With the move to healthy and ethical eating continuing to gather pace, it’s a great time to be opening a vegetarian or vegan restaurant. But how can you give your business the best start possible? We’ve put together our 5 steps for success when opening a vegetarian restaurant.
Sales of plant-based food have increased by 40% since 2014, according to recent market research from Mintel. The shift shows that demand for vegan and vegetarian options is coming from meat-eaters looking to reduce their meat consumption as well as from people looking to cut out meat and dairy entirely.
The result is a huge and growing market that’s hungry for delicious, healthy options, and great potential for those opening a vegetarian or vegan restaurant. But running a business is a challenge with a steep learning curve. We hope the points below will guide you in the right direction to start things right.
First, here’s some good news. You may have heard that most restaurants close within the first year. This is a huge exaggeration. A study in 2014 that covered 98% of US businesses found that the correct figure is 17%. If that still sounds worryingly high, don’t forget that many will have closed by choice, despite being successful. The downside to the study’s findings is that smaller restaurant startups close or fail at a higher rate than larger ones - the first months of your new restaurant may dictate whether you will survive and thrive, so you’ve got to hit the ground running...
1. Make your menus clear
A lot of customers will commit to eating at your restaurant, and coming back, based on the clarity of your menus. If there is any doubt about allergen contents or ingredients used when people browse the menu outside your restaurant, for example, they are likely to go elsewhere rather than walk in to check.
As diets become more tailored to the needs of the individual, the appeal of off-the-shelf meals is reducing. You might want to think of a way that your menus can cater for individual choice, letting people pick and choose some ingredients.
2. Employ staff who care and keep them
You care about your food and customers, so that’s a good start. But if you are planning to hire someone, you’re unlikely to find yourself recruiting from a pool of similarly passionate people. As I mentioned in our last blog, the hospitality industry is plagued with a high staff turnover. If you find yourself rehiring within the year, you will have wasted time in training and will likely see long periods of time where your customers are receiving substandard service.
This is particularly the case for a vegan or vegetarian restaurant, where customers will expect your staff to be aware of different dietary requirements and the contents of your menus.
A recent Zenput survey of major QSR chains including Domino’s, KFC and Chipotle asked restaurateurs what the biggest barriers were to delivering a great customer experience. The leading concerns were all employee related: Rising labor costs: 48 percent; Employee turnover: 44 percent; Store employees not being properly trained: 39 percent.
Restaurant operators anticipate having to pay employees more in the near future, and giving them more tasks as a result. According to Zenput, “This means embracing new strategies, processes, and automation—technologies that will enable staff to focus on higher-value activity and do it more efficiently.” However, the study found that only 27% of restaurant operators were embracing technology to automate aspects of their business to a “great extent”. Interestingly, this takeup of technology was far lower in bigger chains - smaller, single-site restaurants have the benefit of being nimble and able to adopt new systems easily. This is one way in which you are in a better position than the big-name brands.
3. Software for a new restaurant
There are dozens of aspects of running a restaurant that can be done with the aid of software, from front of house (FOH) to back of house (BOH) covering everything from inventory to payroll, payment and accounting. They will vary in the degree they can help you according to your needs, and it is worth putting research into the most relevant ones for your restaurant.
Some of the most helpful software systems in terms of productivity and the running of a new business are a point of sale (POS), table management, accounting software and inventory management. This article breaks down the varied types of software available and what they do.
It’s tempting to think that adopting software can wait when you are starting a restaurant - people want to start off without a system and then adopt one as they grow. But we’ve found that it is much better to adopt a system first. This way you are all set for expansion and don’t need to worry about learning to use software right when you are at your most busy. A good system will let you take control of your business and speed up growth, as well as helping you provide a better quality of service by preventing errors.
4. Be ready for delays and cost overruns
A survey of 700 restaurateurs by RestaurantOwner.com found that the average cost overrun from initial cost estimates was about 33%. Equipment, staff, marketing, building and software can all add up very quickly to a number much larger than you imagined.
This article by Sage (the accounting software) shares the wisdom of experienced restaurant owners and their tips for those starting out. Among the advice from the co-owner of a Philadelphia restaurant are “always make sure you get things in writing”, “don’t over-hire in the beginning,” and “Whenever you think you have enough money, add another $25,000 to that figure.”
As with all advice, numbers will vary according to the concept you are starting, the location and many other factors. The important message is to calculate your costs carefully in advance and anticipate overruns. Look to prioritize your needs and wants and make sensible savings where you can, whether that’s second-hand kitchen equipment, not overhiring staff, or reducing marketing budget.
5. Start your restaurant business with online catering software
Getting into drop-off catering is a great way to increase your revenues. Providing meeting room food brings in high order value customers (we find average catering order values to be around the $200 mark), with a lot of potential for repeat custom - once you have proved your business to be a reliable source of catering, the food-booker is very likely to order from you again rather than risk using a different business.
Catering is also a great way to avoid down-time in the kitchen - a lot of new restaurants struggle to handle the workload at rush-hour, but find they are wasting time on wages during quiet periods. Drop-off orders fill these gaps in the day, as food can be prepared in the late morning, or snacks can be delivered for afternoon meetings.
Spoonfed is built specifically to handle corporate catering orders, from start to finish. We built the system while running our own catering business, and found that it improved our efficiency so much, and helped us grow so quickly, that we took the software to market.
If you are planning to start a vegetarian or vegan restaurant, and want to cut out paper and avoid mistakes, automate processes and ensure you are ready for growth, get in touch with us and find out how Spoonfed could help.