Food business is a kind of business which yields profits irrespective of the economic situation of a country. It is simply because they need to eat. Hence one can assume that food business is not as prone to such risky external factors as a number of other businesses. If a person can smartly manage the quality, expenses, and marketing of the business, then this business has every reason to foster and flourish at a rapid pace. IBEX team has interviewed several restaurant and food business owners and here is a complete guide of starting a restaurant in Pakistan.
The acquisition of a suitable land area is the foremost step. A person should have adequate knowledge about the nature of the food business and only then can he acquire or take the land on rent which satisfactorily fulfills its requirement. Property prices have seen an upsurge in the recent past particularly in the commercial areas and are still increasing thus creating hurdles for new investors and even for the already existing ones.
But one thing should be kept in mind that this increasing cost of rent is only for commercial areas catering to the elite class of the society especially in cities like Islamabad. If a person is looking for an area other than such sectors of major cities, then the cost of property varies from place to place but it would still be less as compared to major metros such as Lahore, Karachi, and Islamabad.
Many young entrepreneurs might not want to believe but there is no business in this world that appeals everyone universally. Trying to please everyone has resulted in pleasing no one at all. Thus, focusing on 10 to 15% is all you need. For this certain categories need to be known. There are two generations eating out namely the X and Y generation.
Generation Y is of course three times as bigger than the generation x while these millennials are quite diverse. They are the best target for business as they go for fast food and handy items. Generation X is a family value audience and go out with parents, grandparents etc. However, these are financially strong too. These people go for comfort, value, and quick service, affordable, and all you can eat buffets etc.
There are other classes like those who can afford to go to high restaurants and spend freely too. They are also great for formal dining experiences and family friendly atmosphere too. The other class is obviously for those grandparents etc who live alone and mostly visit the most upscale restaurants while having discretionary incomes. The last is the senior class that visit good family styles restaurants while they remained focus at health at all times too.
There are three styles here namely quick-service, middle scale, and upscale ones. Quick services are obviously the ones with fast food options and limited items that are made quickly at a low price. Some have casual dining areas while take away windows and drive-thru joints are very common and successful in this type. It includes hamburgers, hot dogs, fried chicken, fries, seafood, etc
Mid scale restaurants have in between service and have full meals at their avail. Thus, they also offer good value for money which is why they are known. These also have salad bars and buffets while they can also have limited counter orders and full service table meals too.
Upscale restaurants do not promote value for money but they offer great quality and cuisine with the richest experience. The ambiance and the dining establishments are more than good. Restaurants of this type have high charges though.
Having great concepts can lure people to come in more as the ambiance and the décor speaks of it. It is then followed by people who love it. It is also why this concept should be well implemented too. If a customer sees a restaurant with some other type of décor and a contrasting menu with pricey items then it won’t possibly enjoy and come again. Thus, choosing a concept is important to match it well. This includes seafood, steakhouses, family-styles, casual styles, ethnic styles, pizzerias, bakery, patisseries, delicatessen, cafes, etc.
Seafood restaurants have limited sea food items in them that are seasonal as well. They can be baked, fried, broiled, poached, etc while this style can be expensive to have and seasonal at times too. The freshness and quality is all that matters here.
Steakhouses mostly represent western mid scale and upscale restaurants. They have good values but have popular themes with formal atmosphere and large meat cuts of better quality. They can charge higher prices for fine dining and family focus too.
Family style restaurants on the other hand are oriented just towards families. It is because of this that they have very reasonable process and appeal people for their speedy service too. This is why they have lots on the menu to appeal to juniors, seniors, millennials, everyone. They are comfortable and a bit higher than fast food restaurants.
Casual dining settings are more casual and here both generations can come to make up for their food needs. They have varieties of foods and also have themes followed too. The best part is that they have intermediate prices.
Ethnic restaurants follow quick servings and limited selections of authentic foods. They mostly have popular foods like Italian, Chinese, Mexican, all on their menu at one place.
Lastly, pizzerias are the most common ones and include variety of pizzas, desserts, salad bars, spaghetti, rolls, ravioli, lasagna, other side dishes etc too. They are also modest at price.
The other categories are for different minds like those who are diet conscious or are totally no conscious etc. Sandwich shop like subway etc works awesome for healthy nutrition while coffee houses are great for meetings and light eating options. They have all varieties of coffee with modest capacity to sit as they make your day start. They can have high sales volumes too. Bakeries are also the choice of food lovers which have bagels, scones, cakes, sandwiches, hot entrees etc.
Management is the most important factor which should be always considered to make a good budget, know the right time to invest in a new dish, promote employees at the right time, keep a check on quality and its taste, maintain cleanliness, and give food service besides being friendly too. All this makes a restaurant stand out well.
Planning is important for aspects like funding the business, getting one’s own resources, getting help from family and friends, using government programs for facilitation, having partnerships, etc. Thus make sure you plan and know your step ahead well and good.
This is the one of the most fundamental steps as you need to research to have a place in reach to most people. It should also be famous and be not very costly too. That area should be known which gives the most sales to you. The ordinances and rules applied there should also be taken in consideration while traffic density should also be noted while buying a location. Lastly customer parking should also be thought for customer’s ease. Terms of lease, history of the place should also be researched well. Only after this the layout for dining area and production should be sketched. It is imperative to select the location first and then study which kind of food is available in the vicinity and what is missing.
Comprehensive market research gives way to quick breakeven. For example if a person starts a restaurant in an exclusive area of Islamabad, Lahore or Karachi, where people can afford expensive food, the owner can then sell a cup of tea by increasing the price manifold. But in order to do so, he’ll have to create a luxurious and captivating environment where the customers would want to spend a sufficient amount of time and would not mind paying extra amount of money even for a single cup of tea because they feel it’s worth it.
This should never compromise on quality and best ingredients while safety and cleanliness regulations should all be followed too. The menu should be set in match with pricing guided alongside as well.
While hiring employees getting the right ones is important so creation of well detailed job description can help. Initial and ongoing training should be given while tips should also be reported properly too. The understanding of wages per hour and child labor laws is also important to be known here.
Chefs, managers, cooks, and servers should be all checked well and regularly for their practices, ethics, cleanliness, performance, duties, management, etc too. They should all be passionate and friendly alongside with creativity and innovation in their work.
Most significant determinant of the food business is the quality of food offered and the methods and techniques used to lure and retain customers. There are a number of factors which can lead to disaster. A critical factor is the consistent maintenance of quality. If the quality standards are not met, then it becomes very difficult to even survive in the market as most of the people now place quality above quantity. It is the job of the management to devise efficient and proper quality control programs and to have proper control over cooks to maintain the quality of food. Cleanliness, best cooks, outstanding environment and warm and friendly attendants all contribute towards the success of the business.
It might seem to be the last point but it is equally important. If your food is good, your service is good, you have an affordable restaurant but people do not know about it then it is all useless. Every business needs one goof marketing plan and food servicing business needs it as well.
While word of mouth seems the best way to advertise, this could be an indicator for you to provide them the best experience. Customers will surely love it and talk about it with recommendations. Asking them how they heard about you also helps one know which of the strategies are working and which of them need to be worked at. Secondly, all marketing materials should clearly speak of things like menu, tables etc to know what you are all about.
Promotions like giving out free vouchers, give-away, discounts, free desserts, etc can help one get the best customers too. Even local radio stations can be used to spread the news of your launch and location with little details. Moreover, contests and competitions to free dinners through social media as well as radio etc can help too.
Furthermore, event sponsorship, memberships, professional meeting handouts of deals, raffle prizes with working conditions etc can also help to get long term customers.
If we take into account the initial investment of daily expenses, it is by and large highly unpredictable in the food business. This is because every food business varies from person to person so it depends solely upon the investor; whether he wants a huge space for the business or a small one, expensive interior or normal and also on the kind of lighting and environment he wants to create in the restaurant and the kind of menu or food he wants to offer. The inner décor depends on the kind of customer segment one wants to target. Hence the expenses are varied.
Daily operational cost
There is great potential in the food business as the owner won’t need big amount of cash in day to day operations. This is mainly due to the practice of purchasing grocery and related items (which are sold on a daily basis) from the dealers on credit. The owner can preset a schedule of payments to suppliers whereby it is decided ahead of time whether the payments are to be made on weekly or a monthly basis.
After all of this is taken care of, make sure you keep checking each area now and then whether it is parking or décor, printed menus or any staff at all. Markets change and so the needs so this step is important for sustainability!
People should invest in this business with proper planning and should follow the standards practiced by renowned internationals food chains. At present, there is no Pakistani food chain which operates globally. Instead of getting licenses from international chains like KFC, McDonald, Subway etc, one should take an initiative of introducing a similar Pakistani brand complying with the international standards and start establishing its franchises throughout the country. This practice can give a boost to local established brands. It can be troublesome in the beginning but has the potential to yield profits in the long-term
Hence, if you follow all these rules while starting a restaurant then you can surely gain lots of success in it soon!