While Canada and Ontario’s severe COVID-19 lockdown limitations posed what was likely the most challenging and demoralizing period for almost every restaurant owner across the country, things are starting to look up again.
An increasing amount of Canadians are receiving vaccinations as active case numbers of the virus are decreasing. This has resulted in many limitations on restaurant services being lifted and the industry as a whole somewhat beginning to prosper once again.
However, the restaurant industry and restaurant owners are still feeling the long-term effects of how the pandemic severely impaired income. Today, perhaps the most pressing question relating to the industry: is now the right time to invest in a restaurant business?
What Is Your Restaurant Experience?
Whether you’re a pro chef with business acumen on your menu, a well-seasoned restaurant investor, or it’s your first time out on the restaurant chopping block, experience is the most important ingredient when making a successful restaurant investment.
The harsh reality of the restaurant industry is that restaurants fail all the time, and one of the main contributors to that high rate of failure is a lack of know-how.
Learn more about what you should be paying close attention to when opening your restaurant:
- Here Are A Few Reasons Why New Restaurants Fail
- Should You Be Your Own Landlord As A Restaurateur?
- Top 5 Mistakes Restaurateurs Make When Opening An Eatery
- Restaurant Menu Pricing 101
It’s not the end of the world if you don’t personally already have any restaurant investment experience of your own. If that’s the case, one of your best bets is to partner up with an operator who has already gone and opened up a restaurant of their own in the past and knows just how hot the kitchen can get.
Get advice on how to connect with a seasoned restaurant investor. Contact us here to leverage our industry network.
What Does Your Restaurant Space Look Like?
One of the major differences between restaurants that earn two Michelin stars and ones that earn three Michelin stars is down to the guest experience. Everything from the manner of the servers to the interior decor to the napkins on the table must be exceptional.
While you might not be shooting for any Michelin stars (at least not right now, anyway), paying close attention to the physical space of your restaurant can still be the difference between making or breaking your investment.
Example: At the time of writing this blog, Ontario has strict limitations on where patrons can gather in a restaurant setting due to COVID-19 restrictions. While restaurants are due to welcome diners back indoors soon, restaurants are limited to serving guests outside for the time being.
What does this mean? Well, restaurants that have the flexibility of being able to hosts guests on outdoor patio spaces have had larger profit margins and more financial stability than those who have had to search for alternatives or shut down service completely.
As an investor, it’s well worth it to place significant focus on the capabilities of your restaurant’s physical space.
Stay informed about the current COVID-related best practices for restaurants and get our advice on opening a successful restaurant patio here:
- COVID-19 And The Restaurant Industry: What To Know
- Top Tips For Opening A Profitable Restaurant Patio
Do You Have Any Co-Investors?
Divvying up the financial burden of opening a restaurant with one or more co-investors not only means you’ll have less of a financial obligation up-front, but it also means that if things go belly-up, you’ll have less of a financial downfall too.
Splitting costs is a great way to stay mitigate risk and protect yourself in the long term, but finding the right co-investors can be tricky. You’ll want someone who is trustworthy, has made similar restaurant investments in the past, and has a good track record when it comes to their success rate.
Our advice? Work with a restaurant-specific business broker to help you identify the right co-investors for your investment idea.
More on restaurant industry business brokers here: Working With A Business Broker: The Basics
What Are Your Overhead Costs?
Once you’ve determined how many people will be investing in your restaurant venture with you — and what they’re willing to contribute — it’s imperative you nail down what your overhead costs will be before putting any money down on the table.
Consider everything from the cost of hiring staff and their wages, implementing any necessary renovations or improvements, the cost of any new expensive equipment, and what your recurring costs like rent and utilities will be.
Get a better sense of what it takes to start a restaurant by following this cost checklist here.
Investing in a restaurant in 2021 can feel like a lot to take on. But, with the right guidance and help, opening your dream restaurant is easier than it might seem. For more detailed information and advice tailored to the restaurant industry, contact us here for a one-on-one consultation.
