Starting a restaurant business is no easy Feat. You’ll need to business plan for restaurant’s success, know how to open a restaurant business and then market it right. Don’t worry I’ll help you out!
Now may not be the best time to start a restaurant business with the lockdown and all. However, If you’re going to take advice, take it from someone who’s kept their restaurant afloat through this crisis.
My family owns a mid-sized seafood restaurant and a café in a small-ish city on the outskirts of Cairo. Before the Corona crisis we had people traveling for hours from other cities to eat at our joint.
I also happen to have a Bachelors in Business Administration, Stenden University – Holland. I majored in International Hospitality Management.
So we won’t only be discussing my experience here on how to open a restaurant business. We’ll discuss the textbook academic approach as well.
When the lockdown hit things went south for a while. However, we adapted and managed to keep things afloat. Moreover, we didn’t have to downsize anyone, we’ll get to the how in this article too.
The first lesson you need to keep in mind, when you start a restaurant business, or any business for that matter. Either adapt to your environment and circumstances or you will inevitably fail.
Before we move on, here’s our handle on facebook (@submarine.egy) so you can see our page for yourself. And hey if after all this is over you ever happen to be in Egypt, drop in and we can meet in person. We can discuss all about how to open a restaurant business and succeed face-to-face!
Alright enough about me and my qualification, let’s get on with it, shall we?
I’m going to take you step by step from the planning phase, to setting everything up, to welcoming the first guest.
This article about having a business plan for your restaurant, will apply to both restaurants and cafes as the fundamentals are the same.
- How To Business Plan For Restaurant Success?
- An Executive Summary:
- Overview of The Business:
- Business Plan For Restaurant – Operations Plan:
- Market Analysis:
- Products And Services:
- Marketing Plan:
- Competition Analysis:
- Projections & Forecasts:
- Financial Plan:
- Location Is Everything When Starting A Restaurant Business
- Starting A Restaurant Business – Design, Aesthetics, And Atmosphere
- Another aspect you need to factor in while in the designing process is hygiene.
- Also you will need to look at the placement of the equipment in the kitchen.
- What kind of atmosphere would you like to offer your guests?
- How To Open A Restaurant Business: Supply Chain, Staff, And Systems
- Supply Chain
- A cash business is where you don’t store much inventory and buy your needs on a daily basis.
- You will need to also have suitable storage facilities for the various ingredients you will buy.
- How Many Staff Do You Need?
- The question is, do you understand why this is so important?
- Facilities serving class D guests usually offer “budget-friendly” items on their menu and thus the income per cover is not so high.
- What Kind of Staff Do You Need In Your Restaurant Business?
- Systems When Starting A Restaurant Business
- Start A Restaurant Business With The Right Marketing
- Offline Marketing When Starting A Restaurant Business
- Online Marketing When You Open A Restaurant Business
- Having A Website & Starting A Restaurant Business
- How to Open A Restaurant Business With A Strong Social Media Presence?
- This means you need to offer them content that can give them something to enjoy and digest.
- So don’t be afraid to experiment with your restaurant marketing and always keep it fun and interesting.
- How To Open A Restaurant Business Successfully With The Help Of Food Ordering Applications
- How To Open A Restaurant Business With Effective Strategic Marketing Techniques?
- Starting A Restaurant Business – Pre-Opening, Soft Opening, Official Opening
- In Conclusion
How To Business Plan For Restaurant Success?
The first step in any business is the plan and starting a restaurant business is no different. So how do we go about creating our business plan for restaurant success then?
A business plan across most industries is pretty much the same. Well includes the same sections, is what I mean. These are:
An Executive Summary:
This can either be part of the plan or as a separate document. It all depends on who will see it. The most common is one to two pages in restaurants but I’ve seen 10-page executive summaries.
A summary that long is not best-practice though. The purpose of this section/document is to provide a very high-level brief of the contents of the business plan for your restaurant. Think of it as an elevator pitch for your business.
It will detail how to open a restaurant business and why it will be a success.
Overview of The Business:
This part of the business plan for restaurant success is where you describe the business. You’ll elaborate first on the legal status (LLC, Sole proprietorship, LP, LLP, etc.).
It is usually followed by The type of business and partner details (if applicable). Finally you’ll include the business location like the city, town, etc.
Here is where you will also describe the industry in the area you will be conducting business in. Then you’ll talk about your business and how you will conduct it. This will most certainly include a physical location, and whether you will be selling online or via social media, etc.
Business Plan For Restaurant – Operations Plan:
This section of the business plan for restaurant success will include everything about your operation. You will include purchasing and supply chain, organizational structure, roles, responsibilities, systems, etc.
You will also include here details about how the business will be managed, who will manage it, etc.
Here you will first give an overview of the market. Then you will get into more details about the specific segment you will be targeting through your business plan for restaurant success. The segments could be anything from house wives, to corporate executives, to even hipsters, teens, or children.
Products And Services:
This is the section where you will include your menu and the kinds of services you will offer. This is an important part of the business plan for your restaurant’s success.
Examples of services you may include here are catering, in-house events and parties, delivery, cooking workshops, etc.
Some businesses split the pricing and sales strategy into a separate section. However, in this how to open a restaurant business guide, I personally don’t think this is necessary.
Since you are talking about the menu here why not just stick the pricing here too?
Here you’ll discuss everything marketing in your business plan for restaurant success. You are here learning how to open a restaurant business, but why would clients choose to dine in your facility?
This is your unique selling point (USP). It details what you offer that makes you unique and it could be as simple as your atmosphere. On the other hand it could be a rare signature dish that can only be had in your facility.
You will discuss the brand, market positioning, and how you will be marketing your business to gain clients. However, you will not be discussing marketing budgets here it comes later in the business plan for your restaurant.
This is where you will need to do a lot of research, and understand your competition well. In this part of the business plan for your restaurant’s success you will talk about your direct and indirect competitors.
Let me explain this a little further, we are a seafood restaurant as I mentioned earlier. Our direct competitors are other seafood restaurants catering to the same segment. That means the same class, age group, gender, etc.
Our indirect competitors are seafood restaurants catering to different classes. But, more importantly restaurants offering other foods like steak or chicken catering to the same segment as us.
This part includes my favorite part of restaurant marketing since I was in uni. You will need to do a strength, weaknesses, opportunities, and threats (SWOT) analysis.
Once you have that ready you will need to create a “TOWS Matrix”. I’ll be writing an article about that in the near future.
Projections & Forecasts:
It shouldn’t be difficult to forecast your sales and create realistic projections by this stage. You already know what your competitors are selling for and approximate number of sales in a set period.
Moreover, you’ve established your expected market share and know the demographics in your area. It’s just a matter of plugging in all these numbers in a simple formula to forecast your future sales.
Without this part, the business plan for your restaurant is worthless. So please make sure to research it well, to be sure you’ll eventually turn a profit.
If you would like to know how it’s calculated, either send me an email via the contact form on the home page or leave me a comment below this article.
I’ll be honest with you, I hate this part of business plans for restaurants, but it’s a necessary evil. This is where you discuss everything money. The startup cost, your fixed costs, your foreseeable variable costs, etc.
Now that you have this information you can create a financial plan. You need to look at how much money you will need for the first year all the way up to 5 years.
You will discuss when you need the money. How much is needed at startup? What parts of the restaurants life will you need to pump in more funds, and how much? Where will you be getting the funds? Etc.
Do not forget to include the cost of equipment that will be needed here.
Combining this section of the business plan for restaurants with the previous section will allow you to foresee the financial future of this business.
Location Is Everything When Starting A Restaurant Business
One of the reasons our restaurant struggled to get walk-in customers initially was because of our location. You see my father compromised location for the sake of restaurant size.
This meant that we have a restaurant that could serve 120 covers but not visible to passerby’s. Moreover, these covers are just the restaurant tables the outdoor café can serve way more.
As soon as I relocated back to Egypt to help run it, the first thing I said to him was, every customer we serve will need to come from ads. I knew immediately counting on walk-ins wasn’t an option, at least for some time.
So what is the relevance of this story? Well if you’re perceptive you probably caught onto the fact that needing restaurant marketing ads to get every single customer through the door meant a high cost per sale.
You see, walk in customers are basically free customers. Someone was hungry and passed by your place, smelled the food and walked in to eat.
Another challenge with ad based customer acquisition is that in many cases you need to convert a customer. Think of it like this, if the person is a connoisseur of your cuisine they probably have a favorite joint.
Just because you let them know you opened up through your restaurant marketing won’t mean they’ll come running to you.
You need to give them a reason to leave their favorite spot or the one they are at least used to, and try you out. But we’ll discuss more about that in the marketing section of this article.
So to summarize, pick a location that is high traffic.
One that is preferably on a corner or intersection so it is accessible and visible from at least two streets. If that option isn’t available or too expensive for your budget then even a single high traffic street could do.
The second thing to pay attention to, is go to your customer, don’t expect them to come find you. What do I mean here? If you know your ideal customer lives in a particular neighborhood, choose a shop in that area, or close by.
Another factor that is often overlooked when people start a restaurant business is signage. Does the building you will buy or rent your restaurant location in, have enough room for a sign? If there are a lot of signs on the street you need a bigger sign that is visible from further away to stand out.
Finding the right location is a critical part of the business plan for your restaurant’s success.
Alright, now that you have found the ideal location, it’s time we discussed the logistics of how to open a restaurant business, and succeed.
Starting A Restaurant Business – Design, Aesthetics, And Atmosphere
Even when opening up a low budget quick takeaway type business you need to put a lot of thought in the design. Design is not just an aesthetics factor, it has a functional factor, and it doesn’t only involve the visible areas either.
Your workflow needs to be incorporated in the design. For example, your kitchen needs to be like a factory production line. I don’t mean literally, that’s only in fast food places, I mean it needs to be efficient.
You need to think, before buying any equipment, about the preparation process of each of your dishes/sandwiches. What comes first, what follows, etc.? The last thing you want is for your chefs to crash into each-other and waste orders. Right?
Is it beginning to be clear why we’re talking about this as we build our business plan for your restaurant?
Another aspect you need to factor in while in the designing process is hygiene.
I will be creating an article in the near future about hygiene. As for now what you need to keep in mind as you learn how to open a restaurant business is…
Both the global standards for food hygiene and whatever regulations are in your country. This shouldn’t be too difficult to acquire.
Just a visit to the municipality, ministry of health, or whichever authority that is responsible for such matters in your country will do the trick. They will either give you a booklet or a checklist of some sorts.
Raw meats and vegetables will need separate chopping boards for starters. This means your cutting table will need to be large enough to house multiple chopping boards at once.
The importance of this will become more prominent when preparing multiple orders at once.
Also you will need to look at the placement of the equipment in the kitchen.
Pay attention to having sufficient ventilation as well as sewage drainage in relation to the said placement.
The same would apply to your table layout you want to maximize the number of covers you can simultaneously serve.
However, you also need to consider the guest privacy, walkways, accessibility, and having enough space for table setup and cleanup.
After all that is considered, we start thinking about the aesthetics. Remember this is all done before buying any of the equipment or furniture.
The idea is to give you a guideline to dimensions and sizes before buying anything.
What kind of atmosphere would you like to offer your guests?
Is it a cozy aesthetic feel? Maybe it’s more of a modern minimal look? Or even a classic Victorian-isk style like Shakespeare and co. offer.
You also need to think how will it all tie in with the food and services you will be offering?
Once you have an overall vision of how the spot will look, you can now start considering equipment, furniture and utensils. At this moment you will also want to start looking at your brand design, signage, menu look-and-feel.
Next you’ll need to look at three very important aspects. Before you can open a restaurant business you need to sort out your supply chain, staff, and systems.
How To Open A Restaurant Business: Supply Chain, Staff, And Systems
Why is this important to the business plan for your restaurant? Before anyone can open a restaurant business’ doors to the public they need to be prepared to serve the guests.
In order to be able to serve your guests you will need to have staff to take the orders and serve them, a system to punch in the orders and print receipts, and raw materials to turn into delicious meals.
These are the things we will be covering in this section.
Every restaurant needs raw materials, whether it be meats, vegetables, oils, or spices. You will also need cleaning supplies, cooking utensils, dishes, silver wear, and table dress up. These are besides the obvious heavy equipment and furniture.
To each of these you will need to find a trusted supplier. It may be difficult to find suppliers who will offer you a line of credit when you are first starting, especially for perishables. So put that into consideration when determining your startup budget.
Depending on the country you are in and the integrity of the suppliers for perishables you may need to go through a trial and error process. Also to lower your startup budget, you could opt to run your restaurant as a cash business.
A cash business is where you don’t store much inventory and buy your needs on a daily basis.
This obviously will raise the cost of the supplies because you are not buying in bulk. However, you’ll find that it is cheaper than throwing away supplies that expired before you could sell them.
It also ensures your ingredients are mostly daily fresh, and you can use that in your marketing as a plus point.
When considering suppliers for equipment, utensils, furniture, etc. choose the ones who will offer spare parts and replacements. You don’t want a chair to break and when you go to replace it you can’t find one looking exactly the same.
Moreover, you don’t want an oven that goes faulty with nowhere to fix it and no one to maintain it.
What I said earlier about a line of credit will probably not apply to kitchen equipment and furniture. Depending on your country and credit status/score, you will most likely be able to get these on a payment plan with a few suppliers.
You will need to also have suitable storage facilities for the various ingredients you will buy.
Just because you buy it on a daily basis doesn’t mean you’ll just throw them in a box on the kitchen floor. You will at least need a suitable fridge and freezer unit, even if you don’t have a more elaborate setup. Like a cold room or freezing room.
Unless you plan on being the chef, waiter, cashier, manager, and sanitation employee as a one man/woman show you’ll need staff.
How Many Staff Do You Need?
The number of staff will depend on multiple factors. Some of these factors are obvious like the size of the facility, distance from kitchen to tables, etc.
Other factors not so much… For example did you know the number of staff in any hospitality is determined by the class of guest you serve?
I actually learned this while I was in university from one of our professors. The Ritz Carlton hotel maintains a ratio of 1.8 staff to every single guest in their hotel. This is almost double the industry average for a hotel of this class.
The question is, do you understand why this is so important?
The Ritz Carlton serves the “Class A” market segment, yes in the hospitality industry we classify guests according to spending power, expectations, and behavior.
Having almost two people serving one guest at any given moment means the guest doesn’t have to look around or call for help. As soon as a guest needs something there is someone present to provide that service for them.
So how does this apply to you? Well, imagine you are serving a class A type of guests in your restaurant and have 100 covers.
Your average cover max occupancy rate is 50% so that means you serve 50 guests at most. You would need close to 100 employees in your restaurant to offer them a 7 star service.
Class A guests are celebrities, ministers, successful business owners etc. so if these are not the guests you expect to serve such a large number is not needed.
On the other side of the spectrum you have the class D guests, and these are the kind of guests who’s check is $10 to $25 or so.
Obviously, the check to class relation varies from one country to another so you’ll need to keep that in mind when thinking about your restaurant.
Facilities serving class D guests usually offer “budget-friendly” items on their menu and thus the income per cover is not so high.
To turn a profit such facilities depend on close to 100% occupancy rate throughout the day and high cover turn-over. Having one employee to every 2 to 3 guests is more than enough to serve this class.
So again let’s take the 100 cover example, this time your average occupancy should be as close to 100 as possible. You would need 30 employees to provide sufficient service to your guests.
We also need to understand something here, when we say staff we mean all staff not just the guest facing staff. So the 100 or 30 employees in both examples would include stewards, chefs, bus boys, waiters, hosts, captains, and even floor managers.
What they don’t include is administrative staff like accountants and the like.
What Kind of Staff Do You Need In Your Restaurant Business?
When hiring staff there is a key element you need to consider. Your staff represent you and your brand. In essence, they are ambassadors to your restaurant business. This implies one crucial fact, they need to be characters cut from the same fabric.
Don’t just hire anyone because they are qualified. Qualification alone is not enough! You need someone that lives, breaths, speaks, and acts out your brand image. Part of this can come from training but a major part is their personality. Remember you cannot turn iron into gold!
So pick people, regardless of whether they are customer-facing or not, who match with your brand’s personality. It will save you time, money, and a lot of headache, trust me!
Systems When Starting A Restaurant Business
In today’s day and age, a hand written receipt just won’t cut it. It gives a lot of room for foul play and manipulation by your staff.
Even if you trust your current employees, they will not be in your business forever. This industry has an extremely high employee turnover rate, no matter how great a boss you are!
This also means that you will constantly have new faces working with you, and you need to leave no room for bad ethics to thrive. Always, assume the worst in people and prepare for it.
I’m not saying to be a jerk, but preventing the opportunity for theft will protect you regardless of whether employees are trustworthy or not.
This is where a great system comes into play.
A good restaurant management system will offer you many functions that can help you thrive when you open a new restaurant business. These functional modules include:
- Order Management (order taking, points of sale, and receipt printing).
- Kitchen Workflow Management ( This is a screen that displays orders in sequence to help ensure orders are made with no mistakes. Some even split the order over different screens, each screen displaying the part of the order relevant to the equipment near it. The more advanced systems will even include timers to manage order preparation standards).
- Inventory Management ( Such systems will keep track of stock usage in relation to orders according to your recipes. They will also inform you when you need to order items and give you the end of period perpetual inventory.)
- Accounting, Analytics and Reports. (A good system will include real time accounting reports, cash flow, salaries, profit and loss statements, and balanced score cards.)
There is no shortage of options when it comes to restaurant management systems. The functions offered vary from one system to another, so pick one that serves your needs.
The systems can come housed on an in-house server, or on a cloud based server. The latter option can come either as hosted or as a copy of the in-house option just on a cloud server.
As someone who is just starting a restaurant business you may want to consider a hosted web-based application.
These are applications that don’t require you to pay a large fee upfront. The application is web based and you access it via your browser or an interface that they provide you.
The payment is subscription based, per user or number of users on a monthly or annual basis.
Such an option will save you a large amount of money since you don’t have to pay anything upfront, worry about server maintenance fees, etc.
Start A Restaurant Business With The Right Marketing
As a restaurant owner you have access to a plethora of restaurant marketing options. These include both offline and online options.
We’re going to discuss here the channels available to you both offline and online, then we will discuss promotions (strategic marketing).
Offline Marketing When Starting A Restaurant Business
Your first line of offline restaurant marketing strategies is your “take away” menu. It should have your restaurant’s telephone number, address, website, and social pages on it. The same should be applied to any bags and delivery bikes or vans.
When you are just starting a restaurant business, this allows more people to find out about you as orders are being delivered. Moreover, having your take away menu with contact details on it, allows you to distribute it like you would a flyer.
Needless to say, if someone walks in asking with no intention to order, you hand them that menu as they are leaving.
That way they don’t have to go through the trouble of finding your contact details online should they want to make an order or reservation in the future.
The other options for offline restaurant marketing are newspapers, TV talk-shows, flyers, and magazines.
You’ll also want to have an in-house marketing strategy.
You know when you sit on a table in TGI Fridays for example, there is always either a tent card or T stand with a new drink or item they are promoting.
This is in house marketing, it’s a way to get sales on items from guests who are already in your facility. It also helps familiarize guests with signature items on your menu when you first start a restaurant business.
It’s also worth noting that in some countries you can invest in getting interviewed on part of a popular TV talk-show. Depending on the popularity of the show and channel the price would vary. In Egypt how this works is you pay a certain amount depending on how long you want to be on the show.
You then get interviewed and could bring in a chef and have the chef cook something on the show. The host of the show would then try it and give their feedback on the food, ask the chef questions, etc.
Online Marketing When You Open A Restaurant Business
When writing this article, I was at a loss where to start. There are so many online restaurant marketing options here. From your website, to social media, to even food ordering mobile apps.
You’ll also want to be listed on google business, trip advisor, google maps and similar platforms. I won’t be discussing these in detail here so I thought I’d brush on it here, because it’s so important!
Having A Website & Starting A Restaurant Business
Your Website is probably the thing you should focus on first. Having a website with SEO optimized pages will allow you to be found in search engine results for free.
This is free exposure, plus you could add a blog with recipes, news, etc. which gets you more visitors from search results.
Appearing on search engines is not the only benefit your website provides. If you place a Facebook pixel and google tags on the code of the page you can retarget visitors with your ads on these platforms.
Moreover, websites today allow you with a simple plugin to send clients notifications (if the visitor accepts your notifications prompt).
This means you can send them notifications with offers and all your new products for free.
This is all in addition to the obvious benefit of having the ability to let your clients order online directly from your website.
How to Open A Restaurant Business With A Strong Social Media Presence?
Facebook, YouTube, Instagram, Pinterest, Twitter are all platforms that get billions of people using them actively on a daily basis.
It’s a no brainer that you need to be on at least two of these channels, as you first start a restaurant business. Needless to mention that being on more of them is always better.
The first step when you open a restaurant is to create profiles on one or more of these channels. Make sure you set them up as business accounts, this gives you access to more options and better reporting.
Once you have the pages, you need to understand what social media is before you can start posting effectively. People don’t just sit on social media to connect with friends anymore. They get on social media to consume content.
This means you need to offer them content that can give them something to enjoy and digest.
What you do not want to be doing is have a page that is purely advertisement of your business. If you want to learn how to open a restaurant business and be successful that is!
Let me demonstrate the importance of this with a personal case study. We’ve not paid a single cent on paid advertising for a few months now. Yet our page continues to grow at the same rate as when we paid for ads.
Moreover, we are still getting new guests ordering through delivery and take away every day! Why is that? I had an executive meeting at the end of 2019 with the owner of our marketing agency.
We discussed what can we offer our followers in terms of content that ties in with seafood but not promotional. Then came up with a strategy and weekly post schedule across our social pages on all platforms.
We split our posts on informational, generic, promotional, and journey based marketing. When Covid-19 hit we add a CSR (corporate social responsibility) aspect in our restaurant marketing strategy.
We started including posts about infection prevention and the like. We also experimented with the mind teaser games that became so popular during the lockdown.
What this did is it made people click the notifications when they saw them because we kept things interesting and informative.
If they knew every post was another restaurant marketing ad, eventually they’ll get bored. Or at least, put it off then forget it as it gets pushed down by other newer notifications.
So don’t be afraid to experiment with your restaurant marketing and always keep it fun and interesting.
However, don’t be all over the place you need to be consistent. Offer variety but also keep a sense of consistency. This way your audience can see you are organized and professional not lost and throwing punches in the dark.
Integrate your social media with your website whenever possible, as we mentioned in the last section. Retargeting ads are much cheaper than regular ads as a restaurant marketing tool.
Moreover, they have the added benefit of helping you target people who are interested in your business. This is assuming your website’s SEO strategy is solid.
Facebook with custom audiences will also allow you to target “look-alike” audiences. The process is simple, you tell people I want you to find me similar people to the ones who visited your website.
The AI algorithms then go and pin point these people for you and then you can choose them as an audience for your restaurant marketing materials.
If you ask me this is a must, because you are now advertising to people who are more likely to buy. This is much more effective than trying different targeting terms with higher hit or miss chances.
This ladies and gentlemen is how to open a restaurant business with a solid social media presence!
How To Open A Restaurant Business Successfully With The Help Of Food Ordering Applications
If we’re to summarize this section with one statement it would be “get on them all”. I’m going to talk about some restaurant marketing things that seem very obvious to me here. However, since I don’t really know if this is obvious to everyone else, I have to say it.
Look these companies will grant you exposure to clients that potentially have never heard of you before. Many of these applications have hundreds of thousands of users each, people that would require you a small fortune to reach via traditional restaurant marketing.
Applications like UBER eats and the likes, each country has their own local applications to lean on, offer you free access to these customers. The other interesting thing here is the industry is extremely competitive.
Which means, these apps need to market themselves to get the user to order through them instead of the next app.
As a result you end up getting a 50% discount offered to customers on your behalf, for orders where you get paid 100% for. In other words, the app developers pay the user to order from you at no cost to you!
Plus, and this is a big plus, apps like these send notifications directly to the phone of the customer encouraging them to order.
As for paid restaurant marketing options? Well, you can with many of these, send a notification via their app about your offers and create win-win offers that the app will notify customers about for free.
Wait, WHAT? If you create an exclusive offer for UBER eats users for example, on the condition that they notify all the users in the area you serve, why would they refuse? The notification costs them nothing.
Since it’s exclusive to them they’ll want to market it to show how amazing an app they are. Showcasing their ability to secure exclusive offers to their users, and in turn growing their market share.
In some cases they may even promote that offer on social media and other marketing platforms at their expense.
This is a very effective technique how to open a restaurant business with orders early on in your journey. Plus it’s a free-ish restaurant marketing strategy, what’s not to like?
How To Open A Restaurant Business With Effective Strategic Marketing Techniques?
This is where all the thinking as well as the “making money” happens. So much goes into strategic restaurant marketing that would far exceed the scope of one or even 10 articles. However, I’ll try and offer you a brief glimpse here on what you can do.
There is so much that is available to you in terms of options. Like a loyalty program that rewards your regulars with freebies and discounts every time they reach a certain threshold.
We shouldn’t forget about the discounts, promotions, and vouchers either. These are what excite customers to try your place out, or come back for more delicious pleasures.
You need to remember that strategic marketing happens in a sequence…
Awareness > Acquisition > Retention
When you first start a restaurant business, you need people to become aware of your existence, your offer(s), etc.
After they’ve been made aware, you begin to reel them in. The marketing involved in acquiring new customers is acquisition. This can include offers like “first order is 50%” and the like.
Then you have retention which is like the loyalty programs, or drawing on orders made for freebies and gifts.
You need to also consider splitting up the slow days and hours of the week on some permanent offers. These offers could include things like kids eat free, happy hour, business lunch buffet, a daily special, a day of the week with a discount on a popular dish, etc.
Such activities don’t only help you earn more on slow days and hours, it also helps you acquire new guests and retain your regulars even better.
Starting A Restaurant Business – Pre-Opening, Soft Opening, Official Opening
This is going to be a fairly short section because this article has already exceeded 5,000 words, if you’ve read this far well done! I’m impressed at how seriously you’re taking starting a restaurant business and your commitment.
We’ve pretty much covered all the basics here now it’s time to talk about how to open a restaurant business. Like literally your opening strategy…
Any hospitality facility opens using pretty much the same sequence. With that being said, a few skip directly to the “Official Opening” or the final step.
This is not a wrong strategy, however it loses you the benefits and learning curve made available by the other two steps.
At the preopening stage you are working on your recipes, which is why your doors in this stage are not open to the public. All guests you serve in this phase are on invitation basis and obviously you don’t charge them.
This is your testing phase, you are getting opinions, observing your staff’s performance and behavior, etc. in a controlled environment.
Once you’ve tweaked your service to the standard you’d like to have and locked in the taste you want to serve, time to soft open.
Soft Opening Stage
A Soft Opening is a low key simple opening of your door with maybe a small announcement on your social pages and website that you are now accepting guests. Make sure you make it clear that it’s still a soft opening in your communication. You don’t want to steal the official opening’s thunder when it comes, do you?
During the soft opening you test your staff’s ability to handle the load and train them for what’s to come. During this phase, you are making back some of your costs and also making some final tweaks before the real work begins.
You want to ensure during this period that you are prepared for working as a full-fledged restaurant serving hundreds or thousands daily.
Do you have enough staff? Are orders coming out on time? Is your kitchen operating efficiently? Is every dish coming out with the same taste as the last time it was ordered?
These are all questions you need to ask and issues you need to resolve before the official opening takes place.
Then comes the official opening with all its bells and whistles! You advertise it a week or two in advance and utilize paid advertising, flyers, etc.
When hour zero hits, you hold an event, maybe some entertainment, music, light show, DJ, etc.
Often you’ll find official openings offer a free buffet, or set menu to all visitors or the first 200 guests or something. This gives you exposure and an opportunity acquire some loyal regulars from day one!
You should be around for this, get the manager to introduce you as the owner, it makes a difference. When people meet the person behind the show and talk to them, in my personal experience, creates a bond to the place.
Starting a restaurant business is not easy and takes a lot of work. However, it is an exciting business to start-up. There is never a dull moment!
When you start a restaurant business be ready to face challenges that tease your mind, and push the envelope on your creativity.
Don’t let that scare you though, it is so much fun. There will be quite times, as with all businesses, and this is when you will really begin to grow as a business owner. These times will test your resilience, planning, management, and marketing skills.
I have learned so much when we opened our chain in the gulf, but the real growth happened when I relocated! I maybe Egyptian but we’ve lived abroad for so long that the mindset and culture here required a big learning curve for all of us as a family.
Trust me, you will enjoy it, I know I am!
Good Luck my friend and if you have any questions, thoughts, or ideas, drop them in the comments below and let’s connect.
Evolve Your Wealth,
Founder & CEO