Success with any new restaurant in our experience as restaurant management consultants is often learned from those in the industry who fail. Avoiding these key pitfalls can help in doing it right the first time: No Solid Plan – The old axiom “Fail to Plan, Plan to Fail” is still true in today’s sophisticated world of software programs, as it was when someone started with their thoughts on the back of a paper cocktail napkin. It is amazing how many would-be restaurateurs, who will spend hundreds of thousands of dollars, do not invest the time to formalize an idea into a workable, business plan. At the very least, a business plan whether you write it or hiring restaurant management consultants to do it should include a) concept, customer demand and market analysis, b) realistic financial projections with breakeven and investment payback, and c) a strategy for when times are good or times go bad. Too Little Capital – If you estimate three months of cash is needed until breakeven, double it. If you project a possible five percent construction cost overrun, figure ten. Statistically – there is a failing restaurant in 1 out of 3 new foodservice businesses the first year. Cash is King! Guess why? Bad Timing – The right menu concept for your customer market is everything. Nothing is worst than deciding to open a fancy new Sushi bar when the neighborhood tastes are going gaga over Italian. Ego NOT Economics – 15th century art on the walls, fifty dollar dinner plates or sophisticated, state-of-the-art kitchen equipment has bankrupted many new restaurants. Customers buy food and service – not furnishings. Cannibalism – Opening another lunch-only operation in an office building with too many similar choices is a bad recipe. Make sure customer demand exceeds supply as part of your restaurant bar business plan. In a future supplement, we will discuss why the 3 M’s (marketing, management and manpower) are especially important from the perspective as restaurant management consultants. Subscribe to our blog to stay tuned. Or, you can also contact us via the link below for a preliminary no-cost consultation about your new concept and plan.
