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Planning for a Restaurant

Planning for a Restaurant

Tim Berry | Entrepreneur Magazine

If you’re planning on starting a restaurant, you’ve got a lot of company. In my experience, more people seek advice on launching a restaurant business than any other type of business. While that doesn’t make your task easier, it does mean I can help with some tips.

To start, you need to plan your strategy very well. Your restaurant has to focus on some key elements that’ll set it apart from the thousands of other eateries out there. These could be location, cuisine, decoration or even—good luck with this one—price. Maybe it’s located where there’s a lot of traffic, or across the hall from a gym, or near a bookstore, or outside a theater. Maybe there are no fish tacos in your town, or no good Italian restaurants. Maybe there are no cafes near the river with outside seating. You have to know why you’re different. In short, don’t try to please everybody generally; find your niche market, and please those people very well.

By differentiating your restaurant, you make marketing it much easier. Marketing is critical to restaurant success, but marketing can be expensive. And in most cases, the most effective restaurant marketing depends on repeat business and word-of-mouth. Think about how you choose a restaurant yourself—do you look through your Entertainment book or other coupon source? Do you research with a Zagat guide or online reviews? Or do you ask for recommendations from friends? Ask yourself how people will describe your restaurant and why they’ll recommend it. If you can’t put that short conversation into easy words, you’re in trouble.

Also, if you have a choice, don’t start a low-priced restaurant. Low-priced restaurants are much harder to market than mid- to high-priced restaurants. Fast-food franchises are everywhere, and they have a huge corner on that market. People believe in cheap food when they see strong branding and lots of customers. You don’t want to be the dive on the corner that can’t attract business.

Unless you’re already partnered with an investor, you should assume you won’t be. In general, restaurants aren’t targets for professional investors because they’re so risky. The few exceptions include celebrities who back restaurants that capitalize on their names, and well-known chefs and successful restaurant owners opening new venues.