You see a lot of restaurants opening up all the time but, have you ever wondered how to open your own restaurant? Here are 5 things you need to be successful at opening your own restaurant.
1. Never Start Without The Big Three: A new restaurant will not succeed without a great chef, a terrific location, and an awesome concept. They are all intertwined together. Your location should perfectly fit your concept. Your chef, or “talent,” should fit your concept, otherwise you’ll always have to deal with the most common word in the restaurant business: Drama.
Some new owners will say, “Location doesn’t matter because I’m going to make a destination restaurant.” In most cases, people say that when they have a terrible location. It’s hard to become a destination if you don’t have a great location to start.
Being easily accessible is everything. The more accessible you can make your restaurant, both in terms of location and in a broader sense, the better your chances of success are. Take a look at the most successful restaurants: They’re the most accessible in terms of location, brand, and price point. Quick casual restaurants are booming since they’re easily accessible on all levels.
2. Always Overestimate Your Capital Needs: Make sure you plan on having seven to 10 months of working capital from the start. You’ll be shocked by how fast the expenses add up and how long it takes for a new place to grab hold and get legs/regular customers.
Most new restaurants see a huge downswing in business after the opening’s starting excitement. That’s when capital is critical. A lot of new restaurant owners start out with excess cash and begin to blow it since they think the initial business will last forever. That’s the reason most new restaurants go out of business. Never let the starting success go to your head. Success is determined by how many years you are open not by how many months you are open.
3. Never Be Cheap With Customers: The most crucial expense you will have is expenses that adds value to the guest. Think of what percentage of your revenue you’ll put into improvements that affect the customers and constantly enhance their experience.
Be sure to spend as much money as you can on the guest experience. Spend your money on the guest already in your restaurant, because that’s the best way to create genuine positive word of mouth and hence will save on marketing cost.
4. Create A System Of Operations: Failing to put any kind of system in place is one of the biggest mistakes a new restaurant owner makes. Most new restaurant owners don’t want to come off as being “corporate”; to them, the “C” in the word “corporate” is like the “Scarlet Letter”. To use these systems would be the same as selling out and becoming a chain. Well, there is a reason chain restaurants are so successful: Every one of them began as a new restaurant. Each had a great chef, a terrific concept, and an awesome location, and they created systems that allowed them to build guest demand, keep key people, and make money. Otherwise it would have been next to impossible to open two locations, much less 200.
Organization doesn’t have to kill the flow of creativity. Putting great systems in place gives you even more freedom to be creative.
5. Generating Funds: All these previous tips are helpful, but let’s face it, funding is probably the most important intial step you’ll have to take. If you have your own funding in the form of cash or investors – you’ll be keeping everyone in the loop and everyone voices an opinion (depending on the contracts you’ve created in each circumstance)
Other options for funding are to get your own direct funding. This is where KLC Financial can help. There are many options and many ways to secure funding. Talk to one of our agents to see what will be good for you and your situation. You can begin your funding inquiries and process with us here:Contact KLC Financial For Funding
Or if you prefer, you can reach out to anyone on our team of experts: KLC Financial Team
We look forward to learning more about your Minnesota Restaurant!