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Craig Lee - Otago Business School - TourismEntrepreneurial skills may be just as important for restaurant owners as serving good food.

A study by University of Otago Business School tourism researcher Dr Craig Lee has pinpointed success factors that have shaped some of the top-performing, independent restaurants in Australia.

What drives businesses to success in the restaurant industry is more than just the quality of its chef – the business owners' level of entrepreneurial self-efficacy and the firms' innovation activities (service, process, and management innovation) are discriminating characteristics for high performance.

Dr Lee said while governments encourage business owners to be creative to survive, understanding exactly what it takes to be successful helps to plan a course of action.

The two most important drivers of successful restaurants are the ability to develop new products and services, and a clear vision of what the business owners want to achieve, which needs to be translated successfully to their employees.

Also crucial are investor relationships, and innovations across the enterprise, such as in marketing and branding, and technology such as smart phone apps and websites. Human resource development is vital in this industry because of high turnover, so staff management and recruitment is imperative.

The other most important success factor is the ability to meet unexpected challenges.

Barriers to innovation are staff resistance to change, marketing and getting customers to understand new processes, and the costs in what is a low profit margin industry.

So where do restaurant owners get their ideas? Dr Lee has identified that successful restaurant owners look to their competitors, are in tune with what their customers ask for, and talk to their staff.

These new insights should help restaurant owners to benchmark themselves against the high performers, and to prioritise the entrepreneurial skills and innovations to develop to achieve business success.

It also presents a challenge to the hospitality industry to have education specific to developing entrepreneurial and business expertise as well as culinary skills. “Many people passionate about their food skills often dream of owning their own business; however, this study shows that it takes more than that to develop a successful enterprise and make money. Training in managing finances or marketing may be a good place to start for those considering entering the industry.”

Dr Lee is keen to look at ways to use the findings from this Australian study to develop the New Zealand restaurant sector.

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