Owning and operating a new business is a challenging endeavor, so it is imperative that prospective owners learn from the mishaps of others. Recent statistics suggest that approximately 60% of restaurants fail within the first three years of operation. However, by taking the necessary precautions and performing extensive research, owners can significantly increase their survival rate. Experienced entrepreneur, Sam Mustafa highlights three common and costly mistakes that new restaurateurs make.
The restaurant and hospitality industry is highly competitive, so it is essential that owners utilize all available resources to promote their business. Sam Mustafa claims that a mistake restaurant owners make is relying on word of mouth marketing. With today’s digital landscape, social media platforms play a significant role in advertising and generating a loyal clientele. It is vital to have a solid marketing plan that uses both offline and online tactics to create marketplace awareness, and spark momentum.
There is much more to choosing the right restaurant location than meets the eye, which is something that many new restaurateurs only discover after they have signed a lease. In addition to ensuring that the interior space is sufficient, it is also important to focus on visibility, parking, safety, and knowing what restaurants are in the area to avoid getting stuck in a saturated marketplace. Sam Mustafa states that realtors are not the only people who preach location, restaurateurs must also be aware of the benefits of choosing the right location, and the consequences of choosing the wrong one.
One of the most common mistakes a restaurant owner can is over or under pricing their menu items. Is it essential that restaurateurs have enough to cover expenses while making a substantial profit; however, it can be difficult to know where your margins fall. Sam Mustafa recommends developing a comprehensive financial strategy and performing extensive research before deciding on menu prices. Prices that are too high will drive a prospective customer away, while lower prices may not be enough to generate a profit.
Many new restaurant owners attempt to manage all tasks single handily. However, there comes a time — and it is always sooner than most new restaurants believe — when they start getting in their own way, and delegation becomes a pragmatic requirement instead of a nice-to-have luxury.
Sam Mustafa states that for the first few months and sometimes longer, it is all hands-on deck in a new restaurant, and everyone has to lean forward to close the gaps. However, there comes a point when restaurateurs are stretched so thin that their quality of work suffers — as does their physical and emotional health.
Sam Mustafa claims that it is important that owners follow these necessary tips to be successful in the restaurant industry. Similarly, it is vital that restaurateurs work to achieve balance to not wear themselves too thin.
Looking for more advance from an experienced and successful restaurateur? Send your questions or concerns to Sam Mustafa today.