In a food business, a factory, a logistics operation, a kitchen, a marketing company, strong administrative control, systems and personnel, among many others, are involved. Who said it will be easy or fancy?
“Cooking is a language through which harmony, happiness, beauty, poetry, complexity, magic, humor, provocation, culture can be expressed” Ferran Adrià.
Just as in the franchise industry there are many myths and false beliefs regarding these business models, something very similar happens in the restaurant industry, it is no coincidence that the food and beverage sector is the most requested in franchises worldwide. representing 35% of the entire franchise sector. According to figures most commonly referred to in specialized literature: 60% of restaurant ventures close in the first three years of operation, 44% in the first year, 33% in the second year, 23% in the third year. The causes are diverse and are normally present before starting operations and are such as not knowing the direction, the lack of a defined concept and the lack of preparation and knowledge of the entrepreneur regarding the food and beverage business.
There are erroneous beliefs that are held in the food and beverage business; However, there are also advantages of starting a venture in this exciting industry, which, as I have said, is commonly for warriors, since there is nothing easy and fancy about it. Earning money in this industry is really complex.
5 misconceptions about the restaurant industry.
- Food is the safest business because everyone has to eat. It is true that everyone has to eat to be able to live, but not everyone is going to choose to eat in your restaurant, that customer’s decision will be based on multiple variables that a person takes into account to enter an establishment, such as: the service, the speed, the prices, the location, the reason, the variety of the menu, etc., etc.
- In my family a recipe has been passed down through generations that should work. In the food and beverage business, a very relevant issue is the standardization of the operation, this means that the dishes produced there can be easily and quickly replicated, a very special recipe may not be because it depends on the seasoning of a particular person, and that is something that to date cannot be replicated.
- I will own my own time. Getting started in the restaurant industry implies working on weekends, holidays and vacations, since these are the days when there is usually a greater influx of people, this must be taken into account because in the social or family lifestyle, it can bringing conflicts that mean taking away focus from the business and therefore running the risk of premature bankruptcy. In addition to this, the operation of a restaurant demands a lot of supervision time, even more so if it is your first restaurant, since there are many details that must be monitored for everything to work correctly. The problem with this supervision is that there are things that do not they can be viewed remotely, you have to be physically on site.
- I am going to hire personnel to operate it and I will just supervise them. The restaurant industry is one of the industries with the highest turnover of personnel, it is common to hear that there is a lack of personnel and that is why we usually always see “personnel wanted” ads placed in most restaurants. This phenomenon means that the restaurant owners have to be in the operation, since, since there are no staff, someone has to do the work while the staff is recruited again.
- I’m going to start with the budget I have, although later I’ll add what’s left. In a restaurant it is vitally important to start 100% from the beginning, because if you start to deny products, or lack decoration or give poor service due to lack of staff, customers will begin to notice that something is wrong. On the other hand, there is usually the idea that industrial machinery for restaurants is not expensive because they are compared to utensils that are made for the home. The machinery is very expensive because it is designed to work up to 20 hours non-stop for several years, this makes people who do not know about this industry opt for cheaper options that in the end will be more expensive due to energy consumption and durability. long-term.
5 great advantages of undertaking in the restaurant industry.
- The cash cycle is always positive. There are industries where sales are going very well, but payments are not so good, which means that they must have an internal collection department, this will never happen to you in a restaurant, since customers pay at the time of consumption, that’s why your cash flow will always be positive and in a restaurant it is you who can finance with the suppliers, since they usually give credit lines of days or weeks. Flow management will be one of the biggest challenges, but there will always be money in the box.
- You are the protagonist. There is something that makes people sensual when they say “This is my restaurant”, it is real and many times when someone ventures into this industry it is because socially you saw a business of this type, your friends, family will come , acquaintances and you are the great host. Now, the ideal is that you do it with full knowledge of what you are doing, sure that all the details are under control and ensuring the experience of each client, only in this way does this advantage become a real advantage, since you will look good with all those acquaintances who visit you in the place.
- You will learn a lot. There is a lot of culture and history in the restaurant industry, to know how to combine a menu you have to know about pairings, typical cuisine of a city or country, wines, fermented and distilled products, types of desserts, sequences of service. In the same way you should learn marketing, labor, permits, accounting, human resources, finance; and an infinity of administrative issues that perhaps you did not know before. The International Franchise Diploma from the Latin American Franchise Institute provides you with senior management training on gastronomic franchise issues.
- Getting capital to grow will not be a problem. As I say in the title of this article, everyone has a restaurant in their head, this is the reason why, if you already have a successful project, it will be very easy to find people who want to join your project with capital to grow. Now, you can do this in various ways, as partners, as franchises, as private loans, as absent investors, the range of possibilities is great, but yes, there are many people looking to invest and one of the first options is always the restaurant industry.
- You will manage your own workers. You have the opportunity and obligation to become a leader, since you will have people in your charge waiting for you to indicate the course they are going to take. If you have never experienced this, it is very important that you prepare yourself personally on the subject. of leadership, since you are not only the boss, actually the income of entire families depends on your good or bad decisions.
Why does the restaurant entrepreneur end up giving up? There are personal reasons such as Burnout – the entrepreneur works very hard for many years, long hours and demands on his time take their toll. The entrepreneur weighs profits against quality of life-Complacency-the entrepreneur is a victim of his success. He stops working hard to seduce his clients. The novelty wears off and the operation becomes routine. Stop finding motivation to adapt and elevate concept. The restaurant goes into decline due to paralysis of the entrepreneur, leaving the business vulnerable. There are external reasons such as a strong increase in rent due to revaluation of the site, the arrival of a colossal competitor, drastic socioeconomic changes, devaluation or inflation, etc.
And how do the successful? They execute the pre-planning stage with the greatest possible help from outsiders, they constantly evaluate, adapt, correct and elevate, their constant focus is on quality, service and value, operating procedures are critical, the balance between change and continuity is always in place. present and hire a professional operator to avoid being immersed in the paralysis of day-to-day life and, in this way, focus on the growth of the company and long-term brand positioning.
On Subway’s founding: I wasn’t among the poorest of the poor when I started my business. But I had no money at that time, no guarantees, no business knowledge. I was a seventeen year old boy who needed to find a way to pay for his college education.
Fred Deluca.
I hope this weekly collaboration is useful for you and your business. Remember to visit my YouTube channel “FranchiseZar” where you will find a great collection of business, franchise and entrepreneurship issues. Listen to me on the FB channel of LA FORMULA DE LA FRANQUICIA every Wednesday at 5:00 p.m. cdmx. Interested in acquiring a franchise? Ask FranchiseZar® and #notedejessoprender. Your friend the Czar of Franchises says goodbye to you, see you in the next one.
Jorge Valencia L.
President of the Latin American Franchise Institute.
CEO Grupo Interfranquicias Mexico & Latin America.
Better known as the Franchise Czar and/or FranchiseZar®
30 years in the world of franchises and business. Specialist consultant in gastronomic franchises and cafeterias. International speaker with more than 500 conferences, workshops and seminars on franchise and entrepreneurship issues. He has traveled throughout much of the world learning and spreading the franchise model. He has the Certified Franchise Executive Certification in the USA by the International Franchise Association (degree of international excellence in franchising). Master’s in Franchising at Nova University in Miami. Master in finance and administration. University professor. Creator of the concept The Franchise Formula. Radio and TV host. Tireless traveler and reader. Just good Mexican coffee. Mezcal to share. Movie buff, connoisseur, music lover, beatlemaniac and 100% dallas Cowboy.