A lot of people have a passion for food and for hospitality. Naturally, they then dream of opening a restaurant. Sitting in a cubicle for 30 years just isn’t appealing to some people but the thought of the exciting and fast-paced world of a restaurant is very intriguing.
Yet, you have to actually make money. Is it a worthy investment to open a restaurant? Many fail so what is it the successful ones are doing right? Some restaurants start out as small businesses and evolve into a sort of culinary empire. So, there is money to be made in restaurants.
In this article, we will go over some of the ways that a restaurant can be successful and make for a good investment.
1. Outsource as Much as Possible
There are going to be a lot of things that are best done outside the restaurant. You’ll be running on some very thin margins and labor costs can eat away at those profits very easily.
Use a service like Vetted Accountants to get matched up with a bookkeeper so you aren’t paying somebody a full-time salary to get the books done. Then, have a company that will wash and supplies all of your linens and other whites like chef attire for the line cooks.
Even having a cleaning service come in at the end of the shift and give the restaurant a thorough cleaning will save you money. And it will be done well instead of half-heartedly by a tired back-of-the-house staff.
By outsourcing, you are actually in much better control of these expenses than if you had a staff that did these jobs.
2. Do Your Research
Before you open the doors to a restaurant, you need to do some market research to see if there is a demand for what you want to do. You’re only going to succeed if there is a market for your restaurant and people looking for what you do.
You should learn about the demographics of the area where you would like to open. See how much money they typically spend on going out to eat. And also what type of restaurant they usually spend money going to.
For instance, if it looks like the area where you plan to open has a lot of working-class families that spend most of their entertainment money on fast food, then opening a casual, family-style restaurant with a low-priced menu is the way to go.
On the other hand, if the locals generally travel to eat out at fine dining restaurants because there are not many choices in that area, then going for that level is a good idea.
3. Be Conscious of Food Costs
Make sure your chef is not looking for a vanity project and is concerned about how much food costs are. Keep your cost of food to around 25% of your operating expenses and you can make a decent profit. With enough volume, you can actually make quite a bit of money if those food costs are low.