Starting a Successful Restaurant

By: Larry Edger

The statistics for restaurant failures paint a very dark picture and they should. Over 60% of new restaurants will not see their third anniversary and even fewer will make it five years.

Running a restaurant is much more demanding than most people ever see in their dreams. However, over the years, I have found some elements that almost every restaurant that is around on their 5th birthday has implemented. These startegies work.

Here is a list to help you start, buy or run a better restaurant;

1) You must have a business plan. It can be one page or a thousand pages, but it has to give clear direction for your concept. The two most important parts of your plan is a cash flow projection and a marketing plan.

2) Your restaurant marketing plan must address the three parts of marketing;

Communicating your message to your customer/prospect.

Selling your product to the guest/prospect.

Delivery of the product and meeting the customer's expectations.


Most restaurateurs believe marketing is advertising. That is not the case.

3) You must have the financial resources to survive. There are a lot of sad stories out there about very good restaurants who just ran out of money - even though they were profitable! If you don't understand how that can happen, you better learn about restaurant cash flow real fast.

4) You must understand your customer and what they expect. The simple example is the person who opened a Sushi Restaurant in Leon, West Virginia. Not a very good idea! You can say it a thousand ways, but the trite phrase "location, location, location" still says it all.

If you think you can circumvent the key elements above by buying an existing restaurant or franchise, they have almost the same failure rate. There are no guarantees.

One of the other keys to success is the commitment of the owner/manager to learn, read and master strategies that retail existing customers and constantly cultivate new ones. Knowledge and a passion to keep experimenting with every aspect of the customer's experience.

Of the most common falacies of new restaurateurs is the idea that if you serve "good" food, that is all you need. The fact is few restaurants serve bad food. Many serve the wrong food to the wrong demographic. Research your potential area for a customer profile before assuming the business radius will support your concept. Convenience and short travel times affect the customer's willingness to return.

Much more on these topics can be found on a new website called. The site has restaurant owners offering advice to other restaurant managers and owners. Another good site is the blog called . Good ideas from a wide range of knowledeable successful business owners may tip the scales in your quest for survival in, arguably, the toughest business in the world!

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