The right stuff

What makes a restaurant successful? Julie-anne Sprague tries to find the recipe behind making a food business work.

IF you need proof that operating a cafe and/or restaurant is popular just ask the kind folk at the Minister for Small Business’s office.

Restaurant and cafe licences were the most sought after licence inquiry last quarter.

However, like any small business, there’s more to making a restaurant work than just opening the doors.

While many restaurants end up in the hands of administrators there are a number of success stories around town that exemplify the art of buying and selling restaurants.

Garry Gosatti, one of the original partners behind Matilda Bay Brewery, has bought and sold four restaurants in the past decade and also invested in two long-term projects – The Norfolk Hotel and Must Winebar.

He says to make a success of purchasing a restaurant you must first evaluate what you want out of it.

“If you’re acquiring something and developing it to then sell it you have to be clear from the onset,” Gary says.

There are two key elements that a prospective restaurateur should look at before making the purchase decision.

“The obvious one is location but also location in terms of foot traffic. You need to be located near a landmark, whether it be near a successful restaurant or some other landmark that brings people there,” Gary says.

“The precinct itself is important. You need to identify an area that is emerging but has not peaked yet. Indicators that can help you do that are other businesses.

“Who is moving into the area? What sort of retail? If it’s clothes stores and hairdressers and lifestyle stores then it’s a place attracting the traffic.”

Funtastico and Zafferano owner Albasio La Pegna says determining the location is all about knowing the market.

“You just have a look around and you get to have a feel of the market. Finding the position is about your gut feelings and emotion. But you need to know what you’re doing. Get the location and do marketing. You could put the perfect business in the wrong location or the wrong business in the perfect location,” Albasio says.

The second element to consider is what you are purchasing the restaurant for – a quick investment or a long-term money earner?

Back in the mid 1990s Gary purchased a cafe in Mt Lawley near the Astor Cinema – the All Star Cafe. He went in with the intent to develop it and sell it.

He renamed it the Globe Coffee House which later attracted big name coffee chains to open close by.

The main difference between the coffee shop and the Norfolk Hotel, which he has owned since 1989, is the financial timing approach.

“In terms of timing (with a short-term investment) you need a year to create, identify, and set the tone. The second year you want to work seriously on creating financial stability,” Gary says.

“You don’t approach a long-term investment in the same way. You look at a more stable long-term turnover and getting a good team and loyalty. ”

And according to Gary the higher risk comes from buying a restaurant that is already successful.

“You want to try and bring the missing factors to the restaurant to make it a success,” he says.

Albasio says that if you are purchasing an existing restaurant you need to know what you want it to become.

However, he says he also enjoys building them from scratch.

“I get a kick out of making my own ideas come to life. It’s a lot harder and you’ve got to be spot on, but the reward is great,” Albasio says.

And another tip from experienced operators – don’t do what’s already being done.

“There’s no point opening up and doing what three or four other people are doing in the area. You need to be a half a step ahead of the market,” Gary says.

Albasio says there are four elements to creating the perfect restaurant – the dream, putting it on paper, building it, and then making it work.

But nous must also play a part.

“There is no golden rule that guarantees success. It’s not as easy as buying a house and renovating it,” Gary says.