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Is there a Recipe for Success in the Restaurant Industry?

BusinessesForSale.com picks out the key ingredients for running a successful restaurant

Succeeding in the restaurant industry has never been easy. You just have to google ‘failed celebrity restauranteurs’ to realise that even being famous doesn’t sell a restaurant.

That being said, this is a very exciting and potentially lucrative time to be entering the foodie world.

New culinary buzzwords now crop up annually along with ever changing trends and with the popularity of programs such as MasterChef Australia and the Great Australian Bake Off, consumers (or self-proclaimed food connoisseurs) are looking for food that’s a little more extraordinary.

This is the year of kohlrabi and teff apparently (kale and quinoa are so 2014) and vegetable flavoured yogurts and ice-creams as well as snackable insects are de-rigeur.

As in any competitive business, restauranteurs will need to at least take notice so as not to get lost in the fray. 

Unfortunately, there are no definitive steps to success. However there are a few key ingredients involved in the making of a good restaurant (and they don’t include scallops, pancetta and fluorescent pea puree…)

Research the people in the area – who’s your target market?

Don’t try to appeal to everyone because, by doing so, you’ll lack identity. Research the area and ask people what kind of food they typically like, then look at the competition.

A sleepy suburb with a high quota of retired folk might not be the best spot to open a Heston Blumental style homage to ‘molecular gastronomy’. Similarly, you wouldn’t set up a ‘mom and pop’ restaurant in Sydney’s Kings Cross district!

Learn (and keep learning) the skills involved in your restaurant – from cooking to front of house

If you’re a master in the kitchen, you don’t really need to worry when you open your restaurant – selling good food is what will make your restaurant successful, right?

Wrong.

Knowing the ins and outs of your restaurant is vital – whether it’s in the kitchen, front of house or marketing, you should make sure you have the skills to deal with any situation. If you strive to learn, and keep learning, about the restaurant industry it can only make your business better.

You also have to be clued up on your figures: how many covers do you have each day? What gross profit are you making per head? Do you have the correct staff to sales ratio?

To run a restaurant successfully, you have to be busy doing and thinking about everything it needs, all the time.

Marketing is key: don’t just rely on word-of-mouth

Don’t underestimate the power of marketing, and don’t think that you won’t have to spend money because the food will talk for itself. Big misconception.

When you’re new, no-one (except proud relatives) will know you – you need to have a marketing strategy in place. The whole point of marketing is to let people know you’re there. Brandon O’Dell, an independent food consultant, believes providing good food and service is only a 1/3 of the battle for restaurant owners – the other 2/3 is effectively marketing and managing your restaurant.

Make sure that you have a strategy in place for pricing

There should be a cohesive, method-based approach for your pricing.

Firstly, you should gather data comprising of: consumer perception of the food and services in the area, competitor restaurant prices, the costs involved in procurement and producing the food, and overhead (fixed) costs.

Once that is considered, some pricing methods can be implemented. These include target return (calculated by money invested into a venture added to the profit that the investor wants to see in return), cost-plus (production costs plus target profit margin), and value (what customers receive, and is priced according to value).

Love food – and love what you’re doing… because you’ll spend hours doing it

It’s no secret that being involved in the restaurant industry is incredibly demanding. It’s almost impossible not to merge personal and professional time, the hours are long and you’ll always be running to outpace the competition; it will soon become a slog if you don’t have passion.

Keep innovating…

You have your target audience-tailored menu, a stylishly designed restaurant and the perfect staff. Now is the time to sit back and relax once the doors are open…

Unfortunately, that won’t be the case. Think about your restaurant as you would a ship on the open sea: the tides will change and you’ll have to alter your position; you need to maintain your boat or it’ll fester and become decrepit; leave your staff alone with no incentive and they’ll mull around, reluctant to sell. At some point, the ship will sink.

Keeping an eye on both your restaurant and the changing tides of consumer trends will allow you to alter and innovate to fit with demand. Of course, most of the time these will be minor alterations and you can still retain the USP of your restaurant, but make sure you keep it relevant.

… But don’t get caught up the latest trends

A la ‘sous-vide’. Why spend $500 on a sous-vide (a.k.a. water bath) just for the sake of having one in your kitchen? Before you buy any gadgets or start completely reinventing your menu make sure that it still reflects your style.

Will adding a ‘deconstructed banana split’ or ‘chocolate soil’ into the mix really whet your customers’ appetite? Or would they be happier with a bonza banoffee pie?

Be sure

Some of these points may seem daunting, but take heed - investing in a restaurant is a big decision. Planning should be a main priority and, while owning a restaurant may be your dream, you should thoroughly research what's involved in running one. 

Further information can be found on the Restaurant & Catering Australia (R&CA) website; a national association that represent businesses across the sectors and provides useful links to training programs, news and events.

If you want a thrilling and fast-paced work life that you’re unlikely to become bored of, the restaurant industry is definitely one to think about investing in. 

Interested? Take a look at our restaurant listings on BusinessesForSale.com

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