Buying a restaurant business in the UK

Introduction

There are many common pitfalls to buying a restaurant business in the UK and to be successful, you need to ensure you know exactly what you are doing. Otherwise, you could be making a very expensive mistake. However, eating out is a huge industry and can be very very rewarding. If you can get it right, the rewards can exceed your wildest dreams. There are a number of considerations to factor before you attempt to open your first restaurant:

Restaurant Type

•  Chose the type of your restaurant

•  Type of service. e.g. fast food, informal, formal or haute cuisine.

•  Type of venue. e.g. ethnic food: Chinese, Italian, Greek, French etc...

•  Location of your restaurant. e.g. lots of pedestrians, near a theatre, mall, cinema etc...

Demographics

•  Things to know about your customer base

•  Average age of your target customers

•  Average disposable income of customers

•  Size of the market in your preferred area (How many customers)

•  The location of your customers by postcode

•  Income breakdown by local communities (low, low-middle, middle, middle-high, high)

•  The interests of your customers

•  Type of housing your customers live in

•  Target market analysis (shows who your main customer is)

Competitive S.W.O.T. ( S trengths, W eaknesses, O pportunities, T hreats ) Analysis

To get an idea of how likely you are to be successful, it is worth your while spending a little time (and money) going out to your potential competition (before you open your restaurant) to taste their food and look at the value added services that they offer their customers. Particular attention should be paid to the levels of service, the variety of their menus and the atmosphere inside. In general, you would be wise to observe the whole experience and take careful note of your likes and dislikes. Individual taste is relative when looking at décor or the type of food and beverages on offer. However, we all know if something tastes good, leaves you feeling satisfied and has a pleasant atmosphere with prompt and courteous service; then it is a venue worth returning to. The time, effort and cost of doing this will pay for itself many times over when your recipe for success is better than that of the competition.

Your Value Proposition

Of course, you will provide great food, a fantastic atmosphere, courteous, polite and friendly efficient service. However, there are unique qualities that make your restaurant better than that of the competition:

•  The quality of your food

•  The freshness & taste of your food

•  The ambiance of your restaurant

•  The great service provided by attentive, but unhurried staff

•  Perceived Value For Money

 

The key ingredients for success

Many people set a great deal of store in the location of your restaurant, however, understanding your market is key. It is very important to study who your customers are, where they will come from and what they will expect. Be sensitive to pricing, because it has a great deal of influence on your customers perception. If they perceive that your venue provides good value for money, they will return and visit you regularly.

Getting your demographic analysis correct is very important as it will govern how much disposable income your customers have to spend. Be aware that when you first open your restaurant, people will come to see what it is like and for a while, you will enjoy all the business that you can handle. This is artificial success. You will know if your venue will be successful if customers return frequently and eventually become regulars.

Never forget the following

•  Repeat business is the best business

•  People talk about their eating experiences, 5 years of a carefully crafted reputation can be destroyed in less than 5 minutes of carelessness. Don't ever get complacent

•  You always have customers in your restaurant, not friends, relatives or others

•  Always charge everybody that comes to your venue. That way you do not haemorrhage your profits.

•  Ensure that you have well defined practices, policies and procedures for every possible situation. There is nothing worse than unpredictable service or surprises. Customers like to have a sense of control as to what they encounter when they want to spend their money. Perception is everything. Ensure that you can set and manage their expectations for the whole dining experience.

 

Author: Andrew Georgiou

email: andyg@eman8te.com