Successful Business Models of Restaurants
- Restaurants have a high failure rate.restaurant image by Svetlana Kashkina from Fotolia.com
According to the business consultants, Gaebler Ventures, more than 30 percent of businesses fail in the first year, and 70 percent fail within the first five years. Restaurants are known to have one of the highest failure rates of any type of small business start-up. Successful restaurants were explored to find the successful business models. - In order to have a long-lasting, successful restaurant, one of the crucial first steps is to have money in reserve. Gaebler Ventures recommends keeping 20 percent of your initial investment in reserve. This comes in handy if there are any issues during the beginning stages as your restaurant establishes itself. The most common issue is slow periods. Without a financial cushion, this can result in financial strain as your expenses surpass your budgeted income.
- Chick-Fil-A has has created a business model that successful financially for the company itself, while providing ownership opportunities to its employees. An employee of Chick-Fil-A who has enough drive, experience and $5,000 upfront capital can join forces to partner with Chick-Fil-A to establish a joint franchise. Chick-Fil-A agrees to pay for all of the new store's construction and real estate costs. Once the restaurant is open, the Chick-Fil-A company and owner share the profits, 50/50.
- Another successful approach to restaurant business models is called the farm-to-bistro model, which includes supporting local agriculture by partnering with a local farm to provide restaurants with fresh ingredients, which include seasonal and organic vegetables, meats, dairy, free-range eggs and poultry and mercury-free fish. The ideal farm would use sustainable methods of growing such as rotating crops, companion planting, using non-toxic pesticides and adding compost from restaurant food waste to the soil to prevent its depletion of nutrients. This model usually consists of a partnership that integrates the expertise of a sustainable farmer along with someone with a background in the culinary arts or restaurant management. A plot of four to eight acres should accommodate an average-size restaurant.
