It’s a city with arguably an oversaturated F&B market. And with several unexpected operational challenges, Dubai restaurant start-ups often take their last-ever orders sooner than expected. Keith J Fernandez chats to entrepreneurs for their top tips to help others in the region avoid the pitfalls.

Over a thousand – 1,109 to be precise – new restaurants opened in Dubai last year, in one of the fastest-growing industries across the nation. That’s a nine per cent growth over 2017, according to data from the Business Registration and Licensing (BRL) division of the emirate’s Department of Economic Development (DED).

Put another way, that’s one restaurant for every 265 people in a city of 3.1 million. It’s no wonder that so many new restaurants quickly go out of business. Public data about closures isn’t available, but between the competition, poor products, changing consumer preferences and bad management, the odds can seem stacked against the wannabe foodpreneur – especially in the crucial first year or two.

Beyond business plans, funding sources, recruitment and SWOT analyses, Dubai F&B insiders suggested a list of questions anyone looking to break into the food business should ask themselves.

Have you budgeted enough cash until break-even?

Under-estimating cash requirements in the crucial first few months while letting costs balloon out of control are big mistakes that new restaurants make, says Mazen M Omair, Founder, President & CEO of Momair Trading and a member and mentor at the UAE chapter of Entrepreneurs Organization, a global networking non-profit.

“Create a cash flow budget for the first three to six months using conservative revenue estimates and allowing for unexpected expenses,” he advises. “This will help you track cash on hand, business expenses, and how much revenue you need to keep your business afloat until revenue start growing. The budget should include estimate for monthly fixed cost items, as well as variable costs. Monitor the actual versus budgeted performance closely, and adjust where possible.”

Have you got a contingency fund?

For Indian couple Shivam Goyal and Shipra Khurana, who opened Mitra Indian fusion bistro at the Al Seef development on Dubai Creek last year, unexpected expenses were a constant headache. From staff attrition costs and mall charges to loss funding, it’s important to factor in exigences.

“While signing the [rental] agreement, you [may] invariably ignore many mall charges that haunt you later, such as chiller charges, gas charges, mandatory annual maintenance contracts for different things,” Goyal explains. “So don’t be in a haste to sign the lease agreement without thoroughly going through it even though it may run into hundreds of pages. Also get them ratified from a law firm to save hidden costs later.”

Does your restaurant reflect your brand?

The need to keep sunk costs low often has entrepreneurs settling for cookie-cutter interiors, or a new sign and menu when purchasing an existing concept. But every aspect of the design must speak to your brand and what it is you’re trying to create.

“The number one design mistake F&B entrepreneurs make is trusting that their passion will transfer to the interiors and branding organically,” says Jacqui Shaddock, partner at H2R Design, an interiors architecture and branding agency that has advised several regional eateries, including Parker’s, Tom & Serg and Paper Fig, and launched its own restaurant, Cassette. Entrepreneurs must think long and hard about their brand’s attributes and values, and figure out how that translates into design.

“The most important thing, when a concept is strong, is that the story is told cohesively. There's a strength in consistency.”

Do you know your message?

Consumers respond to clear messaging but sometimes, a contrarian approach can help brands stand out, says Bhavika Bhatia, a 24-year-old former graphic designer who relied on family catering expertise to launch the vegetarian and vegan-friendly Moreish Restaurant & Café in Oud Metha last year.

“Vegetarian and vegan food has surged remarkably over the past two years, and it’s only going to grow exponentially,” she says. But in a city that loves meat, using those labels can work to a restaurant’s detriment.

“Not marketing our restaurant as vegetarian/vegan has helped us avoid filters and brought in customers who would otherwise think little of a meatless meal.”

It’s paid off so far.

“I’d say that aside a few hiccups, we haven't had any big blunders – but we are very new to the market.”

Do you have enough practical – and local – knowledge?

Ahmed Abdulla Tahnoon, a 31-year-old Emirati, took the leap of faith without prior hospitality experience when he decided to bring Japanese street food to Dubai with Spheerz, a Port Rashid restaurant that grew out of a kiosk at Global Village.

“I had no business background or experience, but as an engineer – and problem solver – I put a lot of effort into reading books online publications until I felt ready,” he says.

Reading wasn’t enough, though, since most books were about other markets with different rules and standards.

“At the end I needed to learn from the field itself. For example, it was overwhelming trying to understand which entity is responsible for what.”

Do you know when to bring in the specialists?

“As entrepreneurs we tend to be perfectionists especially when it comes to our business and getting things done, we often found ourselves doing more than we can and to avoid delegating tasks to others. This approach has proven to be inefficient and distracted us from making more important decisions in growing the business,” says Aisha Mohammed Sharaf, a 25-year-old Emirati who has been running the dessert café Pastryology at Mina Rashid with her husband Tariq Yousef Taher, 32, for over a year now.

She says it’s important to realise when to trust in outside knowledge.

“The way we overcame this is by hiring specialists for tasks such as accounting, HR and so on, which tend to be overlooked when opening a small restaurant, however they are crucial for a business.”

Do you have staying power?

Starting your own business will test your patience, says Zubin Doshi, the 27-year-old founder of ice-cream Scoopi Café, whose signature dessert, the Black Diamond, is the most expensive in Dubai at Dh2,999.

“No business takes off immediately,” he says. “Keep in mind that you’ll need a minimum period of three years before you start seeing actual results.”

Fine-tuning your product into something unique is equally time-consuming.

“You need to be patient to see your brand succeed especially when economic conditions aren’t the most favourable.”