It’s strange, but true: the restaurant industry has not only persisted throughout history in light of extreme economic crashes, but sales continue to climb over time. The National Restaurant Association restaurant industry sales to hit $782 billion in 2016, up from $586 billion in 2010. This growth is partly due to consumers becoming more “adventurous” diners, interested in eating a wider variety of foods — but also due to the changes technology has brought to dining experiences.
There’s no doubt this is a lucrative industry for restaurateurs. However, the old adage about doing what you do best (and outsourcing the rest) particularly applies to restaurant ownership. If you don’t have a background in running a restaurant, it’s crucial that you partner with those who can help with daily operations.
There’s no “right” way to open a restaurant, but before you make the leap, take some time to examine your dreams and determine if restaurant ownership is right for you.
The Life of a Restaurant Operator
It’s common for restaurant owners to spend more time at their business than at home or on vacation. It’s also common to face 60-hour workweeks, late nights, and unforeseen stressors completely outside of your comfort zone. Restaurant operators aren’t just entrepreneurs: they’re dishwashers, salespeople, plumbers, and entertainers.
However, the truth is, there are hundreds of variables in the restaurant business, and the best way to determine if it’s right for you is to truly know yourself. This means knowing who you are, right now, rather than who you wish you could be. Are you the type who wants to get business up and running and then play a very minor role in the daily operations? Or are you more of a hands-on type, one who wants to know everything from the daily numbers to the name and birthday of your weekday dishwasher?
Discover your role and intentions by taking some time to honestly explore each of the questions below.
- What’s most important to me in life? Some people are naturally energized by work. They love the flow of interacting with hundreds of people daily, handling new challenges, and pouring their creative energy into their local community and economy. If this is you, restaurant ownership may meet your needs and goals perfectly.
- What motivates you? What comes first in your life? If it’s your family, you may want to wait until your children are grown to open your restaurant. If you thrive on frequent vacations or you’re unsure of where you want to live, you may also be better off waiting until you’ve settled down.
- How flexible is your lifestyle? Lorri Mealey shares her story of how she and her husband adapted their lives to work around their restaurant’s schedule — even sharing holiday meals with staff and their kids after hours.
- What experience do you have with restaurants? Unless you’re independently wealthy and well-connected enough to have others run your restaurant for you, your success will be directly tied to your aptitude in the industry. However, if you haven’t worked in a restaurant, this doesn’t necessarily spell doom — a background in retail, management, purchasing, or even human resources can translate very well into the food industry.
- Am I passionate about restaurants? “Make sure that starting a restaurant is your passion, not just a business venture you hope will make money,” says Lisa Furgison in a BPlans article. It’s passion, not profit, that will carry you through the rough times.
- Can I handle months of little or no pay? When you’re running a restaurant, the business (and your employees) come first. You may have to forego your own paycheck to keep things running smoothly, meaning you’ll either need a financial support system or a hefty savings account.
- What are my long-term goals? A restaurant is a commitment, much like homeownership or starting a family. It’s important to consider where you see yourself, and your business, in 5, 10, or 15 years. Also, consider who will take over the business if you no longer want to run it, suggests Caroline Cummings in a BPlans article.
Your Restaurant Business Plan
After you’ve examined the questions above, one of the quickest ways to determine what you want is to start writing your restaurant business plan. It may seem counterintuitive (isn’t the business plan something to do once you’ve already decided to go for it?) but writing the plan can actually serve as part of your decision-making process.
Here’s why: When you commit your ideas to paper, you’ll start to see where your strengths and opportunities lie. You’ll unveil challenges that you may have completely overlooked — perhaps there are three other full-service Thai restaurants in your area, or maybe the people in your neighborhood are more interested in coffee than the wine bar you’ve dreamed of opening.
Attempting a “lean” business plan to start out with also helps you determine if you’re really ready to start a restaurant. If you don’t feel compelled to finish writing the plan, it may be a signal that your new venture needs to wait a few months or years. On the flip side, if the business plan gets you pumped up, you won’t have to start your “full” plan from a daunting blank page — you’ll already have something to build upon.
Although you don’t need to nail down the specifics of which ladles you’ll buy or how frequently you’ll post Instagram updates, write down as much as you can for each section to see where you’re at. Here are the basics to cover in your lean business plan:
- Market research
- Competitive analysis
- Target audience
- Marketing plan
If you’ve decided to make the leap and start your own restaurant, the next step is to learn everything you can. There are a breadth of a decisions you’ll have to pin down before you obtain financing and legal status — from restaurant service styles to the specifics of location, to carving out your differentiators and your niche.
Subscribe to trade magazines, visit conferences, and read local and national news to keep a finger on the pulse of the economy. Most of all, enjoy it! Your restaurant will become the manifestation of your creativity, the proof of your hard work and passion.