Introduction: How Do You Know if You Need a Restaurant Consultant?
It is said that up to 70% of new restaurants go out of business within the first year of operation. This is just not true and is considered an urban myth. New restaurants fail or succeed at around the same rate as any new business. A frequently cited study by the University of Ohio concluded that only around 26% of new restaurants failed within the first year. However, the same study showed that within three years, up to 60% of new restaurants shut down. That means 6 out of 10 fails. It takes more than a great location, a love of food and a good menu to open, run and maintain a restaurant. It needs business sense, discipline, and foresight. The food and beverage industry can be a cut-throat one, with notoriously narrow margins and many pitfalls for the inexperienced restaurant owners. Even the seasoned veterans can find the going gets tough at times.
Who Needs a Restaurant Consultant? You Do.
Four kinds of people need a restaurant consultant and if you are reading this, chances are you are one of them:
|1. Novice, Newbie, or Rookie||These are those who want to go into the restaurant business for various reasons such as love for food, having a great business concept and think it’s a good investment. These may also include those who just recently launched their brand.|
|2. In trouble||These are those whose businesses are dropping, costs are out of control and need immediate help or assistance.|
|3. Comfortable||Comfortable business owners are those who have their businesses under control, but could still make it better. Things are going smoothly but these people are worried on what the future may bring.|
|4. Hungry||The hungry restaurants owners want more – more customers, revenues, and outlets.|
What Do Restaurant Consultants Do?
What can a restaurant or hospitality consultancy in Dubai bring to the table? Experts in the Food & Beverage (F&B) field should be able to advise new and existing ventures on a range of issues. Some consultants specialise in certain areas, while others provide full-scale support on all of the following:
|Concept Development||Branding||Staff: Recruitment & Training|
|Location Scouting & Selection||Menu Development or Refreshment||Restaurant Design: Décor-Furniture-Ambiance|
|Kitchen Design||Financial Systems & Accounting||Purchasing & Cost Optimisation|
|Business Planning & Financing||Sales & Marketing||Social Media Presence & Public Relations|
|Back Office Support: e.g. Payroll||Initial Start-up||Project Management|
|Growth Strategies||Exit Strategies||Operating Systems & Policies|
Operational management inclusive of area managers, accounts etc.
Investing in a restaurant is not for the faint-hearted; whether you are going to run it on your own or bring in partners; whether you have an independent concept or are part of a franchise. There are competent people who can help you enhance and refine your vision and make your business run more profitably.
Making the decision to hire a consultant can be difficult for many business people. There is an old joke about the man who brought in a consultant to tell him the time, so the consultant presented him with a detailed diagram of a watch. The problem here was the poor choice of a consultant, not in the concept of consultancy itself.
A good F&B consultant can bring to you tried and tested solutions to improve your operation. They will have experience in solving the problems you are facing, along with specific skills and know-how.
In a complex and dynamic market like in the UAE, it makes sense to consider not only if you need a restaurant consultant but how to find the best one. The reasons for this will become clearer in the next section.
UAE Food & Beverage Industry Outlook: When the Going gets Tough the Tough gets Going
“While the outlook for the sector as a whole has probably never been better, for individual players, the market has become increasingly competitive and thus challenging.” KPMG partner Anurag Bajpai
Over the last few years the F&B market in the UAE has grown at explosive rates, to the point where people have been referring to as oversaturated. By the end of 2017, there were over 16,000 food and beverage outlets in the UAE, and this is expected to increase to over 19,000 by 2020. According to Euromonitor, the UAE F&B industry is one of the world’s largest markets, estimated at AED 52.4 billion in 2015. While the overall outlook is positive, on the ground, the competitive landscape is extremely complex, with high fixed costs, including rents and wages, stagnating revenues and ever more discerning customers.
Despite this, the country remains a highly attractive target for investment in the hospitality sector, and that is set to continue, especially in the run up to Expo 2020. The UAE, according to KMPG’s “Ready to Serve: 2017 UAE Food & Beverage Report”, continues to attract F&B investment because of its demographic profile, with a relatively young and growing professional class, high average per capita income, a healthy tourism industry and government support for the service sector.
Consumers spending is rebounding as the economy recovers, with customers claiming that they are spending as much as, if not more than, during the previous years. But operators are still feeling the squeeze. There are just too many outlets competing for the same customers. According to the same report, the market is suffering from an oversupply that has outpaced demand. Most F&B operators will continue to struggle throughout 2018 leading many to reconsider their business models and branding to remain competitive.
Just last month, a top executive in a firm running several popular restaurants spoke of a “bubble” in the Dubai F&B sector that is now bursting, forcing many outlets to shut down. The bubble, he argued, was caused by too many “amateur” would-be restaurateurs hoping to make quick returns, flooding the market. Despite the constraints, he argued: “Don’t misunderstand me. It’s a very profitable market. It’s the number one in the region and will continue to be, but it is a [maturing market] and it will naturally select the best. It’s not easy like it used to be. To succeed in the F&B sector today, you need to be the best. You can’t afford not to be.”
Abdul Kader Saadi, Managing Director of Glee Hospitality Solutions, one of the region’s top restaurant and hospitality consulting firms, spoke to the National newspaper last year about the challenges facing the industry due to the economic crisis Many restaurants struggled to deal with rising rents, while customers were becoming both more discerning and price sensitive. Mr. Saadi pointed to the contradiction between more international and regional chains opening in the UAE, while local players suffered from shrinking margins. This situation, he argued, needs more creative solutions to control costs, for example, more flexibility on the part of landlords, and more flexible staffing solutions to consider seasonality and daily peak or off-peak seasons.
F&B industry analysts agree that although the UAE market is crowded, there is still room for growth. The market is going through a culling. Restaurants that cannot adapt will go out of business or be forced to sell to new owners. The remaining players will learn how to survive and thrive in tough conditions.
KUAI is an example of a concept developed and operated but had to shut down as the entire development didn’t work.
Before searching for the Top Restaurant Consultants in Dubai
Before hastening to hire a consultant for your hospitality or F&B business, make sure to identify first your objective. It will be a waste of time and resources if you will just jump in to the idea without knowing the direction you are aiming for. The following questions will guide you in determining your objective:
- Do you want to grow your business – customers, outlets, revenues?
- Do you want to increase brand awareness?
- Do you need to increase social media presence?
- Do you need advice on the:
- Décor / Ambiance
- Do you need to manage costs?
- Do you need help with HR issues, like staffing and training?
- Do you need to implement new technological solutions?
- What kind of financial resources do you have to implement improvements? Will you need financing assistance?
Once you’ve identified your objective, it’s also important to determine your expectations from the consultant. These could include the time frame you think is reasonable to implement the improvements or new initiatives, and the cost you are prepared to pay the restaurant consultant?
A Checklist on How to Find a Restaurant Consultant That’s Right for you
Anybody can call themselves a restaurant consultant – but not everybody has the requisite local knowledge coupled with the international level of experience needed in a fast-paced and aggressive F&B market like the UAE. Just like you can go to the doctor for a regular check-up or before you even get sick, think about seeking a reputable restaurant consultant before investing in the market or asking what you can do to improve your margins. An experienced consultant can highlight many issues you may have overlooked in your business plan or operational strategy. The top consultants will have rich the experience and many effective tools to deal with all the issues related to the F&B business as well as an in-depth knowledge of the local market dynamics and trends. Below are some tips on how to find the best restaurant consultant for you.
|Research F&B Consultants|
|Develop a Short-List|
|“Pitch Meeting” Presentation|
Selecting the Best Restaurant Consultant
What to Avoid
There can be many pitfalls in selecting a restaurant consultant. Most of these can be avoided if the checklist is used. But here are some tell-tale signs to watch out for, especially if you are rookie restaurateur.
- Consultants who boast about “international” experience but have never worked outside of the country.
- Consultants who boast about “local” experience, but don’t even speak the language, or have a local office.
- Promises, Promises. Avoid anybody who promises to deliver things that are just too good to be true. Some of these are revenues from day 1, discounts on prime location rentals and costs slashed to 25%. As mentioned previously, cheaper price and shorter timeframes are also some of the most common broken promises. If they promise you the moon, chances are they are only interested in getting the contract, and not too worried about what and how they will deliver.
- Fuzzy budgets: If the consultant will only give you a preliminary budget without specifying costs of each service, be wary.
- Project Budget substantially lower than competitors. Chances are they are low-balling their pitch, then will hit you with additional costs and overruns. Transparent budgeting and breakdowns are a sign of an honest and experienced company. Again, watch out for the deliverable deadlines.
- Reluctance to provide proof of experience, like a portfolio and contact information for previous clients.
- Proposals that look generic or “cut & paste”. If they don’t take the time to check your business, they will not take the time to do a thorough job later on.
- Concepts that are clones of an already successful business down to the menu. In a crowded field, new restaurants need to find ways to stand out.
- “Hard Sell”: Avoid companies that try to pressure you to shorten the selection process or that try to get you to expand the project scope beyond your brief. Chances are, they are only after closing the deal.
- We have worked with the likes of Mighty Quinn and Berris. Both international franchises on bringing them to the local market and adapting to the local market due to our local knowledge
We are currently working on BlackSpoon in Saudi due to Open in Oct 2018 and Mint & Coco opening next month in Muscat
What to Look For
REPUTATION: In selecting the right firm to work with, who they are is as important as what they can do. Top firms already have established a reputation. They will have a roster of clients who are willing to recommend them. Repeat customers are an excellent indicator of satisfaction. Ask how much repeat business the firm has. What percentage of projects are due to long-term customers. If they are involved in management and operations, what is the reputation of their restaurants?
LOCAL KNOWLEDGE: As previously noted, the UAE F&B and hospitality market is complex and highly competitive. Find a consultant who understands the realities on the ground, who, in other words, “speaks the language”, and who has the capacity to anticipate future trends and to plan for them. Speaking the language means understanding all the fine details that go into developing, launching and managing an F&B outlet such as:
- Scouting and securing prime locations, including negotiating rents
- Design input
- Managing fit out
- Regulatory issues (e.g. VAT implementation)
- Food trends (e.g. vegan and vegetarian menu choices)
OPERATIONAL EXPERIENCE: Look for a record of hands-on operational experience in all the interrelated phases of restaurant design and delivery, from concept to brand identity, carrying through to management and operations.
PASSION: The best restaurant consultant will be the one who has a real love for the business. They are fascinated by every aspect of the business and keep up with industry news and trends. They recruit the best available talent, because they want to be the best in the field.
SCOPE OF EXPERIENCE: Look for a range of experience with both international chains and local individual operators. Some consultants will be specialised in only one aspect of the restaurant business, like public relations, or kitchen design. It is better to find someone who has comprehensive experience because this will ensure that there is continuity and consistency to all the different initiatives going on in your business.
IN-HOUSE RESOURCES: When you select a consultant for your restaurant business, select a consultant who has the expertise, resources and skills to do everything you need without outsourcing. If they outsource, it means they are sending your business on to another entity that you have not vetted. It creates another layer of accountability that may create problems down the line.
CHEMISTRY: Finally, find a “good match” for your vision and ambition. Someone who you can trust to provide you with all the support you need to achieve your objectives. Business people are usually good at listening to their gut, but one way to assess whether to trust a consultant or not, is how much guidance they are ready to provide, during the selection phase. If they are open and trusting you during the interview process, chances are, this is how the relationship will continue. If they provide insights and advice before you hire them, you can conclude that they are supremely confident that you will not find anybody who can help you better than them.
We have a team of 20 people in head office with knowledge across many facets of the restaurants business
An Example of The Best Kind of Restaurant Consultant
If you are looking for a competent firm that possesses all these qualities and more, you will not be able to find a better F&B consultant than Glee Hospitality Solutions. Glee has incomparable local knowledge built over the last 8 years as well as a highly qualified staff with international experience. The Dubai-based firm is among the top restaurant consultants in Dubai. Offering end-to-end hospitality services, Glee caters to restaurateurs in the UAE, in other GCC countries, as well as in Egypt and Jordan. They have launched more than 50 F&B concepts and opened over 70 outlets regionally. The firm has nearly 400 employees with a rich range of experience in all aspects of restaurant design, implementation and operation. Their focus is on innovation, deployment and implementation, from finding the best location, identifying key customer segments, to recruiting and training staff and undertaking. Clients receive personalised guidance and support so they can achieve and even surpass their ambitions.
Conclusion: A Good Restaurant Consultant Can Make the Difference
UAE restaurant owners need to be agile in this transformative period. Those businesses that can adapt will ride out the slumps and come out stronger. Those that can’t will fall by the wayside. According to KPMG, “the economics of the business have changed in current times and a strong control over costs, while managing customer experience, will be critical to achieving the right financial outcome.”
From kitchen to dining room, from bar to back office, there are people doing delicate and coarse tasks, and there is money to be gained or lost at each step. Few individual business owners will have the requisite resources and knowledge to see the big picture and to pick the right development path for their operation. In a crowded field like F&B, restaurant owners and operators need to be able to find the best ways to leverage on digital technologies and food trends without losing business to competitors or being outmaneuvered by the industry players.
Always remember, restaurant patrons want more than just a meal. They are paying for more than the food. A good restaurant must sell a story, a concept, a vision; and that’s where a restaurant consultant can make the difference. The restaurant consultant can provide the exact kind of support needed to make your business stand out and grow.
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