Pandemic creates uncertainty for hospitality sector but also throws up unique opportunities to start your venture.
Restaurants are the heart of many communities. It’s where families go to celebrate, couples go on a date night and even friends gather to watch the game and grub. If you’ve always dreamt of starting your own restaurant, you’re not alone. In fact, there are a large number of people who wish to own a restaurant one day keeping aside what their primary business or source of income might be. While these times are strange and unpredictable than before, the hospitality industry in India remains to be one of the most affected by the pandemic. Some stats say that after that initial six month lockdown, over 40 per cent of the total restaurants in India had to shut down.
The ones that held ground were either experienced restaurateurs who have been in it for the long run or deep pockets who were ready to take the hit to sustain and protect their brand. The loss to the industry with minimum or no government support was immense and the bottom line has been taken back at least seven years for most of the big organizations.
Although looking at an alternative picture, these times also bring in an opportunity for those with a super optimistic outlook. Compared to pre-Covid times, one can get a prime property at 50-60 per cent rental value, buy equipment from recently shut restaurants (saving about 60 per cent total cost), cheaper labour and staff due to unemployment, and more viable contracts as it's a demand-driven market. Mumbai, known for the city where most businesses’ would be infeasible due to cost structures, is now in a position where a business can convert many fixed costs into variables that give them huge term leverage on their agreements.
The pandemic presents unique challenges for anyone wishing to enter the industry at this point. And while the path forward depends on many variables, here are some strategies one can adopt to set up and run a restaurant business in the current scenario:
Get Your Concept in Place- The first thing while starting your own restaurant is to put down details of what your concept, food, service style and offerings are and what makes your place unique and adaptable and why it would be the first choice of your consumer. Detailing out the same also means that you fit into the community and area pocket well. Keeping in mind the current scenario, the concept should be strong with dine-in as well as delivery. Your food, packaging and communication should all fall together into one brand language.
Ensure to Get Professional Help- Like any other business, success can be found only by getting things right from day one. Ensure to get a good consultant or set-up agency on board who can guide you through all the nuances and put their years of experience to help you set up your business. You can also opt to get a management agency on board who can work with you even post-opening to handle the day-to-day operations of your business.
Find the Right Location As Per Your Concept- In the restaurant industry, visibility is a direct equivalent to good sales. The location of your restaurant will be a major revenue factor. It’s good to identify the location depending on the audience you’re catering to, the average per head cost you’re aiming to sell at and also your competition in the area. Restaurants are about serving the guests what they would like versus creating a product that you personally think is a consumption requirement.
Get Your Legalities Right- Having a good legal team right from the beginning is another key resource. From helping you with your rental agreements all the way to sourcing all required licenses from your end, it's a professional's job to do. Invest in a team that would make long-term business easy for you.
Find Your Core Team- They say that your business is only as good as the team behind it and that if you’re the smartest person in the room, you might be in the wrong place. Your core team which includes your manager, chef, store manager, cost controller and auditor, your accounts and your marketing team are all roots of your business. They define the way your restaurant should operate and will pool in the experience to do so.
Work with the Right Technology- In today’s time there are many tech solutions available for your business. Right from your billing and accounting software, moving on to your marketing tools, Customer Relationship Management (CRM) software and other reach-out mechanisms help in communicating with your customers a lot more efficiently and easily. Data analytics in this business is huge and the greater use one can make of it, the better it is for the business.
Find Your Vendors And Partnerships- Your vendors for sourcing food and non-food products are like partners in your business. The margins and profitability are driven by cheaper purchase values, credit periods and easy supply of goods. Ensure to have multiple vendor partners to check pricing, drive discounts and manage inventory. A good inventory management system (could be a part of a robust POS system) will be great for the business.
Marketing And Product are Equally Important- The key of your business post-launch is the marketing and awareness of your brand. Over the years, I've seen many amazing restaurants with some great food fail due to the lack of marketing and brand awareness. Your product however great will always require a customer touchpoint to convince them for their first visit post which your product will drive a repeat value.
When uncertainty is on top of mind, people are looking for information they can trust. This is even more evident when it comes to accessible and available food options nearby. You need to ensure your brand fits in the space that people wish for you too, and keep in mind that the first six months of your restaurant defines its life post.
The idea and thought behind starting a restaurant might be exciting, but the day-to-day management and execution is another ball game altogether. With this article, we’ve lined out a base for you to start your own restaurant business in the middle of a pandemic and only hope that you fall into a success category that shapes up the future of your company here on!
The author is Founder, Silly
DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.