Portfolio of Research Studies

Research Into The Concerns Of New Restaurant Owners

For the next research project that I am sharing an overview of, I dived into the hospitality industry and the world of restaurant owners to detail some of the major concerns that they have when opening a new restaurant. Unlike many of the previous research projects that I have documented within this portfolio, this one was much less survey based and involved more of a qualitative element rather than a quantitative approach. The primary objective of the research was to gain further insight and a deeper understanding into the challenges facing restaurant owners when opening a new restaurant.

In order to achieve this objective, we conducted long form interviews with 10 different restaurant owners who had opened new premises within the last 12 months. The questions consisted of a number of open ended questions designed to allow us to build our knowledge and understanding of the challenges facing a new restaurant opening and where the majority of the common recurring issues come from. These 10 extended interviews formed the first phase of our research. The second stage involved a shorter survey that was built based upon the answers given during the first phase interviews. During this phase we were focused on reaffirming some of the findings stemming from the first phase, as well as acquiring more information about some of the specifics of the topics raised through these initial interviews.
 

Phase One

The first phase of extended one-on-one interviews brought several key takeaways that were common trends amongst several of the respondents:

1) How Long It Takes To Make A Profit
Without doubt the biggest concern for new restaurant owners resolved around the time that it would take them to start making a profit on their venture. Most new businesses take between 2 and 4 years to start making a profit which can create a very tense and stressful period of time for the owner who has invested a significant amount of money into getting their restaurant up and running. The barriers to entry for a new restaurant are generally higher than most new business ventures which means that the startup investment required is also generally on average larger. Therefore, it is very easy to understand why owners have such concerns over those stressful first few years when the business is operating below its break even point. 

2) Delegating To The Right Staff
Placing their trust in other personnel to manage key aspects of their new business was another fairly common concern to be flagged during the first phase of interviews. This concern seemed to tie in frequently with the above concern regarding the financial vulnerability of the restaurant. Due to the critical financial importance for the restaurant to be successful as soon as possible, there was a sense of wanting to do everything themselves coming from the restaurant owners, whilst at the same time, an appreciation that they can't do everything themselves. Finding the right people to put their trust is understandably an incredibly hard decision to make at such a pivotal stage of a business' do or die stage. There was also a sense of concern from follow up questions on this topic that in order to find the right people with either the correct experience and/or skillset for them to be able to trust them in such a pivotal role, that they would need to pay them a significant salary, something that further played into the concern around investment and the time it would take to turnover a profit on the restaurant. 

3) Reliability of Equipment
The third and final key takeaway point that we had from the first phase of interviews was based around the need for any equipment and machinery that they invest in to be reliable. Needless to say, the impact of key equipment within the kitchen of a restaurant failing can be extremely damaging to the business. It could easily result in having to offer a restricted service to customers which can then form a bad first impression and lead to them not wanting to return to the restaurant for another dining experience. Alternatively, the worst case scenario at the extreme end of the vulnerability scale would be having to close the restaurant for any period of time and failing to generate any revenue, again further adding to the stress of the predominant concern for restaurant owners. As a result, restaurant owners are key to find suppliers of commercial catering equipment for their restaurant that can provide not just reliable products, but also a reliable customer service.
 

Phase Two

Based on the findings from phase one, focusing mostly on the three key takeaways listed above, we put together a short survey that we then sent to a larger sample size of restaurant owners to help us gain a deeper insight into the concerns that new restaurant owners have and the challenges that they face when opening a new restaurant. The results from phase one allowed us to identify the concerns, then the results from phase two allowed us to learn more about what could be done to work towards reducing the level of stress caused by these concerns. 

When it comes to the time that it takes for the restaurant to start making a profit, there unfortunately is no magic answer to stop restaurant owners losing sleep over it. This is simply part of what business owners sign up for and the trade off for the potential rewards that they can experience further down the road. However, one interesting response that wasn't frequent but was reoccurring, was that gaining more business knowledge around what are realistic expectations for new startups in the hospitality industry apparently helped to calm the concerns of some respondents. 

In relation to delegation of key roles, the vast majority of respondents in the phase two research agreed with this being a key concern and something that caused them a lot of stress. When asked about investing more into a higher salary for more experienced employees, the vast majority of the respondents agreed that they were happier to spend a little more in order to reduce the level of risk associated with the hiring of key roles during the infancy stages of the restaurant's life cycle.

Finally, the respondents from phase two had some interesting insights to offer in relation to the reliability of key equipment and machinery. Nearly all of the respondents concurred with this being an issue of varying importance, more often than not scoring 4 or 5 on a 5 point scale of importance, 5 being the highest value. The questions also dived into the possible solutions that restaurant owners had implemented to help reduce the level of risk associated with important equipment and machinery. Similar to the solution for the second point, it was generally agreed that investing a little more in higher quality equipment from a reliable and reputable manufacturer was more beneficial in the long term. This was in large part due to the business critical importance of your machinery not failing on you, along with the desire to have one less thing to stress over for the sake of saving what in the grand scheme of things was considered an insignificant amount. Further questions prompted respondents for suggestions as to reputable manufacturers that they rely on for their commercial catering equipment. A common supplier referenced was Magrini for their selection of commercial blenders, along with Buzz Catering for chef's equipment Websteraunt for machinery and storage facilities.
 

Further Research

This research project helped to give potential new restaurant owners, and indeed the restaurant and hospitality industries in general, a deeper insight into the main concerns that new owners have when trying to establish a new restaurant within the industry. However, this project is merely a starting point when it comes to researching this aspect of the hospitality industry. In order to develop a stronger level of knowledge and understanding, further research would have to be conducted into more of the specifics of the points that have been introduced via this research project. It would be interesting if further research dived deeper into the potential solutions that can help to benefit new restaurant owners. While this research was successful in highlighting some of the main concerns and causes of stress for owners, it served more so as an introduction to what is a much wider scope of topic. Some solutions were briefly introduced in the second phase of data collection which offer some opportunities to serve as starting points for future research into this aspect of the topic.