Over the years, we’ve worked closely with hundreds of restaurant owners, identifying their needs and working to guarantee they always have ice for their customers. Through this experience, we’ve learned quite a bit about how to run a restaurant successfully – mostly because we closely tie our business model to our customer’s success.
We want to pass on a bit of that knowledge to you, so here are 5 tips you should know about how to run a restaurant successfully.
Keep It Simple
They say the secret to a great elevator pitch is simplicity. If you can sum up your value proposition in one or two sentences, it will be more appealing to a potential buyer, because they’ll have a clear understanding of where they’re investing their time and money.
The same goes for running a restaurant as well. Your establishment should have a single focus. You should know the type of cuisine you’re offering, the type of clientele you’re catering to, and the kind of experience you want your customers to have. If you try and appeal to everyone’s desires, you’ll end up appealing to no one.
When we founded Easy Ice, we knew exactly what we wanted to offer our customers; a no-hassle ice supply, no matter what.
If you have a clear-cut business model, important decisions like the type of staff you want to hire, the design of your restaurant, and where to spend your capital will be easier to identify.
Learn Every Area of Business – then Delegate
If there is one key component to running a successful business – it’s experience. According to a study by Cornell University, a restaurant’s risk of failure lowers for each year they stay in business. Many factors contribute to this, including initial startup resources and size of staff, but the study also found that restaurant failure is more affected by internal rather than external factors. Of those internal factors, an owner’s skill level running a restaurant ranked highly.
A restaurant has a lot of moving parts. From the kitchen, the front of the house, to budgeting capital effectively; you’ll need to understand all these areas.
Now, that’s not to say you should actively manage all these areas. You can’t be everywhere, nor is it realistic to be able to handle everything at once proficiently. That’s why all good leaders (not just restaurant owners) know how to compartmentalize their duties and delegate them to trusted experts so that they can focus on the big picture. If you’re not an expert in running a kitchen, hire a person who is. If budgeting is not your thing, hire a good accountant.
We know a thing or two about this because we’ve built our business model around it. Owners are responsible for providing ice to their customers, but they have better things to worry about than the condition of their ice machine. We come in, offer and maintain a top-of-the-line ice maker so owners sleep soundly knowing they’ve made a sound decision that will improve their business.
Manage Your Capital
Your restaurant can have the best food, stellar service, and a loyal customer base, but if you don’t spend your capital wisely, your business will tank.
Running a restaurant means a lifetime of managing your costs. It’s a never-ending battle between keeping costs low while maintaining a positive customer experience. You may choose to spend more on the type of ingredients, furniture, or glassware use, but one place you don’t want to pay extra money is on your operational expenses.
For instance, one of our customers, Dean Contracting in Texas, was spending $32 a day on ice to keep their crew hydrated. Short-term that seemed like a small price to pay to keep their crew going, but it added up quickly. Before signing up for an Easy Ice subscription, they were spending over $600 a month on ice when all was said and done.
Small, incremental costs can add up in the long run. Not only does it make a dent in your bottom line, but you could spend that money on more important investments that help increase your profits.
According to a study by University of California, Berkeley, half on all newly opened restaurants will close within 4 ½ years. It’s a stark reality, but that doesn’t mean you should shoot for staying open for less than five years.
While there is indeed some logic in keeping investments low to limit risk in those first few years, it can end up hurting you if things go well – which is what you’re aiming for anyway.
Consider your lease. You could opt for a short-term lease, just in case things don’t go as planned, but if you stick to your goals and succeed, renewing your contract will probably lead to an increase in rent.
We’re familiar with this situation as well. Restaurant owners will come to us because they purchased an ice machine when they first started, but now it’s broken down and costing them money. Despite warnings that ice machines tend to break down after five years without regular maintenance, these owners opted to cross that bridge when they came to it – and now they must pay the toll!
If you’re planning on staying open long-term, your decisions should reflect that. By planning for a prosperous future, you’ll benefit the most when your business performs well.
Consistency is Key
When Ray Kroc joined on to head the McDonald’s franchise in 1954, he managed to grow the chain from its original roots in San Bernardino to the most successful global fast food corporation in the world. The key to his success was consistency. He knew that customers desired familiarity, so he enforced strict policies across all McDonald’s locations, down to the cooking time of each batch of French fries.
Now, we’re not saying you should be as meticulous as Ray Kroc, but he did prove how strongly people respond to consistently stellar customer experience. To this day, McDonald’s serves over 69 million customers in over 100 countries.
Your menu might bring customers into the door, but your dedication to your customer’s experience will keep them coming back. Once you hook someone with great customer experience, they’ll expect the same with every visit.
Consistency is something we pride ourselves on in the ice machine business as well. Many of our customers come to us for an ice machine subscription after their ice machine broke down and caused them to lose customers in the process. Our promise to provide our customers with a consistently hassle-free ice supply is what keeps us in business.
In the end, it’ll take more than a top-notch chef or great menu to keep your restaurant in business. Sound business decisions and clear-cut goals will give you a far better chance at prospering in the restaurant industry – just as they do in every industry. If you’re new to running a restaurant, it’ll most likely be a rocky start at first, but by mastering the fundamentals of running a successful business, you’ll have a head start on the competition.