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What makes a successful restaurant?

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By Brandon O'Dell

September 30, 2009

You won't be able to find the answer as to what it is exactly that makes a restaurant successful in any forum. Without experiencing it for yourself, it's tough to imagine that a restaurant is one of the most complicated businesses you can run. Most businesses are pretty simple. You buy a product, mark it up enough to cover your overhead, and hire people who can sell it effectively and count change, or you manage a warehouse, a sales team, a manufacturing line or a specific service your business offers.

A restaurant is so much more complicated than that. First, you are more than a retailer. You are running a warehouse. You have to have the same skills a good warehouse manager has, including a system for checking everything in and out of inventory, protecting your product from theft, knowing how to keep your vendors honest in their pricing and their service, tracking and recording all your purchases and usage. All of this for a 200 item inventory of PERISHABLE goods, not just pieces that can be stored indefinately.

You are also a manufacturer. You have to run several assembly lines at once, and fill the orders for your product faster than any manufacturing line ever has to. You're not just making one product either. Usually, it's at least 20, sometimes as many as 100 different products, all with the same employees. The parts for these products are also perishable. If your warehousing systems aren't good, it can ruin the manufacturing of the products. If your products aren't getting made efficiently, consistently, and cost effectively, the whole ship will go down.

You are also a delivery service. You have to have systems for delivering a product with a very short life span to the right place within a time limit, all the while doublechecking that the manufacturing of the product meets standards. The delivery systems inside your restaurant is even more important than any you might offer outside the four walls.

You're running a sales team too. Your front of house staff have to not only be experts on your product, but also know how to sell customers your highest profit products. You're margin for error on staffing sales personnel alone could sink you. Without effective sales staff, or staff with the ability to communicate work with the other systems in place, the whole system won't work.

You are also a service provider. In addition to being your sales force, your front of house staff are also customer service representatives. The number of things that can go wrong within this entire complicated system are enormous. Your FOH staff have to make sure none of those mistakes ever effect the customer. That's a big task.

You may also be a repair service and a custodian to your own building if you don't want to pay someone else to do it. There is a lot of equipment in a restaurant to break, and a lot of square footage to keep clean. A breakdown in either of these operating systems could also ruin your business.

All this before we even make it to the management. Managers and owners in restaurants have to know how to run all these different types of businesses under one roof, in addition to being bookkeepers, expert marketers, graphic designers, realtors and human resource pros, while keeping up on legal issues from labor law to health codes, building codes and city ordinances. Not an easy task while you're supervising a team full of low wage employees. It's not easy finding managers with all these skills at the wages restaurants can afford to pay. It's not even easy to have all these skills as the owner. With all the rest of this to consider, how can you even fathom how to price your product to pay for everything? Most owners can't. They guess, or they use some bad math someone else taught them that doesn't take into account the unique financial situation of their own restaurant, or the market they are competing in. Then they guess at what a good purchasing contract with their vendors is, they guess at whether their lease is a good one, and they bet on their food being SO good, people will line up at their door to get it.

A lack of experience in any one area of a restaurant can sink it. That doesn't mean it will, many bad restaurants make money DESPITE the mistakes of their managers and owners, but that doesn't make it a good idea to try. My advice to anyone opening a restaurant without experience is to use someone else's. Either pay someone knowledgable to teach you what you don't know, or open a franchise where all the planning is done for you and the operating systems are already in place.

If you are looking for reasons why restaurants fail, they are easy to find. There are a million of them. If you are looking for reasons why restaurants succeed, that's a tougher task. I think marketing is the most important thing an owner does, but any one thing they don't do in their business can counteract their greatest strength, even a natural knack for marketing.

Maybe after all this, you can see why I say that great food just isn't enough. It's only the minimum necessary requirement to running a successful restaurant. There is so much more.

This article is brought to you by O'Dell Restaurant Consulting.

O'Dell Restaurant Consulting has the expertise to help independent business owners design and implement the tools and management systems that their chain competitors use every day.

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Posted by Gordon Freeman on 10/1/09 at 2:16 AM EST

So, what makes a successful restaurant?
Posted by Howard Black on 10/2/09 at 5:05 PM EST

GF....the answer is simple. Making more correct choices than wrong!
Posted by Gordon Freeman on 10/3/09 at 12:34 PM EST


I think success has to do with providing a product (the entire restaurant experience) that customers want (whether they know what that is or not) better than most of the competition, at a fair price (as determined by the market).

Brandon's article is a list of jobs that one must get right. Unless a restaurant owner bites off more than he can chew or starts a restaurant beyond his current abilities, he shouldn't have any trouble getting such jobs right.

I think that most restaurant owners know what level of restaurant they can manage effectively. To take a extreme example, I wouldn't start a four star restaurant if I knew I could only handle a small sandwich shop.

As long as the ower is within his abilities, the less of a pain and mystery these jobs become.

So, I don't believe the list of jobs that Brandon provided has very much to do with the success of a restaurant, UNLESS the owner bit off more that he could chew. And as I mentioned, most owners are at least in the ballpark in knowing what they can handle.

I also like to add that as long as you got customers coming thru your doors, things ain't so complicated. There are a lot of restaurants out there that run a tight ship, but have no customers. And there are a lot of restaurants that are unorganized, but have lots of customers. And Brandon knows this is true.

Attracting customers is key to success. And as he mentioned in his article, "marketing is the most important thing an owner does". But as Brandon knows, you have to have something worth marketing. You have to provide a restaurant experience that people are attracted to, that they deem fairly priced, better than most of the competition.

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