Being a restaurant owner is a tough gig. There is a lot of competition out there, as Census data from 2010 indicates that one out of every fourteen businesses in the United States is a restaurant. Plus, the failure rate is quite high – about 30% of restaurants fail in the first year and 60% fail by year three.
So how does a current or future restaurant owner avoid becoming just another statistic? One way is to take advantage of trends in the marketplace. If a restaurant can take advantage of a change in the social, technological, economic or regulatory environment, it has a much better chance of being successful.
Take Chipotle. It became a huge success by tapping into a trend known as customization. The thing people love about Chipotle is the ability to customize your food exactly how you want it. Chipotle’s customers feel like their food was made just for them.
Given their success, it is no surprise that Chipotle has inspired a host of other restaurants that offer similar levels of customization. Just blocks from campus, Pieology offers custom pizzas. You pick the dough, the sauce, the cheese, and the toppings. Then your pizza goes into an oven and is cooked to perfection in a matter of minutes. Millions of Milkshakes in Hollywood allows customers to pick from a long list of toppings to create their own customized milkshake. Tava Indian Kitchen is offering customized Indian food – roti wraps, rice bowls and salads – in the San Francisco Bay Area. And at How do you roll? in Marina Del Rey you can fully customize your own sushi rolls.
While these restaurants essentially emulate the Chipotle model and apply it to a different cuisine, there are other ways restaurants can tap into the customization trend. For example, Room Forty aims to deliver the experience of a fine restaurant, but at the location of your choice. They brand themselves as “a restaurant without walls.” They are caterer, but not in the traditional sense. Rather than having their customers choose from a pre-set menu, they tailor their menu to fit the needs of their customers. This menu includes both food and drink. For those of us who do not need a caterer, but still want to have an extraordinary dining experience , Room Forty regularly host “pop-ups.” They transform a venue to create a “pop-up” restaurant where patrons can have a memorable dining experience. Check out pictures from their most recent pop-up at The Last Bookstore in Los Angeles here.
For those of you who currently own or are interested in starting a restaurant, it is probably in your interest to figure out how to leverage the trend of increased customization. A simple way to do so is to take the Chipotle model and apply it to another cuisine. But as Room Forty has shown us, leveraging this customization trend can be done in other ways too.
And for those of you who just love to eat, if you’re on a student budget, visit Chipotle, Pieology, Million Dollar Milkshakes and How do you roll? But once you hit the big time, check out one of the Room Forty “pop-ups.”
Guest blogger Atul Teckchandani, assistant professor of management at Mihaylo, teaches courses in entrepreneurship, provides student advising and is involved with the Center for Entrepreneurship. His research examines how different types of organizations in a community collectively affect economic outcomes and entrepreneurial activity. You can follow him on Twitter @atulteck.