Some restaurant managers will start up with just a concept in mind, hope for the best, and think that’s all it takes to run a successful business.
Unfortunately, it’s not that simple.
Lucky for you, I’m going to be sharing expert tips you can use to run a successful and profitable restaurant with preparation and ease.
Here’s the 5 Tips that helped me build my successful ice cream chain with no previous experience:
1. The ACE Formula
This is the formula that has helped not only build my ice cream chain, but it is also the lens I use when building my other businesses. It is a framework that I believe is relevant across different industries and concepts.
ACE stands for Align, Connect, and Explode.
Most people commit to a “great” food idea or concept before even knowing the specific product that they’re going to make, let alone the customer they’re trying to sell to. This creates false positives and misdirection, often leading new restaurateurs to their demise
You want to Align with your “Why”. Know what you stand for. This is the only reason people will buy from you – the reason someone would pay $30 for your burger instead of someone else’s $5 burger, because they’re supporting your cause. You want your customer to be aligned with your vision and values and support you in that.
If you fake it, customers will know and lose interest fast. Sitting down to find alignment also gives you a clear marketing strategy in a super competitive industry.
The second step is to Connect with your customers. Understand what bothers them and what they like. Ask yourself these questions: What is it that they want? What is it that they’re looking for? Are they looking for a grab-and-go bite or to wine and dine-in with their friends and family?
If you jump right into running promotions before connecting with your customers on a deeper level, they won’t feel understood or welcomed by your business. I recommend creating a customer avatar, your ideal customer, to help understand their likes, dislikes, and motivations.
This even goes beyond your food or drink concept – get involved with local events and engagements to really establish your spot in the community.
Last but not least is to Explode in revenue. Explosive results only come after Alignment and Connection, as those are the foundations for building your successful business.
This is the stage when we start doing promotions. Without your customers supporting you as a brand… without connecting with them and understanding each other, there really is no point in running any kind of promotion because you will likely lose money.
When you’re ready to scale up your marketing, collaborate with other brands or local organizations that are relevant to your ideal customer and/or are aligned with your business and vision.
My A.C.E. formula isn’t foolproof, but stacking these proven business strategies correctly will generate a predictable and loyal customer base and a strong business foundation that generates great cash flow.
2. Build Your All Star Team
Ultimately, the end goal of creating this business is likely for it to be self-sustainable and generate cash for you month after month without you even having to be there working.
You need to make sure you have the right people in the right place on your team in order for the business to run itself. These people need to be aligned with your vision and values.
That’s when you can have everyone rolling in sync. And when everyone is rolling in sync, you can be sipping that drink on the beach while your business continues to generate revenue for you.
You can find more articles on everything you need to know about staffing here!
3. Know Your Numbers
I cannot stress this enough. All too often I mentor a budding entrepreneur who doesn’t know their numbers at all.
You need to understand your 3 biggest costs: food, labor, and rent. If you don’t know the benchmarks you’re shooting for or your current numbers, how will you know if you’re losing or making money?
Research the ideal profit margins for your food or beverage concept. Understand the expected staffing and costs to pay your staff. Determine a competitive rent by asking around the area, partnering with a broker, or researching competitors.
I know it’s dry and difficult but if you can keep an eye on these now, you will understand which levers to pull in order to put more money into your pocket.
A lot of your profits are hidden in the details so make sure you find out the things that are costing you more than they should and remedy that. It might just be one ingredient, one menu item that’s killing your profits. The only way to find out is to keep track.
If you don’t know your numbers, unfortunately over time, you’ll suffer from it.
4. Know Your Community
When we talked about the ACE formula, we talked about connecting with your customers, but there’s more. You also need to connect with your community as a whole.
Just like we talked about understanding your personal values, you must understand your community values also. Find and grow in a location that fits your brand identity. Once you have regular customers coming in, address them by their first name and remember what they order. Individuals make up the community.
Knowing your community is what gives you an edge over the new restaurant that just opened around the block. This is how you can build brand loyalty and eventually be able to charge a premium for your products.
5. Have A Procedure
Procedures allow you to walk away from your business – so you can go on vacation and take time off while the machine continues to run without any hiccups.
You need to be able to document every single process.
Document the entire process of someone walking in, to the moment that they’re being served. Being able to articulate the experience you want to create for your guest creates consistency and makes training new staff a breeze.
The same thing goes for your back of the house. Assume that you’re going to franchise. The more specific, the more consistent and smooth everything will run. Take away that ambiguity and set expectations as early as possible.
Documenting your processes in detail may seem annoying now, but will save you loads of time and money down the road so you can take a much deserved vacay.
There you have it: The five tips for operating a successful and profitable business right from the get go.
#1. Understand the ACE formula. Align with your business and values. Connect with your customers & team. Explode in revenue with strategic promotions.
#2. Build Your All-Star Team. Only hire people that believe in what you believe in and are able to actually create the same culture as you.
#3. Know your numbers. Keeping track of and understanding all of your costs prevents you from losing money and helps you understand where you can make the necessary changes to optimize profits.
#4. Know your community. This allows you to stand out from your competitors, build a loyal customer base, grow your brand, and increase profits.
#5. Document your processes. This creates a well-oiled machine that allows your business to run at max capacity and efficiency, so you can save money and take time off when you please.