- Open with enough working capital:
Most independent restaurants do not make it past the first year and the reason is invariably the lack of working capital. This capital is the cash which you will use to operate your restaurant business until the profits are strong enough to take over. With this money, you will pay your rent, employees, and all other operating expenses. This could take from one to two years to happen, so it is important to have enough cash to last until then. Without enough working capital, stress could begin to creep into your life and your sales and profits will deteriorate.
2. Learn how to treat and train your employees:
It seems as though the most difficult aspect of operating an independent restaurant business is the people who work there. It has been determined however, that we are not talking about the employees; instead we are talking about the management of the restaurant. Not only must management understand how to train employees properly, but management must also understand how to treat employees with respect and how to motivate the employees. A restaurant business with constant employee problems does not have employee problems; instead, this restaurant has management problems. Proper restaurant management involves getting the most possible out of each employee without being disrespectful of each employee. It takes a very special management team to understand the fine line here.
3. Understand customers needs:
Many moving parts go into the experience a restaurant customer may have at an independent restaurant. Attracting a new customer to your restaurant not only has to do with your advertising, but it also has much to do with the signals which everyone in your building is sending out. If your message is a negative one, it can be felt on the streets. Once that problem is solved, here is a list of important factors which will determine if your restaurant customers experience is a positive one or not. The atmosphere is critical to your customers experience, are you and your employees happy to be at work today? The proper music can also go a long way toward breaking the ice and creating a cheerful atmosphere. Great food and great service is a given. Competition is around every corner and if your food and service are not above average, you will not find yourself on any customers list. Your prices must be in line with what you have to offer a customer. Lousy service or food will not command a high price.
4. Understanding profits:
Management must understand how profits work at an independent restaurant. The simple definition is as follows: Profits are simply learning how to keep as many sales dollars as possible for you. More profits are lost through waste than any other source. If, for instance, too much (refrigerated food) is ordered it could spoil and need to be thrown away. If employees drop food on the floor, that is waste. A leaky water faucet is waste. The scheduling of too many employees is waste. Waste is rampant throughout every restaurant. Successful restaurants understand where losses occur and learn to control them.
One last nugget. Here is an example of motivating your employees to help you to find success in the independent restaurant business.
During your next employee meeting let your employees know that without happy customers, who will return day after day, there will never be enough money to give employees a raise. Then tell them that you really want to give everyone a raise, but for that to happen, each of them must excel. You will not have to wait long for the results.