So you want to join the ranks of proud restaurant owners? Then you’ll need to be prepared for whatever this experience throws at you. Opening a restaurant is vastly different from starting any other business, which is why we’ve put together this list of insights from experienced restaurateurs to help you prepare for the most difficult challenges you’ll encounter when opening a new restaurant.
Working Day and Night
Whoever said, “do what you love and you’ll never work a day in your life,” clearly never owned a restaurant. Even with a deep passion for the food industry, a 14-hour day is still very long. Unfortunately, long hours are likely what you’re in store for when opening up your own restaurant. When you’re not in the kitchen, you’re likely working on other areas of the business such as purchasing, marketing, or payroll. So you need to be prepared for your social life to take a temporary hit when starting off.
Finding and Retaining Reliable Staff
Any restaurant, whether a small delivery/takeout-only pizzeria or a full-service location, will require a full team of people. This means you’ll need to hire front counter workers, cooks, and possibly delivery drivers, depending on what services your restaurant provides. But as countless restaurant owners have experienced first-hand, hiring and retaining employees is not as easy as it initially seems.
“Finding help is the biggest challenge for us. Half of my time is spent managing people.” - Chris Garcia, Frankie’s Pizza
Not only do you have to find people who are suited for the foodservice industry, but you also need to find ways to get them to work for you rather than for a competitor a couple of blocks away.
This becomes even more challenging when hiring delivery drivers. As Mike Fredrickson, the Director of Operations for Papa Murphy’s Canada, explains, "It’s difficult to find drivers. They work for Uber and Skip the Dishes in Alberta. A lot of our franchisees are tapping into family, and posting on Indeed and Craigslist to find drivers. In order to attract drivers, we’ve had to offer more incentives than [third-party delivery companies]. We offer an hourly wage, a delivery fee, and the tips for each delivery. The third parties don’t pay a wage, so that differentiates us a bit."
“Delivery drivers have become really challenging for us to hire.” - Gabe Connell, HotBox Pizza
You’ll need to take advantage of various online job searching platforms in order to get your job opening in front of as many eyes as possible. It’s also a good idea to create an employee referral program to encourage any current staff to publicly recommend your company as a place of employment.
“We figured if we can get somebody to join on and be with us for 60 days, there's a good chance they'll be with us for a while. So, we pay the employee who referred them a total of $200.” - Gabe Connell, HotBox Pizza
Maintaining a Consistent Food Quality
It’s easy for someone to create a delicious meal when you have all the time in the world. But it’s much harder when you’re on the clock and trying to go through 300 or more orders each day. As a result, many restaurants have a tendency to let their food quality slip as they continue to grow and get busier.
19% of customers will never order from you again after having one bad experience.
To prevent your food quality from suffering when trying to meet such high demand, you need to have systems in place. This includes standardized recipes and in-depth training programs.
Figuring Out How Much Money You Need (And Where to Get It)
Perhaps the biggest challenge for most budding restaurateurs is navigating the financial requirements. Not only do you have to research how much all the various equipment, staffing levels, and ingredients will cost you, but then you also have to add all of this up and determine how you will go about finding a source to give you this money.
“Depending on your financial standing, there are usually two ways to open a restaurant. There is a want and a need. You open a restaurant thinking you want to do this, this, this, and this. You want to have a three-door prep station, a big walk-in, and xyz. When I did it, my dad sat me down and told me to think about what I needed to get the doors open, not what I wanted. This let us open the place for $19,000 instead of $50,000." - Andrew McElderry, Andrew’s Pizza & Bakery
As a hopeful restaurant owner, here are the various methods for securing the funding you will need:
- Small Business Association loan
- Personal savings/credit cards
- Bank loan
- Home equity loan
- Cash advance
You can potentially lower your initial cash outlay by 10-15% by financing your kitchen equipment.
If you can use our tips and find other ways to help overcome these work/life balance, staffing, and financial challenges, then opening up your restaurant will become significantly easier. And when you’re ready to make your concept into a reality, check out our blog post on the starting steps in opening a small restaurant.
