Opening a new restaurant is a notoriously stressful affair. Securing the proper licenses and permits, finding equipment, hiring staff, and thinking about how to draw in customers are typical stressors — and we didn’t even mention making sure the food is great!
Much of the underlying stress that unites all restaurant tasks has to do with money. With that in mind, here are some ways to cut costs during the first few phases of your project, courtesy of Allen Marketing Communications, Inc, a boutique travel, food and beverage and lifestyle public relations agency based in New York City
Test Your Concept Through Pop-Ups
One of the hottest ways to bring your restaurant business to life is the pop-up. By taking advantage of bars and restaurants that will host your idea, you can create a clientele prior to ever opening a restaurant, cafe, or food truck. You will also have the flexibility to choose which neighborhood you want to be a part of.
Though the traditional reasons a chef or restauranteur would want to stage a pop-up are exposure and attracting investors, nowadays, pop-ups can be a solid way to generate buzz while also being a semi-permanent strategy. Organizing a well-prepared pop-up allows you to place your “restaurant” close to the action — a brewery, street fair, or other event. The overhead is also very low, which can help immensely in the beginning stages of your concept.
The best things you can do after you get your idea together is to ensure your business will be a legal entity and secure a free EIN number. Make sure that you check with your state and local authorities about how a pop-up should operate in your area. You will also want to plan for the future by creating a business model that you can use to expand when you are ready. Choosing a business service will help greatly with making your dream a reality.
Don’t Blow Your Budget On Marketing
Public relations is an effective marketing tool to generate credible third party stories about a new restaurant. By incorporating the SEO keywords into all press materials, then you will increase your visibility in online searches and drive traffic to your restaurant.
Blogs are another effective low cost marketing strategy to enhance your restaurant’s visibility. It is important to blog at least two times a week. Content is key to increase your online visibility.
Social media is another low cost marketing tool. Develop a content calendar. Post at least two to three times a week on Facebook, Instagram, Twitter, Linkedin and Snapchat to build loyal first time and repeat customers. It is also important to respond to any posts on your social media feeds.
Free advertising is always the best advertising. One of the biggest things new restaurant owners overspend on, in the beginning, is marketing.
There’s really no reason for a new restaurant to sink thousands of dollars into traditional marketing campaigns anymore — at least, not at first. Radio, print, and TV campaigns can be of use, but those should wait.
Let Technology Help
You surely know about low-cost point-of-sale systems and how they can lower your restaurant’s initial (and long-term) operating costs. But there are so many more apps and technologies that can not only help you trim costs, but also analyze your business and tell you where you should trim costs in the future. Some of these include inventory management, cost analytics, invoicing control, and automated payroll software.
Don’t Staff Up Too Quickly
It’s tempting to want to hire a full, quality staff from day one, but that might not be the best thing financially. It’s better to err on the side of understaffing rather than overstaffing as those payroll costs can be brutal at the beginning of your venture.
“Paying a large workforce can cause a strain … when you’re not bringing in a lot of money. Start by hiring for the most crucial positions and try to design a schedule that maximizes each employee’s productivity,” suggests Silverchef.
Once you have your staff set, you can reduce labor costs by reducing turnover, being smart and flexible with your scheduling, making changes to your menu, and streamlining your floor setup to minimize back- and front-of-house labor excess. You’ll also need to get very familiar with the world of payroll, which will require a bit of paperwork on its own.
For example, you’ll need to collect W-4 forms, make sure you have a pay schedule set up that everyone understands, and pay taxes on time to avoid any penalties or fines. Fortunately, you can outsource this work to payroll for startup services, allowing you to focus on other aspects of your business.
When you break down all the costs associated with opening a restaurant, you’ll find that a $250,000+ price tag isn’t that rare. No matter how much you get through loans, investors, and your own savings, you’re going to want to do everything you can to trim the fat. Every little bit counts, as the restaurant game is a game of inches.
For professional guidance on successfully marketing your venture, connect with Allen Marketing Communications.
By Tina Martin, Life Coach and Creator, Ideas Inspired.com