The Ingredients of Restaurant Success

Reach the Next Level

Business plans and menus are crucial--but there's one more essential ingredient needed for success as a restaurateur: passion for the business.

"This business is a highly competitive grind," Smith says. "So if you're not passionate about it down to your core, you won't make it. You also have to make others buy into your vision and make them want to be part of something great. Those things, coupled with integrity and a really strong work ethic, are the keys to success."

Where Everybody Knows Your Name
TV shows like Cheers have made bar ownership look easy and fun. But don't be fooled-bars entail many of the same business responsibilities as restaurants. On the plus side, you can operate out of a fairly Spartan space and you don't open until 4 or 5 p.m. You have far less perishable food on hand, and you need fewer cooks and servers. Profit margins on consumables are usually higher, too-for example, one bottle of spirits will yield a lot of shots, which can add up to a lot of money depending on the price point. For these reasons, it's possible for a new bar to be in the black in about six months.

On the flip side is the reality that you'll be working into the wee hours of the morning, which can take a toll on your personal life. You'll also have to deal with unruly patrons and spend a lot of time coaching your staff on how to handle troublemakers. Plus, the bar industry is far more scrutinized by regulating officials. "You have to understand the laws, ordinances and political climate associated with selling liquor," says Randy Smith, president of Bottomline Hospitality Group in Scottsdale, Arizona. "If we didn't share a full-time lobbyist with other local business owners, it would be nearly impossible to do business."

Selecting the right concept for your bar is crucial. Neighborhood bars are still the most popular type, although sports bars do very well in cities with professional sports teams. Other types of bars include specialty bars, like martini or cigar bars; brew pubs, which sell house microbrews; and nightclubs, which have entertainment on tap in addition to libations. Choose a location that has good traffic flow in the area and safe and convenient parking, and you're on the way to becoming a fixture in the neighborhood.

What Not To Do When Starting A Restaurant

  1. Don't sign a lease if your rent ratios aren't in order, or you'll be working for the landlord.
  2. Don't commit to the project financially if you're not already committed to it conceptually, culturally and logistically.
  3. Don't ever start a project that doesn't have a genuine sense of purpose and concept credibility. It won't stand the test of time.
  4. Don't lose sight of the fact that employees are the most important part of your business, and don't skimp on training and development. A happy employee equals satisfied guests.
  5. Don't start believing your own hype! You won't be able to make sound decisions.

Source: Randy Smith, president of Bottomline Hospitality Group

Eileen Figure Sandlin is an award-winning freelance writer and author who writes on business topics.

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This article was originally published in the March 2007 print edition of Entrepreneur with the headline: The Main Ingredients.

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