It’s amazing to see how many people open restaurants with absolutely no knowledge of the business. That’s probably one of the reasons why 60% end up failing after 3 years and 80% after 5. These should be harrowing numbers if you were thinking of opening a restaurant. You cannot afford to get things wrong with this type of investment, and it’s important that you dispel some of the biggest ones before getting into the industry. Here are a few of them.
You Need to Start Big
This is probably one of the biggest misconceptions about the business. Starting with a big restaurant is one of the worst mistakes any person can make. Unless you have a lot of money backing you and you are 100% sure of your concept, then you should always try to start as small as possible. Instead of going big, you could start with catering or a small take-out operation with a few tables, for instance.
Another major mistake people make is starting with a huge menu. What that does is put a lot of stress on your inventory. You have items that won’t sell as much, and you will still need to maintain stock. Doing too many things also means that you can get many of these dishes wrong and get a bad reputation. Instead, try to start as small as possible and with what you do best.
Getting Financing is Nearly Impossible
That’s not entirely true. While it’s true that most lenders view restaurants as risky investments and will ask to see a lot before they can finance yours, it often has to do with what you want financing for. If you are looking for financing for things that will help boost sales, then you have more chances of getting accepted. It also helps if your finances are in order.
We also suggest that you look at alternative lenders, such as advancepointcap.com. People like these will look at other factors besides your credit score and history when deciding who they award financing to. They will also look at things such as gross sales, for instance. This would give you a chance to get financing at the start when it’s often the most needed.
You Don’t Need to be a Cook to Open a Restaurant
Sure, you can always decide to go in cold and maybe you think your home cooking skills will be enough. But there are many aspects of the business that you may not understand or techniques you haven’t mastered.
Someone who has experience as a cook will be much more efficient. Not having a professional technique could be an issue if one or multiple people in your staff are missing. You might realize how important it is to know how to cut when you have 12 pounds of carrots that you have to julienne for a recipe.
So, we would suggest that you think about getting some sort of formal training before getting started. We would even suggest that you work for a restaurant for a few months or even years so you can get some inside information on how to run one.
These are some of the most common myths floating around about owning a restaurant. Make sure that you know the truth about running one, so you’ll have a clear idea of the challenges that lay ahead.