Restaurant

Things to Consider When Opening Your Restaurant

February 17, 2021 by Tim McMahon

Starting a restaurant is a dream come true for many people. However, it’s expensive to make that dream a reality, and “common wisdom” says that it is one of the least likely to succeed. So-called, “experts” often claim that as many as 90% of new restaurants fail in the first year. But RestaurantOwner.com thinks that the common wisdom is wrong. They say the actual number of failures in the first year is closer to 26% and about 19 percent failed in the second year and 14 percent in the third year. Other sources say only 17% of restaurants fail in their first year. Much depends on which year. Some years like 2009 had a much higher failure rate than others.

This is actually close to the average of all businesses with more than 20% of all new businesses failing in their first year. According to the Bureau of Labor Statistics (BLS) for businesses that started in 2019, 78.1% were still in existence a year later for a failure rate of 21.9%. On the other hand, information companies had the highest failure rate at 63% failing in their first year.

To put yourself and your business in the best financial position possible, you should look for ways to save money when you’re first opening. Naturally, you can’t skimp on food quality, so you have to find other places to cut costs. Here are some things to keep in mind when opening a restaurant.

Labor

One of your biggest expenses will be [Read more…] about Things to Consider When Opening Your Restaurant

Starting a Restaurant Business?

March 25, 2019 by Guest Contributor

Being a fan of cooking and preparing three healthy meals for your family every day of the week is one thing, but doing that professionally for dozens of people all the time is something completely different. But, if you think cooking is your true calling, this is something you have to invest all your time and money into. Starting a restaurant business can be hard and challenging, but it’s probably the most exciting thing you’re ever going to do, so here’s what you need to look into and how you can become the best restaurateur you can be.

Why are you doing this?

There are lots of reasons why people open restaurants – from wanting to be in a charge of a successful business and trying to invest their money into something lucrative, to actually trying to make a difference in their community and sharing their passion with the world. So, you need to understand what you’re doing and why you’re looking into this idea in the first place.

Once you define this, all the other crucial things – the scope, the size, the location, the menu, the design, etc. – are going to come to you naturally. In the end, if you don’t know what you’re doing and what you’re trying to achieve, your restaurant won’t be successful and you’ll just waste your time and money.

How big a restaurant do you want?

Depending on your ideas and desires, you can either start a small restaurant that’s going to prepare only a handful of different meals daily, or a huge place that might be able to accommodate dozens and dozens of hungry guests. Ultimately, it all depends on your level of skills and dedication to your new career. [Read more…] about Starting a Restaurant Business?

Running a Successful Restaurant Business

February 26, 2019 by Guest Contributor

Owning a successful restaurant is hard because of the competitive market. With so many restaurants opening, it can be hard to find your unique niche. Common wisdom has it that 90% of restaurants fail in the first year. But actually it isn’t quite that bad. The actual number is is about 26%. But another 19% fail in the second year and 14% more fail in the third year of business for a total of 59% failure rate in the first 3 years. So obviously there is more to running a successful restaurant than just knowing how to cook grandma’s famous baked beans. If you have a desire to succeed, you need to study the secrets of successful restaurateurs. [note: the proper spelling is without an “n”.]

Location is Everything

Legendary marketer Gary Halbert used to ask his students this question, “If you and I both owned a hamburger stand and we were in a contest to see who could sell the most hamburgers, what advantages would you most like to have on your side to help you win?” The students’ answers vary. Some say “superior meat from which to make their burgers”. Others say “sesame seed buns”. Others mention “location”. Someone usually wants to be able to offer “the lowest prices”. But Halbert says the one advantage that trumps them all is “a starving crowd”. Now some may say this is actually a function of location. But without keeping this factor in mind you might misjudge what makes a good location.

When it comes to choosing the perfect location, you have a few choices. For example, it’s always great to find a property near colleges because students love reasonably priced meals (and always seem to be hungry). On the other hand, if you want to run a high-end restaurant, you may want to think about the business quarter and try to attract people during their lunch break or business meetings. But be sure to keep Halbert’s advice in mind and find the location with the “starving crowd”.

Getting Started

Starting a restaurant can be a very expensive proposition. According to Restaurant Engine “the median cost to open a restaurant is $275,000 or $3,046 per seat. If owning the building is figured into the amount, the median cost is $425,000 or $3,734 per seat.” So if you are on a limited budget (and who isn’t?) you might want to start small. Unless you have a lot of restaurant experience and a Culinary Arts degree, consider getting a food truck and visiting events (this will put you in front of a starving crowd) and give you experience preparing food and dealing with customers. If this small venture succeeds you can consider looking for opportunities to expand into things like catering, etc. and then when you do open your restaurant you will be prepared and experienced.