Story by Lee Hindin: A good friend invited me to lunch the other day. He wanted to talk about opening a restaurant. Since I have opened and run over 50 restaurants during my career, I guess he figured I would be a good person to talk to.
Among the 50 restaurants, I started and grew 35 of them myself. The remaining restaurants I either licensed, franchised, or purchased existing concepts. The funny thing was that I wasn’t sure if he wanted me to talk him into it or out of it!
We had a nice lunch as I shared my thoughts with him. He had a good conceptual framework for his menu and décor. He was convinced he had a winning concept. I was impressed with his general premise. I wish I could share it with you but that would not be fair since he shared the concept in confidence.
What I can share is what it takes to turn a winning concept into a winning formula – a restaurant that makes money and stands the test of time. I learned this the hard way during my time studying at the school of hard knocks. I certainly do not want my friend to have to do the same. I would not want anyone to have to go through that. This is why I wanted to share our discussion on my blog in hopes that it could help someone who is thinking about opening a restaurant.
For a restaurant to be successful they would need to have great food, a winning value proposition, the right location, great service, fitting décor and ambiance, targeted marketing, and militaristic systems in place that make it all run smoothly.
History shows that only one out of every ten new restaurants succeed. The key is to understand why the nine fail and to make sure you identify, address and solve for the reasons that drive their failures. Some neglect to get the food right. Some have great food but do not get the profit margins right and are unable to pay the bills. Others get the food and profit margins right but do not have the right location. Some may have the right location but not enough tables or parking. They may have paid way too much rent or spent too much on building the restaurant. Some fail to implement proper training systems so while the premise is right the execution is inconsistent. Others do not focus enough on wowing and delighting their guests with great service. Some forget that even with great systems and training, it all comes down to the people. To have a great restaurant that makes money you must have great people who believe in what you are doing. They need to love your food and love working with you. Finding great people and keeping them is often a new restaurants downfall. Some design great offerings but cannot find the right suppliers or ingredients and have trouble stocking their inventory. In my experience, these are only some of the ways why even the greatest concepts in restaurants fail.
If you can develop a great concept, avoid the pitfalls that were discussed, stay focused on your goals, you have a good chance of being that one out of ten restaurants that succeed.
I hope this is helpful and I wish you the best of luck if you are starting a new restaurant. It can be the hardest, most frustrating thing in the world but it can also be the most fun and rewarding endeavor you have ever experienced!