4 Things You Should Know Before Launching Your Restaurant

Restaurants are a tough business to launch. To compete against the huge brands, you have to be at least as good as the big guys.

With the restaurant industry expected to hit $898 billion in 2022, according to the National Restaurant Association, it’s understandable that you would want a piece of the pie. It isn’t as easy as it sounds due to there being over a million restaurants succeeding in the crowded U.S. market.

Roughly 60 percent of new restaurants fail within their first year, and nearly 80 percent close before their fifth birthday. However, careful planning and direction can help your restaurant beat the odds.

If you’re thinking about opening a restaurant, you might already be wondering what you need to know before taking the plunge. We’ve put together a handy guide to help you plan, market, and open your restaurant successfully.

Where Will You Locate Your Restaurant?

Anyone with a passing interest in real estate knows the most important thing is location, location, location. Location doesn’t just matter for homeowners; it’s also vital for business owners and restaurateurs.

Jarrett Bellini of CNBC says choosing the wrong location is the key reason new restaurants fail. A hip neighborhood might get a lot of foot traffic, but the rent will be higher than in quieter parts of town. Consider the pros and cons when settling on your location.

Where your restaurant will be located is important in several ways. Research shows that location is a significant factor in why some restaurants succeed while others fail. 

Location is particularly important when you’re just starting out and don’t have a track record.

There are location factors that you need to consider before you set your opening date. You need to think about the following location factors:

• the type of neighborhood a restaurant is in,
• neighborhood population,
• number of tourists and tourists who eat outside,
• whether or not the area is growing,
• what’s happening around the restaurant,
• proximity to competitors, etc. 

It’s always good to open your restaurant during the time of day that you want to be busiest. Still, you also need to think about the impact that your restaurant’s location will have on your bottom line. Suppose you’re opening near a major intersection or a busy thoroughfare. In that case, you may lose business if there’s too much traffic to get through to get to your restaurant.

How Will You Market Your Restaurant?

Marketing helps businesses generate brand awareness and encourages consumers to use their products and services. When your restaurant is new, marketing is even more critical. As a new restaurant owner, you’re trying to spread the word about your new venture while convincing the public to change their dining habits and choose your restaurant.

Since marketing is so important for your restaurant, you must get it right. Rather than playing it by ear, take time to develop a marketing plan. Consider social media and promotions, such as grand opening specials and theme nights, which can generate buzz. Be sure to think promotions through though. You don’t want to be like Jiamener Hotpot Restaurant in Chengdu, which was thousands of dollars in debt when it closed after its all-you-can-eat deal was too popular.

As an owner of a restaurant, you know that advertising is the lifeblood of your business. However, most restaurant owners simply do not take the time to develop an advertising plan. Marketing is more than just posting flyers in local shops and hanging signs on poles. Marketing is about developing and implementing a strategy to attract new customers and keep the ones you already have.

Now is the time to build your customer base.

To do so, you need to focus on three critical things.

Your Restaurant’s Website

The first is your website. This is where you will make or break your restaurant. As you probably know by now, building a website isn’t easy. But if you do it right, it can be the difference between opening a brick-and-mortar location or staying in the virtual world of online sales.

Your website should be able to handle all aspects of your business. It should be mobile-friendly so that people can view your menu and place orders from anywhere. It should be easy for customers to navigate and find what they want.

Your website should also showcase your brand and communicate to potential customers why they should choose you over your competition. There are many ways to build a website. You can hire someone to build you a custom site or use one of the many website builders on the market.

Social Media Strategy

The second thing you need to focus on is your social media strategy. Social media platforms like Facebook and Instagram have changed the face of advertising. Suppose you’re not using social media to advertise. In that case, you’re missing out on an opportunity to reach potential customers in ways never seen before.

Consumers are looking to share their experiences with each other online. If a restaurant doesn’t have a presence on sites such as Facebook, Instagram, or Twitter, they’re missing out. This is why restaurant owners should take advantage of these sites to build brand recognition, encourage customer loyalty, and increase sales.

Word-of-Mouth Marketing

The third and final thing you need to focus on is word-of-mouth marketing. Word of mouth is one of the most powerful and underused marketing strategies. 

People talk about the good or bad experiences they have had, and the word gets around. That’sThat’s how restaurant chains grow or fail. 

Word-of-mouth marketing isn’t about simply telling your friends about how amazing your food tastes. It’s about getting people talking about you online and offline.

So how do you use word-of-mouth marketing to attract new customers?

There are many ways to get people talking about your restaurant online, such as posting photos of your dishes on Instagram and Facebook or writing reviews for your business on Yelp.

The key is to build a reputation as a great place to eat and a fun place to hang out. People who enjoy their experience tell their friends and family about it. If you’re a restaurant owner, you need to become the friendliest restaurant around and listen to what your guests have to say.

Who Will You Work With?

When you think of restaurants, you think of people. And in a restaurant, you’re really working with human beings. So you need to know who you’re going to work with before you open up shop. Are you going to have just a handful of managers? Or a huge staff?

It’s important to decide:

• Who will be responsible for what when you’re ready to open your doors?
• Who will oversee the day-to-day operations?
• What about supplies and ingredients?
• Who will manage the finances?
• Who will be the chief?

There’s much to consider when looking for the right restaurant partners for your business. First, ensure you find someone who shares your vision for your restaurant operationally and stylistically. Next, don’t just settle on the first place that takes your money. If you’re planning to hire staff, look for people with similar skill sets and personalities. And if you want to work with a restaurant supply company, check out their clients; you might be happy with the results you see.

Successful restaurants often credit their achievements to surrounding themselves with the right people. Forging the right connections before you launch will help your restaurant run like a well-oiled machine once the doors open.

Hire a chef who shares your culinary vision and can create the kind of dishes that will make your mouth water. Work with your chef to hire other kitchen staff who can support your food dreams. Bubbly waitstaff, who can help make your diners’ experiences memorable, and quality suppliers, who can deliver fresh ingredients to make your meals sing, are also vital. The C&O in Charlottesville knows the value of the strong relationships it forged with its suppliers, such as local farmers, vintners, and cheese makers. These relationships have helped the restaurant wow critics and members of the public since 1976.

What Payment Methods Will You Accept?

For any business, the bottom line matters most. Identifying the payment methods, you’ll accept will help you put the right processing systems in place before opening day. Credit cards are the most common payment method in the Western world, so make sure your restaurant can accept payments from all major cards. Accept payments from e-wallets like Apple Pay and Android Pay to appeal to younger diners.

Sadly there is no secret recipe for restaurant success. But if you know where you’re heading before you start, you’ll have the greatest chance of thriving within the competitive restaurant industry.