Are you looking for the best restaurant business opportunities and how to conquer the top challenges facing you? Would you like to see what other successful restaurant startups like yours are doing to overcome their fears? Or you are considering investing in the hospitality industry in the United States but don’t know where to get started. We are here to help you.
The restaurant business is a highly dynamic and lucrative industry. The industry accounts for 10.5 million jobs as of 2020 in the United States.
According to the 2022 restaurant industry report by the National Restaurant Association United States, it’s expected that the food service industry will bring in an additional 1.6 million jobs in the next 10 years, with employment reaching 16.9 million by 2029. This shows that more restaurant business opportunities will rise in 2023 and beyond.
However, there are several pressing problems facing restaurant startups in the United States. In this article, you will get detailed information on the challenges and opportunities obtainable in a restaurant business. But before we go into that, let’s find out the definition of a restaurant business.
What is a Restaurant business?
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A restaurant business is a commercial entity where you prepare and sell perishable food for consumption to the general public. It involves serving drinks and meals at tables on the premises while also offering takeout and delivery packages.
The restaurant business opportunities are basically in three categories: quick service, midscale and upscale.
A quick service restaurant is a fast food type that offers a limited menu of meals prepared quickly to be taken within the premises or taken out.
The midscale category is in-between quick service and upscale restaurants. They offer limited and full-service options. In a limited-service operation, customers order their food at the counter and receive their meals at their tables, while in the full-service option, customers place and receive orders at their tables.
The upscale operation offers dining and full-table service. They focus on the quality of their cuisine and the ambiance of their facilities. Customers do not just eat but treat themselves to the best varieties of food, tour, outdoor recreation and experience. This is why this type charges the highest price.
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List of Popular Restaurants From Around the World
Below is a random list of different popular restaurants from around the world in no particular order:
- Chicken Treat
- Chooks Fresh &Tasty
- Burger King
- Yum! Brand
- Cibo Espresso
- El Jannah
- Pizza Hut
- Fast Eddys
- Ty’s Place in the Bahamas
- Hungry Jack’s
- Lord of the Fries
- Jack in the box
- Taco Bell
What Are the Challenges Facing Restaurant Business?
Statista Research Department in Australia published a list of the restaurant industry’s challenges in November 2016. On the list, cost challenge has the highest percentage 27.8% followed by staff management with 18.2%.
Other challenges listed by the department include changing industry trends, industry compliance, stress, time management, staff retention, advertising, competition and suppliers.
Most restaurants whether in Australia, Asia or America shut down within the first year of operations because running a successful restaurant business is tasking and can be overwhelming.
The following are notable challenges amidst the restaurant business opportunities:
1. Environmental / Epidemic Outbreak
In situations where goods are stocked to meet adequate demand, sudden environmental and epidemic outbreaks can disrupt the smooth running of the restaurant business and cause great loss. The National Restaurant Association in the United Nations projected $225 billion in losses in March 2020 due to the coronavirus epidemic.
2. Demand Forecasting
Accurate demand forecasts of raw materials and ingredients can save restaurant businesses their input costs. Low or poor demand forecasts will lead to overordering, over-portioning, and food waste. These all contribute to a loss in revenue.
3. Uncontrolled Stock Wastage
The day-to-day running of the restaurant business requires buying a large stock of items mostly perishables. Hence improper inventory management will lead to common wastage.
Saurabh Srivastava, the Vice president of Deskera, a business growth solution management company, says automating inventory management is a strategic advantage for business, yet most restaurant businesses do not have proper inventory management.
4. Hiring/Human Resource Management
Employees are the most valuable asset in a restaurant business. Getting to hire the right personnel will produce optimized results for restaurant business opportunities. Working with a professional HR team can help you train and manage your employees to optimum productivity.
5. Profitability Issues
The cost of preparing a menu, if not well analyzed, will cut into the profits of the business. Careful analysis of all revenue costs is crucial for menu pricing. This is why every restaurant should be using accounting software to help automate business processes.
6. Increasingly High Competition
New restaurants are constantly established across various regions in Australia and Europe. Moreso, these crowded restaurants have to compete with other delivery and app-based food technologies like Deliveroo, Uber Eats, and Foodora. This makes it a tough game.
This Increasing competition forces owners to devote more expenditure to decor, lighting, and other state-of-the-art equipment. “This means it’s harder to turn a profit, let alone amortize the set-up costs, ” says REGATTA restaurant and bar executive chef, Damien Pignolet.
What Are the Restaurant Business Opportunities?
The restaurant industry is changing and embracing new technological advancements. This advancement in technologies helps to improve efficient and more personalized services. Across the globe, consumers are adapting to this development. From physical locations to online services, from dining to fast food, and continued emphasis on delivery options. Below are restaurant business opportunities to plunge into:
The latest statistics show that consumers would pay an average of 14 percent more for the chance to use digital ordering methods. This is an amazing opportunity for restaurants to synchronize services to delivery and app-based.
Automated Inventory Software
Inventory management enables end-to-end management system setup, reduces delivery costs, and provides better customer service, bulk purchases and cheaper storage rates.
Providing Special Offers
Changing trends and awareness of alternative lifestyle is evolving. Vegetarianism, paleo, gluten-free, veganism, etc., are all restaurant business opportunities to plunge into. Providing diet preferences and lifestyle is a big opportunity for a restaurant business.
Aside food truck business, a Kiosk is one of the restaurant startup ideas that is also profitable. The only difference is that Kiosks are limited in what kind of offerings they can sell while a food truck can sell virtually everything. Sandwiches are popular among food truck sellers. Food trucks require a hefty initial investment, but they are worth it if you have the right product.
Setup location is important for food trucks. But if you have a great menu, people will make the journey to taste your offerings.
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How to Improve Customer and Employees Engagement in Your Restaurant
Engagement begins with staffing. Encouraging open communication and feedback will bring great insights to the menu, introduce better technology and improve services.
Engagement with customers is also very key. Ideas like bar promotions, restaurant marketing ideas and menu specials, if well implemented will boost sales and recommendations. If you are looking for where to invest your money, consider these restaurant business opportunities.