Starting a Restaurant? Now May Be the Time
Before you label me insane, let’s do a little thinking. Yes, the economy may be the worst in at least 25 years, food costs are sky high and consumers have reduced their restaurant visits. However, look at the positive aspects of starting or buying a restaurant:
- The economic conditions show signs of bottoming out. That means we can expect improving conditions in 2009.
- Sadly, there are many restaurants that haven’t weathered the storm. There are good locations available for very low per square lease rates.
- There is a glut of new and used equipment at bargain prices.
- You have an opportunity to find good staff. Many hospitality workers are unemployed. Others are earning very little.
- There are statistics that show what consumers are eating and the demographics that are less likely to be affected.
- Food costs and commodities are leveling off and some prices are coming down. One of our chefs just bought Certified Black Angus rib loins for $4.35 per pound and strip loins were only slightly higher.
Still not convinced – neither am I - if you don’t use caution and common sense. Here are the caveats before you decide to start your restaurant;
- Cash flow and a comfortable cash position is a must. If you have to borrow, wait for a few months until there are clear signs of an improving economy.
- Your location is always important, but now you will have to understand demographics and figure how to position your restaurant in the best possible place.
- You will need to be unique. Opening another restaurant just serving “good” food is not enough. You will have to be different from all other operators around you.
- Marketing will be your life blood. If you don’t clearly understand restaurant marketing, learn now before you consider the investment.
- Finally, don’t just put lipstick on a pig. If you think you can re-open an existing restaurant that closed, be cautious. Know exactly why they closed and do something different and better. Talk to former customers for valuable input. Make sure you can financially support the operation as you grow your customer base.
Many people who decide they want to own a restaurant still have the belief that all they need is “good” food. That won’t work. There are many thousands of restaurateurs serving great food that are struggling in this whirlwind of issues for the industry. Knowledge is key.
As a blatant advertisement for one of my books, if you don’t have experience with restaurant cash flow, marketing, demographics and choosing restaurant locations. Invest a few dollars in The Restaurant Ebook. You have my personal guarantee that if you don’t save yourself thousands of dollars paying for errors you would otherwise make, you will get a 100% refund. If you choose not to buy my guide for opening a restaurant, find other materials that cover these subjects. Your research may be the difference between just surviving and thriving.
Larry Edger
Restaurant Owner, Author
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