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Starting up a restaurant anywhere in the UK is a tough proposition in an oversaturated market but it remains a rewarding and potentially lucrative investment. Starting up is expensive and you need to break through the 2 year barrier to call yourself established. Our advice is to be prepared and before starting up a restaurant, especially your first restaurant, ask yourself some questions. These are things we’ve seen every restaurant owner struggle with.
Never underbudget. In our own experience most people starting a restaurant spend too much on refurbishment, then they overstaff during the start up period but they don’t spend enough on marketing, management or on a quality menu. This keeps turnover low and customer loyalty low which means business for the restaurant is tough from the start up. You need to allocate at least 3% of your projected turnover for marketing, every year.
Forget its you starting up the restaurant and play the hard nosed customer or accountant. Ask your self constantly; Why should I come to this restaurant? Why would I pay these prices? Is this new restaurant different? How would I know it is open for business? Do I really understand generating good profits in the restaurant business? From starting a restaurant until the day it generates good cash profits you can never be too harsh on every aspect of the business.
Starting up a restaurant means finding a great location. Before starting a restaurant, or more likely taking over an existing restaurant, take a tour of the choice of locations. Your guide should be anyone that knows the area intimately and eats out regularly in restaurants. Analysing this, BEFORE starting and looking at the local competition is essential. The restaurant business varies enourmously from site to site.
Some restaurants have huge footfall during the day or during the evening. Some restaurants are badly positioned or in poor areas, while others attract wealthy clients. Some are seasonal while others are a good bet all year round. Starting a restaurant in the right location is half the battle.
More than any other factor, your location will affect your startup cashflow. Remember also that the worse the location the more you MUST spend on marketing and the better your food, ambience and service have to be. Starting a restaurant by saving money and getting a poor location, starting with a cheap offering and spending very little on marketing is a recipe for disaster.
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