Restaurant Startup 101
Four fatal mistakes that can doom you on Opening Day
Hola Chefpreneurs,
The path to restaurant success is narrow. The reasons for failure are more numerous than the hairs on my rescue mutt. I’ve made all of these mistakes before and will probably make them again: they are that difficult to avoid. But if you can avoid them, your chances of success will climb, and your blood pressure will plummet. Here are four pitfalls I hope to help you avoid:
Undercapitalizing. In other words, you didn’t raise enough money. I made this mistake with Bluebird (our French bistro that opened in Chapel Hill, NC in July 2022), even though it was the third restaurant I’d opened as a principal, and probably the tenth I’d opened in my career. The Covid-era construction costs spiraled to nearly 200% of the contractor’s estimate, so I became one of those restaurant owners who takes out five credit cards to spread around the imminent recurring expenses (WiFi, chemical services, reservations system, etc.) and still had to make a personal loan to the business on top of the money I’d already invested–not to even mention putting a lien on my house as a personal guarantee of the lease of the restaurant space. I implore you to raise, borrow, or contribute far more cash than you think it will cost you to get not only to opening day, but far past it, with a cash float that will carry you through expenses of ninety days post-opening. If you end up not needing all of that capital, you can return it to your investors like a hero.
Overpromoting. No product survives its first contact with a paying customer fully intact. Whether you know it or not, you will open your restaurant with MVP (Minimum Viable Product) and you’ll need to improve or adapt your food, beverage, and service offerings according to the guest feedback you receive in the first few weeks. To that end, understand that you’re in Beta mode for at least a little while, and that you’re better off not playing to a packed house every night when your restaurant is brand new. You’re far better off with several nights of a soft opening with loving, understanding friends and family who eat for free. They’ll be forgiving of your crew’s mistakes and will love you no matter what. Make your mistakes with that crowd before you encounter paying guests. People will eat in your restaurant for the first time only once, and if it’s not a good, not only will they not return, they’ll advise their friends to stay away as well.
Saying “We don’t do that.” Everything should be on the table in the beginning. I’m not saying or implying that you should be all things to all people; you’ll have a few nasty guests come in, treat your staff poorly, and complain about the food. It’ll be clear to you that yours is not the restaurant for them. Let them go! But in the midst of defining what you are, it’s important to avoid, in the early stages, etching into stone what you are not. I say this because you may have a guest point out to you that the brokers at the real estate firm next door would stop in for a couple of drinks if you opened at five instead of five-thirty. You realize that you’re wasting money on labor by opening for brunch at ten on Sunday mornings, but you’re in a town where everyone goes to church. Or you think your food doesn’t look good in a to-go box, but soon realize that the parents in the surrounding neighborhoods have the money to spend on weeknight dinners out, but need the convenience of take-out. And so on.
Obsessing and catastrophizing. Like it or not, this too shall pass. Despite all the teeth-grinding, gut-churning moments of debilitating stress, despite the intravenous flood of ecstasy-inducing endorphins when your team crushes a busy Saturday night, the sun will rise and people will get up and go to work, and 99.999% of the world’s population will never, ever, ever care about your restaurant. Please believe me that you will be a more satisfied and effective leader if you, at the very least, sit still and count your breaths and empty your mind for at least five minutes every morning.
Allez allez! Keep it between the navigational beacons out on those dark waters, Chef.