How to manage a gastronomic business without losing profitability

Starting a business in the food industry seems, at first glance, an attractive and accessible path for those looking to start their own business. Latin culture is deeply connected to food: from home cooking to large family gatherings, we’ve all had contact with this industry in one way or another. However, behind this closeness lies a complex landscape that explains why so many restaurants, bakeries, and delivery businesses close in the first few years. Competition, low margins, and dependence on human capital make this sector one of the most demanding for any entrepreneur.

Adding to this challenge is another common scenario in Latin America: managing family businesses. These businesses tend to be economic pillars in the region, generate employment, and represent a significant percentage of SMEs. However, managing a project that combines family ties and business goals requires skills that go beyond financial or culinary knowledge.

Starting a business in the food industry

Opening a restaurant, launching a healthy product, or starting a catering service can begin as a simple and enthusiastic idea. Pilot tests, such as offering a reduced menu or selling at small events, allow for quick validation of whether there is a market willing to pay. This initial ease, however, often leads to underestimating the risks.

The main obstacle is profitability. Although most entrepreneurs believe margins are high, reality shows otherwise. In many countries, net margins hover between 3% and 5%, requiring strict control of costs, waste, and personnel. Added to this is the pressure of a changing consumer, who demands constant innovation in flavors, presentations, and service formats.

Therefore, beyond culinary talent, what truly defines the sustainability of a food business is the ability to standardize processes. A poorly executed recipe on a single day can generate complaints and damage the brand’s reputation. In this sector, consistency is synonymous with trust, and achieving it requires operational discipline, investment in training, and streamlining tasks so that any employee can replicate the established quality.

The Importance of the Human Team

Food businesses are essentially people businesses. The ultimate quality of service depends on cooks, servers, delivery drivers, and front-of-house staff. Although operating manuals exist, it’s not possible to completely eliminate the variability that each person introduces into their daily routine.

For this reason, an entrepreneur in this sector must be aware that hiring technical talent isn’t enough. Attitude, willingness to serve, and the ability to solve problems are equally important. Reducing operational complexity, standardizing kitchen equipment, and limiting product variety can open the door to hiring motivated staff, even if they don’t have perfect experience. This combination of clear processes and people with a positive attitude ensures that customers always receive the same positive experience.

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Furthermore, staff turnover is one of the biggest challenges. The industry is known for its physical and emotional toll, which forces leaders to invest in organizational culture and wellness programs. Listening to employees, recognizing their work, and offering development opportunities are actions that make the difference between a company that constantly loses employees and one that manages to retain key talent.

Scaling a Restaurant Business

If opening a restaurant is difficult, expanding it is even more so. Expansion requires a methodical and disciplined mindset, capable of viewing the business as a series of replicable processes. Simplification and standardization are essential so that quality doesn’t depend on a single person, but on the system as a whole.

This is where continuous improvement methodologies such as Lean or Kaizen come into play, which were originally applied in the automotive and manufacturing industries. Adapting them to gastronomy allows for measuring, correcting, and perfecting every stage of the operation. From production in the kitchen to delivery to the customer, everything can be analyzed and optimized to ensure consistency and efficiency.

A clear example is fast-food chains, which manage to grow thanks to an obsession with standardization. The idea is not just to sell a product, but to create a system where any branch can replicate the same flavor and experience. For a Latin American entrepreneur, adopting this approach can make the difference between staying with a small location or building a scalable brand.

Challenges of Family Businesses

When a food business is also family-run, the challenges multiply. In Latin America, most SMEs have a family origin, and they are often the main source of employment in their community. The problem arises when roles are not well-defined and personal ties are confused with business ties.

There are three distinct spheres: being a family member, being a partner, and being an employee. Not all family members fulfill all three roles, and it is essential to make this clear from the outset. A common mistake is to assume that being a son, brother, or nephew entitles one to a management position, when the reality should be based on merit, preparation, and established rules.

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Establishing clear guidelines helps avoid conflicts. For example, requiring any manager to have a master’s degree or previous experience in another company ensures that the person filling the position is truly qualified. It is also vital to maintain open communication and define boundaries: family members must know when they are speaking as relatives and when they are acting as bosses or collaborators.

A key aspect is to professionalize the business. This means implementing boards with external members, establishing competitive recruitment processes, and, in many cases, ensuring that management does not always fall to a family member. The business must be viewed as a shared asset that transcends individual interests.

Transforming a Business for the Future

The food service sector is constantly changing. From digitalization to new consumer trends, the businesses that survive are those that adapt quickly. Incorporating technological tools, such as customer management systems or online ordering platforms, is no longer optional.

The pandemic showed that those who managed to implement delivery, hidden kitchens, or digital partnerships were better able to sustain themselves than those that relied solely on on-site consumption. However, digital transformation in family businesses often faces resistance. Breaking away from old ideas and convincing new generations requires patience, communication, and pilot tests that demonstrate results.

In addition, authentic leadership plays an essential role. Being consistent, listening to employees, and showing empathy strengthens the organizational culture. A leader who leads by example, who participates in operations, and who spends time talking to his people conveys credibility and builds trust. This is the foundation for retaining talent and maintaining motivation in such a competitive sector.

The Value of Personal Branding in Business

Finally, in a world where consumers connect more with people than with logos, entrepreneurs find their personal brand a powerful tool. Becoming a recognized voice in the industry, sharing experiences, and showcasing the story behind the company helps humanize the brand and open up new opportunities.

In B2B businesses, such as catering or corporate catering services, this factor can be even more decisive. Giving a company a face builds trust with clients and partners and allows it to differentiate itself in a saturated market. However, building a personal brand must be balanced with the internal management of the business, so as not to neglect its operational growth.