Solo diner owner or multi-concept restaurant mogul, all restaurateurs face nerve-wracking, downright nightmare-inducing fears. They’re ever-present, a laundry list of common worries, day in and day out.
They may not surface after consecutive months of increased sales. But all it takes is one slower-than-usual Saturday night and those fears bubble right back up.
“The problem with running a restaurant is that you have to be constantly innovating,” says Trish Watlington, owner of the Red Door restaurant and Wellington Steak in San Diego. “You can never rest on your laurels. There’s always that inner voice saying, ‘What are we going to do tomorrow? What reasons are we going to give people to come next week?’”
Managing food costs, attracting repeat customers and increasing traffic are the three most common worries, according to foodservice research firm Datassential. But restaurant owners interviewed across the country cite nagging concerns over a host of other issues as well. Here are their insights.
Fear: Losing regulars to the latest new restaurants
Solution: Unique loyalty programs that connect with diners on an emotional level
Service standards will always matter. Creating a policy that compels servers to log customer preferences, their children’s names and other anecdotal information is free and helps cement customer loyalties.
In fact, building a unique loyalty program can pay huge dividends, says Abraham Merchant, CEO of New York-based Merchant Hospitality Group. At his beer-focused Clinton Hall, customers join the restaurant’s Reserve Society, which gives them access to sample and buy rare small-batch beers, attend special beer parties and enjoy exclusive cellar brews. “People can buy a beer and a burger anywhere,” says Merchant. “It’s the personal touches that people remember and keep them coming back.”
Fear: Lower profits because of rising labor costs, shifting regulations and evolving health insurance issues
Solution: Think outside the industry
John Kunkel, CEO of Miami-based 50 Eggs restaurant group, has a saying: “If you’re not reading, you’re not leading.” He shares and discusses thought leadership and business articles with his chefs, front of house staff and executive teams.
Kunkel recommends joining a local business organization composed largely of executives who are not in the restaurant industry because solutions aren’t exclusive to the food world. “You want to form a group of peers that you can learn from and bounce ideas off of,” says Kunkel. “It can make a difference.”
Fear: Losing loyalty and staff
Solution: Create better incentives
Experiment with new ways to incentivize great work. David Rowland, director of food and beverage at the Louisville Marriott Downtown, says millennials prefer schedule perks, such as the freedom to dictate their hours, more than small pay incentives.
Also try creating incentives built around social media results—better Yelp reviews or TripAdvisor scores—that can build camaraderie around a shared goal.
“Millennials often want to be autonomous, which is often confused with independence. They want to work as a team but will hold the individuals in the team accountable for the ultimate success of the group,” says Rowland. “Getting that positive guest feedback can be really important to them.”
Fear: Becoming irrelevant
Solution: Keep the best of the past, but update the interior and dishes
When a restaurant’s glory days are all but a distant memory, how does it reinvent itself to increase sales without alienating its core customers?
In 1991, Shareef Malnik took over his father’s legendary restaurant The Forge, with its well-heeled but aging clientele, and transformed it into one of the hippest spots in Miami Beach. In 2009, he closed the restaurant and completely renovated it. “You have to divorce yourself from emotional considerations,” says Malnik. “Everyone has a different opinion on what you need to keep and change, so follow your own vision.”
You might have an iconic dish, but are people ordering it? Can you dress it up in a way that is fresh but still reminds them of the past? Remember the power of a well-placed homage. If you have iconic paneling and sconces, as The Forge did, can you update them but keep their feel? Can you move from classic to classically modern? Honor but replace.
Fear: Empty seats
Solution: Tell your story
Embrace the power of storytelling. Write a short story about your restaurant on your menu. Use your website and social media. And work with your waitstaff on telling a good yarn. At Proof + Pantry in Dallas, co-owner Michael Martensen tells his staff to compare the restaurant’s unique family-style dining to a trip to Grandmother’s house and share stories with diners about the farmers and purveyors. “At the end of the day,” says Martensen, “we’re still in the entertainment business. People love a great story.”
Fear: Insufficient funds to invest back into the business
Solution: Crowdfunding and social media
Leverage the power of social media and crowdfunding. As Steve “Nookie” Postal was preparing to open his restaurant-market hybrid Commonwealth in Boston, he wrote a weekly blog explaining his philosophies and ideas. Social media posts followed, but his Kickstarter campaign was his most daring move, an effort that raised $70,000 and generated a flood of media attention.
Existing restaurants can use crowdfunding to finance expansion, upgrade equipment and make other capital improvements. His one piece of advice: Think big. Nookie gave away everything from $25 barbecue rubs to a $10,000 pig roast for 100 people. The big prizes paid the biggest dividends.
Fear: Compromising quality to keep up with increasing food costs
Solution: Cut waste, buy in bulk, buy in season and preserve foods
Most kitchens realize the dangers of food waste. Pickling, smoking and preserving allows restaurants to buy in larger quantities when the price is right and avoid markups. But consider taking the idea of “farm to table” literally.
Trish Watlington, owner of Red Door Restaurant and Wine Bar and The Wellington Steak and Martini Lounge in San Diego, grows produce on her own farmland. She recommends working with farmers to contract or lease plots of their land or arrange for them to grow products to specifications and quantities, which also provides marketing fodder for promotions.
For his Carnitas Snack Shack in San Diego, Hanis Cavin embraced a similar philosophy, sourcing his pigs from a local rancher. “I know what makes for a better product,” he says. “So now I have confidence that I’m ordering the best product available.”
Advice for chefs thinking about the jump to restaurant owner
Got the itch to have more creative say and control? Once you’re a chef-owner, everyday fears can increase exponentially. Keep these tips in mind before taking the next steps.
» Connect with a local alderman or neighborhood representative to understand—and make key connections—in the community where you will set down roots.
» If you’re taking on a partner, get a good lawyer and make sure your share of the business is clear and set in an airtight contract.
» Create as detailed a budget as possible. Talk to other restaurateurs so you can factor in hidden costs. Expect the best but plan for the worst.
» Don’t cut corners on your insurance. Lawsuits are often an unavoidable aspect of the business.
» Do your homework in terms of where to source your products. Know volume needs and who is capable of meeting those needs.