Starting a restaurant is profitable if the right steps are taken. Research shows that 15.5% of UK businesses in the hospitality and catering sector fail every year. The complex nature of running a business requires the harmonisation of different aspects to ensure its success. This often leads to costly mistakes that could undermine your restaurant’s success. Therefore, it is vital to know these common mistakes to prevent or avoid them. Below are some common mistakes you should avoid when opening a restaurant.
1. Not creating a business plan
A business plan, in simple terms, is the roadmap of your business. It helps put your business into perspective, identifying potential challenges, projecting profits, and outlining the short-term and long-term goals of the business. Despite its importance, several new restaurant owners make the mistake of not creating one! A business without direction is certain to fail. Although time-consuming, creating a business plan is worth the effort to ensure your business’s success. If you are unsure of what to incorporate in your plan or to ensure its effectiveness, you should consider hiring the services of professionals.
2. Underestimating your operational costs
A common mistake most new restaurateurs make is underestimating the operations involved in running a business and the costs. There are several components you must consider when setting up a business, such as your suppliers, maintenance, employees, kitchen and bar supplies, and so on. By underestimating or not knowing the costs, you risk investing insufficient capital into the business, which can hinder its success. Or you may use all your initial capital to set up the restaurant without saving some for a rainy day. To avoid this, you should create a business plan (as mentioned earlier) and, most importantly, a budget. A budget helps you manage costs, predict profitability, and prepares you for unforeseen costs.
3. Using a complicated menu
What most restaurant owners seem to miss is that the menu is not only a sales brochure but also a significant marketing tool. Through your menu, your customers get a sense of the personality of the restaurant and leave an impression on them. This means various elements such as design, visibility, and accessibility are important when putting up your menu. A complicated menu makes it difficult for customers to look through to place an order, causing you to lose out on potential sales and profits. Additionally, complicated menus can overwhelm customers, leaving a bad impression. You can prevent this by using menu engineering to create a simple yet unique menu concept your customers would enjoy. However, work with your chef to ensure it is functional and within their capacity.
4. Working with under or untrained staff
Your restaurant is only as good as its employees. Imagine your waiters spilling drinks and food on customers or waitresses forgetting orders. It is safe to say that your business is doomed to go under. This is why you need to ensure your staff is well-trained. Be sure your host/hostess and waiters/waitress are trained in the right customer service processes and tips to ensure your customer’s satisfaction. You should ensure your chefs are up to code according to various food safety regulations and other statutory requirements.