Article contributed by Lucy Wyndham
So, you want to bootstrap your restaurant business? Fortunately, there’s no time quite like the present. The restaurant industry offers a unique opportunity because it always seems to be changing, with unique trends influencing the market and the way businesses are managed every year. For instance, there’s the recent trend of pop up restaurants, which increased by 8% in popularity and overall growth in 2016 and show no signs of stopping.
This is great news for entrepreneurs who are looking to bootstrap a restaurant for the first time. With the viability of “testable” platforms, like food trucks and pop up restaurants, you can easily build a brand, raise awareness, and test out your product for consumers. While it may take a little creativity, with the right amount of preparation and consistency, you can bootstrap your restaurant business and become the owner of a well-known brand.
Begin with the Finances
One of the biggest reasons that 20% of new businesses fail in their first year is the lack of financial preparation. Without proper financial planning, your restaurant will be doomed before you even get started. Start by developing a financial plan that takes into consideration training employees, operating expenses, and unexpected expenses and the first six months.
Once you have these numbers, you may want to explore your financial options. Perhaps, take out a loan if you do not have the finances or investments to run your restaurant for six months. The first six months will always be a very trying and stressful time. But if you are aware of the financial pressures of this initial period, you will be able to develop a financial plan that keeps your business on track from the start.
Test Every Element, Every Step of the Way
Now that you’ve hired employees, rented out a kitchen, and have your business plan in place, you may feel ready to hit the ground running. However, it is crucial to start small before spending money on things your business may not need and your customers may not even want. Instead of going into debt by planning some expensive grand opening, start by testing your product to get a feel for your target market first.
Every step in your strategy for growth should include testing and optimizing your results. If your chef decides to test out a new dish, bring in your friends and family before offering it to a paying customer. This taste-testing strategy should be utilized at every stage of business development. By constantly testing the way to your customers respond to your changes, you will be able to keep an eye on your resources and offer things that people truly want without wasting money.
Before you bootstrap your restaurant business, make sure that your finances are in order and that you are dedicated to testing what works and what doesn’t every step of the way.