University of International Business: Restaurant Success Factors

This report, prepared by students at the University of International Business, delves into the multifaceted factors that contribute to the success of a restaurant business. The research explores financial indicators, key elements for establishing a successful restaurant, and the impact of customer satisfaction. The study incorporates a literature review, examining scholarly articles on the topic, and a qualitative study involving interviews with three specialists. The report highlights the significance of financial planning, operational cost management, and the importance of adapting to market trends. Furthermore, it emphasizes the role of customer retention, accessibility, food quality, and service in driving success. The findings suggest that while individual restaurant success is subjective, fundamental business principles and adaptability are critical for long-term viability. The report also underscores the significance of a well-defined concept, target marketing, and understanding the competitive landscape.

UNIVERSITY OF INTERNATIONAL BUSINESS
Discipline: basics of organizing a restaurant business
ROS: What factors affect to success of restaurant business?
Alpysbek Z, Stepanenko D, Kim D
Hospitality Management 21.364
Almaty 2022
Abstract
Several variables influencing the success of the restaurant industry were discovered
through the examination of scholarly articles on a related topic. These elements had an
impact on areas such as the financial component, the physical indications, and consumer
satisfaction.
Then, using the insights of three specialists, a qualitative study was conducted.
The evaluation of both primary and secondary sources of data demonstrated that each
restaurant's success is purely subjective. However, it is still important to take into account

the fundamental guidelines for creating a company, financial, and marketing plan. The
restaurant's continued success already directly depends on the company's adaptability.
Key words
Entrepreneur, customer, indicator.
Introduction
Restaurant Success is not always clear-cut. A consistent income serves as a marker of
success for some. Others have more ambitious objectives, such as increasing market share or
obtaining the desired return on investment. No of the objective, every business owner is
concerned with how to make his restaurant profitable. As a result, the subject has been
covered in a number of scientific research. However, practically all of them approach this
issue from various angles. However, there are a number of them: monetary, and physical,
and it is also important to take into account the viewpoint of the customers since it has a
direct impact on the restaurant's success. The best way to respond to this query is to examine
both main and secondary data.
Research question and objectives .
Research question: What factors affect the success of a restaurant business?
Research objectives:
• Studying a financial indicators of restaurant business.
• Key factors to create a successful restaurant.
• Reveal the customer satisfaction effect on success of restaurant.
Literature review
Studying a financial indicators of restaurant business.

According to Nathan Buehler, Your main concern before committing is the upfront
expense of buying an existing restaurant or opening a new one. However, to ensure a good
cash flow and prevent going out of business, your restaurant must control operational costs
and increase sales (Nathan, 2020).
Key factors to create a successful restaurant.
The success of a restaurant depends on many factors that vary according to the situation.
The first stage is planning.
-Find out who makes up the audience of potential customers of the restaurant;
-Get "transparent" ideas about the future business;
-Determine the level of initial costs and current costs;
-Find out the level of profitability and profitability of the institution;
-To decide what the restaurant will be;
-Imagine how the restaurant should be positioned;
-Think over how many and what kind of personnel will be required;
-Get an idea of the quantitative and qualitative components of the menu;
You need to have other information to build an effective business (Mtvralashvili, 2010).
However, this is not all the rules of a «successful business», as it is still worth taking
into account the elements of internal management:
-Marketing;
-Engineering and development of a range of dishes;
-Operational activities;
-Staff;
-Management;
-Company resources and read.

And, elements of the external environment:
-Current legislation;
-Regulatory legislation;
-Political situation in the country and the region;
-Social structure and cultural traditions;
-Features of the economic development of the country and the region;
-Available technologies and know-how;
-Competition, the influence of competitors, and the power of suppliers:
-The purchasing power of consumers and so on (Mtvralashvili, 2010).
However, other people believe that passion alone is insufficient. You'll need both a solid
idea and expertise in managing restaurants (Miller, 2008, p.13). Successful restaurant
management requires at least some prior experience in the industry or extensive research.
Someone who has worked their entire career as an electrician or doctor is probably not
qualified to run a restaurant. A person with ten years of expertise in a field is more informed
than the majority of people in that field and would profit from starting a firm in that sector
(Howell, 1997). People shouldn't start a business in a field where they lack experience
(Howell, 1997).
Another factor that weighs the development of business is to take into account the
benefit of the client, the success of the restaurant depends on it. It is divided into five
subtypes:
-Functional;
-Non-functional;
-Sensorial;
-Self-Identifying;

-Symbolical
-Social (Huber, Herrmann, & Morgan, 2001).
After a full analysis of the market, a businessman should find the type of restaurant that
he will develop in the future and the restaurant should satisfy the customer's benefit. The
interior, direction, visual and taste qualities of the restaurant completely depend on this.
(Baraban, & Durocher, 2010).
Reveal the customer satisfaction effect on success of restaurant.
We agree with Jinsoo Hwang, Ph.D., that it is crucial to determine whether perceived
quality elements have a more negative or positive impact on customer satisfaction or
discontent in the restaurant industry since customer satisfaction can be directly connected to
restaurant sales (Jinsoo Hwang, 2010).
Customer retention
Before you understand what keeps customers in a restaurant, also as said by Toa Heftiba
and Abdullah Oguk you need to understand that customer retention is much easier than
acquiring a new customer. (Toa, Abdullah, 2017)
Make your consumers feel appreciated, and they'll show you their loyalty. Additionally,
since they will recommend you to others, your devoted clients will help you gain new ones
as well as keep the ones you now have.
So what do customers pay attention to when choosing a restaurant to go to?
1. Lorri Mealey thinks that the first factor is accessibility: It makes them more
convenient for customers since major restaurant chains are frequently situated close to
highway exits. Because of their convenient locations, some restaurants, such as those close
to the Eiffel Tower or the Colosseum, can get away with serving or serving customers subpar
food. (Lorri, 2019).
2. Second on the list, but not in importance according to Resto Giyan is Food Quality.
23% of patrons prefer to eat at a restaurant because of the good food they serve, according to
the 2019 NRAI Food Services study. About 7% of customers return because they enjoy the

flavor of a particular meal. The success of a restaurant is unquestionably impacted by the
quality of the food.The meal is what the customers are mainly thinking about.
3. Also, one of the important criteria, as Indeed Editorial Team said, is the service. Here
are some justifications for why it's so crucial. (Indeed Editorial Team,2019)
• Greet the customer with a smile
• Be flexible when possible
• Be prompt and attentive
• Know the restaurant's products (Den,2017)
Quoting Michael Elkins: These are only a few of the most crucial factors to take into
account before operating a restaurant. (Michael, 2017).
Research methods
The two types of research methodologies are quantitative and qualitative. Quantitative
research involves asking a big number of respondents some questions and compiling the
results into statistics. The primary data for the qualitative method, in contrast, is collected
from a smaller number of respondents, but each is subjected to a thorough interview. This
helps people find credible information from professionals. For this research, a qualitative
research methodology was selected.
It's also vital to keep in mind that there are three different sorts of interviews: structured,
unstructured, and semi-structured interviews. The first type suggests that all interviewers will
be asked identical pre-written questions, while an unstructured interview will be conducted
with the interviewer improvising completely. Both the first and second sorts of indications
can be found in a semi-structured interview. The form of the structured interview was
selected for this study for the following reasons: ease of assessing the responses collected;
compatibility with time management; and facilitation of the interview process.
Findings and Analysis
1. Studying a financial indicators of restaurant business.

Questions 1 and 2 addressed the subject of finances in developing a restaurant business,
which was the first objective of the study. The first respondent listed a long list of steps that
had to be performed to guarantee that the budget is utilized effectively:
1. Calculate the costs.
2. Evaluate and track sales in your restaurant's budget.
3. Compare your sales and your costs.
4. Make changes so that sales always cover costs.
5. Work on increasing profits.
6. Use the software to monitor wages.
The opinion of the second respondent was based on the complexity of the question,
justified by planned and unplanned expenses. «It's all very individual, so I can say that if you
want to properly allocate your finances, then you need a professional in this business to help
and calculate everything,» he replied.
Hiring a team of professionals who correctly allocate the budget for expenses and know
where to direct the extra money was also touched upon in the response of respondent B.
The answer the first respondent gave
a detailed and extensive scheme affecting many areas in the allocation of the budget,
while the previous two brief answers dealt with another aspect concerning the additional
team.
The following query was focused on the value of the initial budget while starting a
restaurant enterprise. A well-planned budget would prevent you from overspending on food,
ingredients, booze, kitchen utensils, and cleaning supplies, the co-owner of the restaurant
business responded.
The second businessman concurred with the first's assessment and pointed out that it is
impossible to downplay the significance of the initial budget because you must equip a
restaurant, hire staff, and invest in advertising at this stage. «However, you shouldn't worry

too much about this because, if you have the right concept, your funds will quickly pay off
and you will begin to turn a profit»-he said.
The third respondent added several new points, contradicting respondents of A and B.
He feels that not everything is as straightforward as it seems. Because even though a lot of
money is spent on one restaurant, it does not succeed, whereas a restaurant with less
investment may become quite successful.
The opinions of Nathan Buehler, who authored a lengthy study regarding economic
indicators in the restaurant industry, and the three experts' responses generally accord.
(Nathan, 2020).
2. Key factors to create a successful restaurant.
After interviewing experts in this field, we realized that all three believe that a well-
thought-out concept is one of the most important factors when opening a restaurant. Also,
having collected information from all the answers, we can note that our respondents believe
that in order to open a successful restaurant, you will need to invest in the right technologies,
the location of the restaurant, understand who your target audience is, the format of the
restaurant, marketing, maintaining relevance with culinary and marketing trends, as well as
cuisine.
Answering the second question, the experts we questioned answered the same way as
the famous chef Mtvralashvili, whose opinion we used to write our literary review. And
that's what our respondents answered to the question «What factors influence the success of
the restaurant business?»:
1. Target marketing.
2. Quality food.
3. Quality service.
4. Presence of competitors in the market
5. The economic situation in the country
6. Good location of the restaurant. 3 main points when choosing a restaurant location:

• public transport stops;
• convenient access for personal vehicles;
• private parking
And now we are talking about the experience of opening your restaurant and relying on
the opinion of Miller, and on the opinion of two out of three experts, we can say that
experience is very important when opening a new business. One of the specialists said that
experience is needed and important everywhere. Entrepreneurs stimulate economic growth
by introducing innovative technologies, products, and services. The second respondent also
believes that if a person already has any experience, he will make fewer mistakes, and the
probability that this restaurant will become successful increases.
But the last of the experts believe that experience is not important in starting a new
business and this is what he says about it: «I can say from personal experience that when I
opened my restaurant I did it for the first time in my life, but before that, I studied a lot of
information from various sources, whether it was the Internet, various forums or professional
advice, and after I opened my own business, I can say with confidence that experience is not
required to open a new business, you only need a brain that you will use correctly.»
3. Reveal the customer satisfaction effect on success of restaurant.
According to the study's findings, every respondent shares the belief that a restaurant's
success is greatly influenced by its customers' satisfaction. Happy clients will return here if
they enjoy everything and may do so not alone but rather with their family or friends. This is
where the opinions of the respondents and Jinsu Hwang, PhD, intersect (Jinsu Hwang, 2010).
If the topics at hand are those that contribute to greater consumer pleasure, then
someone brings up the interior, exterior, food, and service, but everyone agrees that it is
crucial to garnering the most positive feedback from clients.
The answers to these two questions are essentially identical, with a few minor
differences, if we sum up our analysis. That is to say, the core principle of every business
remains constant: consumers are highly important people whose opinions should be valued
in order to earn their trust and increase their loyalty to our company. This clearly

demonstrates that almost nothing is done for business owners themselves but rather for
customers first. After all, all the clients who merely come, merely visit, or even those who
observe our hotels and restaurants. Customers that remain devoted to you will obtain benefits
that will boost your revenue (Toa, Abdullah, 2017).
Recommendations
It is advised to consider all the risks and elements that could either directly or indirectly
damage your business after the analysis of three interviews. If there are any issues, such as
with the initial budget, do not worry too much. The concept of the idea and the way the work
is done matter more than only the financial aspect of the restaurant's success.
Conclusion
In conclusion, we can say that the opening of a restaurant business is quite a difficult
matter and does not open simultaneously. Your business should be thought out even before it
opens, take into account a million factors and, of course, have some knowledge in this area.
It's cool that you have an idea and a plan, but without knowledge, your business will burn
down without even opening. Also important is the team that you will assemble because a
good team that consists of competent and experienced professionals who know their business
can raise the fame of your business to a new level.
To respond to the research question, the following elements influencing the restaurant's
success are inferred:
1. Follow the fundamental company management guidelines;
2. Be adaptable in all circumstances;
3. Recognize that your customers are your company's biggest advocates;
4. Continue to explore opportunities to advance.
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