Opening your Restaurant – Part 1

Opening your Restaurant – Are you ready to open your own Restaurant?

Part 1 – Evaluating your product, market, profitability

Let’s start by evaluating your product first

Do you have a product that is ready to sell to customers? As I have discussed in previous blog post Product, as a restaurant you will be selling 3 things as a Product to customers – Food, Service, and Ambiance. Most of the time, Food will play the biggest part although it will vary. So let’s evaluate it!

Evaluating your product

Is your product so good that people will buy it? How confident are you? Have you tested it? If so to who? Average or subpar items won’t do, even with an excellent product, poor execution can lead to failure so let’s make sure we start off with higher probability by making sure we have a great product that people will be interested in! To get an opinion, you should have your family, friends, fiancé, and possibly co-workers. But make sure they give you an honest opinion! Just because they want to encourage you, they should not be saying “it’s great” just to be nice, if they do not think it’s good, they should honestly say so and you should take their advice humbly to re-evaluate your product. For example, there are lots of hamburger places opening, and anyone can make a “hamburger” but is it a great one? Is it good enough so that a minimum of 75% of people who try your burger will say it’s great? You cannot possibly think that you will be able to satisfy every single person, simply because of their preference. Some people like a juicy and fat patty burger whereas some people like it smashed and crispy patty burger. Therefore, don’t get discouraged if your trusted person says it’s not good because they tend to like “different version” of your product. If you can make them like it, then that is amazing. If not, let another trusted person try it who tends to like the type of product that you are trying to sell.

Market

Once you confirm that you have a great product, you must do market research. For the sake of an example, we will stick with a burger example. So let’s say you created a great burger that any burger loving person will like your burger. Well, what if the neighborhood you open your store is full of vegans and vegetarians? What is suddenly there is a wave of healthy food trend that crushes demand for burgers? These would be extreme situation but it can happen. A more realistic example would be your burger store opening in a student focused neighborhood, but your burger is a premium product that is usually beyond their budget. Or your physical store is located in the middle of the block where people usually do not pass by (it does happen!) There are many things that can cause problems, so let’s do some market research and make sure your product belongs to the right market to increase the probability of your success!