Quick Tips on How to Open a Restaurant

My father was a World War II veteran who loved the opportunity to recall his war stories as a young sergeant in the army. Growing up we heard many of the same stories over and over again – many of them even stayed the same sometimes! One thing that never changed was the soldier’s constant fear of minefields. A casual walk could turn deadly anywhere in Europe.

Opening a restaurant is littered with minefields that can make survival difficult. Here are a few tips on how to open a restaurant and avoid those business minefields.

1. The majority of restaurants fail, period. There is no debate on this issue. The only debate is whether it is 60% or 90% or somewhere in between. Regardless of the percentage, the reason most restaurants fail is under estimating the cash it takes to open and survive the first few months of operating. Never open a restaurant without enough cash to pay your bills for at least six months.
2. The focus on food while opening a restaurant is lopsided. Study after study says that food is important, but only 40% of the reasons a diner chooses a specific restaurant. Service, ambiance, convenience, value and consistency makes up the other 60%. Many new restaurateurs spend so much time perfecting their food product, they forget to complete the package by working on the entire system.
3. If you really want to get some tips on how to open a restaurant, go back to your childhood and remember the classic lemonade stand. They had it all! A sign, location, cuteness factor of kids, immediate service, value, emotional appeal, cost control, simplicity of the menu, street appeal and a simple budget.
4. Key to surviving as a new restaurant is understanding restaurant marketing. Marketing is not advertising. Restaurant advertising is a very small part of restaurant marketing. For a great start to your restaurant buy The Restaurant Marketing Plan Handbook. This will be the best $20 you ever spent.
5. Cash flow is king! If there was only one tip I was allowed to offer someone who was opening a restaurant, it would be to understand cash flow. You can be profitable and go broke! In The Restaurant Ebook, there is one complete chapter on how restaurant accounting and cash flow relates to your ability to prosper.

Live your dream and take the entrepreneurial plunge, but do it responsibly and with all the knowledge you can possibly glean from other restaurant owners who have been in your shoes. Don’t rely on any comments from people who haven’t actually had the ups and downs in the restaurant business. Learn how to spot those minefields from the people who have shared the battlefield.