Normal car insurance is not enough!
Whether you deliver by car, van, bike or scooter you need 'courier' insurance.
As a result of the covid epidemic thousands of food outlets began delivering food direct to customers who were prevented from going out by lockdown regulations. Unfortunately many delivery drivers fell foul of the law.
Because of the lockdown crime was low and there was little traffic on the roads. As a result those delivering food were easy for the police to spot; and they had little else to do anyway!
If you make food deliveries; whether these are pizzas, curries, Indian or Chinese meals, burgers, fish and chips or any other kind of fast food the right insurance is essential.
Without it you risk getting prosecuted for driving without insurance - and this could result in a huge fine and possible loss of your driving licence.
Don't risk it! Get delivery insurance today.
Food delivery was not the perfect answer for restaurants though. There were heavy overheads; not only the cost of paying a courier but also paying the food delivery company (usually Deliveroo, Just Eat or Uber) who provided the couriers. There was after all a limit to what the customer would pay to have a single pizza delivered.
Another problem that wasn't anticipated though was the effect it would have after the Covid epidemic was over; many people got used to the idea of having a meal delivered rather than go to a restaurant to eat it there. In the restaurant they wouldn't just have a single course but there would usually be drinks, perhaps starters and desserts, and maybe even a bottle or two of wine for a family group. These are all high profit items that are lost if the food is eaten at the customer's own home!
Running a restaurant has always been a risky business; most go out of business early in their lives. It is hardly surprising that so many went under during the Covid lockdowns; and it would take a brave entrepreneur to invest in one now.
Why is running a restaurant so risky?
The restaurant business is extremely risky and challenging. A new restaurant will fail about 70% of the time, even for famous chefs. It’s no wonder that most restaurants fail after just a few months because there are so many things that need to go right to succeed. The riskiest part of opening a restaurant is not the cost of the renovation, finding staff, or buying equipment. It’s whether people like your food enough to keep coming back again and again. Here are some reasons why your dream of opening a new restaurant might be risky as well as some ways to lower the risk level.
Food Costs Are Very High
The cost of food is a huge risk because you have no control over it. If your suppliers start to sell food at a high price, you’ll have to pay that price too even at a loss. If your suppliers go out of business, you’ll need to find new ones quickly or run out of food. If you can’t find new suppliers fast, your customers will go somewhere else. The food cost risk is higher if you plan to serve a type of food that is harder to find or in high demand. If you serve something unusual like live lobsters, that increases the risk that you won’t be able to find enough of it, or at a reasonable price, when you need it.
Staffing Is Extremely Difficult
Restaurant staff are your biggest cost, by far, and the most difficult part of opening a restaurant. It’s almost impossible to find experienced, qualified staff even when you’re hiring during a good economy. It’s even tougher when unemployment is low. How will you find enough staff who are skilled and reliable enough to serve food that you can be proud of? How will you pay them enough to help you stay in business yet stay competitive with other restaurants? What if you do find great staff and they have to quit because of a family emergency?
Competition Is Fierce
Competition is a huge risk in the restaurant business. Not only do you need to compete with other restaurants in your area, but you also need to compete with convenience stores, bars, coffee shops, and family members who may want you to cook at home. You may think your cuisine is different enough to draw customers away from nearby restaurants, but that isn’t always the case. Customers may want to go to a certain restaurant because of convenience, loyalty, price, or tradition. They may even go out of habit without even thinking about the food. The best way to lower competition risk is to do research. Visit nearby restaurants and talk to the staff and customers to find out what they like or don’t like.
Restaurant Renovations Are Very Risky
If you buy an existing restaurant, you’ll have to renovate it to make it your own. Renovations are a very risky part of the business because you have no control over the contractor’s schedule or the quality of their work. If the renovations get behind schedule, customers may have to be turned away or even wait an hour for a table. If you have to cancel an order for restaurant supplies to make the renovations happen, it could cause a cash flow problem. Renovations can also be very expensive. If you want your restaurant to be special, you may have to spend a lot of money making it look just right. It’s also hard to estimate how much renovations will cost before they start. You’re better off starting with a smaller renovation to keep the cost down.
Has fast food really destoyed the restaurant business?
There are already huge risks with running a restaurant or fast food outlet. Perhaps food delivery companies have not been the only cause of their decline, but they are certainly a major contributor.
Conclusion
The restaurant business is extremely risky and challenging. A new restaurant will fail about 70% of the time, even for famous chefs. It’s no wonder that most restaurants fail after just a few months because there are so many things that need to go right to succeed. The riskiest part of opening a restaurant is not the cost of the renovation, finding staff, or buying equipment. It’s whether people like your food enough to keep coming back again and again.