5 Mistakes to Avoid When Starting a Business in the Service Industry

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Many individuals, not necessarily entrepreneurs, dream of having their own café. There is a fascinating component to the idea. During my career, I have met many people elated by the mere thought of opportunity. Unsurprisingly, I’ve also met a few with decent savings, family money, or disposable income who decide to turn this dream into a reality. The hard truth tends to surface a few months after most of the investment has already flowed into the project.

When considering this investment, understand that it’s common these days for brands to be judged on their online presence and following. Potential customers mainly notice what the company wants them to see via social media and what their influencers choose to promote. Since decor and ambiance impact first impressions, the most “Instagrammable” cafes are often added to many must-visit lists. As with many cafe startups in the UAE, it seems somewhat justifiable that business owners have this tendency to splurge on interior design and branding.
But at what cost ?

Kicking off the hype on social media before a business opens is always a good idea, but know that overnight success is a myth. Many new owners tend to have a false sense of security and are prone to slack off if they notice that their business is booming in the first few months. Consumers are curious enough to play into the hype of a new cafe with at least one visit, and they will come with high expectations, so be prepared for diligent follow-ups and keep in mind that hype alone is short duration.

Related: The Business of Harnessing the Power of Social Media

The clock officially starts when a customer walks through the doors of the establishment for the first time. Immediate success means that a customer leaves very impressed with their experience and wants to come back. Conversely, if their overall experience is less than satisfactory, there is a higher likelihood that their negative feedback will spread.

Our research on café and restaurant trends in the United Arab Emirates in 2019 revealed that only one in 12 people would post their positive experiences online without being encouraged by the establishment. However, an unhappy customer would tell about their negative experience to an average of eight people. We also discovered that one in three people would post their negative experiences online. A staggering 82% of customers will not return to a cafe or restaurant if they experience inconsistent customer service or inconsistencies in food and drink quality.

Related: How to Start a Restaurant

With all of this in mind, it seems prudent that your launch include vigilant and progressive strategies. In a market that can be perceived as oversaturated, we have witnessed the hardship and demise of many enthusiastic entrepreneurs who underestimated the demands of starting and sustaining a cafe in the UAE.

Here are five common mistakes I’ve witnessed first-hand and some opinions to consider before embarking on your journey.

1. Overestimating your location

Given the investment of launching a cafe, it’s safe to assume that you’ve done your due diligence and quantified the expenses and returns based on your location. But pay close attention to all tangible aspects of the property such as visibility, foot traffic, customer parking, surrounding noise, local customers and local competition. If there are many similar establishments nearby, how do they behave throughout the day and how will you stand out in your particular location? Also, consider the limits of your space and future neighborhood developments.

Overstating revenue in part due to poor placement for your particular brand can be a time and money consuming mistake.

2. The blatant carbon copy strategy

Customers are apparently tired of constant replicas of interior design, in many cases here, exact copies of menus and dish styles. The aesthetic elements of successful establishments are frequently copied. This practice, without restraint, will lead your customers to compare you directly to your models of inspiration.

When it comes to the overall design of your space, start with your menu in the foreground. This approach helps you plan the exact equipment and space requirements, including the kitchen and behind the bar workflow. You’ll quickly find that the menu is more relevant to your space than the aesthetic.

Find your niche and establish credibility through your offering or individuality while ensuring the highly efficient workflow layout of your space.

3. Neglecting your staff

Considering that customer service is at the heart of hospitality, it’s surprising how often “bad” staff fill customer-facing positions. Having to bring their “A” game to every shift, many employees are simply not cut out for hospitality, and your customers will notice. Many employers favor quantity over quantity by hiring lower quality staff with lower salaries rather than attracting highly competent and efficient staff with a better salary offer.

Make sure you have a comprehensive human resources plan and aim to hire the right people. Personality wins loyal customers in the hospitality industry. An inherent willingness to learn, coupled with core competencies, will ensure that your people steer your business in the right direction.

4. Choose unsuitable suppliers

As an owner, you should be involved in the supplier selection process and, before formalizing any commitment, seek genuine testimonials and references. There’s nothing worse than premature stock depletion, delayed deliveries, or receiving poor quality ingredients when trying to run your business. The cheapest options tend to be just that for a reason. A failure in your supplier’s quality control means that your company’s reputation suffers. This buying strategy is not the most sustainable option.

Be aware that side deals or scams are one thing. Some suppliers can not only influence the selection process, but many also have their way of deliberately increasing the frequency of orders. Being actively involved in the coffeehouse industry in the UAE for over a decade, I have often witnessed such unethical practices.

Work with suppliers who have earned their integrity through experience and reputation. Identify individual representatives who want to understand your business and have your interests at heart. These providers exist.

5. The first inconsistencies

You can limit day-to-day inconsistencies with management and the appropriate teams designated and ensuring strict policies through detailed operational procedures and regular training. Well-appointed management should ensure that checklists and detailed recipes are accessible and diligently followed by all staff.

Customer incidents should be recorded and included in daily discussions with the team. With regular open communication and encouragement from the team, any gaps can be a powerful training tool. Keep your team happy and motivated, and remember that superior customer service, product quality and consistency will leave less room for failure.

Related: 18 Brutal Business Failures by Extremely Successful Entrepreneurs

Final Thoughts

An owner’s involvement in their own business is an irreplaceable personal touch. Many customers feel a sense of belonging and appreciate the soul of a cafe with a present and active owner. Understanding your day-to-day operations and engaging with your first customers is imperative to building a relationship. Lean on your customers to know what’s selling and what’s not.

Be aware of your competition while being ready to evolve and innovate. Adding new items to the menu or replacing non-vendors keeps things fresh and exciting for your guests. Ultimately, have detailed metrics to ensure your business will be executed and delivered consistently from day one.

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