Like any business, the restaurant industry as profitable as it seems has an array of factors dictating the gains and losses one makes. Owning a restaurant is exciting, challenging, and fun but also not for the faint-hearted. A restaurant’s success is dictated by the market, location, as well as economic factors. So, are you dreaming or planning to open a restaurant? Look no further.
We bring to you a list of economic factors to consider and be mindful of before you open your establishment!
1. Seasonality of Cuisine
We live in times, where every dish and every cuisine is available at the tips of our fingers. It’s important to curate a menu that isn’t limited to a particular season of the year or bound by the seasonal availability of ingredients. While niche establishments have their own space, it’s important to not limit yourself. Curating a menu with diverse dishes and ingredients.
2. Labour Market
Good restaurant personnel and staff are an essential part of the success of any establishment. It’s important to understand the staff requirement and the associated costs that come with hiring them. The seamless functioning of any business depends on the capabilities of the entire team. Getting an understanding of the hiring trends in the market, relevant salaries, and benefits to be provided such as health insurance for employees before hiring goes a long way in building a good team.
3. Food Inflation
Good food is made with good ingredients. It’s important to be mindful of the costs associated with the key ingredients to the dishes on your menu. The cost of food items, basic and imported are usually subject to a lot of other economic factors at play. Doing a deep dive and being aware of the prices of ingredients and the cost trends surrounding the food market is a good step before opening your own establishment.
Pro Tip: Do not forget to use a good inventory management system to make your kitchen life easier!
Assessing competition is an important step for any business, but especially important for the restaurant. There are fewer industries more competitive. Be sure to visit restaurants in your area, especially ones with similar offerings as yours. Analyzing your competition helps one identify their strengths and weaknesses and measure them up to yours to make tweaks accordingly. Identify customer preferences in said establishments to implement them into your restaurant and provide a better dining experience.
5. Licenses and Permits
Another important factor to consider before opening your restaurant is the kind of licenses and permits to be issued basis your establishment’s locations and offerings. There need to be business licenses, food safety licenses, health trade licenses, etc. These permits and licenses usually take some time to come through and it’s best to apply in advance.
6. Quality vs Cost
What might not seem like a very apparent factor in the start is the battle restaurants fight between providing quality food and deciding the prices of their dishes. Restaurants that provide high-value offerings are more likely to succeed than those that simply aim to be inexpensive. Customers are often willing to pay for good food, made with better ingredients and with a good presentation.
Opening a restaurant is a daunting task but luckily there are factors that are in one’s control. One of the biggest ones is the POS system used. Lucky for you, that’s where Petpooja comes to the rescue. Bringing to you the best inventory management, billing, reporting, CRM, and online menu solutions, Petpooja makes the process of opening and running a restaurant more fun and less challenging.
We’d love to hear from you. Share with us your experiences and the challenges you faced while opening your restaurant!