Few industries have as much turnover as the restaurant industry. It’s common to see three or four restaurants come and go in a single building over the span of just a few years. But it can also be one of the most profitable industries. So what’s the key to being successful?
Competition in the Restaurant Industry
Generally speaking, competition is extremely high in the restaurant business. While there are certain small towns that might have just one or two places to eat, the average city is going to have dozens (if not hundreds) of places for customers to choose from. What are you doing to stand out and be successful?
Before you can even think about operating a restaurant and establishing a competitive advantage, you have to recognize what the marketplace wants. In other words, what is it that draws them to a particular restaurant?
“We eat for pleasure as well as sustenance,” points out Devra Gartenstein, who has owned multiple small food businesses in her career. “A restaurant can gain a competitive advantage by either building an appreciative following that is passionate about a particular style or a quality of food, or by offering basic sustenance in a way that is especially convenient or affordable.”
How you establish a competitive advantage obviously depends on numerous factors – like existing competition, location, demographics, price point, resources, etc. – but don’t forget to establish a strong and firm foundation that’s built on these principles.
6 Tips for Being Successful
It’s hard to come up with a perfect recipe for success in the restaurant business. There are so many different aspects that affect profitability and longevity. However, if you do the following, you’ll greatly increase your chances:
1. Get the Food Right
It all starts with the food. While there are lots of different factors that come into play, it’s impossible to be successful if the food isn’t good. You can start a restaurant without having any business experience and eventually acquire the skills you need to build it into a business, but you can’t start a business without any food skills and just hope that it’ll work out. Don’t launch until the product – i.e. the food – has been perfected.
2. Pick a Good Location
Location is a key factor in restaurant success. While there are exceptions to the rule, most highly successful restaurants have visible, easily accessible storefronts.
This is one of the reasons it’s always best to launch a restaurant in a market that you’re familiar with. When you’ve lived somewhere for a few years, you begin to see where people spend their time, how traffic and parking work, and which areas of town are busy on which days/nights, etc.
3. Hire the Right People
You may be the world’s greatest chef or a master of business and marketing, but you can’t achieve the sort of results you want without the right people on your team. From the kitchen staff down to the wait staff, hire people who are loyal, honest, and personable.
It’s easy to get annoyed with the challenges of the hiring process and rush to fill openings, but be patient. It’s better to be short-staffed for a couple of weeks than to make a bad hire.
4. Manage People Well
It doesn’t stop with hiring. Once you onboard your staff, you have to manage your people well. Whether in the kitchen or the dining area, your staff will perform better at their jobs – and be better representatives of the brand – if they know you support them.
One key ingredient to managing people well, particularly in the restaurant business, is to master the art of scheduling. Because scheduling is typically too challenging to handle manually, you’ll need an automated solution like Humanity to help you streamline the process.
5. Get to Know Your Customers
It’s one thing to send out a survey and collect data from your customers. It’s another for you, as the owner, to actually get to know your customers in a personal way.
If you study some of the most successful restaurants in your area, you’ll find that the owner doesn’t stay in the office or sit at home. No – the owner actually mingles with customers and helps in a hands-on manner. You should do the same whenever possible.
6. Drive Word of Mouth
You can spend thousands of dollars on billboards, TV advertisements, radio spots, sponsorships, Facebook ads, SEO, and social media, but nothing will ever be more profitable for your restaurant than positive word of mouth.
People trust the opinions of people – not advertisements. The more you can drive positive word of mouth, the more you’ll see your business grow at a sustainable rate.
How do you drive positive word of mouth, you may ask? In addition to providing delicious food, you also need to make the dining experience memorable. Discover something that people will remember long after they’ve left.
Find Your Edge
What sets your restaurant apart from the competition? What’s the one thing you do really well? Why do customers choose to spend their money in your restaurant, versus the one across the street?
The more questions like these you ask, the better you’ll understand your restaurant and be able to utilize your strengths. And at the end of the day, that’s what it takes to be highly successful.