Common Myths About The Restaurant Business
The restaurant industry in Ireland is currently on a solid upswing. Many employers have reported positive feelings and predictions in the last couple of years based on their sales, as well as employee retention. In fact, many restaurants reported having to hire new waiting and cooking staff to meet increased demand.
However, restaurants are still one of the most risky categories of all businesses. Part of this is due to the fact that pop culture and other sources have fed us a lot of myths and misunderstandings on how they run. Here’s a rundown of some of the more common myths, and the truth behind them.
Myth 1: Family Recipes/Catering Success = Restaurant Success
Say that you run a small catering business in your home, or perhaps sell baked goods from a local farmer’s market. A series of good reviews from locals may have you built up to the idea that you’re able to turn this into a sustainable business concept. Not necessarily. The main reason for this is that a hobby doesn’t always translate into a business. That person who’s selling their baked goods every now and again goes from only focusing on their food quality, to having to juggle that with managing staff, financial elements, marketing, and all the other things that we know goes into running a successful business. So, if you’re not ready to make that commitment, being the big fish in a small pond may be a better fit. There’s nothing wrong with that.
Another side note we should mention with this is that if you were previously a waiter or even a chef, this doesn’t mean you can necessarily translate into ownership smoothly, even if you are experienced. Again, this is because the skills needed to take on that new position grow exponentially.
Myth 2: Food Costs Should Determine Your Menu Pricing
One classic idiom that you may hear from restaurant novices is that your menu costs should always be around three times the food cost it takes for you to put that item out. Not necessarily. The truth is that food cost is one of the most important things about running a restaurant, and you need to adapt your menu pricing to try and make every item profitable. For example, some items may have a higher food cost, but sell so well that it’s still worth your time and effort. A basic standard upcharge is going to result in you losing money. Instead, when putting together a menu or changing a menu, you need to look at each individual recipe and how much of each item you are selling.
Myth 3: You Absolutely Need To Start With Brick And Mortar
One survey of restaurateurs showed that a quarter of them were able to get their businesses started for less than $25,000. How is this possible? It’s about not making the leap to brick and mortar right away. While many people assume you’re not really running a restaurant until you make that move, there are some transitive steps you can take to save money at first. Virtual restaurants, pop-up restaurants, and partnering with local festivals and farmer’s markets are all ways to gauge a community’s receptiveness to your concept, without having to make the massive investment in a physical location.
People are used to turnover in this industry, but training and onboarding new staff still represents a significant investment of money and time. However, in one survey of restaurant staff that had recently left their jobs, 76% said that their main reason was that they had “reached their learning potential.” By nature, this is a transient business, and it’s often expected for professionals to move around to try and grow their horizons. With this in mind, if you’re not happy with your turnover, you need to reevaluate the opportunities for advancement and growth you provide, not just your paychecks. This is where a resource like the HiUp Platform comes in handy. Built in association with the Restaurants association of Ireland, it’s designed to help business owners increase staff retention, keep their business compliant and cut costs. HiUp is an online training platform for your staff, enabling you to not only clear up any of these misconceptions, but to get all the necessary training and licensing for your Irish restaurant business to remain compliant.
Myth 5: Restaurants Are A Gateway To Fame
The celebrity chef or restauranteur we’ve been exposed to over and over again on television may sound like an ideal for a lot of business owners, but this is an unrealistic goal to set for yourself. There are many successful restaurants where the owner or chef doesn’t become a household name, but that’s okay. Even a lot of the celebrity chefs you see on television today had to put in a lot of hard, anonymous work to get where they are today. On top of that, there is a luck element. Your top priority should be keeping your business financially solid while providing the best experience possible to customers.
It’s one thing for a customer to buy into these myths when getting something to eat, versus your staff and management team following them in their directives. Following some of these myths as gospel can lead to your business losing a lot of money or potentially damaging your brand.