After your restaurant’s grand opening, you may be thinking all of the hardest parts of getting started – finding funding, creating a menu, acquiring a location and hiring staff – are behind you, but that’s not the case. Here are a few things to prepare yourself for as you run your restaurant every day.
If you’re opening a restaurant only because you love the ability to create new dishes regularly, you’re in for an eye-opening surprise. It’s a great sense of accomplishment to create a dish that’s well-liked, but many of your customers are going to come in for food they know and love. It’s likely that there are only a few dishes for which your restaurant is well-known. You’re going to be making a lot of the same dishes, over and over again. If it’s a dish you feel passionately about, maybe that excites you, but you’re going to need to prepare yourself for the idea that eventually, it can get tedious.
This isn’t necessarily a bad thing; if you get a really good system going, it’s more cost-efficient than making a bunch of dishes. It also reduces the risk of mistakes. However, churning out hundreds or thousands of tamales every day to satisfy demand isn’t always easy or pleasant.
According to the National Restaurant Association, average net profit margins for restaurants is about 4%. Of course, the actual spread is anywhere from 0% – 15%, but it’s usually on the low end of that scale. You’re not going to open up your restaurant, make a delicious dish, and then sit back and rake in millions of dollars. There isn’t a one-size-fits-all method for handling the low margins, either.
Unfortunately, while the cost of food may not be astronomical, there are other overhead costs that you can’t dismiss, such as both front-of-house and back-of-house staff, rent, equipment, and industry-specific expenses like POS systems, among other things. One of the biggest issues that new restaurant owners face is thinking they have to price their food based on their competitors, but the more important thing is to make sure you’re making a profit based on your own costs.
Many people open their restaurants for the joy of feeding others and providing hospitality. Once the business is up and running, though, they realize one key fact: it’s still a business. Feeding people will always be the main motivation, but everyone has to face the reality that someone has to handle the bookkeeping, the food inventory management, repairs, utilities, rent, suppliers, deliveries, complaints, and staffing. Someone has to take care of the things that run the restaurant, and it can be an unpleasant surprise.
None of this should stop you from living your restaurant dream, of course. What you need to do is be prepared for it. Psych yourself up for the monotony of preparing the same meal many times over in a day. Understand that you’ll have to make concessions to account for the low margins that restaurants typically have. Find ways to ease the burden of running your restaurant by adding inventory management software, hiring a bookkeeper, or using a simple service that can help you, like Reachify, which is an excellent way to ease the strain of phone calls. Let us show you how we can help with a free demo.