4 Mistakes to Avoid as a New Restaurant Owner FI

4 Mistakes to Avoid as a New Restaurant Owner

4 Mistakes to Avoid as a New Restaurant Owner

Opening any new business is always an exciting opportunity, but restaurants face a unique set of challenges to getting their doors open.

The idea of turning a passion like cooking into a fulfilling career is appealing, but there are many pitfalls a new restaurant owner should be aware of. “As opposed to worrying about being famous, worry about the restaurant being popular within your neighborhood,” said an award winning chef, when asked about the most common mistakes for first-time restaurateurs.

Of course, that’s easier said than done. Below are a few common mistakes that can be easily avoided by staying focused on winning locally..

Location, location, location

The importance of good location is obvious, but it’s easy to forget what factors into whether or not a location is right for your restaurant. Affordability can be an attractive reason to choose a  location, but before settling on a spot, ask yourself a few other important questions:

  • Are there similar restaurants in the area? If so, tread carefully. You may be confident about your restaurant-to-be, but the competition could already have captured your market.
  • Is the location easily accessible? Available parking or access to public transit could make or break any business.
  • Why is the space available? If the location is good, why did the previous tenant leave? Little things like placement of traffic lights and whether signage is visible can affect success.
  • Are there residential homes or businesses that could be home to potential customers? Ask yourself what type of people would likely try your restaurant, and consider the income they might have if living or working in the area.

Menu math

Do your homework and set menu prices that ensure profitability from Day 1. Special offers or lowering prices can lower brand perception. On the other hand, having to increase prices after the fact can alienate already loyal customers. It’s important to know what your competition is charging, but most importantly you need to understand the cost of business.

Too often menus are created by chefs who are more concerned with presentation and taste than profit margin. But the most important factor to determine pricing is simply how much the item costs to produce. Calculate the total cost of ingredients, factor in the time and effort of preparation in the form of labor, and sell the menu item at a price that makes sense. Depending on your location and desired clientele, that could mean a different amount, but understanding how your other business costs factor in is a good first step to finding that sweet spot.

Not getting social

Marketing costs can be daunting. Social media is an amazing low-cost marketing tool, but it’s important to understand how it’s used. There are countless tips on how to use networks like Twitter or Instagram, but there are a few founding  principles that apply to them all.

Do not mistake these platforms for free advertising. Before you can spread the word of new menu items or special offers, you need to build a following. The easiest way to do this is to humanize your account. This could be as easy as posting pictures of your staff, or as sophisticated as using the right hashtags to contribute to trending topics.

Most important is to be consistent. This could be one post each day, or three a week. Regardless of frequency, create a realistic routine you can follow.

Lastly, do not do it all yourself. Encourage your staff and customers to contribute to your restaurant’s online presence. This lessens the burden while also further humanizing your brand. Running promotions that require people to post from your location or with a unique hashtag could drive more business while engaging customers to increase brand loyalty.

Make sure to have WiFi easily accessible to your customers to encourage participation. Also, if you haven’t done so already, be sure to claim your Yelp business page, where you can add photos, update business hours, list your specialties respond to reviews and more.

Don’t underestimate the necessary staff

As a new restaurant owner, your initial inclination will be to hire only the minimum number of staff needed to operate. You may be unsure of how busy you will be when first opening, and think the last thing you want to do is pay people who will be standing around. This is not the right mentality.

If you want to be successful, prepare for the night that you are flooded with customers, especially in the beginning. No one will leave your restaurant upset that there was too much staff, but one chaotic night of long wait times could spoil a room full of potential loyal customers.

That’s not to say you should waste money on additional staff, but until you truly understand the demand on any given night,  err on the side of caution by over-staffing. You will find out very early who is worth keeping around as your core team, but until you do, staffing is not the area to cut costs.

Opening a new restaurant is exciting, but there are no shortcuts. There is no such thing as too much research, and it can ensure a smooth opening that will have a lasting impression on customers for years to come.

Learn how Yelp WiFi can help you overcome challenges in other areas of your restaurant’s marketing.

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