Reach your customer’s mind through the stomach
The pandemic creates uncertainty for the hospitality industry, but also offers unique opportunities to start your business.
Restaurants are at the heart of many communities. This is where families go to celebrate, couples go on a date, and even friends gather to watch the game and eat. If you’ve always dreamed of starting your own restaurant, you’re not alone. In fact, there are a large number of people who one day wish to become a restaurant owner regardless of their main activity or source of income. Although these times are strange and unpredictable than before, the hospitality sector in India remains one of the worst affected by the pandemic. Some statistics indicate that after this initial six-month lockdown, more than 40% of total restaurants in India had to close.
Those who held on were either seasoned restaurateurs who have been there for a long time or deep pockets who were ready to take the plunge to maintain and protect their brand. The loss to industry with minimal or no government support was immense and the bottom line was taken back at least seven years for most large organizations.
While looking at an alternate picture, these times also provide an opportunity for those with super optimistic outlook. Compared to the pre-Covid era, one can get prime property at a rental value of 50-60%, buy equipment at recently closed restaurants (saving around 60% of the total cost), a hand – cheaper labor and staff due to unemployment and more viable contracts. because it is a demand driven market. Mumbai, known for the city where most businesses would be unfeasible due to the cost structure, is now in a position where a business can convert many fixed costs into variables that give them enormous leverage over time on their deals.
The pandemic presents unique challenges for anyone looking to enter the industry at this point. And while the way forward depends on many variables, here are some strategies one can adopt to start and run a restaurant business in the current scenario:
Put your concept in place The first thing to do when setting up your own restaurant is to detail your concept, your food, your style of service and your offerings and what makes your place unique and adaptable and why it would be your consumer’s first choice. Detailing the same also means that you fit well into the pocket of the community and the area. Keeping in mind the current scenario, the concept should be strong with the on-site dinner as well as the delivery. Your food, packaging, and communication should all come together in one branding language.
Make sure you get professional help– Like any other business, success can only be achieved by doing things right from day one. Make sure you have a good consultant or creative agency on board who can walk you through all the nuances and put their years of experience to help you build your business. You can also opt for an on-board management agency that can work with you even after opening to manage the day-to-day operations of your business.
Find the right location according to your concept- In the restaurant business, visibility directly equates to good sales. The location of your restaurant will be a major revenue driver. It’s good to identify the location based on the audience you are reaching out to, the average cost per capita you want to sell to, and your competition in the area. Restaurants serve customers what they want against create a product that you personally believe is a consumer requirement.
Get your legalities – Another key resource is having a good legal team from the start. From helping you with your leases to getting all the required licenses on your end, that’s the job of a professional. Invest in a team that will make doing business easier for you in the long run.
Find your core team They say your business is as good as the team behind it, and if you’re the smartest person in the room, you could be in the wrong place. Your core team which includes your manager, boss, store manager, cost controller and auditor, accounts and marketing team are all roots of your business. They define how your restaurant operates and will pool the experience to do so.
Work with the right technology Today, there are many technological solutions available for your business. From your invoicing and accounting software, to your marketing tools, Customer relationship management (CRM) and other contact mechanisms help to communicate with your customers much more efficiently and easily. The data analysis in this industry is huge and the more you can use it for, the better for the business.
Find your suppliers and partnerships- Your suppliers for the supply of food and non-food products are like partners in your business. Margins and profitability are driven by cheaper purchase values, periods of credit and easy sourcing of goods. Make sure you have multiple supplier partners to check prices, generate discounts, and manage inventory. A good inventory management system (could be part of a robust point of sale system) will be great for the business.
Marketing and product are just as important– The key to your business after launch is marketing and brand awareness. Over the years, I have seen many amazing restaurants with great food fail due to lack of marketing and brand awareness. Your product, regardless of its quality, will always require a customer touchpoint to convince them, on their first visit, that your product will generate repeat value.
When uncertainty is at the fore, people seek out information they can trust. This is even more evident when it comes to food options that are accessible and available nearby. You need to make sure that your brand fits into the space that people want for you as well, and keep in mind that your restaurant’s first six months define its life.
The idea and thinking behind starting a restaurant can be exciting, but day-to-day management and execution is a whole different ball game. With this article we have laid a foundation for you to start your own restaurant business in the midst of a pandemic and only hope you fall into a category of achievement that shapes the future of your business here!
The author is the founder, Silly
DISCLAIMER: The views expressed are those of the author and Outlook Money does not necessarily endorse them. Outlook Money will not be liable for any damages caused to any person / organization directly or indirectly.