Congratulations! You are on your way to starting your very own restaurant, you must be feeling very excited and looking forward to owning a successful and prosperous business. You are no doubt, quite comfortable making big decisions around business and large investments, if this is your first foray into the restaurant world, then you should be prepared for anything.
Learning from the mistakes of others is a great place to start. So, we have compiled a list of mistakes that you should avoid in your first year as a restaurant business owner.
1. I’ll be making money from day one, right?
It is very unlikely that you will start to make a profit right off the bat. For this reason, most new restaurants that survive will have a budget based on not making a profit for at least a few months after the doors open (if not longer). Failure to plan for this eventuality can lead to disaster.
Another thing that you should watch out for in the first few months is that your food and labour costs may be higher than you expect during this time, as all of your employees get used to the procedures and commercial kitchen equipment you have installed. Given time, you will be able to optimize and reduce costs. However, in the first crucial months where you are establishing a reputation, you want to have the funds available to put your best foot forward.
2. Don’t underestimate your capital needs
There will be some costs that you can prepare for like the purchase of a new fridge or oven, however in the first few months of operation there will simply be too many surprises for you to have anticipated everything. It is quite common to find a new restaurant that has run out of money after having to pay for construction that exceeds the budget, or additional costs required to pay local permits. Sometimes, even things like liquor licences can be overlooked. Quite simply, you need to have funds available to cover these little things that all add up to a big dollar value.
3. No direction or purpose
This is a problem that is quite common among a great deal of new restaurant or coffee shop owners. It can be quite hard to define, however, when a staff are not given clear leadership, the restaurant will suffer. Without the help of everyone working hard with a goal in mind, the ship can seem rudderless, and without this focus you will not achieve your dream of owning a successful business.
You will need to take time to craft an identity for your restaurant, and where you see the business in 5 years time. You will need to communicate this vision to your staff so much so that your enthusiasm is infectious. Knowing where the you want the business to go in the future will drive yourself and your staff to push through the long hours and busy shifts.
4. Failure to have procedures set in place
There will be so many moving pieces in the day to day operation of your restaurant that you simply cannot manage them all at once. This is where you need your team to pick up the slack. Consistency and efficiency are your friends, they will save you time and money. You will need to have established and documented procedures for nearly every facet of the running of your restaurant. From the steps needed to clean the kitchen at the end of the day to how to store the cutlery, a little effort preparing this manual as you go, will forge the backbone of your business.