10 Essential Tips for Successfully Opening and Running Your Own Restaurant

Starting a restaurant today is easier than ever. However, if it's not done correctly, you risk losing your entire investment.

Having worked with dozens of restaurant owners who collectively own nearly 1,000 restaurants, here are our top 10 tips to help you get started and stay successful.

Location Matters, But It's Not Everything

Even the largest restaurant groups started small but starting small can mean your initial location might not be ideal. However, if you can generate excitement while located in a less-than-perfect spot, you're likely onto something special.

Create a Memorable Signature Dish

Burgers, wings, fries, chicken sandwiches, and barbecue are popular but competitive. While basic menu items may succeed in areas with limited options, to truly stand out, you should have at least one dish that distinguishes you from others.

Define Your Restaurant's Identity Clearly

Many restaurants launch with the idea of offering an unforgettable experience. While trying to offer an unforgettable experience it’s possible for your restaurants identity can become confusing to both staff and customers if it's not done correctly. We typically see problems when a restaurant operates more like a nightclub during dining hours. Those types of establishments tend to not last too long.

The establishments that excel at offering amazing experiences also never forget that they're a restaurant first. For example, if you visit Chicken and Pickle, Top Golf, Goats Arena or Kitchen + Kocktails, you'll see the perfect blend of experience and dining which are all executed at a high level.

Set Clear Expectations and a Personal Goal

Opening a restaurant without clear expectations can lead to missed opportunities. It also helps if you have a goal, regardless if that goal is professional or personal. This could include things like the desire for financial freedom, buying an expensive piece of property, or achieving generational security but no matter what your motivation, having a goal and clear expectations can help you focus on doing things the right way.

Understand Your Restaurant's Breakeven Point

Before opening your restaurant, it's crucial to know your breakeven point. Many new owners focus on potential income, but it's vital to calculate the revenue needed to cover costs and expenses. This realization can be eye-opening.

Become a People Person

Building relationships is key in the restaurant industry. Restaurant owners who engage with people can generate 25% more income and have a better chance of long-term success.

Be Open to Using Technology

You're not the first to open a restaurant and technology can help you avoid costly mistakes. Aside from your POS, we recommend reviewing various forms of technology that can help with inventory management, bookkeeping, employee scheduling, delivery services, reservations, table management, employee communication and more.

Maintain at Least Six Months of Operating Expenses

With proper planning, developing relationships, and marketing, you can be profitable your first month. When a restaurant first opens its doors there can be a bit of intrigue from people who want to know more and when this happens, restaurants can get a boost in sales very early on. We call this the "honeymoon period" which can last as long as three years.

Despite having early excitement and interest in your new establishment, we still recommend that you maintain at least 3 - 6 months of capital for operating expenses.

Be Conscious of Your Restaurant Layout

If you design your restaurant from scratch, ensure that your bar and/or kitchen don't occupy more space than the dining area. Your revenue depends on seating capacity. A good rule of thumb is 30% kitchen area, 10% storage, 60% dining room area which includes 10% bathroom and waiting area. Also try to avoid layouts that can make customers uncomfortable. This might include seating and tables without enough spacing between them or tables near bathrooms or the kitchen.

Focus on the Numbers

Many focus on running their restaurant but neglect the business side. Dedicate weekly time to analyze the numbers, leveraging technology and meeting with your staff. Here are some numbers we encourage you to monitor:

1. the number of customers served weekly

2. average ticket amount

3. revenue growth and influencing factors

4. weekly expenses

5. inventory usage vs. purchases

6. labor costs vs. budget

7. table turn times

8. changes in vendor prices

9. forecast for the upcoming weeks

10. prior weeks budget and forecast compared to prior weeks actual numbers

Final Thoughts on tips for opening and running your restaurant

Launching a restaurant can be an exhilarating journey filled with challenges and rewards. By following these essential tips, you can navigate the complexities of the restaurant industry with greater confidence and clarity. Remember, the average restaurant is forecasted to last between just three and five years, but with dedication, strategic planning, a passion for your craft and the willingness to listen to your customers, you can build a thriving establishment that lasts for generations.