The Canadian restaurant sector has been experiencing a growth in the last few years, but with the growth of the economy not expected to rise in 2018, this could have a knock-on effect with regard to profits in this sector.
Care needs to be taken when buying a restaurant as many places can be over-saturated, but if a good location is found with a profitable USP, then there is the possibility for owners to succeed.
Facts and figures
- Revenues for Canadian full-service restaurant sector are $28 billion a year, with an annual growth of 1.4% between 2012 and 2017.
- There are 43,348 businesses employing 513,190 people.
- Revenues for the whole of the restaurant sector in Canada, which includes fast-food restaurants and other vendors, are $80 billion a year, employing 1.2 million people directly and serving 18 million customers each day.
The restaurant industry is gradually improving year on year with a slow but consistent growth, and it may prove more profitable for owners to specialize or at least find some way of setting themselves apart from the competition.
Customers are increasingly looking for good value, sustainability, and environmentally sound processes, all of which can be used to distinguish a restaurant from others.
The key for restaurateurs hoping to capitalize on trends is to try to differentiate their restaurant from the competition by trying something eye-catching and different.
This could include innovative products or competitive pricing, while continually ensuring the whole experience is enjoyable for the customers.
It may pay to develop a loyalty program for both new and existing customers to try to garner repeat business, as well as utilizing third-party firms for delivery options such as JustEat, UberEats, and Ritual.
Technology is increasingly becoming commonplace and one of the foremost trends in the coming years will be mobile ordering to allow customers to place their own orders for convenience.
An important way for restaurants to stay current and relevant in the next few years will be to serve the exact foods that customers crave.
This is where technology comes in to play again. If you can offer a digital menu, it may be possible for people to customize their orders and have exactly the meal they would like, improving satisfaction and hopefully repeat business.
Unfortunately, although there is a slow growth in this industry, many towns and cities are very near to market saturation, meaning fewer customers to go round, and ultimately less profit. If there is a population growth in a particular area or greater disposable income then restaurants will see an improvement in sales and therefore profits.
Fast food outlets are also seeing an improvement in sales which means there is yet greater competition. A successful restaurant will need to diversify and separate itself from the competition if they are to persuade customers to visit them as opposed to another restaurant.
Licences and Permissions
There are a number of licenses that you will need when running a restaurant business including ones for employing staff, and serving or selling food and alcohol.
It pays to contact your specific province or territory, as the conditions and requirements vary depending on what part of the country you are in.
There are also considerations for health and safety, as well as fire regulations which must be met, and if you are considering playing background music, a SOCAN
The skills associated with being a restaurateur are pretty self-explanatory. Customer service is important not only to give your customers a pleasant time in your establishment but also to encourage repeat trade.
And because of the many different things that can go wrong, thinking calmly under pressure, and problem-solving can be a winning combination under duress.
Keeping the customer happy should be foremost in your mind, as happy customers will ensure your profit-margins stay as healthy as possible.
Before you take on a restaurant, it may be an idea to have experience of working in one. There is nothing quite like experiencing jobs from the ground up to appreciate the problems that servers and kitchen staff can come up against. And this understanding can stand you in good stead for being able to think of alternatives quickly if things go wrong.
Buying a Business
There are two options for budding restaurateurs as they can start a business from scratch or buy an existing restaurant, and there are pros and cons for both.
The major differences will include the initial expense and
Of course, these won’t be an issue if you purchase an existing business, although the downside here is that it will probably be a greater initial expense as you are purchasing access to the customer base as well.
Having an established customer base is an excellent starting point
Whichever route you decide to follow, owning a restaurant can be a very rewarding experience. It is hard work and can be challenging, but with the right staff and compelling menu, it can be an unparalleled success.