Whether it is a full-size buffet restaurant in the busiest section of town or an intimate bistro by the lake, new restauranteurs hope that their establishment will attract and hold a solid base of repeat customers. Many restaurants do in fact thrive, while others find themselves struggling to keep their doors open a year after their debut.
What qualities do all successful restaurants have in common that keep them thriving while others close up around them? Here are five considerations when opening a new restaurant in your area.
1. Location, location, location. Not just limited to real estate, this maxim applies to restaurants as well. You may have the best food, the best staff and the best prices, but if you are not located in a convenient area for potential customers, you will be out of business in a year. A new restauranteur's first instinct may be to lease the abandoned property of a former restaurant. This may work, if the traffic is heavy and the location is acceptable, but will work against you if the former restaurant went out of business for lack of customers. Research the history of any property you are considering for your new restaurant. You are not necessarily limited to buildings designed specifically for restaurant use. If the building codes allow it, consider putting in a restaurant near the court system or other high-traffic areas. You may have to do some heavy renovations at first, but the client base should make up for the initial investment. New restaurants stand a better chance of survival if you go to where the people are, instead of waiting for the people to come to you.
2. Advertise like you have never advertised before. A new restaurant is usually a highly-anticipated event in many smaller cities. Heighten this anticipation by promoting the restaurant even while you're still working on construction. Make sure you hang a banner announcing the arrival of a new and exciting restaurant. Generate positive word of mouth advertising through radio spots and print media. By the time you are ready to open the doors, you should have a crowd of hungry customers waiting. Restaurants typically enjoy a 'honeymoon' period where business is booming and new customers are pouring in. What you want to do is keep enough of those customers coming back for more. Within reason, promote your best dishes with 'two for one' deals or other heavy discounts. You want this first wave of customers to recommend your food to others who take a more conservative approach to choosing a restaurant. They will be your customer base once the honeymoon is over.
3. Never price yourself out of existence. Pricing your food can be a challenging process from start to finish. You must take into account any number of fixed or variable costs, including actual cost of the food, salaries, and advertising. You'll want to adjust for a healthy but reasonable profit on each dish, while keeping the prices low enough for the customer. This is a delicate balancing act to pull off, but you must remain proactive during the first few months after opening. If the customers seem to be avoiding your higher-ticket items altogether, you may have to lower prices in response. If your customers seem to be ordering one or two items in mass quantities, you may have priced them too low.
Get a feel for the going rate on certain standard items and charge accordingly. You'll still be closing your doors in a year if you continue to sell food at a loss, despite the number of customers who are taking advantage of your generosity.
4. Seek out and keep quality employees. From kitchen managers to dishwashers, maintain the best staff you can afford. Customers react much more positively if the staff is friendly and professional. In fact, customers can often sense tension among the staff even before management does, so it pays to keep interdepartmental relations cordial and professional. Any restaurant that runs continuous classified ads for new employees becomes suspect in a potential customer's mind. Whatever the current wage for restaurant employees happens to be, be willing to pay it. If customers seem to prefer a certain cook or an especially good hostess, do everything you can to keep them happy and satisfied with their jobs. Disgruntled employees will lead the way when it comes to negative word of mouth, so make every effort to retain key employees early.
5. Find the right theme and stick with it. You certainly don't want to open the fifth Mexican restaurant on the block or the twelth Italian bistro. You'll want to find a theme for your restaurant that is exciting and innovating, or at least different than the competition. Basically, a good restaurant environment seduces the customer into ordering higher-ticket specialty foods and also encourages return visits. But you must keep 'gimmicks' to a minimum if you want long-term success. Decorate the walls with theme-related items, such as antiques or movie posters. Select uniforms that match the theme and decor of the restaurant. Background music is essential, and offers you a chance to emphasize the theme even more. Find your strongest connection to the overall theme and exploit it in advertising. Are you more authentic than other ethnic restaurants? Are you more child-friendly than the other family restaurants? Do you have more entertainment than the other 'fun food' establishments? Instead of trying to promote your new restaurant as all things to everyone, concentrate on what makes you special- work on building a niche market of customers who prefer your style of food consistently.
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