Restaurants get their fair share of bad-mouthing in the business world. It’s known to be one of the hardest businesses to run — and even harder to make profitable. But with a universal love (and of course, need) for food, ambitious chefs and restaurateurs open new restaurants in spite of all the statistics and many are wildly successful.
But what makes one restaurant successful doesn’t always work for others. It takes the perfect combination of location, concept, buzz and quality execution to create a successful restaurant. And that’s just when it comes to attracting customers. There’s a bevy of other components that all come together to turn your restaurant, café, deli, bar or even pizzeria into a success — from choosing the right point of sale system to having proper permits and licenses and, of course, hiring.
To help, Seek Capital spoke with successful restaurateurs to get their two cents on how those who are new to the restaurant industry can set themselves up for a prosperous future.
Check out the secrets to success from restaurateurs that have been through everything from finding the right restaurant loan to creating the perfect menu:
1. Start With a Solid Business Plan
“It is crucial to develop a solid business plan that is achievable and conservative in your revenue and cost estimates — in our business we don’t just count pennies, we count half pennies,”said Jim Balis, managing director of the strategic operations group at CapitalSpring and owner of LuLu’s Pizza in Boise, Idaho. “Start with understanding the cost of each plate served to a customer down to the garnish. [Make] sure your food is priced sufficiently so you can make a profit — 25 percent to 30 percent of your revenue is a good number to use for ‘cost of goods sold.’ Your labor or staffing costs should also be appropriate to deliver good service but protect profitability — all-in labor with payroll taxes and benefits should be around 30 percent of revenue. Your rent should be 6 percent or less of revenue. If you create the right business plan, serve good/consistent food in a best in class experience, you will succeed.”
2. Build Your Brand
“I think one of our keys to success involves placing a premium on marketing and branding. We consider them just as important as our food and our service,” said Thomas Nguyen, co-founder of Peli Peli and Peli Peli Kitchen. “Just as we introduce new menu items a few times a year, we take great pride in coming up with unique ways to create real relationships with our customer base and interesting ways for them to feel good about dining at Peli Peli or Peli Peli Kitchen. With over 15,000 restaurants in Houston, having great food and great service may not always be enough.”
Looking for restaurant financing to launch your dream business? Contact Seek Capital to get the best restaurant loan for you.
3. Listen to Your Staff
“There is tremendous value in giving your team time to express their thoughts. By opening yourself up to those conversations, you create a bond with your staff which lends a hand to more effective leadership,” said Bryn Butolph, President and co-founder of Eat Clean Meal Prep and manager of Nicky Rottens.
4. Prepare to Pivot
“The key is to remember that the plan you have thought up for your restaurant is not the plan that will bring you success,” said Brian Stephens, CEO of Tandy-Stephens, Inc. “And I am not talked about ‘Plan A’ and ‘Plan B.’ I am talking about ‘Plan K.’ Our restaurant is much different than we had initially envisioned even with good market research. We did not hold onto that initial plan. If we did we would have been closed within a year — just one more unsuccessful restaurant — Tandy’s Top Shelf — white tablecloths and cloth napkins. We shifted gears and changed our approach in response to what the market wanted — no more tablecloths — not Tandy’s Top Shelf — but [it became] Tandy’s Pub and now Tandy’s Pub and Grille with an outside Tiki Bar in the warmer months.”
5. Location, Location, Location
“[It] may seem obvious but location for a restaurant is critical,” said Balis. “Location means understanding who your core customer is and how they will use you (walk, delivery, drive/park), making sure it has the right visibility, signage, access, parking, etc. Convenience is the number one reason for visiting restaurants. Visit would-be competitors, and not just serving similar food, but all [the] restaurants in the area. Everyone is a competitor as we all fight for market share, or as we say, ‘a share of stomach.’”
6. Adapt to New Technology
“The restaurant industry has historically been slow to adapt to technology. Restaurants that have began to automate and leverage the power of technology are showing much greater satisfaction and consistency for their restaurants which correlates with the bottom line,” said Eric Burns, former restaurant owner and now CEO of Gazella, a Wifi marketing platform. “Often the reason for this, is they simply have a way to communicate with the customer about their satisfaction and experience. For example, at Gazella Wifi-Marketing, many of our restaurant customers ask the question ‘How was your visit?’ after a customer has logged onto their guest wifi network. By simply leveraging technology to connect with the customer [who] may never [have gotten] the chance to have their voice be heard, the restaurant can now correct unsatisfied customers, or grow on their strengths.”
7. Consistency Is Key
“Good food goes without saying but producing it consistently so that if a guest orders an item it will taste the same every time is more challenging – it is partially what contributed to McDonald’s success,” said Balis. “Aside [from] convenience, restaurants are visited for the experience — this means the greet should be shortly upon entering (either counter or host), the service, the décor, the ambiance, the music (and levels), lighting above tables and around restaurant, timing of the food, and exit (customers leaving when they want to leave).”
In need of restaurant loans to get your business off the ground? Contact Seek Capital today to learn how we can get you the financing you’re looking for.
8. Time Your Expansion
“People always ask me, ‘how do you know when you’re ready to expand?’ [The answer is] when you no longer need to work in your own restaurant — no cooking, no serving and running smoothly with a manager,” said Ed Lee, co-founder and partner of Wahoo’s Fish Tacos. “You can’t be at multiple places at the same time … If you cannot walk away from your first location for a couple of months while you build out the next one and you’re no longer needed at your original restaurant, you can expand. Expanding from the first to the third was one of the hardest times in our professional life, [but] because there were three co-founding brothers, we were able to expand our brand. We took a break after our third location so that we could review all the problems we faced and streamline the expansion.”
9. Use Out-of-the-Box Marketing Solutions
“We can attribute our 30 years of business to serving food we would cook for our own families,” Lee continued. “We love working with brands we love like Vans, Quiksilver, and have a presence as events like the U.S. Open of Surf, Coachella, X Games, and more to increase our visibility. The stickers and memorabilia in our stores are part of who we are as a company. We follow the action, and that’s where we find our most dedicated fans, which has included athletes and celebrities over the years. My brother Wing is good at networking and it’s become a big part of our business. Plus these relationships make work so much more fun!”
10. Slow Down — Sometimes
“There’s a time and a place for being hard on yourself. Wanting to be better and do better is one thing, that’s healthy, but knowing when to turn that off is also key,” said Butolph. “One of my daily rules is that I listen to my body. I know how hard I can push myself so it is really important for me to recognize when I need a break, or when I need sleep, or when I just need to unwind and spend time with the family … Work can wait, it’ll be there when I am energized and ready to focus on it. Taking a day off to do what you want, sleeping in occasionally, taking last-minute vacations — this is all okay, as long as you work hard and have your systems in place. It’s important to listen to your body and family, taking the time you need when you need it. “
More From Seek
- How Does My Personal Credit Affect My Business?
- Business Line of Credit vs. Loan: Which Is Right for Your Startup?
- 10 Tips For Female Entrepreneurs From Women Who Founded Their Own Companies
- 5 Best Business Podcasts to Inspire Your Inner Entrepreneur
Photo credit: Jacob Lund/Shutterstock.com