A majority of all new restaurants fail, and most do so quite quickly. Many formerly successful entrepreneurs and investors find themselves drawn to the idea of starting a new, local restaurant. Most will end up discovering that the business is more difficult than would be expected, often in dramatic and profoundly disappointing ways.
While it takes a lot more to succeed in the foodservice industry, keeping costs down always helps. Unfortunately, most new restaurants end up paying quite a bit more for the supplies they need than do larger, better-established competitors. That alone can make it difficult for a young restaurant to remain viable, with thin margins amplifying the damage caused by even the slightest of mistakes.
Signing up for the best available restaurant purchasing program can make a difference by providing some much-needed breathing room for a new operation. While many newly minted restaurateurs do make this leap, relatively few do so to the greatest possible effect. Instead of joining a conventional restaurant buying group, it will often be far more productive to look for a different type of program that affords larger effective discounts.
The Traditional Buying Group Model Does Not Serve Small Restaurants as Well as It Could
A chain restaurant with dozens of locations or more will almost always be able to negotiate discounted prices from food manufacturers, packagers, distributors, and other suppliers. A newly established restaurant with only a single kitchen will, instead, be expected to pay the list price in just about every case.
In order to overcome this imbalance, the food service buying group was created many years ago to allow smaller operations to band together. While still placing individual orders of their own, participating restaurants benefit from agreements that have been arrived at on the basis of the group's combined buying power.
While that will normally cut food costs, to some extent, there is significant overhead inherent in this type of arrangement. As a result, some portion of the negotiated discount will almost always end up not in the hands of restaurants that are members but the managers of the group itself.
A Better Option for Many Newly Established Restaurants
As those who follow here will learn, however, there is another type of program that can deliver larger discounts without demanding any sacrifices in return. One of the most popular of these is run by the provider of the most commonly employed restaurant industry accounting services. With this program enabling significantly larger discounts than any traditional buying group, participants can cut their food costs significantly.