Opening any business is a daunting undertaking, but restaurants just might take the cake when it comes to complexity. To make your life as a new restaurateur a bit easier, here’s 5 important things to remember before opening day.
1. Be Flexible
Any new business is going to start out in at least some state of flux, and a restaurant is no different.
No matter how much planning and preparation went into opening up shop, there are going to be surprises along the way. Business spaces change, staff come and go and shift roles, and business goals and needs will be reevaluated and change.
Due to all of this, it is imperative that you and your business always be flexible and plan for sudden change.
There are a number of ways to stay flexible. Hiring a staff experienced in multiple areas of expertise will ensure that they can shift between roles as needed to accommodate a changing staff structure. Creating an initial business plan that is leaves lots of room for change from the outset will reduce the complexity and stress of adapting it to unforeseen circumstances.
Another important place to stay flexible is in the technology you utilize. There are plenty of pieces of restaurant tech that can assist in this, but a cloud-based point of sale system is a good place to start.
With features like automatic software updates and integration with partners for reporting, payroll, and more, a cloud-based POS helps to plan for change whenever and however it happens.
2. Market Properly
With a commonly-cited 60% failure rate of restaurants, succeeding in the restaurant industry boils down to more than just cooking the best food in your area. Be it a full fledged restaurant or a cloud kitchen, one key to success that many new restaurants often forget is paying proper attention to their marketing.
In today’s restaurant industry landscape, avenues for effective marketing are near limitless. There are of course the older industry-standard marketing techniques such as holding a grand opening, advertising in newspapers, and sending out mailers to residents in your restaurant’s area.
Newer, more tech-focused methods have quickly become the new norm, however. No modern restaurant should be without its own website, and online newspapers and email advertisements have all-but-replaced their analogue counterparts.
The real change, however, is in how social media has reinvented the way restaurants market themselves.
Platforms like Instagram and Facebook are a goldmine of advertising potential, affording you the ability to share mouth-watering images of your menu items and news about deals and offers directly with thousands of potential customers instantly.
If you’re not social media-savvy yourself, you don’t have to go it alone: hiring a marketing manager who is well-versed in social media can relieve the stress of managing social media advertising and provide an invaluable marketing asset.
3. Keep Costs Low
This doesn’t mean your restaurant should look, feel, or be low-quality. It is of course important to invest in quality equipment, supplies, and decor, but it’s easier than you might think to overspend on the essentials, and even easier to invest in things that aren’t really necessary for a new restaurant.
Brand new kitchen equipment is not a necessity at all, as used equipment is always available at a fraction of the price. Splurging on extremely high-end dishes and flatware is another common pitfall, as is outsourcing the creation of things like websites, flyers, and other marketing materials that can all be made cheaply and well enough in-house.
4. Keep in Compliance
When working in the food service space, your business is subject to more legal and safety regulations than most.
There are plenty of local, state, and federal licenses and permits you’ll need, as well as food and kitchen safety laws and regulations to follow to operate a restaurant.
Licenses and permits required for a restaurant include:
- Business License
- Certificate of Occupancy
- Sign Permit
- Employer Identification Number
- Food Service License
- Building Health Permit
- Employee Health Permit
Depending on where your restaurant is located, this list is by no means exhaustive. For this reason and more, it’s a good idea to consult a legal professional familiar with these laws to be certain your business is compliant with all requirements.
5. Choose the Best Legal Structure for You
Another area where it’s best to consult legal counsel is in your choice of a legal structure.
Different types of restaurants benefit from different legal structures, so it’s important to give serious thought to this decision. It will affect many different aspects of your business, from how your taxes get filed, to your liability in the event of a lawsuit against your restaurant.
Restaurants (especially larger ones) often tend to fall under the “Corporation” structure due to the protections from liability it affords, but this isn’t always the case. Other legal structures to consider include:
- Sole Proprietorship
- Limited Liability Company (or “LLC”)
- S Corporation
Again, this can all get quite complicated, so it’s best to consult an experienced legal professional when making this decision.