Make Quick Money in Quick Service Restaurants
The fastest way to make money in the food business is through quick service restaurants (QSRs). Cheap quality food and fast service is a surefire way to attract a stampede of customers to your cash register. Nowadays, dining out almost always means eating at a fast food restaurant – just look at how rapidly Jollibee and Mang Inasal made it big.
The oft common starter to putting up one’s own food business is through franchising. But there are also those who cannot afford to buy a good franchise and prefer to start one on their own. If you are thinking of starting your own QSR, here are things you must bear in mind:
● Come up with an excellent product. When McDonalds entered the Philippine market, everyone thought that with their internationally famous brand and limitless financial resources they will overwhelm Jollibee. But Jollibee prevailed and maintains market leadership because their recipe is more attuned to the Filipino’s taste. Do not just conduct a taste test among your friends and relatives. Not only are they not possibly representative of the market you want to tap, they may also be biased and just say nice things in order to please you. Also note that there are strong regional taste differences. What may be a hit in Metro Manila may not be palatable in the Ilocos region.
● Get the best location you can afford. Although everyone knows that a good location is critical to success, most are intimidated by the high rentals of premium spots. Nevertheless, it is better to be too bold than to be too timid in selecting a location. Remember, nothing can remedy a poor location.
● Hire professional artists/interior designers. Trying to save money by using unqualified people to design your logo, flyers, signage, interiors, etc, will produce poor results. Any savings you can get will be offset by the lousy image you will project.
● Develop operating procedures. One big advantage of the franchises is that they have already perfected procedures. This enables their business to run smoothly and consistently. However, a newbie who is starting on his own does not have to reinvent the wheel. There are many business consultants who can help you develop your operating manual for a reasonable fee. Just make sure the consultant already has extensive experience in the fast food industry.
● Have a fanatical devotion to cleanliness. Comparing a well run fast food to a run-of-the-mill biz, the first thing you will notice is that the first is usually cleaner even if there are more customers in their place.
● Know your total costs. To know your total cost accurately, it is not enough to know the cost of every ingredient that went into the item. You must also factor in the labor cost of food preparation. Also include overhead expenses like rent, electricity, and depreciation of equipment and renovation. All these factors must be considered in setting your prices. If this is not your forte, then it is best to hire qualified accountants.
● Have a market driven pricing system. Start from the ideal price of an item, and then determine its projected costs to have a good margin. You can adjust your costs by varying the serving size and ingredients, among others. This market driven approach is far better than the usual production centered technique of starting from the cost of the item and then adding a mark-up or applying a multiplier. The old approach may result in an unsellable item or, if the result is too low, in lost profit opportunities.
● Limit your menu items. Offering too many items will affect the speed and quality of your service. The temptation to add more items is very hard to resist. A rule of thumb you can use is not to add an item if the additional profit is not substantial. Or you can delete a slow moving item to make room for a new one.
● Invest in automated equipment. As long as you can afford it, go for automated tools. This will not only improve productivity but it will also enable you to have a better and more consistent quality.
The fast food business is a huge industry and there are plenty of opportunities for the enterprising individual. However, it is not advisable to do everything yourself to start and manage a quick service operation. Do what you can but leave those outside your expertise to the professionals in the field. In the end the result will be a better return for your investment.
*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.