Opening a New Restaurant
Do you dream to open a new restaurant? Do you want hungry customers queuing outside your restaurant and leaving with a smile on their face? Do you want to be earning money in an industry worth an estimated £25b? If the answer is yes continue reading to make your dream a reality.
The UK market have approximately 56,000 restaurants which simply began through a vision similar to yours. In such a competitive industry and with extensive experience in providing funding to new-start restaurants in the UK, WestWon have collated 6 key points to help you along the way. We want to ensure that you avoid common mistakes made by many on your journey of success.
Expecting to Make Money on Day One
It is impossible to say when a new start restaurant will start making a profit. Restaurants of different sizes and locations will all have different outgoings and profit margins. But, it will take time for a new restaurant to build a client base and establish a reputation. Revenue will start off small, and with expected growth in the coming months and years.
Some prospective restaurant owners will mistakenly imagine the ‘grand opening’ as the day that they start making a profit. It is worthwhile to remember the first year of any business is when costs are at their highest. As the restaurant develops, and your employees become accustomed to the daily routine, the business will become more efficient, thus leading to higher profits.
Failing to Communicate with Staff
Running a new restaurant is not easy, especially if the restaurant owner has no prior experience in the hospitality sector. Failure to communicate effectively with your staff can lead to low morale and staff concerns. This will naturally affect the way your employees treat your customers.
Speaking to your employees regularly will keep them invested in the business. Methods vary from holding staff meetings, making time for one-to-one interaction, and even discussing issues over the telephone. Asking your staff for their feedback and how you can improve the day to day running of the restaurant keeps the employee invested in the restaurant and will help you succeed.
Poor Customer Service
Many restaurants fail due to poor customer service. It is possible that a customer may experience a less than satisfactory visit to your restaurant. That is a part of life – not everyone has the same expectations. How you and your staff react to the complaint is extremely important. It is essential that you have a complaints policy in place, and that you regularly train your employees on how to deal with them. It’s easy for restaurant owners to fight with complainants, but if they have a justified complaint, then this can lead to a bad reputation.
Most importantly, take the negative feedback on board and ensure it does not happen again. Bad comments are more important than good ones, because they give you insight into how to best improve. We may not like it, but we humans learn more from our mistakes than our successes.
Poor Marketing
So, you’re setting up a new restaurant, how do you promote that you are open and entice people to come in and enjoy your food?
Budgets may already be stretched, and usually the marketing budget is the first to go, if cash flow is tight. Even if your marketing budget is low, or non-existent, you should make the most of free advertising including social media accounts for your restaurant. 86.5% of restaurants have a Facebook page, and over 60% have a Twitter page. If your new venture has a Facebook page, your guests can check-in as they arrive and spread the word to their friends and family.
Neglecting Finances
It can be easy to lose focus on your outgoings, especially in the first year of running a business. Costs in the first year are expected to be much higher than an established business. While there’s every chance you have a hands-on approach at the beginning, keeping on top of your finances is vital.
Producing cash flow statements, profit and loss accounts, and balance sheets, lets you see the overview of the business’s performance. It also gives you insights like where the restaurant may be spending too much money or where you can improve profitability.
Consider Leasing
Leasing is a great way to keep the money in your business. With structured payment plans, you know exactly how much is going out and when it is going out. It makes sense to pay for the equipment as you are using it, therefore keeping cash in the business, doesn’t it? Did you know that tax benefits from leasing equipment often makes leasing the cheaper option than paying cash?
WestWon specialise in catering equipment leasing. We can even fund the full project including other collateral such as furniture, IT/EPOS, lighting, we even fund the fit out of your restaurant! With over 25 years’ experience in this industry, we can help all sizes of company save money and make your dreams a reality. Bon appetit!
For more advice on how to avoid these common mistakes or to speak with a catering leasing specialist, please give WestWon a call on 01494 611 456 or email hello@westwon.co.uk.
Written by George Shillingford.
