Restaurant Startup Mistakes and How to Avoid Them

It’s easy to make mistakes as a new restaurant owner; you don’t have the experience that comes with time and practice. Fortunately, you can learn from established restaurant owners to help you be more successful today. Here are a few common mistakes that restaurant owners make, and how to avoid them.

Underestimating the Capital Required

Far too many startup restaurants have a great business plan and excellent prospects for success, but not enough funds to get off the ground. Unless you’ve done it before, you could easily be blindsided by higher-than-expected costs, such as permits, liquor licenses, construction delays, insurance binders and more.

To prevent this, seek professional guidance to help you identify and estimate the startup capital you need. Even then, you should add 10 to 15 percent as an extra cushion.

Believing Profits Will Roll in Immediately

It takes time to build a reputation and achieve optimal sales levels. Even if your sales are exceptional, your managers and wait staff need time to acclimate.

Avoid this mistake by doing what experienced and popular restaurant chains do: reserve additional cash for two to three months of operating deficits when calculating your startup budget.

Lacking Written Procedures, Systems and Training Methods

Individuals and groups of individuals complete hundreds and even thousands of tasks in your restaurant every day. If you fail to organize and consistently execute these functions, you can guarantee that efficiency will plummet, customer service will suffer and food quality will drop.

To avoid this problem, establish your startup as though it was a chain restaurant. No matter what McDonald’s you visit, the ingredients, menu, packaging, food preparation methods and delivery are all the same. A detailed business plan makes this possible. Outline everything from preparing the lettuce to cleaning the bathrooms to closing the register at the end of the day.

Failing to Act like the Owner

As the owner, you shouldn’t act like just another employee — bussing tables, cooking in the kitchen and doing hostess work. Acting like the owner means monitoring cash flow, determining next month’s marketing strategy, analyzing public relations and re-evaluating the menu. If you put these tasks on the back burner, guess who’s managing the restaurant? No one.

At the beginning, it’s likely you’ll wear many different hats, but it shouldn’t be long before you have enough staff that your only focus can be managing the business, not just running the restaurant.

Scheduling the Grand Opening on Opening Day

It may seem counterintuitive, but if you host a grand opening on the restaurant’s first day, you set yourself up for failure. You’ll be slammed with more business than you can handle, overwhelm your staff and make a very poor first impression.

To prevent blowing it, open your restaurant with no hullabaloo and wait a month or two to declare your grand opening. That way, you have all your ducks in a row before the spotlight shines on you.

Failing to Determine the Local Market’s Needs

A big mistake is to become obsessed with a concept based on what you want and what you would be willing to pay, and only then finding a location. This method gets you nowhere.

You must find out what people want in the local market, and that doesn’t just mean the city you’re in; it means the very street on which the restaurant is located. Find a location and then determine what the demographic in that area wants and what they’re willing to pay.

Trying to Please Everyone

If you try, you’ll end up with an overcomplicated menu, confused customers and no unique identity.

Instead, find an unfulfilled niche and focus on filling that slice of the market. This helps you narrow your focus and lets you excel in one area instead of attempting to be a Jack-of-all-trades.

About the author

Ezra Adler is the Ecommerce Marketing Director for Culinary Depot, a commercial kitchen equipment and supplies company in Monsey, NY. has a large selection of commercial equipment used in restaurants and commercial kitchens, including cooking equipment, display cases, food prep and catering supplies.


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