How To Start A Consulting Business

In 2023, the size of the chain restaurant market was around USD 228.4 Billion. This is as per a report by IBIS World. In the United States alone, there are about 749,404 restaurants. The question is, are all of them successful?

No, as remarkable as the number may seem, hundreds more went out of business within a year. To keep their businesses profitable, they take advantage of restaurant consulting services.

Restaurant Failure Rate
Source

What is a restaurant consulting business, you ask? Simply put, these businesses employ consultants who provide invaluable expertise and an outside perspective to help restaurants thrive. They guide dealing with rising costs, staffing problems, and cutting through competition.

This guide covers the critical steps to start a restaurant consulting business from scratch. Let us get started!

Step-by-Step Guide on How to Start a Restaurant Consulting Business

1. Get a Hospitality Degree

To start a restaurant consulting business, one of the most important steps is to get a hospitality degree. This provides critical knowledge and credentials to advise restaurants effectively.

While hands-on experience in the real world is invaluable, having a robust academic background sets one apart. Aspiring restaurant consultants should consider getting any of the degrees below:

Bachelor’s in Hospitality Management

It is a common four-year program that equips the students with core knowledge of:

  • Restaurant operations
  • Food and beverage industry management
  • Hospitality law
  • Accounting
  • Marketing

The degree will provide the well-rounded expertise needed to provide restaurant consulting services.

Culinary Degree

A culinary degree will help those who want to specialize in menu management and development. An associate’s or bachelor’s degree covers the following aspects:

  • Cooking techniques
  • Kitchen management
  • Cost control
  • Purchasing

MBA in Hospitality

People with little work experience can aim for an MBA degree. It will allow them to make strategic decisions on a deeper level. The MBA provides advanced analytics, finance, project management, and entrepreneurship skills.

In addition, keep updating your knowledge base to be aware of the latest industry regulations, technologies, and best practices. Attending seminars, conferences, and online courses allows you to expand your expertise.

2. Choose a Business Model

How to start a restaurant consulting business without deciding the right business model first. You cannot! Here are a few standard options to be considered:

Sole Ownership

This is the simplest model, where you operate the consulting firm as an individual owner. All income and losses flow through to your tax return. Minimal paperwork is required, but you take on unlimited liability.

Unlimited liability means the owner is equally responsible for any debt and legal claims accrued by the company.

This model best suits new consultants starting before bringing on partners. It allows testing your services, building a client base, and validating the business before a more formal setup.

LLC

LLC, or a limited liability company, keeps your personal and business operations separate. An LLC files its taxes, thus protecting liability by establishing the consulting firm as a separate entity.

Yes, it is more complex than owning a sole proprietorship, but being a separate entity builds credibility as the business grows. A formally registered business would have more legitimacy and trustworthiness than a sole-ownership business.

Partnership

Businesses are often launched in partnership. A plus side to this is that you can tap into different individual’s strengths to take your business forward.

For instance, one can partner with an accountant to offer operations and financial consulting.

The responsibilities, expertise, and profits are strategically shared via robust contracts. Partnerships open avenues to provide comprehensive services.

Virtual Services

With the world shifting toward a remote or hybrid model, why can’t a restaurant consulting business plan be virtual? It opens a broader client pool across different geographic areas.

However, restaurants often prefer and benefit more from in-person, on-site guidance when making major changes. As an online consultant, ensure you can still provide hands-on assistance when required.

3. Fix a Target Market

Once you have fixed your restaurant consulting business plan, fixing your target market is essential. Defining an ideal customer profile allows you to tailor your services, marketing, and expertise to fit their needs best. Consider important factors like:

  • Restaurant Type: Quick service, casual dining, fine dining, bakeries, food trucks, etc. Each has unique needs. New startups may want concept development while existing chains need scaling help.
  • Budget: High-end places can afford comprehensive services, while smaller venues need affordable options like hourly consulting.
  • Location: Urban restaurants face different challenges than suburban or rural. Locale-specific expertise helps, such as local supplier options and foot traffic patterns.
  • Service Model: Full-service vs limited-service restaurants have different priorities. Consultants can niche down further, like cafeterias, buffets, or breakfast-focused.
  • Cuisine: Specialize in any one kind of cuisine, like Italian, Mexican, or seafood. Sometimes, specializing in an umbrella cuisine, such as Pan-Asian, consists of many food categories. Become experts on associated dishes, ingredients, staffing needs, etc.
  • Values: Sustainability-focused, family-owned ventures, minority-owned, etc., may want consultants in line with their values.

4. Market Your Restaurant Consulting Business

If you are wondering how to get clients for your business, the crucial bit is to market your business smartly. Build a robust website to increase visibility. It is the first step to establishing your brand’s presence online. The website should communicate the following aspects:

  • Your expertise and credentials, like client testimonials, certifications, etc.
  • Service offerings
  • Client niche
  • Pricing and billing options
  • Contact information

Start a social media page and impart knowledge and information about your business through blogs, videos, whitepapers and newsletters. Network in person at industry events and conferences to connect with restaurant owners and managers. Send personalized emails with the help of a restaurant email list describing your services to potential leads.

5. Market Research About Restaurant Pain Points

Market Research About Restaurant Pain Points
Source

Conduct thorough market research to identify restaurants’ top struggles that your expertise can solve. This can be done by taking these approaches:

Interviews

Have face-to-face conversations with restaurant owners and managers to learn about their issues. Probe their frustrations and obstacles, and take points on how your firm would solve them.

Comprehensive Surveys

Create short questionnaires outlining their top struggles, needs, and goals for eateries. Distribute them through social media and your website. You can even offer a small incentive for completion, which might attract a wider response.

Extract statistical insights from a sizeable sample of at least 100-250 responses.

Analysing Industry Reports

Search for detailed industry research reports on the restaurant sector. Compile data on failure rates, closures, labor shortages, rising food/rent costs, etc.

Thoroughly Research Competitors

Research what gaps your competitors don’t fill and persistent problems where restaurants still struggle despite competitor services. This indicates potential opportunities to differentiate your restaurant consulting services.

6. Decide on Your Services

Once you thoroughly understand your target client’s needs through research, the following key step is deciding on the specific restaurant consulting services you will offer. This should align directly with the pain points and goals identified.

Potential services could include the following:

Concept Development

Assistance crafting their restaurant concept, brand, and identity from scratch. This may involve name creation, logo design, interior décor definition, and branding strategy.

Business Planning

Developing financial projections, funding and investment plans, feasibility studies, and complete business plans to launch or refurbish the restaurant.

Menu Development

Work closely with clients to design menus and recipes optimized for food costs, pricing, trends, and target demographics. Services can also include:

  • Menu layout design
  • Menu printing and production
  • Professional photography of the dish

Staff Training

Conducting hands-on training programs for all front and back of house staff, including chefs, servers, bartenders, hosts, and bussers. Training processes would cover tools needed, customer service techniques, order accuracy, food safety/hygiene, responsiveness, teamwork, and more.

7. Price Your Consulting Offers

Pricing your services appropriately is integral to starting a restaurant consulting business. Always establish rates that reflect your value while remaining profitable and competitive. You can start by doing the following:

Researching Competitor Rates

Conduct market research on what competitors charge for similar restaurant consulting services in your geographic area. This can act as a baseline range to set your rates.

However, don’t simply match competitors’ prices. Analyze if there are gaps where you can provide greater value through niche expertise or expanded offerings and thus warrant pricing higher.

Consider Your Expertise and Experience

Suppose you have specialty skills or depth of experience that make your guidance more valuable; factor that into pricing appropriately. For instance, a consultant with 20 years of experience focused on quick service brands can charge more than a novice fresh out of university.

Calculate Your Costs and Desired Profit

Detail all your costs of delivering services— materials, admin, marketing, travel, etc. Price your consulting higher than costs to reach your target profit goals. For example, if your total costs are $50,000 a year, you may want to generate $100,000 in revenue.

8. Build a Team With Certified Restaurant Consultants

As your restaurant consulting business grows, you may need to build a team by hiring additional consultants. Ensure you recruit those with relevant credentials, like degrees, certifications, and industry experience.

Look for consultants who fill gaps and complement your existing expertise. For example, if you specialize in restaurant operations, hire those with a financial background to expand your services.

Partner with independent consultants in other geographical areas to support multi-location clients. Or partner with niche experts like social media marketing consultants to augment capabilities.

Challenges in Developing a Restaurant Consulting Business

Initially, you might have to offer massive discounts and free consulting to build a client base and network with potential clients. But ensure you consistently deliver high-quality work and measurable results for initial clients to build referrals.

When learning how to start a restaurant consulting business, one must be familiar with the challenges one might face. Let us see what they might be:

  • You will have to compete against bigger and more established companies. You can overcome his challenge by targeting underserved niches that larger firms ignore. Emphasize your specialized expertise in a specific cuisine, restaurant type, or operational area.
  • There might be inconsistent cash flow initially, as there is not always steady business. What you can do is maintain a financial diary diligently. Focus on long-term client relation-building projects instead of one-off gigs.
  • If you are juggling many things at once after opening a new restaurant consulting business, you may miss out on industry trends. But try and take time each week to update yourself on industry insights.

Conclusion

This blog aims to provide the necessary guidance on how to start a restaurant consulting business.

These consultancies provide services that help restaurants navigate challenges, such as rising costs, staffing problems, and fierce competition. As we step into 2024, the role of restaurant consulting services becomes even more crucial.

They offer a different point of view on how to run and operate a restaurant successfully. If you’re considering starting a restaurant consulting business, there’s no better time than now. In the year 2024, this business will have a better ROI.

To help you in this journey, our comprehensive restaurant email list is a valuable resource. It can connect you with potential clients, setting the stage for your successful venture in the restaurant consulting business.

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