Think food services, and most people think of a busy restaurant. However, of the 12.1 million food service workers, only a portion actually work in a restaurant. You also have cafes and food trucks that go into the mix.
If you’re thinking about entering the food business, how should you get started? Food trucks, cafes, and full-blown fine dining establishments all have their pros and cons, so let’s run through the various options.
What Does it Take to Open a Successful Eatery?
Regardless of the type of business you eventually settle on, the same principles for success apply to all. Aspects like location, branding, audience, and the type of food you serve all go into determining what type of business you decide to open.
You’ll also run each type of eatery with the same adherence to high food hygiene standards and health and safety policies.
Plus, you also need the proper protections to defend your business if your health and safety protocols fail. Insurance policies, such as BOP in food services, workers’ compensation insurance, and general liability policies, ensure you don’t pay medical costs, legal fees, court costs, and settlements out of your pocket if someone is injured or falls ill.
Furthermore, your restaurant insurance package can also protect your building, equipment and even replace lost income. It underlines the importance of connecting with an insurer who has industry-specific insurance.
Fine Dining Restaurants
The cornerstone of a fine dining restaurant is a high degree of culinary knowledge. With higher meal prices, nothing but the best will suffice. You will be crafting elaborate menus, investing in the highest standard of service, and attracting a certain type of clientele.
These are the restaurants that deliver a classy atmosphere, fine details, and the highest standard of dining available.
Opening a fine dining restaurant will usually require the largest investment of all eatery types.
Casual Dining Restaurants
Casual dining restaurants offer freshly cooked, presentable food delivering a modest, casual atmosphere. These restaurants tend to orientate themselves more toward a family-friendly experience.
Rather than the seven-course meals of the fine dining establishment, a casual dining restaurant typically sticks to three meals and offers affordable prices to appeal to a broader range of people.
Food trucks are among the fastest-growing food-based businesses in the country. The growth rates on these ventures are incredible, with a 12.1% annualized growth rate between 2016 and 2021.
There’s comparatively little competition in the food truck business compared to restaurants. The fact that your business is on wheels means you can move around and pitch up according to where your target audience is.
Another reason why food trucks have grown in popularity is the amount of variation on offer. You can accommodate everything from Mexican to Lebanese cuisine. With limited menus, you also have limited overheads. Furthermore, people love food trucks because the food is cheap.
Many experts recommend starting off with a food truck before expanding the brand to a fixed restaurant location. It’s an excellent way to test-drive your idea and see if people respond because the startup costs are considerably lower.
In many cases, you may not even need to seek out external financing to start a food truck.
The café or bistro restaurant format typically focuses more on self-service and self-seating. While table service can be found in these establishments, it’s far from the norm.
These restaurants concentrate more on comfortable sitting areas and a relaxed mood. Menus at the bistro are more likely to include finger foods, such as sandwiches and pizza slices.
That’s not to say these restaurants cannot have the same full meals found in casual dining restaurants. But, again, it depends on the crowd you’re aiming for.
Bakeries are a fascinating part of the food services industry because of the considerably higher margins these businesses can take advantage of. Serving cakes, artisanal breads, and snacks, the menu at a bakery can be as simple or as elaborate as you choose.
Services are relatively basic, such as self-service and delivery. However, more and more bakeries are beginning to incorporate aspects of the full-blown restaurant into their repertoires.
Many bakeries will offer seating areas for dining in and drinks, but table service is still an extreme rarity.
Note that bakeries are also only open on certain days of the week and usually for limited opening hours, which can be ideal for owners who don’t want their lives dominated by their ventures.
Which Option is Right for You?
These are just some of the choices available for a food services business. So how do you know which one is right for you?
Here are some of the main factors to consider when thinking up a business plan:
- Passion – Which type of business appeals to you the most? Your passion has a big influence on running a food services business long-term.
- Financing – How much financing can you realistically access? For example, starting a food truck is great for people with less capital access.
- Community – Every community has its preferences. Launching a fine dining establishment in a low-income community is obviously a terrible idea. Research your target audience first.
- Competition – You might struggle to compete if you live in a hotspot for bakeries or highly-rated casual dining establishments. Instead, search for gaps in the market.
Simply looking at the potential margins isn’t a good way to start any type of restaurant. Instead, it requires a firm knowledge of the target market, your potential place in the community, and your chances of success.
With restaurants having such a high failure rate, getting the decision wrong can derail your efforts from day one.
Launching any new business venture is an exciting time for anyone. Unfortunately, the food industry is notoriously difficult to succeed in, so you need to be in this for the long haul.
Take your time in coming up with a plan, and don’t be afraid to bring in family and friends to advise you on the process. What type of eatery appeals to you the most?