Food! Everyone eats, so naturally everyone can own a successful restaurant, right? While everyone does in fact eat, not everyone is cut out to own a restaurant. However, if you can wrap your head around a few concepts, you will have a much better chance than most. While restaurants flood the modern world, it is interesting to note that only one in five restaurants survive. Most restaurant dreams end in a pile of debt and the owner standing next to the remnants of their business with a for sale sign on the door. Here are some essentials to make your dream a reality, as well as a profit!
Banks, loans, and research
It all starts with the bank. Unless you have a large pool of financial resources, you will start out by seeking a business loan. You can attempt to bring other "investors" on board, but personally I have seen it be disastrous for everyone involved. What is your target market? What will you be known for? These may seem like very basic questions, but the bank loan officer will not only want these answers confidently answered, but also the numbers describing how you plan to pull it off.
The other day I walked into the bank just to inquire about the types of loans for new businesses- mainly restaurants. I was instructed that there are 3 major types of loans for restaurants.
A start up business loan. These are the hardest to acquire, due to the amount of high risk associated with a new business venture.
Buying an existing business. These loans are just as hard to obtain, but there is at least a proven track record of the results from the business.
Buying into a franchise. This is a completely different ball game with requirements tailored the ownership of a franchise market.
For arguments sake, we will assume you want to open up a new business venture. The loan officer at my bank instructed me to (hypothetically) have as much cash as possible to bring to the table. Yes, naturally the more cash you can inject your account with, the greater your possibility of securing the loan. Plus, the more cash you are able to come up with shows the bank how serious and committed you are to your idea. Along with the cash, be sure to do your research!
The Menu
Start with your menu. The menu is the fundamental blue print of your restaurant. Decide what style of dining you will be providing, and plan your choices accordingly. A key point here is to NOT offer every style of item to the world. Yes it is nice to have options, but a lengthy menu puts even more stress on the kitchen, and the quality is almost always compensated for the quantity of items provided. Keep it simple. Chef Gordon Ramsay has said that every restaurant in America needs their own house burger. Burgers are easy to produce, appeal to a large number of people, and can set your restaurant apart regardless of your theme. Most every menu I have seen in America offers some sort of chicken item. Not just for small children, but even the pickiest of patrons will still order your Jamaican Jerk Salad.
The key here is that you don't need everything, but you do need a few things. Try as much as you can to pick a sector and stick with it. Add a few chicken items and a house burger, but the rest of your menu should compliment your theme and ideally pull everything your guests sees together. Short, simple, and tasty wins the race!
Location Location Location!
As the title suggest, location is EVERYTHING! Location will make or break your business. While already identified traffic "hot spots" are attractive, they can be very expensive. Look for your target market first. For example, a seafood restaurant would be more successful on or next to the beach, rather than a rural area. From there, with your target market in mind, look for a property that will best support your idea. Visit the property multiple times. Don't just visit the property during lunch or dinner. Go back throughout the day and especially on weekends to observe trends and traffic. Is your prospective location the center of all the night life, or is it a prime lunch spot perfect for an internet cafe? The true beauty of this idea is that it is yours! There is no right answer! Different locations and themes work for different owners. The bank is just going to want to ensure your idea will be profitable, and that you have done all the necessary planning before pulling the trigger with the loan.
Wait, we need equipment too?
So many new restaurateurs forget a very important asset. The equipment! Naturally, this ties into your idea and menu. If you are thinking about a cafe with deli sandwiches, you may not feel like dealing with a fryer. Analyze your menu. Determine what you will need to produce at the volume you are projecting. Outsource equipment if you can. For example, my four restaurants all have Pepsi machines. Pepsi has a deal where they own the fountains and simply lease it to you just for providing their product to consumers. Even better, at the end of the year they give you a rebate check for a percentage of their product sold. What about the music? There has to be music right? Many restaurants use Pandora or iTunes. Both of these options are very inexpensive and can be changed at anytime. Determine what you can outsource, and what are the best deals for your business. You really don't need to own everything!
Staffing
A staff can make or break your business. I went to an Irish pub on a cruise. I was so excited to have a brew and catch a game. A short while after I sat down, I noticed the bar seemed cold, uncomfortable, and well basically everything an Irish pub shouldn't be. Fast forward a year later. I went back on the same ship and decided to give the pub another go. To my surprise, the bartender greeted me upon entering and offered to pour me a brew off tap. We talked for quite a while, and I ended up going to see Gary multiple times throughout the vacation. Your staff alone has the power to make or cripple your business. The raw energy or dragging knuckles reflects on your entire establishment; and it is because of who you hire.
Don't get me wrong, good help is hard to find. Especially in the restaurant business. The hospitality industry is notorious for substance abuse and attracting people with a very basic education. Knowing this, it is critical that you (the business owner) do the interviewing. No other person can determine the right fit for your business like you can. Personally, I have found amazing success with college students looking to pick up some extra cash during the semester. The retention rate for any restaurant employee is is very low. Restaurants are notorious for high turnover, and lack of training.
Training
Ah training... The most fun you never want to have again, until next week. Thorough training is naturally the key to any job. Unfortunately, most restaurant owners and managers do not see the need to spend the time with a new employee to ensure they are properly trained. I have found that bringing the new employee in prior to opening, preferably, on a slower day for a brief orientation, paperwork, and an introduction to the equipment results in longer employment and less frustration for both parties. If a new employee is getting started and it gets busy, have a few extra sets of hands to compensate for the new employees lack of knowledge. It is totally appropriate to have the employee step aside until the kitchen catches up on the amount of orders. However, I have found that new employees want nothing more to be included. Some of my best managers like to cut the corners in training or even worse, not train at all. It frustrates the new employee, as well as your leading veterans. Give the new employee a small simple job to get them involved and acclimated with the volume of orders. Effective training is EVERYTHING! Don't take it for granted.
Forecasting, Inventory, & Purchasing
While these seem obvious, these actions alone will make or break a business in a matter or days. I had a friend in college who was working as a server at a cafe in the heart of downtown. I told him how much I enjoyed the wine there (New Age). He smiled and said "I'll be right back." He came back with a full bottle and said "Here on the house." Now already I know what you're thinking... Yes, it is indeed terrible and dishonest. Being that I'm on the owners/ operations side in my restaurants, I know how terrible this truly is. When a server offers you "free dessert" or a bottle of wine "on the house," they ultimately want you to show some sort of compensation on their behalf.
To my other friends disapproval, I left the bottle on the table unopened. I later asked him why he thought it was necessary to try and give away free wine that wasn't his. He just said "Well, they don't take inventory here... Everyone does it" My jaw just dropped. As a restaurant owner, you will notice that many people- your employees & customers, will try to make off with as much product or money as they can. Inventory is EVERYTHING in this business. I told my friend that the wine and everything else the staff loots comes off the business's bottom line. Naturally he didn't care to much. My point of the this story is that every restaurant who survives and thrives has a well managed inventory & cost system. Develop your own, or use a template off Google. Many businesses today use P.O.S. (Point of Sale) systems to track their labor, overhead, sales and place orders. P.O.S. systems are costly. Four one of my locations to get the most current P.O.S. installed would cost us $20,000.00. Yikes! The initial investment seems outrageously high, but with technological advances in computing, the business owner can track (anywhere from the cloud), the critical data that reflects their bottom line... Profit!
More Money= More Problems
Complaints... Every business has them. They are inevitable and happen from time to time. I always advise my staff to do what they can to make the situation better. No you cannot please everyone, and believe me you wont! But, if the guest has a legitimate complaint, it is naturally in your best interest to resolve it promptly and calmly. Some complaints are very trite and seem almost childish. They can be! Being a restaurant owner, you have the unique opportunity (more so with a bar) to meet people from all walks of life. If you have 1,000 customers a day, odds are at least 2 will show up angry and leave even angrier through no fault of your own. These types of complainers are usually irritated because the DOW was down again or they simply want something for nothing.The biggest point to remember is to not argue! Guests really don't have time for it, nor do they want to hear you defend whatever the issue is.
What about the ones who are irate? Well, the immediate solution is to remain calm. Calmly talk to the guest. Ask questions to help solve the issue. Most issues are not life or death... they just needed a Ranch dressing. My favorite line to use on a customer who is irate is, "What can I do to make you happy?" It never fails. In my years working and managing 4 restaurants not one customer has said.."No I refused to be helped!" From that point, it is just a negotiation game. Free food for a year? No... Need a hot order of fries? No problem whatsoever. Remember, it is easier to just solve it.
Likes on Twitter
Like the Imagine Dragons hit "Radioactive"- Welcome to the new age! If you haven't already guessed it, your business and even you need some sort of online presence. Many restaurants offer specials or fun facts on their Twitter page or Facebook profile. Online marketing helps drive sales and attract new customers who wouldn't normally know you exist.
That said, pay attention to what people are saying about you! Look for tweets about your business and be sure to pay attention to those Google reviews. They exist whether you know about it or not. Once you get up and running or if you are already established, look up your business on Google and Yelp! See what people are saying. Not every review is negative, but definitely keep up with the comments online.
Whatever you do, DO NOT write your own revue about your business. As tempting as it can be, phony reviews only hurt your integrity, and most of the time they come across as biased. I knew a woman who owned a local diner. The diner started out well, but after a year the business was crippled and had a reputation for being terrible. She would go on twitter and webpage and pick fights with patrons who gave her business a bad revue. It was so obvious it was her. How do I know? She would post a rebuttal after everyone's comment since the page was created. Just don't do it!
On the other hand, it is totally acceptable and appropriate to contact a guest who has expressed a negative comment about your business. I have even received a thank you card from a guest who had a terrible experience at one of my restaurants. Complaints are unfortunate, but are a chance to show why people need to dine with you over the guy cross the street. Don't look at complaints as a burden, but as an opportunity.
Still Reading?
As you can see, the restaurant business is very fun and lucrative, but it is a high stress and lifestyle business. Naturally, any job, especially a new business venture consumes most of the owner's life. Expect to work long hours. Even if you are not hands on cooking on the line, or physically bringing food to guests, being visible at your business is critical to having things run smoothly. Gordon Ramsay once told a failing restaurant owner that "Things are as good as they're ever going to be when you're here." That quote really hit home for me. Being in the restaurant, even if you just do your paperwork, is vital to the success of the business. This is your concept. Do not expect anyone (no matter how good they are) to nurture it, or put its best interest above their own. When I started managing a single location, I learned that I could be highly effective as long as I was present. It is insane how being visible keeps everyone on their game, and ultimately honest. You can pick your nose outside and have it be a disaster, or pick it inside and have things be smooth as silk. No, please don't actually do this, but do believe that being visible to your managers and employees is absolutely critical to the success of the business.
There are countless topics to address concerning restaurants. If you think you can handle the lifestyle of the business and are totally committed to your bottom line, go for it! You won't regret it! This business is not for everyone, but if your coffee is something unique or your fried chicken is the next best thing, then you owe it to yourself to make it happen! Ownership is a very fulfilling role, but be ready to handle challenges from all angles at any point (even at 3am). With that, go! Go live the dream and most of all... HAVE FUN! Cheers!
Article Source: http://EzineArticles.com/?expert=Alexander_J_Bortone
Article Source: http://EzineArticles.com/8008538
Banks, loans, and research
It all starts with the bank. Unless you have a large pool of financial resources, you will start out by seeking a business loan. You can attempt to bring other "investors" on board, but personally I have seen it be disastrous for everyone involved. What is your target market? What will you be known for? These may seem like very basic questions, but the bank loan officer will not only want these answers confidently answered, but also the numbers describing how you plan to pull it off.
The other day I walked into the bank just to inquire about the types of loans for new businesses- mainly restaurants. I was instructed that there are 3 major types of loans for restaurants.
A start up business loan. These are the hardest to acquire, due to the amount of high risk associated with a new business venture.
Buying an existing business. These loans are just as hard to obtain, but there is at least a proven track record of the results from the business.
Buying into a franchise. This is a completely different ball game with requirements tailored the ownership of a franchise market.
For arguments sake, we will assume you want to open up a new business venture. The loan officer at my bank instructed me to (hypothetically) have as much cash as possible to bring to the table. Yes, naturally the more cash you can inject your account with, the greater your possibility of securing the loan. Plus, the more cash you are able to come up with shows the bank how serious and committed you are to your idea. Along with the cash, be sure to do your research!
The Menu
Start with your menu. The menu is the fundamental blue print of your restaurant. Decide what style of dining you will be providing, and plan your choices accordingly. A key point here is to NOT offer every style of item to the world. Yes it is nice to have options, but a lengthy menu puts even more stress on the kitchen, and the quality is almost always compensated for the quantity of items provided. Keep it simple. Chef Gordon Ramsay has said that every restaurant in America needs their own house burger. Burgers are easy to produce, appeal to a large number of people, and can set your restaurant apart regardless of your theme. Most every menu I have seen in America offers some sort of chicken item. Not just for small children, but even the pickiest of patrons will still order your Jamaican Jerk Salad.
The key here is that you don't need everything, but you do need a few things. Try as much as you can to pick a sector and stick with it. Add a few chicken items and a house burger, but the rest of your menu should compliment your theme and ideally pull everything your guests sees together. Short, simple, and tasty wins the race!
Location Location Location!
As the title suggest, location is EVERYTHING! Location will make or break your business. While already identified traffic "hot spots" are attractive, they can be very expensive. Look for your target market first. For example, a seafood restaurant would be more successful on or next to the beach, rather than a rural area. From there, with your target market in mind, look for a property that will best support your idea. Visit the property multiple times. Don't just visit the property during lunch or dinner. Go back throughout the day and especially on weekends to observe trends and traffic. Is your prospective location the center of all the night life, or is it a prime lunch spot perfect for an internet cafe? The true beauty of this idea is that it is yours! There is no right answer! Different locations and themes work for different owners. The bank is just going to want to ensure your idea will be profitable, and that you have done all the necessary planning before pulling the trigger with the loan.
Wait, we need equipment too?
So many new restaurateurs forget a very important asset. The equipment! Naturally, this ties into your idea and menu. If you are thinking about a cafe with deli sandwiches, you may not feel like dealing with a fryer. Analyze your menu. Determine what you will need to produce at the volume you are projecting. Outsource equipment if you can. For example, my four restaurants all have Pepsi machines. Pepsi has a deal where they own the fountains and simply lease it to you just for providing their product to consumers. Even better, at the end of the year they give you a rebate check for a percentage of their product sold. What about the music? There has to be music right? Many restaurants use Pandora or iTunes. Both of these options are very inexpensive and can be changed at anytime. Determine what you can outsource, and what are the best deals for your business. You really don't need to own everything!
Staffing
A staff can make or break your business. I went to an Irish pub on a cruise. I was so excited to have a brew and catch a game. A short while after I sat down, I noticed the bar seemed cold, uncomfortable, and well basically everything an Irish pub shouldn't be. Fast forward a year later. I went back on the same ship and decided to give the pub another go. To my surprise, the bartender greeted me upon entering and offered to pour me a brew off tap. We talked for quite a while, and I ended up going to see Gary multiple times throughout the vacation. Your staff alone has the power to make or cripple your business. The raw energy or dragging knuckles reflects on your entire establishment; and it is because of who you hire.
Don't get me wrong, good help is hard to find. Especially in the restaurant business. The hospitality industry is notorious for substance abuse and attracting people with a very basic education. Knowing this, it is critical that you (the business owner) do the interviewing. No other person can determine the right fit for your business like you can. Personally, I have found amazing success with college students looking to pick up some extra cash during the semester. The retention rate for any restaurant employee is is very low. Restaurants are notorious for high turnover, and lack of training.
Training
Ah training... The most fun you never want to have again, until next week. Thorough training is naturally the key to any job. Unfortunately, most restaurant owners and managers do not see the need to spend the time with a new employee to ensure they are properly trained. I have found that bringing the new employee in prior to opening, preferably, on a slower day for a brief orientation, paperwork, and an introduction to the equipment results in longer employment and less frustration for both parties. If a new employee is getting started and it gets busy, have a few extra sets of hands to compensate for the new employees lack of knowledge. It is totally appropriate to have the employee step aside until the kitchen catches up on the amount of orders. However, I have found that new employees want nothing more to be included. Some of my best managers like to cut the corners in training or even worse, not train at all. It frustrates the new employee, as well as your leading veterans. Give the new employee a small simple job to get them involved and acclimated with the volume of orders. Effective training is EVERYTHING! Don't take it for granted.
Forecasting, Inventory, & Purchasing
While these seem obvious, these actions alone will make or break a business in a matter or days. I had a friend in college who was working as a server at a cafe in the heart of downtown. I told him how much I enjoyed the wine there (New Age). He smiled and said "I'll be right back." He came back with a full bottle and said "Here on the house." Now already I know what you're thinking... Yes, it is indeed terrible and dishonest. Being that I'm on the owners/ operations side in my restaurants, I know how terrible this truly is. When a server offers you "free dessert" or a bottle of wine "on the house," they ultimately want you to show some sort of compensation on their behalf.
To my other friends disapproval, I left the bottle on the table unopened. I later asked him why he thought it was necessary to try and give away free wine that wasn't his. He just said "Well, they don't take inventory here... Everyone does it" My jaw just dropped. As a restaurant owner, you will notice that many people- your employees & customers, will try to make off with as much product or money as they can. Inventory is EVERYTHING in this business. I told my friend that the wine and everything else the staff loots comes off the business's bottom line. Naturally he didn't care to much. My point of the this story is that every restaurant who survives and thrives has a well managed inventory & cost system. Develop your own, or use a template off Google. Many businesses today use P.O.S. (Point of Sale) systems to track their labor, overhead, sales and place orders. P.O.S. systems are costly. Four one of my locations to get the most current P.O.S. installed would cost us $20,000.00. Yikes! The initial investment seems outrageously high, but with technological advances in computing, the business owner can track (anywhere from the cloud), the critical data that reflects their bottom line... Profit!
More Money= More Problems
Complaints... Every business has them. They are inevitable and happen from time to time. I always advise my staff to do what they can to make the situation better. No you cannot please everyone, and believe me you wont! But, if the guest has a legitimate complaint, it is naturally in your best interest to resolve it promptly and calmly. Some complaints are very trite and seem almost childish. They can be! Being a restaurant owner, you have the unique opportunity (more so with a bar) to meet people from all walks of life. If you have 1,000 customers a day, odds are at least 2 will show up angry and leave even angrier through no fault of your own. These types of complainers are usually irritated because the DOW was down again or they simply want something for nothing.The biggest point to remember is to not argue! Guests really don't have time for it, nor do they want to hear you defend whatever the issue is.
What about the ones who are irate? Well, the immediate solution is to remain calm. Calmly talk to the guest. Ask questions to help solve the issue. Most issues are not life or death... they just needed a Ranch dressing. My favorite line to use on a customer who is irate is, "What can I do to make you happy?" It never fails. In my years working and managing 4 restaurants not one customer has said.."No I refused to be helped!" From that point, it is just a negotiation game. Free food for a year? No... Need a hot order of fries? No problem whatsoever. Remember, it is easier to just solve it.
Likes on Twitter
Like the Imagine Dragons hit "Radioactive"- Welcome to the new age! If you haven't already guessed it, your business and even you need some sort of online presence. Many restaurants offer specials or fun facts on their Twitter page or Facebook profile. Online marketing helps drive sales and attract new customers who wouldn't normally know you exist.
That said, pay attention to what people are saying about you! Look for tweets about your business and be sure to pay attention to those Google reviews. They exist whether you know about it or not. Once you get up and running or if you are already established, look up your business on Google and Yelp! See what people are saying. Not every review is negative, but definitely keep up with the comments online.
Whatever you do, DO NOT write your own revue about your business. As tempting as it can be, phony reviews only hurt your integrity, and most of the time they come across as biased. I knew a woman who owned a local diner. The diner started out well, but after a year the business was crippled and had a reputation for being terrible. She would go on twitter and webpage and pick fights with patrons who gave her business a bad revue. It was so obvious it was her. How do I know? She would post a rebuttal after everyone's comment since the page was created. Just don't do it!
On the other hand, it is totally acceptable and appropriate to contact a guest who has expressed a negative comment about your business. I have even received a thank you card from a guest who had a terrible experience at one of my restaurants. Complaints are unfortunate, but are a chance to show why people need to dine with you over the guy cross the street. Don't look at complaints as a burden, but as an opportunity.
Still Reading?
As you can see, the restaurant business is very fun and lucrative, but it is a high stress and lifestyle business. Naturally, any job, especially a new business venture consumes most of the owner's life. Expect to work long hours. Even if you are not hands on cooking on the line, or physically bringing food to guests, being visible at your business is critical to having things run smoothly. Gordon Ramsay once told a failing restaurant owner that "Things are as good as they're ever going to be when you're here." That quote really hit home for me. Being in the restaurant, even if you just do your paperwork, is vital to the success of the business. This is your concept. Do not expect anyone (no matter how good they are) to nurture it, or put its best interest above their own. When I started managing a single location, I learned that I could be highly effective as long as I was present. It is insane how being visible keeps everyone on their game, and ultimately honest. You can pick your nose outside and have it be a disaster, or pick it inside and have things be smooth as silk. No, please don't actually do this, but do believe that being visible to your managers and employees is absolutely critical to the success of the business.
There are countless topics to address concerning restaurants. If you think you can handle the lifestyle of the business and are totally committed to your bottom line, go for it! You won't regret it! This business is not for everyone, but if your coffee is something unique or your fried chicken is the next best thing, then you owe it to yourself to make it happen! Ownership is a very fulfilling role, but be ready to handle challenges from all angles at any point (even at 3am). With that, go! Go live the dream and most of all... HAVE FUN! Cheers!
Article Source: http://EzineArticles.com/?expert=Alexander_J_Bortone
Article Source: http://EzineArticles.com/8008538
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