How not to overspend when starting up a restaurant

Restaurant Fit Out

You have managed to locate and purchase your building and have so many ideas about what your restaurant will look like but remember to really look at your budget. So many start-up restaurants have been ruined by overspending that the restaurants don’t even open. How can you avoid this happening with your restaurant? We will discuss five common areas that lead start-ups into overspending and suggest alternatives to keep the costs down.

Kitchen Equipment
Whilst every new start up would probably like to have every fancy new piece of kitchen equipment, the reality is that it will set you back a small fortune. If you really must go down this road, then look to a good quality, experienced finance company who can support this and help you budget a monthly cost for the equipment. At least that way, the expense is spread over several months and you aren’t overspending at the start of your new venture.

If you can hold off from buying the very latest models, why not look to second hand equipment. Whilst you can always look on eBay and local online shopping forums (such as Facebook and Gumtree) there are always restaurants who are sadly ending their venture who will be looking to recoup some of their capital by selling their equipment at a reduced rate.

Also, be selective about what equipment you actually need... you aren’t going to need everything. Consider discussing the necessary pieces you will need for your food with experienced chefs.

There are two pieces of technology that you really need- a point of sale machine and something for your book-keeping. Other than these, the rest are non-essential luxuries so if you are keeping the budget down, then don’t try and buy each waiter an iPad (or similar) to take the customers’ orders. Obviously there are benefits to having this kind of support for your front of house staff but the restaurant business managed for many years simply with pens and paper, before the invention of these smart tablets.

Equally, shop around for the best deals for your internet. The best deals aren’t always shared initially so don’t give in when you receive the first quote. Remember to also check the renewal quote as often savings can be found by moving elsewhere. Sometimes if you find the cost cheaper elsewhere, you present company might be willing to match the cheaper price.

Marketing and Advertising
Obviously if you have the money to hire a company who can run a marketing campaign for your new restaurant and target the advertising for you, it can take away a substantial amount of pressure off you and it allows you to dedicate your time elsewhere in your restaurant. However, the money that can be needed in this area can be a small fortune and it is important that you are aware of other ways to spread the word about your new restaurant.

There is a great deal that can be done on social media. Create your own Facebook, Instagram, Pinterest and Twitter page and become part of local groups that allow you to advertise. Share images of your restaurant and plates of your food, even your menu or offers that entice people in. Ask your friends and family to share you page and before you know it, you have a rather large audience to communicate with.

Consider having a soft opening and invite local residents and business owners who can help spread the word. Posters and leaflets as well as running a small advert in the local village magazines are all still useful to alert the general public to your new restaurant.
Remember word of mouth is one of the best types of advertising plus your delicious food and atmosphere will develop your reputation once up and running.

Food and Drink
One of the biggest overspends start-up restaurants make is in purchasing food from one big company who can source everything for you.
Whilst helping to spread the word about your restaurant, you can build links with local businesses selling food produce. Look for farmers who can source your meat. Once you have built up the relationships, fixing and sustaining low prices is easier to accomplish.

Other pitfalls lie in the actual food- either in offering too much on the menu or in preparing more food than is necessary per person.

Keep your menu simple. Keep a record of what is chosen regularly and what is not. Then adjust your menu accordingly.

Analyse how much food is left on the plates and reduce portion sizes so that little is left on the plate. If you maintain the price of the dishes, you are likely to discover you don’t need to order as much food and your profit margins will increase as a result.

Similarly, there are POS systems out there that help you to monitor the drinks being ordered so you can work out which ones to remove from your menu. Training your waiters to be accurate in their measures will also ensure that you don’t have to buy more than you need.

Many people believe that by trying to project manage their own renovations or trying to actually do the majority of the renovations themselves, they will save money. The truth is that this often leads to overspend as the lack of experience in the renovation industry allows you to make mistake after mistake.

There are a wide range of fit-out companies that offer every solution to your renovation plans. They help you to set and keep to your budget and have the experience you need to predict and budget for the downfalls you are likely to face in your project.

Whilst the fit-out company may be an initial expense, the benefits of knowing the projected costs and a more likely approach to keeping to your budget allow your restaurant start-up to proceed the way you want it to.

This is by no means an exhaustive list. There are other ways to overspend but if you pay attention to these areas first then hopefully you will be a little bit wiser about being frugal with your money when it comes to your start-up restaurant.