You wouldn’t bake a chocolate cake without a recipe, would you? The same goes for starting a restaurant.
Have a business plan
Unfortunately, the hospitality industry has a large failure rate, so it is imperative to plan and look at all the aspects of the business before you set up. I was told by a business planning company “Failure to plan is planning for failure”. The business plan will highlight many aspects you otherwise would not have discovered until it is too late. With a plan, you are not guaranteeing success, but it is a blueprint or a road map of what you want to do and where you want to go. It is also a vital tool in the search for identifying funding opportunities and will assist potential investors in making that important decision on whether to invest or not.
Make sensible purchases
Have you heard of the saying ‘never go shopping on an empty stomach?’ Well, the same can be said for purchasing a business. No matter who you are or how long you have been in business, anyone can fall victim to the emotional gremlin and buy a business with their heart instead of their head. It never ends well.
Separate the kitchen
It is important to remember the kitchen should be viewed as a standalone business within the business, and it requires a higher level of care. In many cases, 60% of money is lost through the kitchen. Separating the kitchen from the rest of the business as two independent cost centres will help to control the expenses and highlights where you are haemorrhaging money.
Know what you're spending
How do you know what price to sell it at if you have no idea on how much it costs you to actually make it? This is a rookie error and one I am most certainly guilty of! I literally stood at the door handing out $50 notes to everyone who came in. I didn’t know what each menu item was costing me so in the end; I was subsidising everyone who ate at my restaurant.