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How to Survive Your Restaurant's First Year of Business

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December 20, 2019

Your first year in the restaurant business can be an exciting and stressful time for new owners. How do you keep your restaurant dream alive and avoid the pitfalls some new businesses make? Setting some realistic goals and being open to change can help ensure growth and prosperity.

Restaurant Business Best Practices for Your First Year

Your new restaurant will go through some growing pains, from high operating costs, to permitting requirements, to hiring the best staff. These five tips can help you navigate potential hurdles and implement solutions to keep your new restaurant thriving for years to come.

1. Get Your Permits

As a new restaurant owner you may feel overwhelmed by the many permitting and licensing requirements. Don't let these challenges keep you from getting all the necessary permits before opening your doors. Failure to comply with state and federal regulations can result in fines or even prevent you from operating in the first place.

Where to begin?

Do your research and make sure you have the correct government licenses and building permits. Keep track of all temporary licenses that will need to be renewed, and make sure to keep those up to date. Always comply with food safety guidelines, so when you get a surprise visit from the restaurant health inspector you'll pass with flying colors. A restaurant not up to health codes can be fined or shut down until compliance is proven.

2. Expect Those Unexpected Costs

After all your permits have been checked off, and your kitchen officially gets the stamp of approval, it's not unusual for additional expenses to pop up. 

Restaurateurs make big investments in industrial equipment like convection ovens and dishwashers, dinnerware and glassware, and much more. With so many components, glitches are not uncommon. Carpet can fray, cutlery can go missing, and your walk-in freezer could stop working.

What's the fix? 

You can't predict the future, but you can prepare for it. Always have three months of operational costs in your reserve fund. It might seem excessive but think about this scenario.

Let's imagine your restaurant seats 75 people, and you have 150 water glasses, enough for each place setting plus overage. If you lose five glasses a day—either servers or customers drop them, or they break in the dishwasher—you will have gone through your entire supply in a single month. With a reserve fund, you can take care of issues as they arise and not have to worry.

3. Don't Fear Your Financials                                                                                                              

It's a hard pill to swallow, but most restaurants won't turn a profit during their first year. High operating costs, general maintenance, and lack of accounting knowledge are all factors in low profits for your initial year. Accept this reality, and don't panic. Financial instability in new restaurants is normal, but there are practices you can do to make sure you don't fall too far into the red.

What's the solution?

Think long term in regard to profit and loss. Calculate depreciation costs on all your items, from carpets to kitchen machinery. Forecast these figures five years into the future and consider them in your financial reporting. Familiarize yourself with solid accounting practices. Partnering with vendors that offer professional services can help you stay on top of your income.

4. Hire a Stellar Crew 

Your employees are the backbone of your restaurant. Chefs translate your menu into delectable, unforgettable meals. Your servers and bartenders translate your brand and aesthetic into personal relationships. Every customer that visits your establishment will encounter these two important customer service elements. That's why it's crucial to hire a crew that can be professional, personable, and diligent in their duties. The first few months are going to be a trial and error period for your staff. Ensuring top-notch service professionals is key to keep your initial customers happy and turn them into loyal repeats.

How do you find the right people?

Meet with all the candidates in person. During the interview process, ask the typical skill related questions, but don't stop there. See if they fit into your unique company culture. Get to know them on a personal level. If possible, conduct second interviews. Ask potential cooks to showcase their skills during a paid, working interview. Have a promising bartender make a new cocktail they are excited about. Once you have your staff secured, don't forget to monitor their hours in relation to your guest numbers. 

5. Embrace Change

At the end of the day, it's your perfectly executed menu items that will create buzz around your new restaurant and keep customers coming back. While you never want to compromise your brand, there are times where you might want to tweak your food and beverage menus based on customer feedback and sales.

Is change good?

The simple answer is, yes. During your first year in business you will learn what your customers want and what they don't. You might present a menu full of choice steaks, but perhaps your customers might enjoy some vegetarian-friendly options. Or, a new competitor could pop up in your area with a similar menu and undercut your prices. 

Don't be afraid to pivot your concept slightly, but keep to your high standards. Partner with a local wholesale restaurant supply store that always provides you with the freshest produce and other top-quality products. 

How a Wholesale Restaurant Supply Store Can Help


Need more help to maintain and grow your new restaurant? US Foods CHEF'STORE provides restaurants and catering companies with high-quality products at consistently competitive price points. 

We also offer professional services to help businesses succeed and grow. Click & Carry makes ordering a breeze, saving you time and money. What's more? Your CHEF'STORE business account offers numerous benefits, such as the ability to create and save shopping lists that you can print, text, or use on your phone. You can also track your purchase history, receive emails regarding specially discounted products, and much more.

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The information materials and opinions contained in this blog/website are for general information purposes only, are not intended to constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations, or undertakings about any of the content of this blog/website (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content).

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