Conventional wisdom states, 90% of restaurants fail within the first year. For anyone thinking about going into the restaurant, or food and beverage business, this is the first difficult decision you’re confronted with. And the first thing your friends and family will do when you go to them to discuss your plan is recite this well-known fact.
But once you’ve carefully weighed all the wearying facts, pros, and cons, if you still feel the drive to open a restaurant, catering business, or to become a pastry chef, etc. you should honor this passion by doing what excites you.
“Passion is energy. Feel the power that comes from focusing on what excites you.” — Oprah Winfrey
“Passion is the genesis of genius.” — Tony Robbins
“Nothing is as important as passion. No matter what you want to do with your life, be passionate.” — Jon Bon Jovi
Assertive Facts About the Restaurant Business
As you’re starting out and begin acting on your plans, the people around you – as if all conditioned to think the same way – will weigh you down with some grueling realities. Jim Bob’s cousin David tried to open a restaurant a few years ago and ran into trouble with the contractor… on, and on, and on. Teach yourself to tune out the noise by focusing on these statistics about the restaurant business.
- Restaurant industry sales are projected at $799 billion in 2017, according to The National Restaurant Association’s 2017 State of the Industry report
- The restaurant industry accounts for 10% of the U.S. workforce
- 9 out of 10 restaurants are small operation with less than 50 employees, and 7 out of 10 are single-unit – operating out of only 1 location
A Successful Restaurant Business
The same basic fundamental principals apply for any successful business. However, the mistake that many restaurant owners make is injecting too much of their personal taste into the business, intolerable to the ideas of others and displaying an inability to remain objective, especially important for first-time business owners.
- Location: choose a location with good exposure and foot traffic and favorable lease terms. By now you should already have an idea about the type of restaurant you would like to open and you know your rent range. Seek out locations where your concept can thrive.
- Have a Niche: Do yourself a favor and do your due diligence! Define your restaurant concept – menu, pricing, customers, ambiance, competitors, etc. What do the locals want? Fine-tune your concept to meet their needs. What is going to be your marketing strategy? How will you differentiate your business from competitors?
- Adequate Financing: decide whether you need financing. The forecast section of your business plan projects start-up capital requirements. Will you acquire traditional financing from a bank, private investors, or raise money from friends and family?
Remember, remain objective. Stand back and allow your customers to act as guides hinting at what they want. This should help you to better serve public interest and enable you to grow your business. So, don’t get too fixated on minor details and be flexible. You’re going into business to serve the public – not yourself.
For business resources and assistance getting started, visit your local Small Business Administration (SBA) office.