By Roger Robinson, Ph.D., SCORE Mentor
This is the 4th in a series of post on starting and opening a restaurant.
Restaurant Categories and Concepts:
Quick-service restaurants sub-categories are fast food and fast casual. These establishments offer limited menus of items that are prepared quickly and sold for a relatively low price. In addition to very casual dining areas, they typically offer drive-thru windows and take-out service. This category serves chicken, hot dogs, sandwiches, pizza, seafood and ethnic foods as well as hamburgers and french fries
Mid-scale restaurants occupy the middle ground between quick-service and upscale restaurants. They offer full meals but charge prices that customers perceive as good value. Midscale offers a range of limited- and full-service options.
Upscale restaurants offer full table service. They focus on the quality of their cuisine and the ambiance of their facilities. Fine-dining establishments are at the highest end of the upscale restaurant category and charge the highest prices.
Your own personality, skills, and preferences will dictate the type of restaurant you choose. Do you have a passion for a particular type of cuisine? Do you enjoy a predictable routine, or do you prefer something different every day? Are you willing to deal with the additional responsibilities and liabilities that come with serving alcoholic beverages?
Are you an early riser, or do you prefer to stay up late and sleep late? If you like–or at least don’t mind–getting up before dawn, your niche may be a bakery or a casual breakfast-and-lunch operation. Night owls are going to be drawn to the hours required for bar-and-grill types of restaurants, fine-dining establishments, and even pizzerias.
If you’re a people person, choose a food-service business that gives you plenty of opportunities to connect with your customers. If you’re not especially gregarious, you’ll probably lean more toward a commercial type of business, perhaps a bakery or even a catering service, where you can deal more with operational issues than with people.
Once you have decided what best suits you, figure out the niche, you’ll occupy in the marketplace. As you do this self-analysis, think about your ideal day. If you could be doing exactly what you wanted to do, what would it be
Selecting a Food Concept, the Challenge
The challenge is to develop a concept that fits a definite market and to do it better than your competition. Care must be taken to ensure that it is not a fad, that there is a market for the concept and that there are enough customers in the area to support the concept over time.
Food service operators deciding to open a new operation have several options:
copy a successful concept
adapt an existing concept
develop a new concept.
The advantage of copying an existing concept is that you piggyback on the work and success someone else has accomplished. The disadvantage is that you will have to offer something better or why should guests go to your operation rather than the original. You must do proper research to make sure your adaptation of an existing concept is what customers prefer.
Look at the fast food hamburger market. Operators realized they could not compete with McDonald’s head to head, so they tried to find ways to differentiate their burgers to draw customers from the segment leader. Burger King offers burgers cooked over an open flame; Wendy’s offers a salad bar, chili, and burgers using fresh rather than frozen meat.
The most risky of the options is to develop your own concept. To be successful, you must be creative and find a need that is not being filled by existing operations. If your goal is to have a successful business, you must appeal to a range of customers. You must exceed customers’ expectations. The more you research the needs and desires of your customers and provide offerings customers want and need the greater opportunity you have for your operation to be successful.
Patrons want to be delighted with their dining experience, but don’t want surprises. Concepts let patrons know what to expect and provide some structure for the operation. Some of the more popular restaurant concepts:
Quick-service seafood restaurants generally offer a limited range of choices, often restricted to fried seafood. Midscale and upscale seafood restaurants offer a wider selection, prepared in ways other than fried, Seafood can be risky as prices are always changing, and many kinds of seafood are seasonal. Make sure items are fresh and meet your standards of quality. If you are not happy with what a distributor offers, you can be sure your customers won’t be either.
Steakhouses are part of the mid-scale and upscale markets. Mid-scales are typically family-oriented, offer a casual environment with the perception of good values. Upscale steakhouses offer a more formal atmosphere and may serve larger cuts of meat that are of better quality and charge higher prices. Their décor may be similar to fine-dining, offering guests more privacy and focusing more on adult patrons than on families.
Family-style restaurants. Geared toward families, they charge reasonable prices. They also appeal to seniors, offer speedy service that falls somewhere between that of quick-service places and full-service. Menus offer a variety of selections to appeal to the interests of a broad range of customers, from children to seniors.
Casual-dining restaurants. These appeal to a wide audience. They provide a variety of food items, from appetizers and salads to main dishes and desserts. They offer comfortable atmospheres with mid-range prices. Many centers on a theme that’s incorporated into their menus and décor.
Ethnic restaurants. They range from quick-service places with limited selections to upscale eateries with a wide variety, including Americanized ethnic dishes, as well as authentic food. Most popular are Italian, Chinese and Mexican followed by Indian, Thai, Caribbean, English, French, German, Japanese, Korean, Mediterranean and Vietnamese.
You have two primary choices; a to-go in a modest facility specializing in pizza and beer, limited seating and self-service or a full-service pizza restaurant with a menu that features a variety of pizzas, beer and wine, as well as Italian entrees like spaghetti, ravioli and lasagna, side dishes such as salads (or even a salad bar), and a few desserts. Hire a good pizza cook who knows how to make a good pizza. Invest in top-quality ingredients and preparation methods. Make every pizza as if you’re going to eat it yourself and your customers will keep coming back for more.
Sandwich Shop/Delicatessen. They enjoy high-profit margins and can change their menus quickly and easily to adapt to current tastes. Many add delivery and catering to their sit-down and take-out operations. Most sandwich shops serve only sandwiches, possibly with some side dishes or desserts. A delicatessen offers a more extensive menu, including sandwiches, prepared meats, smoked fish, cheeses, salads, relishes and various hot entrees.
Coffee is the world’s most popular beverage. Beyond coffee, people frequent coffeehouses and espresso bars to meet with friends, for a quick lunch and a drink to perk up the afternoon, or simply to start off each morning with a great cup of coffee. Most successful coffeehouses have heavy foot traffic and high-volume sales serving up to 500 customers per day and up to five customer turnovers during the lunch hour, despite having limited floor space and modest seating capacity. Profit margins for coffee and espresso drinks are extremely high – the product is more than 95 percent water. The average ticket is around $3, so you need volume to reach and maintain profitability.
“Bread-only” retail bakeries have almost disappeared. Today many offer cakes, scones, bagels and coffee drinks. Some even have full dining menus, including sandwiches, hot entrees, beer and wine. The market is extremely competitive
Trends in terms of menu content and design should influence the type of food-service concept you open. The problem is whether the new food service trend is really a trend or just a short-lived fad. Care must be taken when adapting a trend and changing a concept so that you do not lose your existing core of business in the attempt to attract new customers.
Trends include vegetarian items, tortillas, locally grown produce, organic items, fusion dishes (combining two or more ethnic cuisines in one dish or on one plate) and microbrewed or local beers. Pita dishes and wraps are a high demand easy-to-consume alternative to sandwiches. There is a strong demand for bagels, espresso and specialty coffees, and “real meals,” which are typically an entree with a side order. Also, trending is more chicken, seafood and beef dishes. At the same time, growth is in meatless alternatives. There is demand for “comfort food”–the dishes that take them back to their childhoods, when mothers baked from scratch, and meat and potatoes were at the center of each plate.
If families are a key part of your target market, have four or five items in smaller portions that youngsters will enjoy. If you serve snack items as well as entrees, note that kids are choosing healthier snacks more often thanks to concerned parents. Consider allowing your young diners to choose from a selection of nutritious options.
Though menu variety has increased over the years, menus themselves are growing shorter. Dining out is a recreational activity. Keep your number of items in check and menu descriptions simple and straightforward, providing a variety of choices in a concise format. Indicate what dishes can be prepared to meet special dietary requirements, including items low in fat, sodium, and cholesterol.
Remember, as you develop your particular concept, you’ll need to find a way to differentiate yourself from all the other competitors.
If you need help deciding which way to go, a SCORE mentor can help guide you for free! Click here to schedule an appointment with a SCORE mentor.