Restaurant Business - Takeaway or Dine-In? Which One Works Best For You
Changing demographics, lifestyles & diversion towards easily available cooked food is making the food-service business flourish. Whether it is working singles or parents or for that matter, elderly people, all want convenient & hassle free food. Either there is no time or no inclination to cook food, but definitely there is a demand for health and tasty food from consumers of all ages & geographies.
Starting a food business or a restaurant is not that difficult though it requires complete planning and strategizing to make it successful one. It is a known fact that a high number of restaurants fail during the very first year of their operations. The restaurant business is not a one-size-fits-all types business. It involves variety based on geography, ages, individual taste, etc. Thus, no one can target to please all or cater to all kinds of customers. Thus, before you start the restaurant business clearly define your target audience. That clearly defines the niche you would want to cater too. All further decisions of the menu, ambience, marketing etc. would depend on what type of restaurant you wish to open which further is dependent on the target audience you wish to cater to.
There are various restaurant formats as quick service, casual dine-in, fine dining and casual fast food dine-in. Casual dine-in provides a casual low-cost ambience with an in budget cuisine. USP of a quick service restaurant is the speed of delivery. They serve food at affordable rates, packed to be taken away or even have in the premise.
Fine dining & casual fast food dining offer a higher quality food & services to their clients. Fast dining focused on quick service with average pricing whereas fine dining provides a higher quality ambience with a variety of meals in the menu (they of course charge on the higher side).
Let’s compare the requirements of a dine-in restaurant to a takeaway outlet vis-à-vis a few important parameters:
Just like any other business, location plays a critical role in food business too. To be successful,s a restaurant would also need a good location surrounded with the target consumers and connected with suppliers of raw material. A dine-in restaurant should preferably be in a prominent location that makes it more accessible & visible to the immediate consumer.
But a takeaway restaurant with a delivery service to offer can forgo this condition or the requirement of a good location. But at the same time it should be in close connectivity with the consumer.
Today the consumer dines out not only because they wish to escape cooking at home but also because they want to de-stress. They want to spend time in an ambience that is not cluttered and are pleasantly decorated. The entrepreneur will have to spend considerable time & resources to design interiors of a restaurant or a café. There should be sufficient space of sitting, entertainment, kids’ movement and washroom facilities.
A take-away, although, need not have creative ambience and interior but of course it should be (and also a dine-in restaurant) neat and clean all the time to give confidence of healthy food to the customers. Here more concentration is required in the kitchen space, safety & storage of food.
A dine-in restaurant structure though has potential to earn higher profits but also involves more investment in terms of finance, manpower and time. The cost is higher for interiors, sub-staff, utensils or cutlery & maintenance of the restaurant.
On the other side, a take-away has comparatively lesser costs involved not only in terms of interiors but also utensils & cutlery. At the same time, a takeaway joint would also save on rent of a larger space to operate. Further saving would be in terms of lesser manpower as only kitchen and supervisory staff is required to manage this structure. As per the Restaurant & Catering Benchmarking Survey of 2011-12: 38.4% of the business turnover in a café/ restaurant is spent on wages, salaries & other payroll costs & about 11% of the turnover is spent on rent, rates & insurances.
In a service related business, first finding a good resource and then retaining him or her is a task. As an owner, especially in a dine-in restaurant you have to keep evaluating your offering for the staff to retain them. In a dine-in restaurant, you would specifically need an experienced Chef and other cooking staff, cleaning staff, serving staff & supervisory staff.
Whereas for a take-away business more staff strength is concentrated towards Kitchen and maintenance. Also, number of delivery staff required would be more.
Along with the requirements mentioned above, both dine-in & take away restaurants would need sufficient number of staff to maintain the accounting records.
Although, both dine-in & take away have the capability of generating an equal amount of profits, still due to lesser costs involved. Also, a take-away restaurant is capable of working on an enhanced capacity and thus earns higher net profit margins. In other words, a dine-in restaurant has a fixed capacity to serve a particular number of customers at a time that restricts its earning capacity to some extent whereas a take-away unit can cater to a larger customer base.
Thus, in the same kind of target customers gross profit margin of both the structures of a restaurant business will be the same. That actual difference can be defined or observed in ‘net profits’.