5 Essential Questions to Answer Before Opening Your Restaurant

Years ago, I stumbled across an article about restaurant openings that declared, “What you do before you open your doors to the public accounts for 80% of your success.” While it's impossible to know how accurate the percentage is, it’s certainly a helpful perspective to take during the pre-opening phase of a restaurant. With that in mind, I’m sharing five critical questions that a first-time owner/operator can use to ensure they're on the right track.

Is Your Concept Crystal Clear and Cohesive?

One of the advantages of opening a restaurant in Los Angeles is our sheer size (about 4 million people). Angelenos love to check out new restaurants, and with about 4 million people in the area, LA is filled with people who love new dining experiences and want to see and be seen in new establishments. However, the competition is extreme, with over 30,000 restaurants as of 2020. To draw people in and keep them coming back, your concept needs to be well-defined and clearly articulated. In Hollywood, a great elevator pitch for a movie is a must. The same applies to restaurants. How would you describe your concept in a sentence? Bonus points if it sounds original and intriguing.

For example, if I told you I was opening a casual Italian restaurant in Mid-City, it might not spark much curiosity or excitement. Conversely, if I told you I was opening an Indian sports bar in Silver Lake, you might think I was insane, but you also might be curious about it. It's an extreme example, but one that was designed and executed with exceptional precision and creativity.

Too many restaurants don’t understand the value of a focused and clear concept approach. So ask yourself these questions before the doors are open and it's too late:

1. How would I describe my new concept as an elevator pitch?

2. Does this evoke some excitement and intrigue? If not, how can we change this for the better? This will help your marketing person (possibly you?) a great deal when food blogs, journalists, and influencers ask questions.

3. Have we added enough of these elements to some of your customer touch points (atmosphere, logo, menu design, etc.)? This does not have to be extreme or over the top; it just needs to be present. A good example is Safyy's - a Middle Eastern restaurant rooted in traditional flavors and executed using modern techniques.

Do You Know Your Numbers?

When I opened my first restaurant, we used a CPA without restaurant experience to run our books. Man oh man, was that a mistake. Six months in, we could not get granular with our expenses and dive deep into the numbers. This is a must for restaurant operators. With average restaurant margins of 3% - 5%, you need to be able to pinpoint out-of-line costs. Don’t make the same mistake we did. Determine your break-even point well before you open, then take time to update and refine these numbers. Resources like RestaurantOwner.com can help you and your accounting partner(s) develop financial tools that you will understand and be able to use effectively. If you open without a system to review your finances on a weekly basis, you run the risk of not knowing where your cash is going, with no way to course correct.

Will You Take Advantage of Your “Hot, New Restaurant” Phase?

Many first-time operators mistakenly opt for a quiet opening to control quality and service. In a competitive market like LA, you need to open with a bang and be fully prepared. If there's high demand in the first few weeks, that's a positive sign. To manage the initial rush, consider opening with fewer tables and limited days. Seize this opportunity by being ready from day one. Have a plan for people who want to write about you. Influencers matter, and if you generate some buzz, valuable ones may want to be seen at your place. Do you have someone who will help you manage this? Do you have a plan for capturing customer information and staying in touch with guests who want to make a reservation but can’t?

Are You Utilizing Technology to Your Advantage?

Ensure your software systems are synchronized. Your point of sale should integrate with timekeeping and payroll systems. Take advantage of smart tools that help you analyze your weekly numbers by syncing data like inventory, food costs, labor, and all other expenses. Choose an HR and payroll system that simplifies the drudgery of tasks like hiring and staying compliant. Implement best practices for HR to limit your liability and maintain compliance. Use smart tech tools to streamline local marketing, social media, and third-party orders as much as possible.

Successfully opening a restaurant is one of the hardest ventures an entrepreneur can undertake. If your concept, location, team, and product are ready on day one, you'll have a good chance to turn new customers into repeat customers.

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