factors that are considered in this practice are as follows:
- Age range
- Household size
- Place of residence
- Areas frequented
- Purchasing habits
- Buying power
Of course, there are a lot more other factors that you can consider, but at least you can see that those factors have a lot to do with lifestyle choices that people make. Now that you have segmented the market, it’s time to identify your target market.
See how I used the word identify and not the word choose? Well, that’s because you don’t get to choose who buys your food. They’re already there, you just don’t know who they are yet.
You can conduct an initial study of your potential customers by observing the restaurants that may be similar to yours and the people who frequent them. Participating in food fairs and bazaars can also give you a glimpse of your target market.
Once your target market is clearer to you, focus on forming marketing plans that will help you sell to them. Remember, these are the people who enjoy your food and make you money. Make it so that your business will keep them smiling until the kitchen stops cooking.
There’s no doubt that at some point, your customer base will expand, and you will have to cater to more market segments. But until then, it’s probably best to stick to your target market to ensure survival in the industry.
Having the restaurant built is one of the decisions that leave permanent consequences. This is also one of those decisions that can either help make your name or make you pack your bags and go home. I’m guessing you prefer the former, so let’s talk about how we’re going to get there.
We won’t jump into cementing everything down though. There’s something more important to consider before you bring the shovel in.
I don’t know about you, but in my lifetime, I’ve been to a lot of restaurants. Some have great food, warm waitstaff, but find themselves closing down after some time. Where could they have gone wrong? What’s a common problem they have? Bad location.
Choosing a location for your restaurant depends on the target market that you’ve identified, along with other factors, of course. If you’ve studied the places your target customers frequent, then you’re one step closer to picking a location. But, you shouldn’t get too excited yet. I can’t express how important it is that you take the time looking for other options. You must be skeptical about the locations you initially find yourself leaning towards.
Lisa and Rita didn’t do so badly in this aspect. They knew their menu is composed mainly of Italian dishes and they knew that people frequent North End for its Italian inspired environment.
Depending on the type of restaurant you want to build and the service style you plan to take up, you’re going to have to look into several other factors before deciding on a certain location. Be sure to consider the following:
- The size of the spaces in each potential location and the corresponding cost of renting or owning a space. You will probably be looking to investors for immediate payments like this while your business isn’t off the ground yet. However, it’s best that you don’t completely rely on them. Do your homework and project your sales for the first couple of years of operations. Pay close attention in your projections, and you will save yourself from a mountain of debt.
- How accessible your restaurant will be for your target customers. This is extremely important for startup restaurants. You have a long way to go before you can rely on word of mouth. For the first few years, it’s your responsibility to make it easy for your customers to go to your restaurant. If you’re dependent on foot traffic, are you close to busy areas? If people will need to leave their vehicles to go to your restaurant, can you provide enough parking spaces for them? Are there parking lots within minimal walking distance?
- Check your competitors out. It’s good to know how their businesses are doing as it can influence traffic for your business. You want your competitors to be making money, because that means customers are there. But, you also don’t want to be next to ones that have made a big name for themselves. That can cut your chances of attracting diners.
- Read up on the local rules that restrict restaurants in the area. Some areas going to your location might be closed to traffic during the times you plan to load up on ingredients. If you’ll be running a bar that have bands over at night, you wouldn’t want to be located near residential areas. These are some of the things restaurateurs miss out on. Read the fine print.
Lay it All Out
I guess it’s time we talk about making your dreams concrete. Picking a location was about your targeted customers, and building your restaurant isn’t going to be too different. The design and layout of your restaurant should be both appealing to your customers and profitable for you.
This is where La Galleria 33 was off. Lisa and Rita wanted to fill their walls with paintings inspired by classical art. It was pretty appropriate with the atmosphere they were trying to go for. However, the painter they hired made a mess. In the end, they had to scrape off some layers of the walls.
You see, like all of the things we’ve discussed, your restaurant design and layout is not something you would want to jump into without careful thought. Redesigning, rearranging objects that have been bolted into your restaurant, or restructuring can be very costly, so get your design right the first time.
Think about your kitchen first! The size of the kitchen depends almost entirely on the food you’re serving. When you look at the food in your menu, you should have an idea of the cooking and storage equipment you will need. Start from that, and work on what else is supposed to be in the kitchen: your cooks, dishwashers, bussers who may walk in and out of it, and maybe even you.
(TIP: Planning out your kitchen workflow should help you decide on a layout faster.)
You want to be generous but efficient with the kitchen space. A poorly designed kitchen will severely affect your operations once you start running it.
Once you have a solid kitchen layout, you can focus on designing your dining room. Keep in mind that this is where you execute your “sales,” so you must prioritize creating a comfortable environment, otherwise, your customers wouldn’t want to stay in your restaurant. You should check out the design and layout of restaurants similar to yours to gather insights.
Some things to look out for:
- Table and chair sizes
- Most frequent number of people that arrive together
- Customer reaction to the set-up
- Lighting and audio systems
Pay close attention to the first two bullets. Doing this will allow you to strategically arrange your tables and chairs.
To ensure efficiency and effectivity, it is a good idea to work hand in hand with restaurant design consultants. These experts will ensure that space is optimized and that design is in line with your concept. With their experience, you will be able to save tens to hundreds of thousands in potential costs.
Like all business owners, one thing you cannot and should not avoid is the gruelling process of getting the best people to work with you. Screening can be tedious, but you have to put in the effort to get them especially since qualified employees, nowadays, are a scarce resource.
But, before you can even look for the right people, you have to know the kind of person you want for each role. Thinking about this will help you come up with clear job descriptions, which will also serve as your initial step in screening applicants!
Lisa and Rita’s choice of staff, from the front of the house to the kitchen, were way off the mark. Some of them were not even qualified for the job. One busboy of theirs never worked in the industry before La Galleria 33. He obviously was not onboarded properly since he claimed to be “the manager slash everything!”
It is funny, but don’t laugh just yet.
They pushed through with their operation. With unclear assignments and unfit staff, they were bound to provide poor customer service. Some of the staff took on the responsibilities of others while some felt like they did not have to do much. Operations slowed down, and they saw the distaste their customers were feeling towards them.
Common problems like this could have been avoided if Lisa and Rita explicitly enumerated each person’s responsibility.
Don’t take it the wrong way, though. It’s not unusual for staff to take on other tasks that should be done by someone else in the team. This commonly happens during swamped hours especially to managers or owners. Even so, you must clarify when and for what roles they are expected to do this.
Neglecting this task is just one of the mistakes that restaurateurs commit in hiring. Asking the right interview questions and background checking among other things are just as important.
Lisa and Rita didn’t interview the busboy they got. Rita hired that busboy, fired him, then hired him again because he was able to tap into her emotions.
Do not make the same mistake.
Now, when you’re screening applicants, you’re bound to find some impressive resumes. Finding them is one thing but to verify whatever’s written on it is a completely different story – something a lot of restaurateurs fail to give importance to. This is where interviews help. In conducting interviews, you will be able to observe an applicant’s thinking process in many ways:
- Letting your applicants assess stressful situations that occur in restaurants will help you see how well they handle such events. These can range from team conflicts to poor customer relations.
- Asking about their bad experiences within the industry will let you know what environments/situations they are not suited for. Note, however, that while this is important, it is even more important to know what they did to overcome such experiences.
- Knowing how much value they see in their job can also give you an idea of how committed they are to maintaining quality service.
- Learning about their strengths shows what other tasks and responsibilities they are be capable of.
- Learning about their weaknesses and how they are coping with or learning from it speaks of their desire for self-improvement.
So, you see, conducting interviews may give you the chance to talk more about the skills of your applicants, but you may also want to give more attention to their attitude. Skills can be taught and refined later on, but one’s attitude will most likely remain unchanged.
Background-checking, which goes hand in hand with interviewing, will take you a step further in pinpointing the best applicants. This requires you to converse with people they worked with in their past job. Those conversations will provide you with more information on how your applicant operates.
Dedicating yourself to the process will reward you with a fully capable workforce that knows exactly what needs to be done when customers start coming in.
A Happy Employee is a Productive Employee
Once you have assembled your team and the restaurant is running, you will bump into a common but challenging obstacle: employee management. Employee management ultimately addresses employee turnover – the rate at which employees leave and are replaced.
In 2016, the turnover rate for the restaurant industry passed 70%. If in that year you began with 10 employees, you would have replaced seven who left before it ended. This seems simple, but it comes at an unimaginably high cost for your business. But, putting enough effort in employee satisfaction can dramatically reduce high turnover rates.
Unsurprisingly, employee management begins with salaries. Do your research before deciding on a number for any position. Understand the labor regulations and be certain to comply. You have to be careful not to overpay or underpay anybody in your team. You know what everyone’s responsibilities are and what they are doing. Pay them accordingly.
Still, even if you screened your applicants thoroughly, you need to formally evaluate their performance. Keep in mind that peer evaluations are highly recommended since the perspective of the rest of your staff is just as important.
Lisa, Rita and their staff don’t communicate, let alone hold evaluations. They were still aware of the poor performance but they weren’t doing anything about it, which is why everything was plummeting.
You have to let your staff know what the rest of the team thinks of their work, so everyone in your workforce, including you, will be able to pinpoint the points to improve on. Employees leave because there’s a point where personal and professional development come to a halt. The constructive evaluations paired with constant training in a healthy working environment will do a lot in preventing that from happening.
These may seem like simple tasks, but the administrative tasks that a lot of entrepreneurs surprisingly underestimate is no joke. These include but are not limited to bookkeeping, scheduling, fixing payroll, and accounting. Each of these is crucial in ensuring the smooth flow of your restaurant’s daily operations.
Expect that it will fall on you or your manager. Owners must be ready to spend excruciatingly long hours after a day’s work attending to these tasks. Scheduling alone takes several hours to plan if you want your staff to be in top shape once the restaurant gets busy.
(There’s a trick to building better schedules more efficiently. And, YOU can do it!)
Don’t be discouraged, though. There are some restaurant owners and managers who achieve efficiency in this aspect by relying on technology that cater to restaurants. The tech ranges from inventory management to electronic ordering!
Yes, it will cost you money.
BUT, switching from long hours of boring administrative work to a couple of clicks and a decent internet connection will definitely save you thousands of dollars more. With this kind of advantage, you will be able to focus most of your time in improving your service instead!
Take it All In
Lisa and Rita, daughters of restaurant owners, worked in a restaurant while growing up, but their experience was not enough for their business venture. Their restaurant had to be renovated, their menu revamped, and their workforce brought back to basics.
Yes, they were able to successfully get back on their feet and resume operations. BUT, before that happened, they had to rely on some very expensive professional help.
No restaurant owner wants to go through that. Everybody wants to win, and they want it fast. So, they all look around in search for secrets to success, but to no avail.
YOU don’t need any secrets, if there are even any. The six things we highlighted are known to restaurateurs. They all know that they have to think about all of those. But, the secret lies in producing high quality output. Successful restaurateurs dive deep into the details of execution. And now, you, too, know what you need to do to get things done right.
Don’t be selfish, though. Share it with other restaurateurs looking to build a successful restaurant!