New York City remains one of the most difficult markets in which to open a new business. Here, restaurateurs need to be extremely industry savvy and understand their markets completely before opening a new restaurant. While this task is difficult, it is far from impossible.
The life of a restaurateur, especially in New York, is far from glamorous. People may expect easy earnings and loyal customers, but more often they face difficult landlords, angry customers, unreliable employees, and surprise visits from health inspectors. By learning from the lessons of restaurant developers who have failed, people can increase their chances of success and figure out how to diagnose the early signs of failure and change course.
The following are some of the most important lessons that entrepreneurs have learned over the years while trying to open a new restaurant in New York:
Sacrifice the social aspects of life.
To make a restaurant work, individuals need to dedicate themselves to it around the clock. For many people, the restaurant becomes their social life. When burdened by other distractions, restaurateurs will always let something fall through the cracks. Individuals should also understand that this commitment could last for many years. Some restaurateurs figure that they can pull back after putting in a year of hard, dedicated work, but most businesses need close guidance for much longer, and restaurants are no exception. Restaurant-related stress can consume a person’s life with worry about employees, landlords, vendors, suppliers, customers, the press, and more. Each of these elements demands significant amounts of time each week, which leaves very little time for any other outside activities.
Spend a lot of time researching costs.
Before opening a restaurant, individuals should find as many people as possible who have opened their own establishments to get a sense of all costs involved. Most small businesses, including restaurants, fail because they do not have enough capital. To be safe, restaurateurs should build a lot of cushion into their budget, which means underestimating the establishment’s initial revenues and overestimating the costs. If someone cannot secure enough money to cover costs with a cushion, that person should find another partner rather than risk quickly running out of money.
The restaurant industry is extremely tricky because many factors, such as the terms of the lease, are unpredictable. Restaurateurs can negotiate several different types of leases, from flat fees to portions of sales or anything in between. Lawyers, consultants, and experienced business partners are the best sources of information for making such financial decisions.
Complete due diligence on potential partners.
A business partner can make the process of opening a restaurant much easier, but this help can quickly become a nightmare if individuals choose the wrong partner. Restaurateurs should think about the customer base they are trying to attract, the location of the restaurant, and the eatery’s theme when trying to identify potential partners.
Restaurant developers also need to consider the goals of potential investors. When it comes to a restaurant, investors should be focused on the long term, because it can take a long time for the establishment to become profitable. When struggling with profitability, restaurant developers need partners with quality advice rather than investors upset about their returns. In addition, it is critical that the ideals of the partner and the restaurant developer align or at least complement each other. If this is not the case, then clashes will likely occur.
Learn how to handle stress.
Running a restaurant can prove overwhelming on a daily basis. At times, it may seem like everything is going wrong. If people crumble under such circumstances, then they are not cut out for the restaurant business. The threat of failure should exhilarate restaurant developers not defeat them. When people learn how to handle stress effectively, they can channel the pressure into a constructive, creative outlet. The best restaurant developers learn quickly how to manage stress and turn it into something motivational.
The restaurant industry involves a number of factors coming together perfectly, so it should be no surprise that issues arise on an almost daily basis. Effective restaurant development involves looking at all the existing “fires” and focusing on the ones that are the most dangerous first so that the business can keep running.
Never underestimate the value of industry experience.
Ideally, restaurateurs have experience working in other dining establishments and understand how everything comes together into a great dinner service. If individuals do not have such experience, they should shadow friends who own restaurants to gain a sense of what it takes to operate a successful eatery. When people do not have direct industry experience, they should seek out partners that do and learn to trust their opinions. Any exposure to the restaurant industry can prove extremely helpful. Even when looking at particularly bad restaurant, it is helpful to discern what makes that establishment operate poorly and how one might avoid such shortcomings elsewhere.