What is in this article?:
- 5 key lessons for restaurant startups
- Customers, branding and commmunity
Restaurant owners should plot a course if they expect to expand. Here’s a roadmap.
Thanks to loyal customers and adaptability, Meatheads has grown to 15 locations in the Chicagoland area.
In my 20-plus years experience with fast casual, high-growth, early-stage restaurant concepts, I’ve learned several business lessons along the way. Below are five specific lessons I learned while launching my first restaurant concept, Meatheads, and some tips on how to apply these lessons to future startup concepts.
1. Any startup business plan needs to be flexible.
A business plan should provide for short to intermediate-term financial viability and contain a set of guidelines that steers the decision-making process. Five- or 10-year financial and growth plans are largely fictional beyond the first 12 or 18 months.
Similar to public companies pushing for quarterly results instead of developing solid long-term strategies for growth and profitability, business plans too literally interpreted and executed can create rigidity in the decision-making process, not allowing for adaptation to the often-changing realities of the marketplace. Opportunities for real growth could be lost in the quest for growth as defined by a plan that may have gone stale, which could put a restaurant in a vulnerable spot.
When we started Meatheads, we did have a business plan that encompassed startup economics and long-term strategy. Since we were operating in an established restaurant segment, we didn't really focus much on brand appeal and target customers. We felt like it was obvious: males, especially those age 18 to 35. We didn't think much about the ambient factors of the business. Instead, we spent time on engineering the menu and cost structure that we thought would lead to profitability.
2. Execution: Create an atmosphere of winning for both employees and customers.
When we opened our first Meatheads location in Bloomington, IL, in 2007, we didn't know what we were doing. We were far busier than we anticipated. And while this seems like it would be a positive, it almost led to our destruction. Since we lacked experience, our execution couldn't keep up with demand and we aggravated a lot of customers.
While at the beginning, it was all we could do to get the customers the food they ordered, we soon came to appreciate every person who walked through our doors. We needed to find a way to turn them into repeat customers, so we created training programs for all our employees, from chefs to point-of-sale to managers, to ensure execution was flawless and we were providing an enjoyable eating experience during every visit. We rewarded employees who excelled at executing and provided opportunities for growth within the company, which has resulted in a higher-than-average employee retention rate.