The take-out and fast food
industry in the U.S. continue to boom, despite related health risks. Yet
perceptions about what constitutes fast food are changing. According to a
recent study by food industry consulting firm Technomic “Consumers are expanding their definition
of fast food“:
“Consumers’ perception of fast food is no longer confined to
quick-service, drive-thru restaurants and convenience stores. Instead, a
dual concept has emerged, consisting of traditional fast food, and of “food fast” served quickly with a greater emphasis on flavor, quality
and ambiance. (The)… idea of places offering fast food has
expanded…to include fast-casual restaurants such as Panera and
full-service restaurants offering carryout and curbside service.”
What does this perception-shift mean for entrepreneurs? More
opportunity but also more competition!
Starting a restaurant (fast food, food fast or fast-casual) is a
hugely popular entrepreneurial dream, yet the reality is far from
dreamy. The restaurant business in notoriously tough – Gordon Ramsay
would be out of a job if it weren’t – but where there is a will there is
often a way.
While vision and ingenuity are key to any start-up ambition, turning
that ambition into success requires research, planning, capital (not
always as much as you think), business acumen, and perseverance.
So how do these all tie together? Here are some tips that can help
entrepreneurs start, operate and grow their fast food or take-out
business successfully and within the law.
Research, Research, Research
Because the fast food business is so competitive, it’s vital that you
do your research. Start by talking to someone who has done this before.
Business networking events (such as those operated by Small Business
Development Centers, SCORE and local Chambers of Commerce) offer a great
venue for picking the brains of fellow business people. Try to find out
what works, what doesn’t, and what they would do differently. If you
are aware of restaurants that have failed, try to identify why (online
community forums are a great way of gauging market need and customer
opinion about local food service businesses).
Knowing what works and what doesn’t will help you to define
your target market and the niche opportunity that you can
justifiably build a strong business case for going after. Whether it’s
specializing in authentic Chicago hot dogs or freshly made cup cakes –
focus on providing a unique and quality product – don’t try to be all
things to all people.
Above all, take your time. Try to objectively determine what price
points your customers will tolerate. What is the competition? Do the
local demographics support your venture (now and in the future)?
Likewise, research potential locations. While city
locations may attract walk-in traffic, many suburban locations offer a
higher concentration of lucrative “family-oriented” fast-food
opportunities. Get more advice and tips from Business.gov on choosing a business location.
And for more market research tips check out Business.gov’s Market Research Guide which includes
free access to demographics and consumer data.
Consider Starting Small
You may dream of gleaming marble counters, a top notch kitchen, and a
prime downtown location, but starting small can often be the best first
step into fast food restaurant ownership. Not only will it give you a
view of the basic fundamentals that apply to the business, but it also
requires less capital and therefore less risk.
Small sandwich shops or food concession stands can provide a taste of
the food service business with minimal overhead. Alternatively,
fast-food franchises might be an option worth considering for
entrepreneurs who are not quite ready to make the leap into full
These articles provide insight into some of the options for starting
- How to Start a Food Concession Business:
An Entrepreneur’s Checklist – Part 1 (the basics of getting
started) and Part 2 (covers regulatory
requirements, finding a location and equipment)
- Going Beyond the Hype, Managing the Risk
and Finding the Right Franchise Opportunity for You – Helps you
assess whether you are ready to be a franchise owner, the types of
opportunities available, and more.
- Opening a Restaurant Franchise – Your
Essential Checklist – This article sifts through some
of the best articles, resources and tools to provide an A-Z checklist
about how to start a restaurant franchise and make it a success.
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