When you are planning to open your first restaurant, all you want to know is how to become successful. But, before that, I believe you should first avoid some lethal mistakes.
Numbers have show that around 60% of restaurants close down in the first year. And I have seen this personally; bars and restaurants suffering in their first year. They all have some mistakes in common. Here are some I would like to point out:
Never worked in a restaurant before
For many people, owning a bar and restaurant is like a cool thing to them. I have seen many owners who have never worked in catering industry before, but make money from other industries, and think the restaurant business looks easy and cool. But what they didn't know is, this industry actually can eat them alive bit by bit. I strongly suggest for those people to look for a partner who knows this industry well.
Wrong partner
Some people are good at talking but not in action. Some people can't work under pressure (when they become an owner its a different kind of pressure), some like the power but not the business, some like to point fingers when things go wrong, and some never agree on the same direction before they open their restaurant. There are others who are confused about they're job role, some who just want money without putting in the work, some who don't like communication, and some who don't even know what they need to do. I strongly suggest to those looking for a business partner to understand that basically it is like a marriage - but to your partner and the business. Once it is wrong, many things will go wrong.
Wrong location
I am one of those people who made this mistake early in my career. I was over optimistic and over confident; it was a painful mistake for me. I hope after people read this blog, they will think again about the location.
The market doesn't understand what you are trying to do or sell
Many times I walk pass restaurants where I just don't understand what they are trying to serve or what they are trying to do. Don't get me wrong, unique ideas or inventions are really important, but how many people succeed from it? Especially for a first restaurant business.
Over budget
This one is really dangerous because everyone wants the best for their restaurant. They want the best design, best equipment, best tables and chairs, best bar tops etc... But they soon realise halfway through their project that they have no more money to spend. Rent is coming, menus need to printed, builders need to be paid, and even if they can open for business, don't expect it to get busy immediately. You will need time to adapt and adjust the business. But then again, the business needs cash flow for the first 6 months to survive.
Relying on staff but without a system or a structure
Once you open, the first GM is the most important person for the business. Having the wrong GM can kill the business, because you can't been there 24/7, and moreover there are too many things is in your hands already. That is why the GM is the key to the restaurant. Some GMs may appear good on their CVs, they may work well in hotels, or at waiting tables, but not at being a GM and managing a whole restaurant. Some GMs don't even care, and I've seen many of them. So be careful when you hire your GM.
People don't even know you're open
Have you ever experienced walking by a restaurant in your neighbourhood, and you didn't even know when they opened. Then 6 months later, you realise that they're suddenly gone.
You need a good marketing plan before launching your restaurant, because once you open, it will be too late to plan. You've got more to do than you think.
If this is your first business, the best thing to do is to become partners with someone who has business experience in the field. This is because you can see their track record and whether they've been successful previously or not, which will help increase your chance of success.
Wing Chang
“Always deliver more than expected.” — Larry Page, co-founder of Google
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