Start a Restaurant

This is addressed to the one million plus restaurant owners in the US. You are in business to make a profit. Sure, you also want to pass on your great recipes, watch happy people eating and create a legacy for your children. But, when all is said and done, you are in business to make money. Doing so is another issue.

It begins with a plan, including the type of food, location, and marketplace. Who will eat there and how much will they pay? How will you attract them? What are your long-term goals? How about a short-term goal of creating the restaurant and surviving the first year?

There are so many elements in the process, yet it’s fairly easy to list them, not necessarily in order:

• The basic business plan
• Arranging the financing
• Securing the property
• Seeking out a contractor
• Creating the cuisine
• Looking for employees
• Obtaining insurance, accounting and legal resources
• Planning the marketing approach
• Setting a timetable
• Designing a menu

The last one is not the least, in order of importance. It might even be the first. Without a menu, you have no restaurant. Why? Because it sets the tone for the whole operation.

It lists all the items you have for sale. It shows the public your pricing structure. It gives other information such as payment types, catering, banquet facilities, delivery or takeout, and other details about your business. If it doesn’t, it should. It’s a mini-advertisement or billboard, that eventually ends up in the hands of every single customer, therefore it’s terribly important. So, how much time did you spend on it’s content and design? Probably not nearly enough, but now you have some food for thought (pardoning the pun).

Now, a few words about my background. I worked as a sales consultant for the Yellow Pages for 25 years and encouraged all my restaurant accounts to place their menus in the directory. The problem was the need for a full page to accommodate the menu. That proved to be rather expensive and therefore, not an option, for many family-run restaurants. (more…)

We talk about it at smbresource all the time. And you’ve probably heard it before. To make your restaurant big and successful you have to work on it, not in it. But what does that really mean?

Growing a restaurant isn’t all about marketing. It’s just one of many components. When you start a restaurant, or any small business you become the CEO. This is an important consideration. The CEO of Ford doesn’t paint cars or bolt the transmissions in. He works on growing the business.

So what do I work on? The short answer is everything. The sales and marketing, the operations of the business, the menu, training the staff, new recipes, and your long term strategy for growth. Your goal is to grow the business, not just the restaurant. That means you have to pay attention to details. As the business gets bigger the details get smaller. This is hard to swallow for many CEOs without the experience of working in a large company but it’s true. I’ll give you a great example. When you open up your mom and pop restaurant you might be serving drinks from a can poured in to a glass. That’s fine. You keep your costs low. But it takes time. When you’re running a small business or new business, you’ve got time. But as the business grows you need to increase efficiency. That keeps the growth moving. To do that, you purchase an automated drink machine. Now the waittress simply puts the glass under a dispenser and presses a button. While she’s waiting for the drink to fill she can go check on the status of the order in the kitchen. You’ve now increased efficiency.

So what should my day as a restaurant owner look like? Here’s what I would consider the perfect day. If you can pull this off you know you’re in a growing business. You walk in at opening and find a clean store. All the employees know the procedure for opening the restaurant and getting the food prepared. For the first hour you look over last nights numbers. Did we have enough people on staff? Did we have too many people? How much food was thrown away and why? You go through the orders and find out if anything was really selling well. Then ask yourself why? Was soup selling great? If so what was the temperature yesterday? If it was cold, you’ve got an indicator. On cold days make more soup. You may not sell more soup, but your customers will get it faster. After spending some time on yesterday let’s look at the operation now. This ideally would be an hour before the lunch rush. Is everyone just sitting around waiting for the crowd to come in? Could this time be spent doing something more productive? Use all of your resources wisely.

During the lunch rush observe. On the perfect day you don’t have to worry about getting caught up in managing the restaurant. Watch the entire operation as a third party observer. Then ask yourself, “Would I want to eat here?”.

Pick out one or two customers and follow them through the entire experience of dining in your restaurant. Were they seated quickly? Did a waiter approach them within a minute or two to get a drink order and place the menus? Was the food prepared promptly? Did it look appetizing or was it just thrown on the plate? When they paid the bill were they smiling? Were your employees smiling and did they thank them for their business?

Growing the restaurant long term. After the lunch rush make some notes, and a specific plan with a time attached to implement some changes. On a big yellow post-it note write down something to remind you to stay on top of the plan. Put it on the corner of your desk or somewhere that you’ll see it often. Then start on your long term planning. This doesn’t start out as a detailed road map. It’s just a brain storm of things you can do to grow your business over a period of months, then years. If your restaurant is always crowded, and people are waiting in line consider two things. The first is expanding the size of the restaurant. The second is adding a second location. (more…)

When I was nearly hitting the age of 30 something inside me changed I noticed I was starting to question my worth and why am I doing this job. As a manager for a big pub chain I had enough of dealing with complaint after complaint and serving rubbish products. That is when I thought long and hard about what I wanted to do with my future.

I then came up with the idea that I wanted to run my own restaurant. This restaurant had to be started from scratch as I wanted to build it from nothing to a busy restaurant and have no wise cracks from people saying “they did not used to do it that way” or “so and so used to do it this way”.

I then made a list of things that I believe make a successful restaurant, these were:

• Location
• Business Partners involved
• Skills of employees
• Size of premises

I knew the location had to be in a busy area which would have a good influx of summer trade but still busy during the winters quiet months. I needed a business partner who had good experience in business and could help coach me along the way and also a business partner who was a skilled chef who could provide consistency in the product. (more…)

Those looking to start a restaurant business need to be properly equipped with the right information. Everywhere you look; there is another magazine or a book that promises to help you along the way. But who can you trust? The good news is that there are some simple steps that anyone can take to make sure that you get started on the right foot. Here are four steps that you can start on today to help start a restaurant business.

The First Step: Plan

You can’t successfully start a restaurant business if you don’t have a plan in place. Planning is the key to making sure that you have all of the information and resources for your restaurant in place ahead of time. This will allow you to make the best decisions for your business. Here are some things you can ask yourself today:

• What kind of customer do I want to serve?
• Do I have a concept in mind?
• Where will I be setting up my restaurant?
• What will make my business unique?

You need to write out the ideas that you have so that you can begin to assemble them into a professional and clear business plan. Here’s what you need to do for the plan itself.

The Second Step: Make a Physical Business Plan

Many business owners find it beneficial to have a physical piece of paper with their plans to start a restaurant business. With things like restaurant business software, you can build a business plan that’s easy to read and for presenting to a bank or a business partner. This plan should include: (more…)

Opening Your Restaurant – Doing It Right

So you’ve decided to open your own restaurant? Congratulations, here are some topics you won’t want to miss learning about, they will be the key to your success. Take your time to plan it all out and be ready for some curve balls along the way, but don’t skip anything.

Research & Planning

Before everything else, you’ll want to make sure you have done your research. From scouting your competition to making sure you know who your target market will be before making any decisions as to the design, menu or hiring decisions to researching the latest restaurant trends, don’t skimp on the research needed to properly open and run a restaurant in the 21st century.

Management – Business & Finances

This includes payroll, order taking, order processing, bookkeeping, taxes, tips and basically all the finances. Don’t forget to get yourself a great POS, point of sale system, to streamline everything and integrate it with a good food costing program to effectively price and organize your inventory. There are many good books on restaurant management, you may also want to pick up one or a few of these. Don’t forget about proper time management, scheduling and expenses.

Menu

The menu! This is the heart of it all. If you have already decided to take the plunge and open your own restaurant, it’s likely that you’ve already envisioned your menu. Well, you don’t have to commit to a set menu for your restaurant’s lifespan, but it’s a good idea to know what the theme of your menu will be. Will it be French style, modern and trendy cuisine with local fresh ingredients or American style with big portions and a salad bar? Write it all down so you have the menu in mind when you make your other decisions. (more…)

If you are thinking of starting a small restaurant, you may want to look into a coffee shop franchise. A Starbucks franchise may be just what you have been looking for. The over 600,000 independent restaurants in the United States with their personalized menu, advertising strategies, and special clientele, could learn something from Starbucks.

Starbucks began as a small coffee shop in Seattle, and has grown into an international phenomenon. They boast nearly $8 billion in yearly sales, and have more than 12,000 worldwide retail outlets. They do not serve flavored coffees or have other food service gimmicks. They simply serve coffee. This small restaurant keeps everything simple, the cups are even made of recycled paper.

Starbucks works hard to convey a certain image. They want people to realize that coffee isn’t simply something to wake them up, it can do a bit of good. This small restaurant does it’s part to help out in the community by volunteering their fare for local events.

The success of this small restaurant is also attributed to the proper treatment of their employees. They realize that friendly and people oriented servers are critical to the success of any business. You need to think of your employees as an extended family. Health benefits are available to any Starbucks employee who works at least 20 hours a week and has been with the company for more than the 90 day trial period.

It may not be easy to offer a health care plan, with the way health care cost keep rising. There are other ways to give perks to your employees too. Small restaurants can offer a server the chance to move up to a management position, when one becomes available. Some smaller restaurants may even offer small profit sharing opportunities to their best employees. (more…)

There is no better time to start a family style restaurant. The economy is hot and the market is inviting. With large franchise chains leading the way in overall sales one might wonder if family restaurants can still hold their own. The answer is yes. With proper management and dedication an idea can become reality.

Family style restaurants are known for their cozy atmosphere and often smaller physical structure. Your vision for your restaurant must be graphically portrayed in your business plan. Is there a specific culture or cuisine that you would like for your restaurant? For example, many Italian eateries and restaurants are owned and operated under a family name. The names of these establishments often use terms like Mama’s and Papa’s which convey a warm and personal tone. To start a family style restaurant means to meet and exceed the customer’s expectations.

At the heart of every great family restaurant is an equally great kids menu. Children are a cherished part of any family, and when it comes to customer service keeping the little ones happy is a priority. Adding healthy menu choices among the traditional picks will not only be good for the kids but will impress Mom and Dad too. And we all know that once a child had decided on his or her favorite place to eat out, that restaurant name will be the first place shouted out when asked. (more…)

When it comes to learning how to open a restaurant you may encounter a lot of negativity surrounding the idea. Since the restaurant industry is notorious for its low success rate, it can be difficult to get your foot in the door. There are several things that need to be taken into consideration when attempting to open your first restaurant.

It’s a well known fact that restaurant turnover is high. Many establishments change hands and locations several times over the years. You need to plan for the worst case scenario from day one because let’s face it, it’s better to be prepared than to be caught off guard. One of the first things needed to open a restaurant is a really great business plan. This includes determining what type of restaurant you wish to run down to every minute detail. Theme, cuisine and liquor sales are all aspects that need to be clearly thought out and planned for.

Taking a business management course in a post secondary institution would be incredibly beneficial. It’s also a good way to network through student business conferences. Networking is especially important when looking for an investor. The majority of restaurant owners generally don’t have that kind of up front money to cover the property taxes, licenses and overhead start up costs. (more…)

Talk about a difficult endeavor. Opening your first restaurant is not an easy achievement. Normally the process takes a year or more after you decide to go for it. And the planning involved is immense! You have to get a business license, sign a lease agreement for your building, equipment to buy, contracts with food providers, employees to hire, advertising, . . The list goes on and on!

But you continue on. Why? Obviously it is not the documented numbers for success. Some of those numbers say you have a 90% failure rate. But no worries, you’ve got something more to offer. This is your dream, and no analyst, or dumb numbers will take it away from you.

And you know what? You’re right! Any number that is published is still just a number, and numbers do not know passion. And hell, even if those numbers do hold out, you still did something to try to achieve your dream. Most people just think about it, but you’re doing it!

Even so, no matter how much you want your dreams of owning a successful restaurant to come true, they will not unless you work hard for it. Yes, sorry, but it is true. You have to work very hard for it. Really, really hard. I don’t think I can emphasize it enough, you have to work hard (times a googol) to fulfill your dream.

The following are three lessons I believe are the most important to make your new restaurant a success: (more…)

Researching information for a recent business plan, I came across an interesting number of 54,000. What is the big deal about that? Over 54,000 new restaurant business licenses were applied for in the last twelve months nationally. That is over 4,500 new restaurant licenses every month, or 90 licenses per state per month.

Out of these 4,500 monthly licenses, I wondered about how many of these new applicants are experienced operators who are really qualified to open a restaurant. As a new restaurant startup specialist, I can sadly attest to the fact that very few of these persons are fully qualified, and as a result, my firm, Restaurant Consultants, Inc. stays busy aiding those who are wise enough to ask for aid in the early stages of a startup restaurant.

The truth is that few people (just starting up) are fully competent at each task in a restaurant. As a new owner operator, you will need to master these skills beforehand—or get help. Frankly, if you do not, you will personally pay the price of being less profitable, and possibly the ultimate price of going out of business. Let us look at a few broad areas where you may need operational assistance:

1. Concept Development: Can you create a concept, position it in the marketplace, and grow the concept through licensing or franchising? What is your exit plan?

2. Pre-opening: Are you able to produce a Feasibility Study, a Business Plan, a Demographic Survey, and schedule the opening around a timetable and budget?

3. Staffing: Are you familiar with employment law, hiring, training, establishing personnel policies and scheduling all of your staff around a budget? Did we discuss management training and development yet? (more…)