5 reasons you should be scared of opening a restaurant

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With lofty level of competition and higher risk to sustain the investment, food business is a high risk taking business.
  • Nusra Deputy Features Editor
Restaurant India

Opening a restaurant may seem a long term business and luxury sector to enter into but, the truth is 60 per cent of restaurants are closed within first year of operation. With lofty level of competition and higher risk to sustain the investment, food business is a high risk taking business. How to ensure that your restaurant is a hit?

An in-depth knowledge of the business and well researched data to enter into the business may help you succeed in the long haul race. Here are five common factors that restaurants fail to understand leading to closure. And, knowing about it you may learn tricks to combat these issues.

Licensing: Lately, restaurants and food industry is working hard along with FSSAI and government to fight the long pending licensing issues of the country. India being the fastest growing country in terms of evolving taste, we need almost 21-25 licenses to open a restaurant. However, in terms of developed culinary countries like Dubai, Singapore and some parts of Europe and UK, people require only 2-5 licenses on an average to open a restaurant.

Manpower: Employee attrition or turnover can dramatically influence a company’s financial state and the morale of the working environment. Restaurant industry with the greatest number of attrition rates which goes up to 100 per cent sometimes needs to follow certain rules to make them their employees a longer employee. According to research more than 95 per cent of restaurants faces the same but, to amaze Barbeque Nation, the Bengaluru based casual dining chain has 40 per cent attritions rate as compared to others. So, the chances are you may become the leader if you are good with employee and never forget your employees are your partners.

Getting the fresh supply: Every restaurant toady face challenges in supply chain like the operational challenges, pricing, food packaging, and to meet those demand every day. So, effective flow of the supply chain processes is what the industry demands today. According to a latest research, it has been found that many food companies routinely dilute the nutritional content and value of the foods products. Most of these fillers can cause potential allergens, mainly in children. And, not only logistics, getting the right and fresh supplies at your door is a major challenge. Hence, looking for local suppliers or picking your own supplies is smarter to hit the fast evolving space.

Selecting the location: Location, Location and location every one cries for it. But, its true to its benefit. There is no single restaurant in the country today which is not working on rationale of a good location. Always and forever go for a location which gives you the best customer attraction, good footfall and a view that your customer relish for a moment. Restaurants like Wendy’s which started with a big bang failed in India may be because of the wrong location they targeted by opening store at Gurgaon.

What makes you unique: Be it a cafe, a fine dine or a normal QSR, everyone is running on the meter of their unique selling point. Some put in their money to serve the best of cuisines; others set the tone that customers can relish on for years.One needs to be very selective in terms of choosing the factor that makes him different from the crowd. You need a strong reason and not just a menu to make yourself growing in the ever growing restaurant business.

And, if you are looking at these challenges with a detail view there is no single reason that can stop you to grow in India. 

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