No matter how much research you do, how many experts you talk to or what plans you put in place, opening a restaurant always has its idiosyncrasies and challenges. You may foresee some, but others may come as complete surprises. How you respond and meet the challenges will likely say a lot about how successful your restaurant will be.
“Start off by doing enough homework to make sure your vision is aligned with market conditions,” says Joe Schumaker, principal design consultant, foodspace+co, San Jose, Calif., and former owner of a successful catering company. “But be flexible enough to pivot when market conditions change. My basic rule is: Make a plan, execute it, and prepare to change it.”
Here are some common challenges you should anticipate and prepare for:
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1. It will cost you more than you expect.
Even if you think you’ve dotted every i and crossed every t, there will be budget items you haven’t thought of, or items that simply cost more than contractors or suppliers estimated.
“In my case, as a franchisee I didn’t have the opportunity to put a lot of the construction out to bid for the build-out,” says Richard Sutton, a former restaurant owner in Indianapolis. “The company essentially forced us to use their suppliers, and of course the facility had to be built to their specs. We ended up with a restaurant twice the size of what we really needed and $11,000 a month in lease cost.”
Consider both restaurant startup costs and restaurant monthly expenses. “Undercapitalization is the number-one challenge that almost all restaurants face,” Schumaker says. “Operators get a space built and then have no money to operate for the first few months until the operation starts generating revenue and making money. People don’t do enough research into what things really cost, or they have too optimistic a view of what they think it will cost.”
2. Everything takes longer than you think.
Despite the fact we live in a time where, in some places, Amazon delivers personal purchases an hour after ordering, most items on your restaurant project list will take longer—and delays happen. You’ll need to anticipate everything from construction delays to late food deliveries because the driver couldn’t get through cross-town traffic.
In the design and construction phase of opening a restaurant, delays could mean pushing back the grand opening by a few weeks to several months, affecting all other schedules, including staffing, ordering, marketing, etc., and seriously affecting your cash flow.
Develop a mindset of building potential delays into every schedule in your restaurant. Have a Plan B for every plan you make. Know what you’ll do if something is behind schedule.
3. Trust but verify.
You have to be pretty jaded and cynical not to trust at least some people. But a few bad apples will take advantage of you if you let them, from building contractors to bartenders. So, trust people until they give you a reason not to, while keeping a watchful eye out.
“I’m an insurance guy who got into the restaurant business as an investment and a hobby,” Sutton says. “Since I wasn’t on site, I trusted my managers to keep an eye on things, but you really need to be there yourself. Bartenders will take advantage of you by overpouring or giving away free drinks; your kitchen staff will walk out with food. We finally put in a video camera, and I was surprised by who was taking advantage.”
4. Finding good employees is harder than you think.
The labor market is tighter than it’s been in 30 years, and a lot of industries are paying more to hourly workers than restaurants do.
It may take you longer than you think to find qualified staff, and you may have to pay them more than you planned to keep them onboard. Also remember that while you’ll want experienced people in key positions—chef, manager, etc.—for support positions, many operators put more weight into looking for attitude and honesty. You can train people to operate a POS, work a slicer or stock a bar.
5. Stuff breaks.
Even after you spend all that money to build a brand–new restaurant, things will break, need service or fail completely. Dishes and glasses will hit the floor and shatter. Flatware will get mangled in the disposer. A compressor might overheat because someone forgot to clean the condenser. The list goes on. Things will need to be replaced, equipment will need servicing, walls will need painting, windows will need cleaning, landscaping will need maintenance. You just have to get used to it.
6. Every project has a regulatory issue.
Whether it’s difficulty getting a liquor license, a fire inspector who doesn’t like how the flashing looks on the hood vent on the roof, or a health inspector who’s having a bad day and taking it out on you, count on one of the agencies you have to deal with making life more difficult.
“Most locales in California require operators to have a grease trap,” Schumaker says, “and in colder climates, you need a heat trace on the grease line from the trap to the sewer so the grease doesn’t freeze or get cold enough to clog the pipes. Even though it rarely gets below freezing in Southern California (and the ground never freezes), one inspector insisted because it was in the code. The cost to the restaurant was $22,000. You might have a contingency fund for problems like that, but it can throw off the timing of your project.”
7. Ongoing restaurant inspections cost time and money.
Too many people forget that the health department is supposed to inspect your restaurant quarterly; the fire marshal will inspect you semi-annually or annually; the liquor board may drop in any time. These interruptions will cost you time and varying amounts of money depending on what needs to be cleaned, repaired or replaced as a result.
8. Orders won’t flow smoothly for weeks or months.
Despite all the time you put into procedures and training, your staff won’t be very efficient at first, and getting orders out of the kitchen will seem chaotic.
It can be hard to establish a system, says John Platt, chef and co-owner of Midway Mercantile, Midway, Utah. “It isn’t obvious things like how much staff to schedule for a given shift or who covers what station or section; rather, it’s things like figuring out where to put all the kitchen utensils for actual efficiency or creating prep lists that staff members respond to at the end of night so you really know what needs to be prepped for next day.”
Platt adds, “It seemed logical and relatively easy to organize and design the restaurant kitchen and front of house layout, but I look back now and see how far we have come from those days of chaos.”