STARTING A RESTAURANT (Top 10 Things You Need To Know)
By The Esendemir Sisters
We received many questions regarding starting and running a successful restaurant business. Here is a summary of the top ten things we believe (from experience) are necessary in order to start and operate a successful, profitable restaurant concept. Some of these are things we wish we knew before we started Flatbread Grill and some of them we already knew starting the business. Either way, this is by no means a definitive list. We could write a hundred blog posts on each of these individual issues, but for now, let’s just sum it up to get you all started.
We will delve further into these issues and offer up our own experiences with each one of them in forthcoming blog posts. We will also be writing up some specific blog posts focused on brand identity and marketing. If there is anything you want to know specifically, please don’t hesitate to ask. Please feel free to leave us comments, questions and feedback down below.
1. A GREAT LOCATION
Real estate is king in the restaurant industry. Choose a great location and 99.9% of your marketing is already done. Choose a bad location and your chance of failure is high. Great locations are difficult to come by in some really competitive markets, but you need one, so take your time scouting. No matter how great your food is or how unique your concept, if your location is not convenient, lacks adequate parking, is completely out of the way and offers no visibility- consider your chances of failure high. A strong location offers adequate parking, high visibility and strong foot traffic. Having a great location can help you bring in a new influx of customers on an almost daily basis. Having a bad location will mean you have to rely very strongly on word of mouth and outbound marketing to raise trial and awareness among new customer prospects. We didn’t do any research or understand real estate when we rented our first location for Flatbread Grill. We spotted a bland building with an empty ditch and had a vision for a big, beautiful patio without understanding the market. We were fortunate enough to build a loyal customer base and thrive on word of mouth, but we didn’t have the prime visibility we would have liked.
2. A WELL-ROUNDED TEAM
Opening up a restaurant requires more than just food knowledge. You need to dissect how your kitchen will be laid out so you can serve as many customers as possible during your rush hours. On top of that, you need to dissect and truly understand how the back of house will integrate with the front of house, while also understanding simultaneously how your customers will order their food, receive their food and enjoy their experience. Hire a great team. Don’t slack. Find a great restaurant equipment specialist who can walk you through a proper kitchen layout, as well as an architect and contractor who understands your concept. Bringing in a building engineer will help you pinpoint electrical, HVAC and plumbing issues, as well as help bridge the ventilation / exhaust system issues that arise. When we were building out our first restaurant, we didn’t have a solid team so we encountered many setbacks and delays.
3. A UNIQUE CONCEPT
The restaurant industry is filled with copycats. Create your own unique concept. Find a niche and fill that instead of being a second rate version of another concept. Take the cuisine you love and are the most passionate about and make it accessible to as many people as possible. Don’t stick to the status quo and don’t follow trends. Food trends come and go. Authenticity and quality never go out of style. Become the best version of your own concept and differentiate yourself so you can compete in almost any market, no matter how competitive. We built Flatbread Grill using recipes we grew up with and tweaked them the way we liked to eat. Originally, when we strayed from serving traditional Turkish cuisines, we were mocked and made fun of, but now, the same restaurant owners that mocked us have tried to imitate our concept.
4. AN EXCELLENT PRODUCT
Don’t skimp on quality and don’t take short cuts. Dedicate yourself to delivering an exceptional experience and an exceptional product. Again, the restaurant industry is fiercely competitive. If you want to stand out, the best way to do this is by committing yourself to outputting great work. Don’t serve anything to a customer you wouldn’t serve to a family member. This ‘family philosophy’ has been a part of our culture since we started and we stick to it no matter what. Whether the cost of tomatoes goes up one week or the cost of chicken rises- we don’t take shortcuts. We deliver a consistent product and this drives our customer loyalty. Keep your kitchen clean. Keep your bathroom spotless and your front of house looking like a palace. Everything from the food you serve to the way you take orders is a representation of your product. Don’t flake on any of it.
5. OPERATIONAL EFFICIENCY
Profit margins are very low in the restaurant industry. Don’t believe the hype. Alcohol can be marked up to bring in a greater return. If you want to run a profitable restaurant, start by streamlining your operations and dedicating yourself to running a consistent operation. Watch your supply chain and manage your inventory. Food costs can creep up on you and they are ultimately where most restaurant operators lose money. Learning how to operate an efficient, lean restaurant was a learning experience for us even though we grew up in the industry.
6. AN ACCURATE ACCOUNTING SYSTEM
Managing your payroll, food costs, profit and loss statements can be aggravating. Setup, implement and stick to an accurate accounting system. Keep track of all your paperwork and file all your receipts. Track your merchant service accounts to make sure all deposits are being reconciled in your checking account. Don’t let the little details slip past you because they will add up and become bigger problems in the future. It’s worth investing in a bookkeeping system and hiring an accountant who can help you manage your books. Many restaurant owners start their business with no prior accounting knowledge. Strong sales will mean nothing if you cannot keep track of your finances. In the beginning, we were so busy filling orders that we were distracted from keeping track of our expenses and inventory costs. We had very high volume and sales that overwhelmed us. We didn’t know how to manage it properly.
7. STRONG LEGAL TEAM
Find a great business lawyer and trademark attorney you can trust. Find someone who will advise you, guide you and be honest with you. We couldn’t afford a legal team when we first started and only realized how important it was as we began to think about expanding.
8. OPERATING CASH FLOW RESERVE
Consumers’ dining out habits change according to the seasons, economic conditions and weather. There will be times when you experience a rougher than normal winter, natural disasters, falling stocks and high gas prices. All of these affect consumer-spending habits. Be mindful of any financial downtime for the business and make sure you have at least 6 months operating cash flow that can help get you through these tough times. Invest in business interruption insurance just in case bad weather or a natural disaster prohibits you from operating the restaurant. Make sure you have enough put aside for rent. Avoid debt at all costs. We opened during the height of the recession and we were not prepared for the economic downturn. We had to bootstrap and make personal sacrifices which meant not paying ourselves a salary (this is common for many start-ups).
9. MARKETING PROWESS
Many restaurant owners start restaurants because they love food or they know how to cook. Serving great food is only a small part of the equation. Can you sell the sizzle to potential customers and earn their devotion and dedication? Can you raise trial and awareness and pull new customers in weekly? Can you maintain high retention rates for your customers? This is where marketing comes in because you need to know how to sell the great food you cook. Hire a freelancer to help you out if you are not creative or at a loss for how marketing works. Invest in a great graphic designer and utilize technology and social media. Do something everyday to ‘market’ your restaurant. Create an army of customers who can market for you. Build the buzz and keep it going. Don’t just wait for people to find you and cross your fingers that they will return. Start an email list. Talk to your customers. Pay attention to them so you can learn how to market your restaurant. All the answers and research you need are right there in your front of house. Statistics will only reveal so much. The brand experience is created within your restaurant and leaves with the customer. Give them something to talk about and your marketing job becomes a little bit easier. Make every single customer touch point memorable and let it reflect your brand identity. We have and still rely on observing the customer experience as our best marketing research. We pay attention to all the small details and focus on keeping our brand identity tight and memorable.
10. THE RIGHT ATTITUDE
Restaurants are physically, mentally and emotionally draining. You are responsible for not only the physical wellbeing, but emotional satisfaction of hundreds and eventually thousands of people from all walks of life. Everyone that walks into your restaurant brings their own individual values, their own attitudes and their own perceptions in with them. You have to keep in mind it is impossible to please every single person but you have to try your absolute best to make them happy and give them the best experience possible. Doing this day in and day out can be exhausting. There will be days when you will wonder why you are doing it, but you have to maintain perspective. In the middle of a hectic lunch rush on the hottest day of the year when your kitchen is equivalent to a scorching oven, the line is out the door and tables are not being turned around fast enough- you will probably want to take your apron off and throw it away and walk out. You have to remember why you started your restaurant when things get tough because it’s your passion and attitude that will keep you going. There were many tough days for us working in the kitchen and in the front of house. We lost friends, experienced criticism and gave up our personal lives to serve thousands of customers, but we never forgot why we started and that’s what kept us going. We maintained focus and kept hustling no matter how difficult the circumstances played out. Our partnership was built on respect, integrity and loyalty.