Whether you’re naturally a risk taker or risk averse, insurance is rarely the first thing that anyone thinks about during the excitement of opening a new business. However, insurance is absolutely crucial to making sure that your restaurant thrives well long term. There is a lot that insurance can cover; from lost earnings of a closure, to customers looking for a quick payday from food poisoning, or even something as simple as a faulty chair. The cost of insurance will depend on where your restaurant is located and what you do. It could be expensive but the necessity of having it means that it’s not a cost you can forgo.
- Credit card processing fees
There are some establishments that get away with being cash only but these are few and far between these days. Customers expect to be able to pay by card and you could lose custom if you’re not able to take plastic transactions. However, what many new business owners don’t realise is that it’s not the customer who bears any bank fees that arise to process these transactions, it’s you. Not only will you pay either a fixed payment or a percentage plus a fixed payment for every transaction that you process by card, but you may also need to plan for the cost of a joining or set up fee or rental of EPOS machines too.
- Permits and licences
The red tape that accompanies opening a restaurant may be boring but it is necessary. There are some serious consequences for anyone who doesn’t comply with rules and regulations that govern the making and selling of food to the public but this is an area that often gets forgotten in the chaos of building works, finalising menus and recruiting staff that can take over the launch process. Look into your own countries laws and make sure you’re compliant, otherwise the cost of submission might not be the only hidden cost, you could even have a fine on your hands.
You may have the best restaurant in the world but if no one knows it’s there then you’re going to struggle to make ends meet, which is where marketing comes in. Many people forget to budget for marketing, simply assuming that word of mouth and great food will do the job for them. Sometimes it will – but this is rare these days with the high volume of new restaurants opening every week. Allocate some resources for someone to run social media for you, as it’s unlikely you’ll have the time to do this yourself. Look into the cost of running some advertising, whether online or in print, and factor in the cost of offering some opening deals and vouchers, such as two for one or a percentage discount. If you’re really serious then perhaps hire a specialist agency who can look at contacting critics and making sure you have a profile on all major review sites, as well as pitching for pieces in newspapers and blogs.
As a chef you may be used to getting your team to clean down the kitchen at the end of service but what about the rest of the restaurant? Bathrooms, tables and chairs, floors and windows should to be cleaned at least once a day by a professional cleaner. Getting servers to wipe down tabletops and sweep up food from the floor is fine but if they’re busy or tired then grime quickly builds up. Many chefs focus on the food and forget that the surroundings in which it is eaten are just as important – and cleanliness is crucial to this.
You may be under the impression that you can simply play whatever you want when it comes to music in your restaurant but this is not the case. As a commercial establishment you need to pay for the right to play recorded music in public. If you don’t obtain a licence from PPL then you could face fines. If you’re playing music to staff, you have hold music on your phones or you’re playing videos to customers then you can add another fee on top for for each one.
Food & Beverage
Chefify - Six hidden costs to watch out for when opening your own restaurant
Friday, April 20, 2018