Tons of people ask me: Should I start a restaurant?
From the hundreds of emails that I’ve received, I’ve determined the top four reasons why someone should NOT jump into the food and beverage business because they’re basically setting themselves up for failure.
So many of us see opportunity in the industry because of the fact that it’s so familiar. Everyone knows a good restaurant experience from a bad one, and everyone thinks they know the ways to improve them – this is the trap and the reason why up to 80% of them fail in the first year.
I’m going to be sharing with you the four poor mindsets or red flags for you to watch out for. This way, you can change your motives or business plan now BEFORE you lose big.
Without further ado, let’s dive right in.
Reason #1: Getting Rich Quick
The number one reason to NOT open a food or beverage business is if you’re just looking to get rich quick.
So many people ask me, “How do I make my money back within the first year? How do I make my money back within the first two years?” The honest answer is, you usually don’t.
If you want to get rich quick, this is not a model for you because we’re talking about anywhere from 5% to 15% initial profit margins. It takes a few years before you can recoup your investment and start seeing real profits.
The food and beverage industry is all about volume.
The more people you serve, the higher volume you produce, and the more profitable you become. It takes a lot of time to build this loyal base of customers. This is why rich doesn’t equal quick.
BUT if you want to create something that gives you longevity, something with some stability, and something that you can serve to the world, the food and beverage restaurant may be right for you.
Reason #2: Not Passionate About Service Industry
You may think you’re in the food industry, but if you’re opening a restaurant you’re actually in the service industry. You HAVE to be passionate about serving others.
If this isn’t you, the food and beverage business isn’t you either.
We need to make our customers feel at home. This is about creating an environment where they feel comfortable, they feel included, they feel that they belong. This is how you grow a loyal customer. And when you have a loyal customers, you don’t need to worry about your competitors.
This is how restaurants become successful: day by day, one customer at a time.
Deal With The Negativity
Along with the good, comes the bad. Unfortunately in the food and beverage world, we come across a good amount of both. Dealing with negative people and reviews are just part of the biz.
Understanding that these people are also customers, and that others are watching the way you handle these situations is very important for success. Customer service = all customers.
If you’re not ready for that reality, you may want to look into other business options.
It’s Not Just About The Food
For example, there’s this one restaurant I’ve been going to for the last five years.
They don’t serve the best food, nor are they the cheapest. The only reason why I keep going back is because they always address me by the first name, because they care about me. I feel like I belong.
I talk with the restaurant owner on a regular basis and he has shared with me his philosophy for running his business: Always make sure that they serve the customers right because they deserve to be served right. They paid for that experience and it is his mission to make sure that everyone that comes into a restaurant, whether they like the food or not, receives the best customer service ever.
When he shares with me I can see that passion in his eyes which is part of the reason why he is super successful and definitely the reason why they have loyal customers lined up out the door all the time.
Reason #3: Not Wanting To Work Long Hours
You need to be ready to work those 10 to 15-hour days. That’s just the nature of this business.
If you’re wanting that nine-to-five setup, if you think that you’re off after just eight hours, unfortunately this is not the model for you.
If you’re looking for that passive income, that passive investment, this is not for you because you’re always going to be putting out fires: machine malfunction, customer problems, HR issues, training and marketing mistakes.
All these problems fall on your shoulders to solve, especially in the beginning. Eventually you’ll be able to build an all star team who can take care of these things for you.
You need people who care about your business, people who have common sense. This takes months, if not years, to create. It takes a lot of passion and it takes a lot of time to nurture this group of people to a place where the business runs like a well oiled machine.
All this takes the times of time.
So if you’re looking for that quick buck, for something that’s nine-to-five or looking for that passive income, unfortunately the food and beverage model is not for you.
Reason #4: Not Listening
The fourth and final reason you shouldn’t start a food or beverage business is if you can’t listen.
This is very different from the second point about customer service. Not listening, not wanting to interact with people, takes your eyes and ears away from the front lines.
If you’re not willing to listen to what your customers have to say, you cannot understand and know where to improve, whether it be the quality of your products, the service, the ambiance or any other touch points.
They want to express that, and you should listen.
The Key To Improving
If you’re not willing to listen, and if you’re not willing to investigate and understand your customers’ feedback, you will not know what levers to pull. You will not know how to improve.
And if you’re not improving, unfortunately in the food and beverage world, then you are on the decline. That new restaurant, that new competitor will come around the block and replace you and steal your loyal customers.
If you don’t communicate, if you don’t listen or talk to your customers, you’ll never be able to build that loyal fan base. They won’t feel like they know the restaurant owner. They won’t feel that they are included in this community.
You’ve got to listen. You’ve got to interact with your front lines. Firstly to understand how you can improve, and secondly to build that loyal following.
At 720 Sweets, our ice cream shop, the only reason why we know what flavors to create and what offerings we need to improve on is by listening to our customers.
We always talk to our customers and interact with them, whether it be in person or whether it be on Instagram and Facebook. We understand exactly what they’re looking for, and in turn we try our best to cater to their needs.
This is how we’ve stayed relevant over the last five years and been able to build profitable collaborations with big brands like Nespresso.
So there you go.
If you are any of these four types of people then unfortunately the restaurant business is not for you.
However, if that sounds like the opposite of you, you’re ready to take that leap to becoming a successful food or beverage business owner!