Why starting a restaurant is easier than ever
Following the crushing economic downturn of the recession, and defying all financial expectations set by Brexit, certain corners of the UK restaurant industry are experiencing an unexpected boom period. Demand for dining out remains high, with not even a quarter of customers polled in a recent RSM survey are aiming to spend less on food and drink in the year ahead.
Surprisingly, it’s the major chains which are suffering; in the last month, rumours of nationwide branch closures at Jamie’s Italian and Byron have swirled around the press. Yet this hasn’t stopped the number of new restaurants in London peaking in 2017, with 280 new eateries launching—many of which are independent outlets.
New pop ups and food halls are opening at a remarkable rate, and a recently-announced flagship food hall on Oxford Street is set to be the nation’s biggest; the owner of the food hall describes this trend as “an antidote to brand mentality.” So if you’re a budding independent restaurateur, there’s never been a better time to get into the business. If you need any more convincing, or want to discover some more practical advice on starting a restaurant, read on to find out why it’s easier than ever to establish an eatery.
Rent a kitchen to cut down on real estate concerns
In the wake of recent, significant changes to business rates, parts of the country are set to experience some major financial burdens. Some of the UK’s biggest restaurant chains recently petitioned the government to curb the looming 20% increase in costs on top of rent in the running of their London branches. Much of the issue for these nationwide restaurants concerns their locations—the bigger hikes in rates are hitting the more desirable parts of the country, and London in particular.
However, small businesses are offered governmental relief if they only use one property or if their rateable value (determined by size and location, amongst other factors) is below £15,000. Aspiring restaurateurs may baulk at the idea of downsizing their property to cut down on business rates, but in recent years, services have come into existence which can allow new restaurants to lower their overheads. Companies such as Kitchup and Dephna offer kitchens for rent, which can be customised to the requirements of your restaurant, and can reduce your on-site preparation space and accommodate more customers.
Capitalise on social media trends to spread the word
Marketing online has never been easier thanks to the reach of social media, but the restaurant industry is a particular beneficiary. Setting up a Facebook, Twitter, Instagram and Yelp account is an essential way to reach out to your potential customer base. 69% of millennials make use of Instagram before they eat what’s on the plate in front of them, and you can use this to your advantage when starting a restaurant, regardless of how photogenic the food you serve is.
One of the best ways to do this is with geotagging, a feature which is included on every major social media platform. If a customer has activated geotagging on their phones, the name and location of your restaurant will appear alongside any photo or post they take there, provided you have created a Facebook page or Google My Business listing with your address. According to AdWeek, just 5% of Instagram posts use this feature, but the posts that do receive an engagement rate nearly 80% higher than those which don’t, providing you with invaluable free promotion.
Social media is also an extremely important tool for engaging with your customers, whether they enjoyed their meal or not. According to one study, 88% of consumers put the same amount of faith in online reviews as recommendations from friends, but that doesn’t mean you should be afraid of any potential criticism. Responding to user reviews—particularly negative ones—will actually benefit your business and increase the chances of them returning, even after a bad experience.
Consider crowdfunding for extra financial support
Crowdfunding can be as loaded with risk as opening a restaurant in the first place, but if your restaurant is based around a novel concept or a particularly desirable product, you could greatly benefit from your customers’ contributions. There are a number of types of crowdfunding which you could use to help finance your business, but the two main methods which you could choose to follow are the rewards-based model or offering equity.