It’s always nice to learn from those who have gone before us. Their mistakes become our stepping stones. We discover what doesn’t work and what might have worked if they had tried it.
Here, we’ll explore what some restaurant operators can teach us, both the wildly successful and those on the verge of defeat.
Develop a Process
Almost always, the first item on every restaurant operator’s to-do list is developing a process. Actually, it’s developing several processes, strategies focused on optimizing the many activities found within your restaurant. A successful process results in reduced workloads, or the number of steps required to complete a task.
Remember the 80/20 Menu Rule
An important lesson from the last few years, and one operator took to heart, is that larger menus work against them. The 80/20 rule suggests that 80% of your sales come from 20% of your menu items.
Take a good look at your offerings, determine the best sellers and the sleepers, and adjust accordingly. The benefits of a smaller menu include lower food costs, reduced waste, and improved customer service.
A Wary Eye on Finances
Operating capital is critical. While some restaurants have experienced that rare event when the stars aligned and their establishment was an overnight success, most operators suggest starting with at least enough funds to get you through the first year while you grow your business. Those rare exceptions include Sofreh in Brooklyn, New York, and SingleThread in Healdsburg, California.
According to the National Restaurant Association, restaurants run on a thin profit margin of 3 – 5%. There’s little leeway for miscalculations or financial mismanagement.
Create an Experience
You can’t look at an industry trade magazine or article these days without seeing the word “Experience” somewhere in the content. In 2023, Geranium, a restaurant in Copenhagen, received the title of “World’s Best.”
Their experience focuses on the best food in a breathtaking setting. The changing 20-course tasting seasonal menu takes about three hours to enjoy. They also possess stunning views from the eighth floor in Faelledparken (Common Gardens).
Never be Satisfied
When the Food Institute spoke with Andy Diamond, the president of Angry Crab Shack, about the lessons learners from Red Lobster’s downfall, he said, “The biggest lesson for operators is to never be satisfied with what has already been achieved. Restaurants should always look to improve their product, operation, and brand. Self-scouting and evaluation are valuable tools restaurants should use to determine whether they’re meeting guests’ expectations.”
Red Lobster laid claim to the highest-grossing seafood restaurant in the nation before filing bankruptcy in May of 2024.
Prioritize Quality and Consistency
When guests dine at a restaurant and experience a memorable meal, their expectations have been set. Now, they’re looking for that same experience every time. If they don’t receive it, you can almost be guaranteed they’re not coming back. What’s worse, they may share their experience online through one of the many review platforms or social media.
Pivot, and Pivot Again
If something’s not working, you can stand there like a deer in the headlights or make some changes. The biggest mistake seen during the pandemic in relation to restaurants was those that couldn’t redefine their digital ordering and off-premise dining processes. According to McKinsey & Company, those who were successful in this pivot saw up to 130% more revenue than those who couldn’t stay ahead of the curve.
Stay True
By the same token, if you’ve found a concept that works, stick with it. Bar and Restaurant reported on Katz’s Delicatessen, an iconic brand that’s been in New York City since 1988. Their key to success was finding a niche and sticking to it. Their customers expect large portions of classic Jewish foods, and they get it every time.
Are you ready to take the restaurant industry by storm? Learning from those who have blazed the trail can make it much easier to weather any upheavals.
