Are you one of the budding entrepreneurs who want to break free from corporate slavery and open your own food business? The post-pandemic period seems to be the best period to open a restaurant business as there has been renewed consumer spending, and people are more optimistic about dining out. As many food outlets shut up shops due to losses during the pandemic, the fittest and most resilient restaurants have managed to survive and thrive.
Even though food entrepreneurs should exploit the current opportunity, they should always be cautious of not being overenthusiastic and end up overspending. Many uncertainties still exist in the form of war, rising fuel costs, supply chain problems, and a spike in commodity prices, which can derail a new F&B outlet. Launching a lean restaurant business model at the beginning is essential; later, depending on the profits, the business can scale up its operations.
Below are the tips by which restaurant can keep their business model lean:-
Low investment options:-
Under the dynamic situation faced today by the restaurant industry, it would be advisable to start with minimum investment. If a food entrepreneur has a unique food idea, one can begin with a cloud kitchen instead of opening a brick-and-mortar store. Once the sales of the business increase and the unit starts generating profits, the food joint can expand to open a dining business. Meanwhile, the cloud kitchen can collaborate with third-party aggregators to deliver food and promote sales and marketing and thereby start with a lean restaurant business model
Judicious expenditure to keep restaurant business model lean :-
Strategizing, market research, and doing homework can save many unwanted expenditures. Carefully select the vendors from whom you buy your restaurant essentials. Nowadays, many online B2B marketplaces sell restaurant essentials right from your daily groceries, packaging materials, and housekeeping stuff. These online marketplaces give you price transparency, a one-stop shop to buy your products with free deliveries. Consider renting kitchen equipment and purchasing second-hand equipment instead of splurging on brand-new equipment.
Prudent selection of location:-
Whether you are operating a cloud kitchen or a brick-and-mortar store with a delivery vertical location of the outlet cannot be compromised. The outlet should be located at a reasonable distance from the delivery location. However good your packaging is, long delivery hours can make the food soggy and unaesthetic. When it comes to the budget dining business, choose a location close to school, college, or middle-class residential areas that are price-conscious and demand quality products at the right price.
Cautious employee enrolment:-
Human resource is a cost that needs to be optimally managed to keep a lean restaurant business model. Appoint the right combination of full-time employees and part-timers if possible. Rather than recruiting employees with high salaries, present a salary structure based on reasonable wages with tip and performance-based incentives. Try to recruit young talent who can be hired at a low wage and groom them to the higher designation. While hiring, prioritize multi-talented staff, e.g., someone who can easily handle the table and your restaurant’s social media posts.
Low budget marketing:-
Marketing is an essential part of the success of any business, and the same is true for the restaurant business. Traditional marketing can be expensive; however, social media can be a very price-effective marketing channel and help you with a lean restaurant business model. Social media channels like Facebook and Instagram can help build a brand for your new restaurant. You can do targeted ad campaigns through social media marketing which can prove highly effective. You can even collaborate with food bloggers and influencers to publicize your restaurant among a new niche of clients that were not accessible earlier.
Emphasis on taste, presentation, and service:-
Well, everything said, there is no alternative to flavor and standard of service, which can act as a word of mouth publicity that comes free of cost. Rather than depending totally on the chef, do your research and don’t shy away from marking innovations with your cuisine and menu. For proprietors who want to open a restaurant on a low budget, rather than inducting multiple menu items, concentrate on a few of them. Emphasize mastering the flavor, food aesthetics, and service of whatever food items you deal in.
While taking steps to control the budget, a budding restaurant owner must also understand the competition one is facing. Your competitor can be a next-door cafe, restaurant, or even a home baker. It’s essential to understand the average product pricing and the customer spending power before you price your product. Competitor analysis also helps you know two things, options not available in the market so that you can carve out your niche and the kind of menu pricing you can calculate as per competition.
Being a food entrepreneur isn’t easy as it involves a combination of hard and intelligent work to be successful. You ought to have a never give up attitude, but however complicated and thorny the path would be, the taste of success is priceless. Adopting a lean restaurant business model will help you to get a head start and then you can increase capital expenditure as you start making profits.