Learning how to open a restaurant in a competitive market is helpful for any restaurant, brunch café, or bar business prospective owner. The restaurant industry, not to mention the hospitality industry as a whole, is in a constant state of competition. It’s something you need to prepare to work with to open a successful restaurant.
In this BinWise blog post, we’ll walk you through what a competitive restaurant market is. We will also take a look at three tips to open a restaurant in a competitive market. Read on to learn how you can take your business idea and work with it in a competitive market.
How to Open a Restaurant
Before we dive into the process of how to open a restaurant in a competitive market, we’ll look at basic restaurant needs. These also come into play for a bar, café, bistro, or even when you’re starting a winery.
The steps of how to open a restaurant include:
- Learn how to write a restaurant business plan and write yours
- Get set up with your software, including inventory software and an order management system
- Learn how to get a liquor license
- Hire employees, from a bartender or two to wait staff and servers to a restaurant manager
- Stock your restaurant and plan your menu types
- Find a location
- Engage in competitor research
- Build your brand through business branding and marketing
Of course, as you go through the process each step will have more steps underneath it. Your restaurant will have specific needs. You’ll find different rules for your location. That’s not even to mention the specifics of opening in a competitive market.
What Is a Competitive Restaurant Market? 3 Factors
A competitive restaurant market is the typical restaurant market. Only so many restaurants can open in one space and serve a specific market. There isn’t a time when the restaurant market isn’t a competitive space.
These three factors of restaurant market competition are consistent and often out of the control of restaurant owners. You can work around them and be aware of them, and the more creative you get, the better off you’ll be.
3. Food Supply Chain Shortages
The food supply chain isn’t within your control. The sooner you accept that the easier it’ll be to work around it. One option is to have a variety of vendors you can work with. An order management tool like BlueCart can help you have a range of choices.
2. Limited Property Available
There are only so many new spaces available for buildings, and only so many current options are available. This is, however, an area where you can get creative. You can open a bar in a bus that is parked semi-permanently. You can get into a food cart or even a ghost kitchen.
1. Limited Restaurant Concepts
Restaurants are, at their base, a simple construct. That simplicity means there isn’t an endless supply of restaurant concepts. There are also many restaurants that are already following a similar model. Your job is to be as creative and unique as possible. That could mean a homemade recipe or a concept that is completely out of the left field.
3 Tips to Open a Restaurant In a Competitive Market
Opening a restaurant in a competitive market may sound daunting. Don’t let it scare you away from an amazing business opportunity. A restaurant has the capability to be a great business venture. It can grow in many ways and bring in long-term profits.
These three tips to open a restaurant in a competitive market will help you get started. With them, you can be less concerned about the competition and more excited about the future of your restaurant.
3. Hire Smart
A great restaurant relies on an exceptional staff. When you’re hiring, plan out everything to find reliable, competent, efficient employees. That includes planning your restaurant interview questions. It also means you need to prepare some bartender interview questions. It all goes into finding the right people for your restaurant.
2. Don’t Limit Your Options
Avoiding limits on your options stretches from your menu choices to your location to your business model. Give yourself room to change your mind. Serve something else you didn't expect, or operate out of a building or area of town that was unexpected and well-suited to your business. Restaurant businesses may be an old industry, but that doesn’t mean you can’t do something new.
1. Be Creative
This is similar in some ways to the avoidance of limited options, but it goes beyond because it starts from the beginning. Before you even sit down to write up restaurant business plans you should keep your mind open. Your restaurant concept can be whatever you want it to be. The only requirement, from a business perspective, is profitability.
"Key Takeaway: Only so many restaurants can open in one space and serve a specific market. There isn’t a time when the restaurant market isn’t a competitive space."
Frequently Asked Questions About Opening Restaurants In Competitive Markets
Opening a restaurant in a competitive market requires a lot of patience, trying again, and learning as you go along. There is plenty to learn every step of the way. Our answers to these frequently asked questions will help you along and give you back up information about general restaurant business operations.
Are Restaurants a Competitive Market?
Yes, restaurants are a competitive market. Lasting growth can be slow in the restaurant market, however, there is still constant competition. There are so many restaurants already open. With building codes being what they are, most new restaurants open in the same areas of town.
How Can I Be Competitive In Restaurant Business?
To be competitive in a restaurant business you need to do your competitor research, be unique in your restaurant plans, and price with forethought. Price competitively where you can, but also know your worth and price your best items with their worth in mind.
What Is One Way a Restaurant Can Attract New Customers?
One way a restaurant can attract new customers is to amp up your marketing. That can include content marketing on social media. It can be email marketing with weekly or monthly promotions. It can even be creating a pop-up event to showcase your menu. Reaching new people will help you draw them in.
How Do Restaurants Attract Employees?
Restaurants can attract new employees by paying well, offering benefits and leeway, and overall being a good place to work. The Great Resignation took a toll on restaurants. Wait staff, servers, hosts, bartenders, and managers can be hard to find these days. The best cures for those issues are to be a restaurant where people will enjoy working.
What Tactics Do Restaurant Owners Use to Increase Profitability?
To increase profitability restaurant owners use tactics such as:
- Increase revenue without raising expenses–including overhead expenses
- Decrease expenses when you can
- Organize inventory for operational efficiency
- Menu optimization
- Increase delivery options
- Host special events–with event management plans
Those are just a few of the options to increase profitability in a restaurant business. For your business, look at the areas where you have room to save money. Then look into the spaces where you could be making more. Find the balance between those two sections of your business.
Opening a Restaurant In a Competitive Market: Restaurant Risk and Reward
Opening a restaurant in a competitive market can be a risk. If you follow these steps and learn along the way you’ll discover the rewards. A restaurant is an exceptional business with great profit margins and room for growth. When you’re ready to open yours, come back to BinWise for inventory program software support.