By Charles Lew/ Forbes
The restaurant business is tough — everyone knows it — but it’s also enticing. As a restaurant consultant, every single day someone calls me, emails me or texts me with a new or novel restaurant idea — the problem is that what I’m being pitched isn’t new or novel at all.
Over the course of the last two decades in the hospitality field as both an operator and a lawyer, I have identified three clear cyclical phases of restaurant evolution in a specific food genre. I have found that the phase in which an eatery opens its doors for business is a very significant factor in the ultimate success or failure of the individual venue.
Phase One: Innovation
The first phase is innovation, during which a particular restaurant idea is original and inventive. These restaurants are the trendsetters, the ones you hear about from your social media-savvy friend who’s always the first to know about everything. The dining establishments you pass by that have mile-long lines outside their doors that make you wonder what all the buzz is about.
While I can’t tell you how to be more creative, I can tell you that travel for me has always been the spark that ignites the fire of originality. Whether I’m dining at a 400-year-old converted carriage house on the outskirts of London or grabbing a bite to go from an Afghan restaurant in Vancouver, nothing gets my gears turning like getting out of my own zip code!
Phase Two: Replication
The second phase is replication, during which other restaurateurs see the opportunity, hear the hype and follow suit. There are often variations added during the replication process in an attempt to differentiate the individual’s particular iteration, but the core concept remains constant. A restaurateur can still be successful entering this phase, but everything from furnishing to fare and floor plan must be perfect. My advice is to look at review sites and see what the customers are saying. My personal preference is Google reviews, but OpenTable and TripAdvisor work as well, and they are all worth examining. Throw out the one- and the five-star reviews, and pay attention to what the consumers in the two-, three- and four-star reviews are asking for. You can glean some incredible insight into the psyche of the consumer and perhaps even improve on the successful trailblazer!
Phase Three: Saturation
The third and final phase is saturation. This is marked by the veritable shop on every other corner. The concepts all begin to blend, and there are no clear distinguishing factors among competing brands. As one can imagine, no one ever thinks to themselves, “Let me open in a saturated market.” But due to unforeseen delays we — myself included — have often found ourselves in this undesirable position. If you find yourself here, batten down the hatches and get ready for the ride. However, with the right planning, cost-cutting measures and control of prime costs you may be able to survive long enough to see the majority of competitors close and market conditions improve.
Pitch conversations about concepts that will likely lead to a restaurant opening in a saturated market have given me some perspective on the mindset that has perpetuated this rinse-and-repeat restaurant cycle and how best to avoid being a victim of a saturated model. Follow these three steps to help lessen your risk:
Step One: Be Aware
There are two primary ways that I use to judge saturation of a specific food genre. First, be aware of the advertisements and marketing that are being sent to you on your social media channels, as increased competition will likely lead to increased advertising as competitors vie for market share. A second — and perhaps a more accurate method — is simply to get out and pound the pavement. You can start from your desired geographic location and expand your search in terms of miles radius from your anticipated leasehold. Nothing can give you a better idea of the true number of your competitors than quality time spent canvassing the area and immediate vicinity of your soon-to-be restaurant.
Step Two: Get Creative
The answer to this dilemma is to innovate — while we can’t necessarily create a new type of cuisine, we can certainly take an existing fare and slice it, blend it, fry it, serve it raw or perhaps flambe it.
You might think that from a decor, design and detail perspective it’s all been done, but that’s simply not true. Have you been to the Robot Restaurant in Tokyo? You dine while gigantic machines battle in front of your very eyes. I have seen everything from robots to model steampunk railroads and the effect worked as I left the restaurant and couldn’t stop talking about what I had just seen. Throw caution to the wind: Get wild, get creative, get robotic!
Step Three: Interact With Your Customer
Interact with your customer: Provide a means for them to incorporate your restaurant into their lives, their social media and their story. Whether it’s mustaches painted on the mirrors for silly picture opportunities or photo booths that let people post directly to their followers, figure out a way to let your customers also be your best advertisers.
Appeal to your customers’ philanthropic side: Give back and suggest ways for your customers to get involved! We have personally benefitted from this by creating a program wherein we identify a reputable nonprofit, and the last Wednesday of every month for three months we donate a portion of our sales proceeds to that charity. This program has allowed us to give back to those in need, create incredible strategic partnerships and allow our customers to donate to worthy causes by just visiting our restaurant!
The opportunities are unlimited. You’re the one who was zany enough to get into the restaurant business, so take some of that uniqueness, throw it on a plate and innovate!
Charles is a lawyer, restaurateur and consultant who owns and operates multiple hospitality concepts across the United States. Charles is recognized as one of the city’s leading experts on not only the operational aspects of restaurants but the equally important although lesser understood licensing, permitting and zoning of hospitality venues.
Charles has appeared on the podcasts Entrepreneur on Fire, Restaurant Unstoppable, and Theater of the Courtroom and has been featured in The Los Angeles Business Journal as “Best Up-and-Coming Restaurant Developer.” He has appeared in FLAUNT magazine’s “Power Hour” with a title reference “nightlife impresario.” And appeared in published editorials in Los Angeles Times, Los Angeles Signature Magazine, and The Huffington Post to name a few.