6 Important Lessons All New Restauranteurs Must Learn

Exploring business opportunities in the restaurant industry is a big challenge for every entrepreneur or, as we like to call them, restauranteurs. With increasing competition in the food and beverages industry, opening a restaurant can be a roller-coaster ride unless you are well prepared. It’s no surprise that a number of restaurant start-ups close down after the first few months. Why, then, would anyone even dare to start a restaurant?  

In this blog, we will look at some of the factors that can save an entrepreneur from facing an early closure of his restaurant business. There are various factors that are not in control of the owner, but by avoiding these common mistakes one can increase their chances of success!

Accurately estimating funding and start-up costs

It’s a real struggle to get traditional bank financing for a restaurant start-up. It has forced entrepreneurs to look for other funding sources. A proper financial analysis to budget the initial capital and operating costs is a must. It’s best to overestimate the initial costs and be prepared for higher costs than originally planned. According to Strategic Hospitality Advisor, Rifaquat Ali Khan Mirza, restaurant owners “need to have a realistic expectation of expenses and profits over time. They need to plan out their finances more specifically.”


If the real estate dealer’s mantra is “Location, location, location”, so it must be for restaurateurs as well! A restaurant’s visibility and its ability to attract the target audience highly depends on its location. Many restaurant owners settle for a location that’s slightly off the beaten path just because of lower rent and end up losing their potential customers. “Make sure your location is the ideal balance of cost effectiveness and great visibility for your target audience”, says Rifaquat.

Investing in social media

The internet is one of the most influential tools for businesses to use, especially restaurants. Research says restaurants are one of the most searched industries online. Hence, the reason to start creating a powerful online presence is quite obvious  –  that’s where your customers are! Running paid promotions and campaigns, addressing complaints and having conversations on social media are all tremendously important to build enduring relationships with your customers.

Keep an updated menu system

Many restaurant start-ups go through stagnant or dwindling sales in the first few months. That’s when it’s essential to check your menu for outdated dishes and understanding what’s driving your customers’ taste buds. Having a robust feedback system from the beginning will go a long way at this stage. In times like these, it’s wise to consider investing in a POS system having integrated management features to help you update your menus and inventory on a regular basis efficiently.

Focus on proper employee training

Unprofessional behaviour and questionable skills of staff members often lead to the loss of many customers and untold revenue. According to Rifaquat “giving top-notch training to all employees minimizes the chances of such problems at the very beginning. Also, give the staff a certain level of autonomy to make decisions that enhance diner experiences, like offering a free drink with compliments of the house or some other value add towards service recovery, without you having to be around.”

Keep track of your inventory and accounts

A majority of restaurant start-ups usually lack a well-organized accounting system that results in mismanagement of resources and wastage of funds. To implement a system that performs with maximum efficiency, you need to track and categorize revenues and expenses of the restaurants accurately. It’s essential to integrate all of these with your inventory and POS systems to have meaningful financial reporting mechanisms to be on top of your numbers at all times.

We all make mistakes, but it’s important to learn from them. If you are planning to open a restaurant or already have one, it’s time to consider these points as a checklist to increase your chances of success. There are a lot more points to be discussed on this topic, so watch this space for future articles.