Owning a Food and Beverage Establishment

Many people have the dream of someday owning a restaurant, coffee shop, bar or some other type of food and beverage establishment.  There are some things you should know before embarking upon this journey.  Extensively exhausting your due diligence process before proceeding with your concept can prevent you from failing.  Being prepared is critical to having a smooth start and enduring the initial pitfalls of starting this type of business.  Let’s go over a few key points.

If you want to be an absentee owner, this is the wrong industry.   A lot can go wrong throughout the course of the day that your staff may not be fully equipped to handle.  Many owners are at their restaurant from opening until closing.  Forget about having your weekends or holidays free.  Your new social life will be within the confines of your establishment.  Customers want to be schmoozed, employees need leadership, problems need to be resolved, vendors want to be paid and the list goes on.

One of the first things you may need to do is enroll yourself in a food safety course.  The department of health requires it and you’ll be surprised how many times you’ll actually need to know the information you’ll learn at this course.  It’s also a good idea to have your manager(s) take the course also.  In most cases, the department of health requires at least one person at the establish at all times who has underwent the training.  It’s also important for you to have a good understanding of the regulations and what is required of you to protect the safety of your customers and staff.  The last thing you’ll want is to be fined or shut down for a violation.

The venue you chose to operate in is vital to the success of your business.  There are few factors more important than your location.  Pick a place that is within close proximity to your targeted customer.  If you plan on opening a high-end establishment, don’t do it in a low income community where the locals won’t be able to afford your restaurant.  Also, consider your competition.   What other businesses will you be competing with or may be selling the same type of food/beverages?  Can you compete with an establishment that has national brand recognition?  In other words, does it make sense to open a coffee shop where there is a Starbucks nearby?  Have you figured out how many pizzerias there are within a 5-mile radius from the location where you want to open one?

If you’re planning on serving alcohol, you may want to consult with an attorney to help you with the licensure.  There are different types of alcohol licenses, some of which are cheaper and easier to obtain.  For example, a beer and wine license is much easier to get than a full bar liquor license.  Either way, you will be significantly increasing your chances of generating revenue with some sort of liquor license.  Most restaurants make far more money from the sale of liquor than food.

Like any other business, promoting and marketing your establishment is important and will be instrumental in getting your business off the ground.  Unless you’re in a very visible, high-traffic location, don’t count on customers just walking in.  Consider placing an advertisement in local publications and develop a website.  Many people use the internet or their smartphone to find out what places are local to them.  Also consider catering opportunities.  This could be an excellent way to expand upon your existing business.  Even offering gift certificates is an excellent way to generate revenue.  You’d be surprised how many people don’t actually cash in on them.

Being original and offering items or varieties that are not available in your area is a way to ensure the longevity of your business.  Recognize that customers are not only interested in the quality of the food but also their overall experience of visiting your establishment.  Utilizing a little creativity and doing things that no one else is doing can really make a big difference.

The development and implementation of a disaster plan could save you from extreme embarrassment so have one ready and make sure your staff is familiar with it as well.  It is important to anticipate what can go wrong at your location and be prepared with a procedure to deal with it.  If you didn’t think you would be responsible for predicting the future as a business owner, you were wrong.  Know your operation and think about what could go wrong.  Chances are, at one point it will.  For example, will you have a backup generator if the power goes out?  What measures can be made to get equipment repaired quickly? Do you have access to on-call staff if half your regular staff or key staff gets the flu at the same time?  Do you have a procedure in place if someone is choking or having an allergic reaction? Do you have enough inventory?

These are just a few things to consider when opening a food and beverage establishment.  Like owning any business, it’s hard work and stressful at times.  Businesses like this fail because of inexperience, bad management skills, lack of working capital, inadequate promoting, wrong location, poor customer service and food quality, etc. Knowing this before you even start gives you the opportunity to plan ahead and prevent yourself from making these mistakes.

For more information on opening and operating a food and beverage establishment, call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.