Sam Mustafa is a restaurant owner and a long-term entrepreneur from the Charleston area. He is also dedicated to his community as he continues to support the growth and area development. Although Sam Mustafa’s expertise revolves around business, he holds a degree in engineering. Regardless of his training, however, he decided to work in the hospitality industry ever since 2008. During that time, Mustafa founded the Charleston Hospitality Group which now operates nine different sub-businesses.
To provide a diverse offering, Sam Mustafa prioritizes an exceptional dining experience over everything else. In fact, his restaurants are built to cater to a wide range of people who come from various locations. Consequently, he holds one of the largest ventures within the market.
Based on your experience, what are some of the easiest ways to generate buzz about your restaurant?
In the past, I mostly relied on word of mouth and TV-based advertisements. Nowadays, I think that social media is the way to go. When you are opening a new restaurant in an area, you need to reach a lot of people. Not only that, those people must be specifically interested in eating out and the food options that you are offering. With social media platforms, you can easily target those interest groups. Utilizing data, you are able to track individuals who recently ate out and retarget them based on previous spending patterns.
How can someone enter the restaurant business and avoid failure?
Although it depends to some degree on the location, the barriers to entry in this industry are high. You are in direct competition with hundreds of business owners and franchisees who already have a brand. Meaning, you have to find ways to undercut their efforts by making your offers more enticing. Some people do that by reducing prices. Unfortunately, that is also the main reason why a lot of entrepreneurs in this market failure.
Can you expand on why radical price reductions can be problematic?
Throughout my career, I witnessed newcomers enter the field by drastically cutting their prices. In turn, their competition is forced to cut prices themselves, or people will start switching to the cheaper seller. The problem, however, rises in the long-run. By selling cheap menu items, you need a high amount of orders to cover your basic fixed costs. You become forced to sell a lot every day to meet the necessary quotas and break even. So, whenever there is a minor downfall in demand, you start struggling worse that opponents whose prices are higher.
What do you need to be a successful restaurant investor?
You must be ready to get your hands dirty. Unlike many other investments that are passive in nature, the restaurant business requires you to be involved. You must know if the management is doing well, are menu items priced correctly, and how competent your servers are. Neglecting any factor, no matter how small it may seem, puts you at high risk of losing money.
Not to mention the requirements that must be satisfied to upkeep all your licenses. As the owner, you are opening yourself to liability in the event anyone suffers from food poisoning or some other health issues. So, you need to be an investor that is also ready to have a full-time job in this field.
How can restaurants improve customer retention rates?
By offering various programs and building mailing campaigns. A lot of restaurants have discount options for those who spend a certain amount of money or eat there frequently. Also, you should do your best to get a hold of people’s emails or get in touch via social media. Doing so makes it easy to promote any events that might be happening at your restaurant. Ultimately, you need to advertise on various outlets until you find something that attracts repeat buyers.
Should people open restaurants in areas where there is a lot of competition?
Yes and no. Generally speaking, high competition indicates that people in that area like to eat out. Hence why a lot of other business owners thought it was worth it to place their venture there. Then again, high competition means that you will have to fight harder for your piece of the pie.
Your restaurant should be unique to the competition. If it is, it does not matter that there are many options in your particular location. But if you are trying to do the same thing that everyone else does, they will likely make it impossible for you to enter the market.
What types of restaurants are on the rise?
Personally, I own quite a few different types. Some are based on a fine dining experience while other provide a more relaxed atmosphere. In reality, no type does better than the other as long as you attract the right people. If you can bring the proper audience, any type of restaurant will thrive.