Start a Restaurant

The food service industry caters to a universal need of humans – to be nourished. However, the way food appeals to humans isn’t at all universal. Mankind is a diverse group and there isn’t one particular operation of food service that could satisfy this diversity. This is one reality that aspirants in the restaurant business find difficulty to accept. Many hopefuls think they can catch everyone, but such efforts end up in failure. Trying to cater to everyone results into not being able to cater to anyone at all. It is best to just concentrate on a small part of the market, say ten percent or so, this way, you can offer the best service for that part of your choice. This is done by doing a market analysis – the study of the potential target market.

The senior market is composed of people who are 65 years or older. Seniors generally live on fixed incomes, from their pension or sustenance by relatives, and thus have a rather inflexible spending power. Most seniors usually go to family-oriented eating places such as lunch buffets because they offer good food and services at affordable prizes. Less active seniors usually prefer smaller portions as they may have smaller appetites. When targeting seniors, it is best to make them special by offering senior promotions, or lowered rates. You can also market your restaurant as senior-friendly by emphasizing safety features such as ramps and handlebars.

The late adult market is composed of people aged 50 to 64. They are usually the ones who are experiencing the empty nest syndrome, where grownup children have left the home. This market usually has the most stable financial status as they could be in the most advanced stages in their careers. At this point, price usually doesn’t matter. This is the age when people start trying to really enjoy life and its pleasures. So the main concern is good food and service. When targeting this market, it is good to present your restaurant with elegance and sophistication. It would be wise to invest more on ambience and class. (more…)

When you open a restaurant business, there are many permits and licenses you will be required to have. The type of business license you will need will be different in each city, county, and state. There are some who require each business to register yearly, and they collect a fee from each registration. There are others that do not require a business to register if the business is not incorporated, unless you will be operating under an assumed or fictitious name.

To learn what type of licenses and permits you will need for the area your business will be located in, you need to talk to your county or city clerk. You will also want to check out the zoning ordinances and sign regulations that may apply to the type and location of your business.

Before you even think about obtaining licenses and permits, you will need to apply for a Federal Employer Identification Number or EIN. You can do this by visiting the IRS website. They will ask a few questions and you will be issued an EIN. This number identifies you to the government (IRS) as a business owner. Everyone who owns a business must have an EIN.

Below are some of the licenses and permits that you may need for your restaurant business.

1. A License for Business– Depending on your restaurant business location, you may be charged a percentage of your gross sales, or a simple yearly fee to operate your business.

2. A Food Handler’s License or Permit– This is necessary for the selling of edible goods. Each state and county have their own set of rules and amount of fee charged. You will be inspected regularly by health inspectors to make sure you are running a clean restaurant business. (more…)

As a specialist in getting restaurants open, it is surprising how many people ask, “How can I get out of my restaurant?” Reasons for this question vary greatly, from a death in the family to a merger with another firm, to the end of a lease.

Selling your restaurant requires quality prior planning if you are going to realize the maximum value for the business. This planning is not much different when getting out than when you first got into that business.

What things did you look for when you bought your restaurant? Of course, profit was probably the key consideration, followed by a great location, a niche market, a solid system of operations, and a vision for growth. Aren’t these the same things you need to concentrate on if you are going to market your operation to someone else?

A strong focus on the basics, about twelve months prior to getting out of your operation can take you from where you are at now, to a maximum market value. Let’s look at some of the top areas you may wish to concentrate on right away:

1. Bookkeeping. A clean, organized and understandable set of financials are critical to the sale. A close friend once said, “A business with no profits on paper has no value”, and this statement is close to being very true. You will want to show where your income came from, what you spent on expenses, and what kind of cash flow exists. If you cannot show these numbers, all the profit in the world will not make any difference to a buyer if you cannot prove it. A professional accounting firm can give you feedback on how to structure your systems.

2. Profits. You simply must be profitable and there are ways to do it. By concentrating on your highest cost areas such as labor, food and beverage, you can make good headway by making your purchasing more efficient, watching your inventory levels, and what you are charging for your products. Obviously profit generation is a very large topic and worth looking at closely. Have you had an operations analysis done on your business recently? A restaurant consultant can conduct this analysis inexpensively and give you a list of things to work on. (more…)

Restaurant Management experts contend that there are four ways in which hospitality businesses can improve their financial performance. None of these ways are mutually exclusive, so you can try any combination of these four variables at any given time and in any order of importance:

Increasing sales volume (getting more customers to your venue)
Increasing price (put up your prices on your menus)
Cutting costs (decrease your food, beverage and wage costs)
Increasing the average spend (get your customers to buy more every time they buy of you)
Combining price and sales volume will no doubt post increased revenue. Cutting costs will also result in savings.

Restaurant marketers (ie you the business owner or manager) mistakenly assume that the only means of increasing sales is to net more customers. While its true that selling to more people will definitely make your sales go up, there can also be several other, more innovative ways of increasing turnover, such as increasing frequency of sales to the same customer or making higher value sales to him/her.

It does follows that turnover also increases when customers spend more each time they buy from you (increasing spend) and when they do it more often (increasing frequency). McDonalds used this technique to great aplomb when it taught its sales force to prod customers with the seemingly innocuous poser: “Would you like fries with your burgers, please?” A simple question like that, marketers testify enabled the snack food giant to increase its turnover worldwide by $19 million a day!

Hence the four variables that impact sales in any business are: (more…)

Hiring restaurant and bar staff is an ongoing job. Even if you have enough staff, you should be looking for others at all times. When you go out to eat, when they come in to eat. Friends of your staff are a great way to find good people.

Once you have the “right” person hired, there are some key things that you should keep in mind.

1. Develop a training schedule. Unscheduled training will lead to extra hours and lower productivity. Explain daily objectives for each trainee and trainer. Create a training program and checklist. Have the trainee and the trainer sign off each shift that the objectives have been completed. This also helps to ensure that they trainee is staying on schedule and your training is consistent. Keep the sheets in the staff’s file in the office.
2. Provide a free meal each shift to each trainee. Allow them to order from certain sections each shift. This will give them a chance to try different items. Example: Day 1 – Apps, Day 2 – soup/salads, Day 3 – mains… How do you expect them to sell the items if they have never tried them? “Oh, I’m sorry, I’ve never tried that.” Would you order it?
3. You need to compensate the trainer as their productivity will be lower. They will not be able to take as much of their normal workload. Less tables for them = less money. See if giving a free meal to the trainer is enough compensation for training vs. extra hourly. If not, perhaps you could let them make their own schedule the following week. Look for something that they will find a bonus, without costing you extra dollars. paying them more is an option, but the most expensive option.
4. Document the training. This will save you piles of money if you end up in Labour Court down the road. See point number 2. (more…)

The History of Server Prepared Drinks

Since the creation of food service waiters and servers have been pouring coffees, teas and sodas for their customers. A tradition of service that dates back as far as history records serving food.

Nothing new for today’s restaurant diner except maybe a bit more variety in the choices of drink. And with servers and waiters vying for more and more tip income it only stands to reason that they are pouring more and more free refills.

So where is the problem? Your customers are getting better service and your wait staff is getting better compensated. All looks good on the surface.

But the question arises, are you getting paid for all those drinks, sodas and coffees? You certainly are paying for all the ingredients. Do your sales reflect the prices that should be charged?

The Need to Control Server Prepared Drinks

But what happens when the server forgets to ring up the soft beverage? Your servers and waiters are already pouring the same amounts of soft beverages so your food cost takes a hit. If they don’t ring the drink to begin with (even if by mistake) then you are out the income that is supposed to offset the heavy pouring that is already taking place.

What you need is a way to enforce the ringing of at least 1 beverage/drink per person ordering food. Sounds simple, but not all point of sale systems can do this. (more…)

Kevin Moll, a national restaurant consultant says, “A restaurant owner’s number one priority should be the marketing and promotion of their business. If your guests don’t know who you are and where you’re located, you’ll never have a chance to show them how great your business is”. According to Moll, the trick is to avoid direct competition, fill your unique niche and let your guests know in no uncertain terms that they’re special by giving them what they want. “Easier said than done, but I’ve found a few methods that have proven themselves highly effective over the years” says Moll. Here are some techniques that restaurant owners and managers can employ to set themselves apart from the competition.

BRAND YOURSELF WITH A GREAT BUSINESS NAME–
The branding of your business is an unwritten guarantee of quality in the eyes of your guest. When making a dining decision, “Guests have expectations that must be fully delivered upon,” says Moll. “Everyone wants to make a good choice when going out to eat, and it makes logical sense to deliver more than what they’re expecting”. Great food and great fun is a combination that usually results in lines out the door. As such, “The goal of every operator should be the clear branding of who you are, what you offer and what makes you unique”. Moll notes that your business name should, to a great degree, reflect who and what you are.

ENSURE A COMPLETE EXPERIENCE THAT’S SERVED WITH PASSION–
Offer your guests things they can’t easily get anywhere else, served by passionate people. ”That’s the whole story,” says Moll. Promoting and serving premium quality and unique products, offering a larger than normal choice of beverages, making sugar free and low carb options available, and staying on top of emerging trends will help set your operation apart from the others. However, your employees are, “Where the rubber meets the road” says Moll. “Hire passionate people that care about what they do, and that have a real desire to please others” is key. “Your people don’t care about mission statements, profit margins or market position” Moll states, adding, “They want a sense of purpose, a clear goal to shoot for every day, and the recognition of accomplishment. When an employer can successfully offer an employee a sense of purpose and meaning, that employer will quickly outpace the market in share, sales and profits as evidenced by the amazing growth of Starbucks”. (more…)

The biggest factor in your restaurant’s success will be how well you control your restaurant’s expenses. This includes food, labor, advertising, equipment, management, rent, operating costs and the rest of your overhead costs. Here are some tips for controlling your costs to increase your profits.

Inventory Control

How well you control your inventory may well be the most important aspect deciding your restaurant’s future. If you allow costs to spiral out of control and make poor decisions as far as choosing what menu items to serve and their ingredients, your restaurant won’t last very long. However, you can maintain stringent control over your inventory and costs with a proper food costing and inventory program. This type of program will allow you to keep track of your inventory, monitor item pricing and specification, verify prices, check invoices against orders, create recipe cards, monitor taste and yield, scale recipes, cost your menu by category, evaluate item popularity and profit margin, calculate actual food and bar costs and compare actual versus projected costs. A good costing software program will allow you to reduce your food costs by 8% or even more.

Leasing

Leasing your restaurant equipment may be a good option for some restaurants. Leasing does not require large down payments and the lease can be extended for long periods of time. Leasing may be advantageous to help control the startup costs of a new restaurant.

Efficiency

The proper management of your restaurant will also be key to your restaurant’s success. You will need to make use of a professional point of sale system, as well as an accounting system. Automation in the ordering process can increase efficiency and reduce confusion for employees. The more efficient your restaurant runs, the better chance at success you’ll have. (more…)

The issue of serving alcohol in your restaurant is one that comes with many pros and cons. It is even common for some family restaurants to offer alcohol with the menu. Some people enjoy a glass of wine, a mixed drink, or a couple of beers before their meal or while they are eating. For those individuals that do so on a regular basis, they may end up avoiding dining at your restaurant because it isn’t an option.

During peak times, many people don’t like having to wait 15 or 20 minutes for a table to open up in a restaurant. They will likely go somewhere else instead of waiting around. However, if you offer alcohol, a high percentage of them will decide to enjoy a drink during that wait period instead of eating at a different location.

Most restaurant owners will tell you that they sell a large amount of alcohol. They will also tell you that they are able to sell it for a substantial profit too. Many restaurant owners have come up with a good solution to slow times with alcohol too. They can offer buckets of beer at 5 pm so an after work crowd shows up. They can also offer great specials on drinks and appetizers during the afternoon so that people will be enticed to drop in.

It can be an added expense for your restaurant to offer alcohol though. You will have to purchase the supplies to make a variety of different drinks. You will also need the machinery to mix them and the glasses to serve them in. This could result in one more supplier to deal with too as you won’t be able to get your alcohol from the same supplier that you get the food ingredients from.

The only way that you are going to get your customers to want to pay for the drinks they order though is to make sure you have the best ingredients available. Don’t try to cut corners by purchasing cheap alcohol. You also need to have bartenders in place that have plenty of experience making various types of drinks that your customers are going to request. (more…)

In our incredibly competitive hospitality industry, owners and managers are constantly seeking the answer to an important question- How do you recruit, retain, and motivate staff who are responsible for creating a “magical” experience which exceeds your guests’ expectations? Some answers may be found by looking to successful companies that are consistently achieving these goals.

William Shakespeare wrote, ‘All the worlds a stage, and all the men and women merely players’. One company that has exemplified that quote is the Walt Disney World Co. based in Orlando, Florida.

Disney is recognised as one company which creates such “magical”experiences. The Disney challenge is to ensure that all of the 36,000 staff are playing a role in a show which exceeds all expectations.

The Disney approach to people management has helped gain them the reputation of providing a leading benchmark for quality and service in America.

Disney does not just “hire” people for jobs, they “cast” performers for a “role” in the show. The emphasis is in finding ‘people oriented’ cast members who are willing to adapt to the high standards established, and not necessarily on the skills an applicant may have.

Their ‘casting process’ introduces each applicant to the culture of the company, and the important role which they will play in the future success. This way there are no surprises, and it is this approach which helps to maintain turnover at approximately 20%.

Success on the “Restaurant Stage” requires the development and choreography of many different aspects, such as a great cast, script, support and direction.

Quality ‘Casting’ or recruitment, is critical to everything else in the production.

As an owner or manager, you are more director and choreographer of a performance. Your front of house staff, are the actors, and your customers are the audience for whom they must perform. (more…)