If you told someone that they could spend hours and hours working on a project, put all their creativity and effort into it, and it would still have a 30% chance of failure, most people would think twice. Despite that risk, so many people take the chance to make their dreams come true. In fact, the restaurant industry outpaces the rest of the private sector as an opportunity for women and minorities to thrive as business owners.

As someone considering opening your own restaurant or who already owns a restaurant, you deserve the best resources. Your journey can be different from the nearly one-third that go under within the first several years if you make the right moves. Below, you’ll find seven tips for restaurant success, as well as an excellent opportunity to network and prepare your business to succeed in the upcoming year.

1. Find the Ideal Location

A chic downtown pad for lease may be ideally suited for your target clientele, but the rent could price it out of consideration. It’s okay to go a little off the beaten path if you’re confident in your ability to market. If you intend to rely on take out and delivery, then that opens up areas further from public transit and city centers.

You also need to consider the state of commercial real estate in your area. For example, a “fixer-upper” will come with many problems, especially if it’s owned by an absentee landlord who isn’t interested in investing more in the property. On the other hand, if you intend to purchase the building, such a property would likely require much more capital to get to a functional condition.

There’s no hard-and-fast rule for when you should lease vs. when you should buy the property. If you can purchase the building for a great price, you should certainly consider buying it, but bear in mind that you’re on the hook for all repairs and maintenance costs. On the other hand, if you were to lease the property, you may see your rent go up year over year, especially if your business is successful and the landlord wants to profit from the business you’ve worked so hard to establish.

If you choose to lease, make sure you review the contract carefully and study what the property was used for in the past. A great landlord is one who has managed properties for restaurants before and responds quickly when a need arises. An absentee landlord, on the other hand, might promise low rent but be impossible to contact when it comes to repairing vital infrastructure that shouldn’t be your responsibility.

2. Secure and Budget Your Capital Wisely

Feed the Soul Foundation understands that restaurateurs must raise much-needed capital for opening and expansion. To succeed, take the time to put everything in order before your restaurant launches. Specifically, ensure you have three things at the ready before you commit to your new venture:

1.     The capital to open the restaurant and develop your infrastructure

2.     The capital to provide a buffer so a lean season doesn’t put you out of business right away

3.     A plan to use that capital effectively and efficiently

You can reduce some of the tremendous stress that comes with running a new restaurant just by having the right capital and knowing where it goes. Even better, having a plan for using that capital is just what potential investors like to see.

Restaurant success is a matter of careful planning and dedicated execution. While less common than loans, grants are a great resource for the prepared restaurant owner. Feed the Soul Foundation has an incredible grant program that helps new restaurants with a one-time grant and ongoing educational resources that make some of the toughest parts of running a restaurant just a bit easier. The best place to start is with this guide on how to effectively apply for a grant effectively.

Finally, make sure you have an exit plan in place. Some things are outside of your control, so even if you make all the right moves, you may find yourself with a struggle on your hands. Take the time to run the business through a corporate entity so that you’re not personally responsible for any debts left over from the business if things take a turn.

3. Keep Your Books Clean and Accurate

Accounting for restaurants includes tracking payroll and labor expenses, ensuring that all taxes and fees are appropriately paid, and reporting sales revenue. These are all essential parts of effectively managing your business and need a lot of attention.

Whenever you reconcile your accounting, you ensure that the money in your business’s bank account matches what should be there. This process is more than busywork, as it lets you do many other things at the same time, including:

  • Gauge your labor cost so that you can schedule appropriately
  • Track your inventory expenses to prevent theft and optimize your purchases
  • Assess your product costs to adjust menu prices as needed
  • Discover fraud and unauthorized transactions in your accounts
  • Collect sales taxes and furnish business taxes to the IRS

The list goes on. Proper accounting is a skill like any other that requires practice, training, and dedication. Spending time conducting your own accounting is also an expense, as you won’t be free to do the innumerable day-to-day tasks that your restaurant demands of you to function well.

You can try software such as QuickBooks, as it has numerous features well-suited to small businesses that are finding their footing. As you continue to grow, however, you may need more assistance than even powerful software can provide.

Accountants can help your business when you no longer have the time or expertise to manage your own books. The right accountant will provide far more value than their cost, while the wrong one may create big headaches for you in the future. Seek references and only work with those that you’re confident can help your business make it to the next level.

4. Manage Your Marketing Strategies

Restaurant owners have to wear many different hats, and one of the toughest jobs for many people like you is marketing for restaurants. A restaurant needs to stand out, and today, that means digital marketing. Viral marketing, securing impressions on YouTube and other digital platforms, and getting positive reviews from influencers on social media are ways to be seen.

The key to digital marketing is making sure it’s targeted. One of its unique features is the ability to select specific demographics, even down to age groups and income levels, so that your audience is almost exclusively the people most likely to visit your restaurant. There are also veteran digital marketers you can work with to create effective ads.

While marketing restaurants may have changed in some ways, building loyalty still remains No. 1 when it comes to securing your future. Effective loyalty programs encourage repeat visits by rewarding your guests for choosing you. The more often you see the same faces, the more you make them feel welcome and appreciated for each visit. There’s no better sign of a restaurant’s health than when you see the same faces week after week.

5. Manage Staff With Sensible Human Resources

Regardless of the concept, a restaurant is only as good as its staff. Hiring the right people, developing their skills, and retaining your veterans are the best ways to have a robust team. The first step is hiring restaurant staff, so be sure you know what to look for during interviews.

To increase your chances of hiring the right people, ask questions that will find red flags as quickly as possible. Focus on the most important things, such as work ethic, avoiding drama, and having a personality. Don’t expect to see the full picture right away, but go with your gut and don’t bring on anyone who makes you think they can’t be trusted.

Staff development and reducing turnover go hand-in-hand. Often, the best reward for your key employees is the chance for more responsibility. Teach them new skills so they feel prepared and ready to help when another team member needs assistance. Praise them publicly for excellent performance and reward them with perks and small bonuses when possible. When providing constructive criticism, do so privately to avoid embarrassment, then congratulate them when they improve.

If you develop your staff correctly and create a healthy work environment, the best staff members will stick with you. More than a third of those in the restaurant industry are under 25 years old, so take the time to develop the employees who will stay with you for many years.

6. Design Your Menu With Guests, Staff, and COGs in Mind

Your menu isn’t about you. True, your personality and tastes will come through in the food you choose to make, but ultimately, if the guests don’t enjoy it, you’ll be left with empty tables. It’s essential to listen to those who come to your restaurant and discover trends you can use to your advantage. Look at what sells and solicit feedback through surveys and one-on-one conversations with your guests. You can also stay ahead of the curve with the latest research about upcoming trends.

One area in which owners can go overboard is complexity. You may have three brilliant dishes in mind that each would be great sellers, but if there’s no overlap between them, they’ll multiply the challenges in the kitchen. Simplicity is king when it comes to restaurant excellence: simple processes, simple layouts, and simple designs. If your chefs have to learn 50 different menu items for dinner, they’ll be jacks of all trades and masters of none. If they have to learn 12 only, you’ll see quality go up, waste goes down, and there will be less stress all around. Simpler menus also make guests feel better by preventing decision paralysis.

7. Keep Planning Your Next Move

As a new restaurant owner, you’ll be constantly challenged to balance working in your restaurant against working on your restaurant. Being on the line or in the dining room is essential for running the day-to-day operations, but it also lets you experience how effective your procedures and staff are. Taking time during the day and securing whole days during which you can take a bird’s-eye view of things will pay dividends. To make the right calls, ask yourself several questions:

  • When I expand, should I change the concept to get another part of the market, or should I use the same idea and secure a new location?
  • How can I enter the catering market, and how can I grow my operations there?
  • What is the latest market research saying about new trends in the industry?
  • What are my current guests saying they like and what they’d like? What kinds of complaints am I receiving?

Restaurants are like sharks: They need to keep moving to stay alive. If you get stuck too much in the present or focus too much on the past, you’ll miss out on opportunities for the future. No matter what else is happening in your restaurant, never lose sight of what you need to do next.

Getting the Support You Deserve

Most new restaurant owners don’t know how to put several of these tips into action. As a result, many struggle to turn a profit, while others fail and go out of business. Without the support, you’ll face many challenges that could make success more difficult to come by. To help prospective and new restaurant owners like you, Feed the Soul Foundation is hosting the Global Culinary Conference in Houston, TX, on January 22-23.

Dynamic keynote speakers cover each of these points, with sessions including how to access capital, find the right commercial lease, keep your books in order, create contract proposals, and more. It’s also a unique opportunity to network with others in the industry facing the same challenges you do, with a selection of Master Classes taught by the best in the business to boost your culinary business. Learn more and purchase tickets here so you’re prepared to run a successful restaurant in 2024.