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Finding The Best Business Practices For A Hospitality Startup

#InspiredByForbes Launching a hospitality startup is more complicated than leaders in most other industries understand. However, savvy hospitality leaders are adept at knowing their customers, keeping up with technology, staying on top of industry trends and even taking cues from other business sectors.

First of all, hospitality entrepreneurs must understand both their current business challenges and the broader business landscape. This has never been more obvious than in 2022. The sad fact is that 90,000 restaurant locations temporarily or permanently closed because of the pandemic.


Operating in the post-pandemic era, newly-minted restauranteurs can take their cues from older siblings in the hotel industry because they share a commitment to providing guests with exceptional experiences. For the hospitality giant Marriott, although Covid changed many things, what has stayed the same is that “at its core, our business is about giving guests a great experience, attracting great talent, and working really well with owners and franchisees. These are the principles that have guided us and will continue to guide us.”


To garner insight into specific best business practices to grow a hospitality startup, begin by exploring current industry statistics. Toast, Inc., a leading cloud-based restaurant management software company, offers a snapshot of the industry in its Restaurant Success Report. It cited the top three concerns of restaurant business owners: high operating and food costs, hiring and training staff and marketing to guests where they are.


Not surprisingly, these challenges are shared across the entire retail sector. With regard to marketing to customers, the consulting firm McKinsey has offered this counsel to fashion retailers: “Optimize the footprint. Sophisticated retailers are evolving how they evaluate stores and optimize their networks. For example, cutting-edge data sources can be used to get a detailed view of micro traffic patterns.”


While retailers may see this as new news, those of us in hospitality startups have known that essential fact—and acted on it—for quite some time. In turning the food truck business that I launched with my childhood best friend into a nationally-franchised, fast-casual eatery, we learned that the first orders of business for a hospitality startup are to:

• Systemize your first location so future locations can easily start and run smoothly—that means figuring out how many square feet your location should be by incorporating the number of seats for guests, space for technology such as kiosks and how many team members both the front and the back-of-house needs to accommodate at one time.


• Consider future needs when choosing technology solutions. Today, your point-of-sale process may be housed in a countertop cash register, but what about tomorrow? Explore what future investments may entail such as tablets, tamper-free delivery labels and reusable service items.


• Analyze consumer attitudes and anticipate challenges—don’t be caught off guard and learn from the experience of aligned businesses, for example, the food delivery apps that pivoted when they faced high inflation and a potential economic downturn in 2022. They found that offering new ads and deals to attract customers and tweaking their apps to trigger more spending gave people more reasons to return.


While the hospitality industry may seem to outsiders as being all about people, today, the role of technology cannot be underestimated. For example, it’s obvious that self-serve kiosks eliminate the role of the cashier and allows for speed of service and helps with labor costs. However, research shows that they can also increase sales by 15% to 20% because of up sales with every order that’s placed.


While understanding our customers and responding to their needs is paramount, best business practices for hospitality startups must look inward as well, and for family-owned businesses, it is especially important to build resilience. Reporting in the Harvard Business Journal, Devin Deciantis noted, “In my work on campus and in the field, I discovered a category of family businesses that are naturally more resilient—those who understand the existential need for sustained investment in organizational agility, even at the expense of efficiency and profitability.”


Whether a family-owned, corporate location or franchise restaurant location, to grow a startup, it is essential to maintain a razor-sharp focus on:

• Maintaining strong ownership and involvement in decision making involving operations, finances, marketing and leadership.

• Ensuring capabilities of key management by acknowledging that you can’t be everywhere at once.

• Perfecting your product and craftmanship so that what you serve is consistent and meets guest expectations every single time.


When running a hospitality startup, we are often so focused on what is happening in the day-to-day running of our own business that we lose sight of what is happening in the broader landscape. That is why one of the best things a restauranteur can do is to always keep up with industry trends and make sure to stay ahead of them. That’s how fledging startup becomes a future powerhouse.


Every entrepreneur starts somewhere. Interestingly, 8 in 10 restaurant owners started their industry careers in entry-level positions. We know from experience that startup businesses are challenging to maintain, much less grow, but history tells us we can do it!