There’s a valid reason why so many investors decide to open or financially back restaurants in today’s economy. According to recent research, Canada’s restaurant industry generates $85 billion in annual sales. That’s about 4% of the country’s economy. Not only is the industry bringing in serious revenue for its owners, it also employs over a million people. In other words, it’s a business that’s not going anywhere anytime soon. Of course, no one should ever jump into a business with blinders on, so if you’re considering opening a restaurant, here are a few questions you should ask yourself first.
Are You Ready for the Time Commitment it Takes to Run a Restaurant?
One of the top ten reasons restaurants fail is due to “hands-off” owners who fail to realize the time commitment necessary when starting out. Certainly there are exceptions and some owners strictly invest in the business, planning for someone else to be in charge from the very start. However, if you are like the majority of restaurant owners today, you might be bootstrapping your company in an attempt to turn a small investment into a steady revenue stream. When this is the case, you will likely be the one doing the majority of the work. You will be the one with the most to lose and the most to gain, so entrusting it to people you are paying wages to is a big mistake. Just know upfront that the time commitment will be huge in the beginning, and prepare yourself to buckle down and work hard to make your dream a reality.
Do You Have a Clear Restaurant Concept?
It’s not enough just to know if you will adorn your tables with cloths and centerpieces for aesthetics. It’s also important to know how you will market your business. Advertising without a clear concept is a waste of time and money. In other words, ask yourself whether your restaurant is a fine-dining establishment or a fun casual family eatery. The difference is pretty big for each type of restaurant in that a fine-dining establishment might be marketed as a cozy and romantic date night spot whereas the other might be advertised as a playful, enjoyable experience for people of all ages. Also, the placement and location of these ads are totally different. For example, the first might be advertised in clubs or upscale boutiques, while the latter is displayed in pediatricians’ offices and daycare centers. Knowing your restaurant concept will get you the most “bang for your buck” in advertising dollars.
Do You Know What Suppliers You Will Use?
If you are starting out small, it might be tempting to source your supplies locally and in small quantities from wherever you can find them. But having a list of reliable vendors right from the start can save you time and money in the long run. For example, suppliers like Vega Direct carry all your service needs, such as flatware and glassware. You also need to develop a business relationship with specific food vendors and janitorial supply companies. Knowing representatives from each of your vendors can help keep your restaurant fully-stocked with everything you need to keep your business running.
The restaurant business is a thriving and financially sound industry, but it’s important to go into it with the right expectations. Plan well and get to know the companies and people who will invest in your new venture. There are many other things to consider in opening any business, but keeping these three things in mind will keep you well-informed and well-prepared for success, as well as help you avoid some of the common pitfalls other business-owners sometimes face.
