The Many Challenges Of Starting a Restaurant in India
Entrepreneur's New Year’s Guide
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Owning a restaurant is fashionable trend these days. Increasingly we are seeing people quitting their corporate jobs and plunging deep into being an entrepreneur and specifically in the restaurant business.
It is indeed a fancy thing to say “I am a Restauranteur”, but what goes on behind the scene is something every person should know before starting a restaurant. There are months of planning, analysis and most importantly, lot of personal sacrifices like family get-togethers, date nights etc.
Understanding some of the commonly made mistakes and not repeating them, can save you a lot of effort and most importantly money.
Based on my experience in the industry, I would like to highlight some of challenges that an entrepreneur might face while setting up a restaurant/cafe.
- Where is the MONEY?
Yes! No honey without money is the correct sentiment, especially taken in the context of this industry. You need to have a proper budget of how much money you need to kick start your restaurant. More often people underestimate the amount of money they require and end up struggling after they open the restaurant as they are be left with no working capital. It is not only the initial setting up capital but also the working capital for minimum 6 months, mainly for staff salary, rent etc, which should be kept aside before starting the restaurant. Every item should be budgeted and be put as a part of your business plan. Without a proper plan or budget it is difficult to manage a business.
LOCATION, LOCATION, LOCATION!
During my management school days, I never gave much importance to one of the Ps in the 7P’s of marketing i.e. PLACE. However, when you actually start running a restaurant, you realize that location is the most important factor. The real estate market is quite tricky, and therefore you have to wait even if it for a couple of months, until you get the right location. The right location with the right target customers can get you maximum business. And also ensure that you don’t overspend on the deposits or rents, as that eats up major part of your working capital for the first few months.
- Get the PRICE right!
Well this works both ways. The price your vendor gives you, directly or indirectly affects your pricing. So be very sure of whom you source your materials from. The price that you sell your dishes shouldn’t be too high for the quantity and quality that you provide and that can be one reason why you might lose out on customers. It is not only price but also the quality for the price. The quality of the produce effects the quality of your dishes. So therefore, it is a vicious circle, which once sorted right can take you a long way.
- Marketing- ATTRACT…ENGAGE…
Have a good marketing mix for your restaurant before even starting it. It should contain all elements of marketing in the right proportion. In my experience in the restaurant business, I have realized that, these days it is more about online marketing. It is all about hashtags, likes, shares and it should be insta worthy. So it is very important that your restaurant should be active on social media and should engage with the customers on a daily basis. The interiors of the restaurant and the presentation of the dishes should also attract the social media. Have a good presence among online restaurant portals and delivery aggregators, as most of the customers would like to order in on a working day and enjoy their dinner at home.
- Customer is king but your employees are GODS.
That is the attitude you need to have before starting a restaurant. You might be the boss, but it is the Chef and the right staff, who can make or break your business. Hire staff with the right attitude. In my opinion, the restaurant hiring solution is still unorganized. Therefore, it is very important to be very specific about whom you hire and how you train them. A well trained kitchen will result in a well-balanced restaurant. Man management is the most challenging aspect of running a restaurant. You need to be empathetic and keep your employees happy.
Customer satisfaction, both with the food that you serve and the service that you provide, plays a very important role right from day 1 of your restaurant. And that is possible when you have well trained staff who is passionate about the restaurant and knows in detail about the dishes.
It is a dream for many to run a successful cafe/restaurant, therefore incorporating some of the above points will surely help you in avoiding costly mistakes.