Owning a Restaurant and Profiting Through the Food Service Industry

Owning any food service location, whether it be a fancy restaurant or simply a food cart, can become a very profitable source of income. There is little fluctuation in the demand of food, and people will almost always be willing to try new edibles or drinks whenever they get the chance. One of the main issues with the food service industry is the huge amount of competition, regardless of where you go.

By using unique methods and competitive prices, combined with advertisement and special promotions, your restaurant or other food service business can excel beyond any of its neighbors and perhaps even expand out to multiple locations.

Food is a product that relies primarily on pricing and convenience. We can all make our own food on some level, so the decision to pay for food from any food service must involve primarily the consumers financial situation, combined with the convenience of not having to make it themselves. The quality of food served in your establishment will obviously play a large role in your overall success as well, but this will often times be overshadowed by pricing and convenience.
Starting From Scratch: A Guide to Small Business

Owning a Restaurant: Business Strategy and Themes

Most restaurants or food service locations will have some sort of theme. They might sell food from a specific culture, or perhaps they make food for only vegans. Although having a theme will help to set your establishment apart from your competition, relying or promoting too heavily on a specific theme can also scare many potential customers away. Releasing an advertisement that claims your restaurant serves the best steak in town might bring in a few new customers, but at the same time, people who see the advertisement might avoid your restaurant in the future if they are looking for a good salad or even chicken. Instead of forcing your business into a category too specific, release promotions and advertisements that speak to the entire population.


Speaking With and Convincing Potential Investors for Small Business

As a general rule, never allow your food service restaurant or other location to sit idly for long periods of time. Be sure to constantly make changes to the pricing and menu options available in your store. If you are unable to constantly add new items to your menu, consider creating combo meals out of items that already exist, or offering a daily special for each day of the week. A customer wants to see change: if your establishment focuses primarily on customers who would like to dine inside your restaurant, changing even the smallest things periodically might have a positive effect. Consider making small customizations to the napkins or silverware - even the right salt and pepper shakers during a festive event might be the key to really increasing your sales base.

Financial Decisions and Employment

Cutting corners is a term that is known all too well when it comes to small business ownership, especially in the food service industry. The quality of ingredients used will be a constant issue for most owners of any type of restaurant or food establishment. For your frequent customers, making even the slightest changes towards the ingredients could have extremely negative results. Take extra care in managing your budget and always try to work your way up from using the cheapest ingredients to purchasing only the best quality merchandise. Reversing this process by providing high-quality food during your initial stages might be a bad choice in the event of financial crisis or difficult economic times that might force you into using ingredients of a lesser quality.

For any business to succeed, employee training must reach far beyond the bare minimum. The solid sense of direction that the owner himself/herself possesses towards the policies and decision-making of the business should be passed on to all employees. Depending on the size of your workforce, managerial positions must be chosen with great care. Creating a web of understanding between all of your employees through managerial positions is a must - certain concepts should become common knowledge among all of your employees, and the way this is made possible is through inter-employee teaching or the sharing of knowledge between colleagues.

Creating Structure in Small Business Through Managerial Training 

Long-term Management and Financing

Having a general idea of how you plan to run your food service location is simple for some, but not every business owner is successful. Many individuals are unable to keep up with the constant pressure of both managerial and financial decisions. By preparing for long-term business ownership through various techniques, any establishment in the food-service industry can withstand the hardships that many small business owners are unable to overcome.

• Before making any single inventory purchase be sure to really do the math and determine exactly how much things will cost you, how long before they perish, how many servings you will be able to make, and how much profit you will receive after the entirety of the item is sold.
• Keep track of your restaurant sales during the initial stages of business. Make a list that documents how much of each dish is sold each week and at what price. You can later use this list to help you decide how much of any given ingredient you will need for an allotted amount of time.
• Since you will probably have to pay rent every month for the location of your restaurant and almost always have to provide payment to at least a couple of employees, you can't do the math only for the food costs and prices. Include every single expenditure that your restaurant has in a master list to be reviewed and altered regularly - consider using a computer program such as Microsoft Excel to easily document all of your financial information.

Opening Your Restaurant

Creating an LLC or Becoming Incorporated

Location

Location is one of the most vital aspects of any food-service business. Without proper positioning, your establishment will no longer meet the needs of your customer base, and a huge amount of your revenue will virtually disappear or hardly even exist at all. 

When trying to determine an ideal location for your individual business, consider exactly who you will be serving and in what manner.

Commercial Districts 

Amidst all the office buildings, retail stores, and car dealerships; there is certainly money to be made. Commercial areas can make or break any food-service business.

1. If your marketing or service ideals aim towards convenience and speed, a commercial district can bring in huge revenue to any restaurant during lunch breaks or even casual business meetings. Prepare your business to quickly serve large amounts of customers. If the line is too long, you'll lose all that extra income you would otherwise make during lunch or dinner time each day.
2. If the area surrounding your business consists mostly of commercial establishments, delivery might be a great way to reach out to some of the more distant residential areas while providing local workers with the option of having their lunch delivered right to them.
3. Don't be hesitant to inform surrounding businesses owners of the services you offer. Regardless of how high you climb up the corporate ladder, you still have to eat. If your restaurant or other food-service location is able to quickly prepare and deliver food that would be perfect for any sort of event or meeting, you might be a suitable catering service for office buildings or other businesses to refer to in the future.

Residential Districts

Households and individual families act as the primary source of income for most small businesses. Regardless of what type of establishment or style of food you plan to serve, choosing to place your restaurant in a residential area will require a slightly adjusted approach towards sales and marketing or advertisement.

1. Customized advertisements, including door-to-door promotion and other personalized means of getting your business noticed will be very vital towards creating a solid base of returning customers to any restaurant positioned in a residential area.
2. As with commercial areas, delivery can often times be used to increase your revenue. Take the time to do some calculations and determine the most cost-efficient way to go about preparing your location to accept delivery orders. If you offer very high-end cuisine, or already invest heavily on the atmosphere and other aspects of your business that only apply to customers who dine in, offering a delivery service might not be the wisest choice unless during a request of special circumstance.
3. Consider offering various deals that only apply to certain times or days of the week. Coordinate your employee schedules to ensure the quality of service in the event of a rush of customers during these periods. 

The food service industry is a considerably difficult field to find large success in. Creativity is going to play an enormous role in any business you attempt, while being aware of the surrounding areas will provide insight into possible improvements or changes that can be made to increase revenue. By taking great care in determining the amount of goods you will require on a weekly or daily basis, small business owners can ensure that no finances are wasted while maximizing the potential of their restaurant or other food-service location.