New places

What are the challenges of running a restaurant?

As a passionate foodie and a restaurant reviewer, the second most frequent question I am asked is “why don’t you open a restaurant?”. The first question is “what is your favourite restaurant?”.

By Jeremy Ryland


Now I know a lot about the restaurant business. I have over 25 years of experience in food service and hospitality. And that’s why I would not open a restaurant!


Don’t get me wrong, I applaud and love restaurant owners – without which we could not eat out and I would have nothing to review. But running a restaurant is not easy. Long hours. Indifferent staff. Difficult customers. Not for me.


Running a restaurant looks glamorous – restaurants look like a good business opportunity. Cooking is the new “rock & roll” and the industry has blossomed on the back of TV shows, glossy magazines and celebrity chefs like Tetsuya, Jamie Oliver, Nigella Lawson etc., who all make it seem easy.


But running a restaurant is really very hard work and has a high failure rate. Competition is fierce and the survival rate is poor. The average life of a restaurant is about 18 months and 50 per cent do not see their third birthday.


It’s a fickle business. Restaurants come and go. Tastes change. Good staff are hard to find and soon become complacent. You as the owner have to be a cook, an accountant, a human resources expert, a purchasing manager, a cleaner, a food safety expert, a marketer – a jack of all trades. The hours are long and the profits small. Restaurants run on passion.


Today’s leading restaurant concepts are about more than just “good food, good service, good atmosphere”. All restaurants promise great food, great value and great atmosphere – the leaders need to deliver something more – a great experience. Today, dining out is about the whole experience.


Did you know that there are over 85 000 food service outlets in Australia? 1.3 million seats! There are more food outlets per head of population in Australia than in Europe and the USA - one food outlet for every 290 people.


There are 35 dining establishments per 10 000 people in Australia.


This compares to:

·  23 dining establishments per 10 000 people in the USA.

·  24 dining establishments per 10 000 people in the UK.


And whilst Australian’s are eating out more – we had 1.35 billion eating out occasions last year – it only equates to about 90 diners per outlet per day. But people still love to open restaurants and it’s one of the few professions for which you do not have to have any experience. Many people who open restaurants and cafes have no commercial experience, just a love of food and hospitality.


What does it take to open a great restaurant?


Firstly the worst reason to open a restaurant is that you love cooking and want to open a warm, hospitable place to welcome your friends. A restaurant is a business, a food factory, designed to make money for its owners. Only open a restaurant if you know the risks and rewards.


Make sure you know your concept, have realistic timeframes and have plenty of reserves – 80 per cent of a restaurants success is sealed before you open the doors.


You need a good concept in a good position and you need to be able to meet or exceed guest expectations. Find your niche and stick to it.


You need enough capital to sustain your business for a year – start-up costs are far beyond what you imagine! And it will take time to build repeat business.


If you have partners, clarify everyone’s roles. Good communication and clear goals are essential.


Ensure the guest experience is perfect – great food, great service, good value, clean toilets, no surprises. There should be no “turn-offs”. For example, guests dislike smelly, unclean toilets, greasy tables, slow table clearing. They don’t want to be disappointed. Their self-esteem is important: they want to feel that they have made a good purchase decision. (note: dirty toilets and premises + dirty kitchen = ???)


Hire the absolutely best people you can – people with high HQ’s (hospitality quotient) with a love of the business. Look after them. Your people are your image and can be the difference between success and failure.


Promote to your staff/employees! They are your front-line marketers: they are the image of your venue. If they are untidy and rude, so is your venue. If they are happy, knowledgeable and positive, so is your venue. You need to excite and delight your staff as well – engage them, inform them, give them the tools to be successful. All staff should have tasted every product – this is especially important for new products and signature items – when introducing a new menu, spend time with the staff to go through the products, how they are made, what they are made of and how great they taste.


And remember – always “Walk the Talk” and lead by example - senior management sets the standards…


"The standard you walk past is the standard you accept" David Morrison.


Market yourself – marketing is vital. Word of mouth is the most important marketing but you still have to get your name out there. Use PR and influencers. And above all, exceed expectations.


Brace yourself for long hours and lots of work. There is no magic formula and bad restaurants survive just as good ones do!


Believe in yourself. Have patience and passion.


Oh, and the answer to the first question: I don’t have one. There are many good ones and many bad ones – it depends on food, context, who I’m dining with and the passion of the operators.