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The following excerpt is from the staff of Entrepreneur Media’s book Start Your Own Restaurant and More. Buy it now from Amazon | Barnes & Noble | iTunes or click here to buy it directly from us and SAVE 60% on this book when you use code SIDEHUSTLE2021 through 6/20/21.
Nothing teaches as well as the voice of experience. So we asked established foodservice business operators to tell us what’s contributed to their success and what they think causes some companies to fail. Here are their stories.
1. Start with a job.
The best preparation for starting your own restaurant is to first work in someone else’s establishment. While you should certainly read books and take courses, you should also plan to work in a restaurant for at least a few years, doing as many jobs as possible. Pay attention to people who are doing different jobs in the restaurant as well, so you can understand the various positions. Think of it as getting paid to learn.
But just because you worked in a McDonald’s doesn’t mean you’re ready to open a fine-dining restaurant. You need to work in a restaurant, pizzeria, deli baker, or catering business that’s similar to the one you plan to start. Paul Mangiamele, president and CEO of Bennigan’s says, “Work in different positions, in the front of the house, back of the house, bartending, hosting, serving, cooking,” he says. “Know every single aspect of the operation, because when you’re an owner, the buck really does stop with you. No matter what comes up, you need to be able to jump in and handle it because it’s your business.”
2. Do basic market research.
When Jim Amaral decided to start Borealis Breads, a wholesale bakery specializing in sourdough bread, no one else was doing anything similar in Maine. To find out if there was a market for the breads he wanted to bake, he called restaurants and retailers, explained his idea, and asked if they’d be interested in buying his breads. “I came up with about 15 accounts that said they’d be interested,” he says. That was enough to get him started.
3. Test your real market.
When your test marketing, be sure you conduct your tests on sample groups that represent the market you plan to target. And remember that many people will compliment free food because they think it’s the polite thing to do. So ask questions that will get you information you can work with. It’s not enough for people to say they like something. Find out why they like it, if there’s anything they don’t like, if there’s anything they would change and if they’d be willing to buy it.
4. Find your market niche and stay focused.
Amaral says one of the key things he’s done that has contributed to his success is to find a market niche that no other baker occupied. “We’ve positioned ourselves as having a unique product. We don’t have a lot of competitors, and that’s allowed us to maintain fairly high wholesale prices.”
One of the best ways to survive in this industry is to become an expert in your area, so don’t go too far from your core business. If you do, you might become indistinguishable and get lost in a cluttered marketplace.
5. Don’t let customers leave hungry or unhappy.
Even the best restaurant will have the occasional dissatisfied customer. Stefano LaCommare’s policy is that no one leaves Stefano’s Trattoria hungry. If someone isn’t satisfied with a dish, he determines if the issue is personal taste or a problem with the preparation. In either case, he replaces the meal.
In his Melting Pot restaurants, Brian Neel takes the approach that the customer is always right — even when they’re not. “Even if we know the customer’s perspective isn’t entirely correct, we do our best to be understanding, and do what it takes to make them happy,” he says. Sometimes an apology is all that’s needed; sometimes a free item will take care of it. Or, Neel says, “If it’s a really bad experience, we’ll comp a check and invite them back to dinner again on us. The most important thing is that they feel that you’re sympathetic to their concerns and that you’re very sincere in dealing with them.”
6. Make your food consistent.
Once you’ve developed recipes that you’re confident in and you know your customers enjoy, be consistent with them. It might be fun for you to add a different spice or try something new, but a customer who’s expecting a dish to taste the way it has in the past is going to be disappointed if his expectations aren’t met.
LaCommare recalls hiring a chef who had a hard time with this concept. LaCommare was pleasant but clear and firm about how things were going to be. “I said, ‘This is my kitchen. My way. My style. I’m not saying you don’t know how to cook. But if you want to work here, you do it my way.’”
7. Build relationships with your suppliers.
Create a bond with your suppliers so when you’re in a bind, they’re willing to do something extra to help you out. Be loyal to them; don’t make unreasonable demands, pay your bills on time and respect everyone on their staff — including the delivery drivers.
“Your distributors are your life blood,” says Mangiamele. “They’re going to make sure you’re aware of specials, discounts and purchasing opportunities.”
8. Get it in writing.
If you’re in the catering or wholesale food business, never assume you have an order until you have a signed contract or purchase order. Caterer Ann Crane recalls making a bid on an upscale party. It was a new client, and she had taken her art director and florist with her to meet with the person — and they all left with the impression that they had the job. But the client was accepting bids from three other caterers. The lesson is clear: Don’t take anything for granted. Find out whom you’re competing against and when you can expect a final decision. And don’t buy any supplies or materials until you have a signed contract and a deposit.
9. Listen to your customers.
Customers are happy to tell you what they want, so give them opportunities to provide feedback. Use comment cards in your restaurant, a feedback system on your website and Facebook page and any other way you can think of to gather responses from your customers.
“We place a lot of emphasis on guest-driven decisions,” says Scott Redler. “We recently replaced our standard ice machines with ‘chewable’ ice machines after guests requested chewable ice. Although it was hard to justify the new equipment on a spreadsheet, we believe it makes financial sense in the long run because it increases the loyalty of our guests.”
On the other hand, keep in mind that you won’t be able to meet every single customer request. Trying to do so will stretch your resources to an unmanageable point. For example, if a few customers ask for certain products, be sure the overall demand is strong enough to make purchasing those items worthwhile. One coffeehouse operator says a few people have asked her to carry goat’s milk, but in her market, to do so wouldn’t be profitable. However, years ago, when customers began asking for skim milk, she realized that the market was strong enough to justify adjusting her inventory.
10. Get in with an out.
In addition to your startup plan, you need an exit plan. Know how you’re going to eventually get out of this business — whether you need to get out because things are going badly, you want to retire or for any other reason. For example, if you have to close the operation because of a lack of business, how will you handle that process? Or, if your restaurant is a rousing success, would you entertain an offer from someone to buy it? If you’re 40 when you start your restaurant, will you still want to be running it 25 years later?
While you never know for sure how your business will do until it’s up and running, hope for the best, while being prepared for whatever comes your way. Businesses have changed directions, relocated, scaled up, scaled down, been sold or simply decided it was time to close its doors. You never know what will happen, but if you start out with passion, enthusiasm, a lot of planning and attention to detail, you might just find yourself living your dream of being a success in the food services industry.
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