You come up with an exciting new concept for a new restaurant. You’re excited. You take out a 2nd mortgage and even private loans from family and friends.
You lease out a trendy spot in town, spend a lot to remodel it, hire and train some new employees, and then hope for the best on grand opening night.
This is the way most people tend to open restaurants right.
But should you open your new restaurant like this?
What’s wrong with this? If you were playing poker, that’s the equivalent of betting ALL of your chips without ever looking at your cards or your opponents. Just a pure blind bet with all of your money. You wouldn’t do that at the poker table, why do that for your restaurant? Instead, stack the odds in your favor first.
One of the biggest mistakes new restaurant owners make is NOT demand testing their concept as early, as frequently, and as cheaply as possible. In fact, you should demand
Starting a new restaurant takes a considerable investment in time, energy, and money so why are so many new owners so willing to risk it all on what is basically a blind bet? Maybe they just don’t know they have options.
If grand opening night is the first night you get real customer feedback on your concept, you could be in for a very rude and very costly awakening.
Or perhaps they just don’t want to face the truth. Getting a rejection is tough but getting it early before you bet your retirement savings on it is worth it, even if it stings your ego.
There’s a reason 3 out of 5 new restaurants will fail within their first three years…the owners were wrong about something important. Location. Customers. Food. Costs. Or a combination of those things.
Things that your early testing could help you resolve beforehand.
Here are Four Easy and Budget Friendly Ways to Demand Test Your Food
Demand Test Idea #1: Host a Party
Yes, host a dinner party and serve the food and drinks that your new concept will be serving. Friends and family tend to be the nicest in terms of giving feedback so make sure to have them invite some strangers. Then have every take an anonymous survey afterward. The key is anonymous—have folks give you honest feedback on food, what they love and hate about it, along with information like their favorite local restaurant and how this food compares to it. You might not like everything you see, but it’s better to find out early than to find out on opening night.
Demand Test Idea #2: Do a Pop-Up
Get a food permit and purchase a booth to serve and SELL your food at an event in the market you’re thinking of opening your restaurant in. There are a few cheaper and better ways to gauge real demand than to test your food concept against actual customers in your target market. Make sure you have extra helpers with you so you can both survey people who do purchase as well as those who stop by but leave. Understanding why someone doesn’t end up buying can be just as helpful as understanding why they do buy.
Demand Test Idea #3: Cater an Event
Create a catering menu based on your concept, make copies, and go door to door in the market you’ll be serving. But make sure you’ve established a commissary that you can lease and use to deliver on your orders. This is a great way to test market demand and learn what it takes to grow catering sales, which is often a significant opportunity that new restaurants often ignore. Besides, if you can’t handle the rigors of delivering food to folks for a single event, how will you feel doing that day in and day out?
Demand Test Idea #4: Partner with an Existing Business
Go find local bars or businesses in the area and see if they’d be interested in collaboration with you. Maybe a “dinner and art exhibition” at a local gallery where you can presell tickets. You could even find a local charity to donate proceeds to, and they could help you promote the event.
Don’t wait until you have to bring customers to your doors. Take your concept to them! You get to learn and refine your idea on the cheap. And you may even create a loyal and eager following well before your grand opening date.
Be creative. Think about all the different ways you could get your food in front of your target customers as early as possible so you can get as much feedback as soon as possible. The only rule is that you don’t sign a lease and you don’t spend any money on a location until after you’ve run 3 out of those 4 tests.
Just get your food in front of potential customers.
Before signing a lease. Before hiring employees. Before spending thousands of dollars and hundreds of hours.
So don’t be afraid to test and get your food out there. Do it as early as possible, and you will not only avoid one of the biggest mistakes most new restaurant owners make, you could even refine your unpolished concept into a winning restaurant.
Are you seriously thinking of starting a new restaurant soon? How will you demand test your concept?
Let me know below!