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Brian Cooper, Brian Floody, and Gina McNeill
Self-Counsel Press (a division of) International Self-Counsel Press USA Canada
1 Advantages 1. The restaurateur as entrepreneur and entertainer The menu Trends Types of restaurants 4. vii . 2.Contents Introduction Part I: Evaluating Your Dream 1 Before You Start 1. 4.1 Advantages 2. casual restaurant 4.4 Social and contract caterers xv 1 5 5 6 6 7 7 8 8 9 11 11 11 12 12 12 13 14 14 15 15 17 2 The Structure of Your Business 1.or fine-dining room 4. 3.2 Disadvantages Franchising Building your team 2. The sole proprietorship 1. 3.3 The quick-service or fast-food restaurant 4. 5.2 Disadvantages The corporation 3.2 The family. 4. mid-size.1 Advantages 3.1 The gourmet.2 Disadvantages The partnership 2.
2 Population profile 2.7 The real estate marketplace Pre-opening marketing strategy 19 19 21 23 23 24 25 27 27 27 29 31 32 32 35 37 38 38 43 44 44 45 3.2 In Canada Trademarks 47 51 51 51 51 52 52 52 53 53 2.1 Hard costs 1.4 The cash-flow analysis Resources 2. The business plan: An overview The feasibility study 2. 3.6 Cultural.1 Target area analysis 2.2 Marketing implications 1.4 Competition analysis 2.2 The break-even analysis 3.1 The income statement 3.5 Industry and tourism profile 2. 4. and sporting events 2. 3. viii Start & run a restaurant business . 2.3 Economic profile 2.1 In the United States 2. 4 The Financial Plan 1. Part II: Start-Up 5 Start-Up Practicalities 1.1 Your own tastes 1.3 The balance sheet 3.3 The Business Plan: Feasibility Study 1. The capital budget 1.2 Soft costs Investment plan Financial statements 3.3 Copyright Registering your business 2. recreational. Naming your restaurant 1.
5.4. flatware.2 Downtown/City Freestanding versus mall location Zoning Leasing versus purchasing 3.4 Kitchen/bar small wares 2. job description.1 Sourcing equipment 1. 5. Equipment 1.5 Dinnerware (china. glassware.4 Kitchen equipment 1. 2. and job specifications Recruitment Contents ix .2 New versus used equipment 1.2 Chairs 2. 7 Design and Renovation 1. 4. 3.3 Other furnishings 2. 4. 9 Your Employees 1. Building your dream What designers can do for you Design Décor Designing without a designer A word about renovation 8 Equipment and Furnishings 1. Job analysis.5 Front-of-the-house equipment Furnishings 2.3 Buy versus lease equipment 1. 6. linen) 2. 6 Obtaining licenses and permits Insurance 53 54 57 57 58 58 59 59 60 60 65 65 66 66 67 68 69 71 71 72 72 73 73 74 75 75 75 78 78 79 85 85 86 Choosing Your Restaurant’s Location 1. 2. Finding the fit Downtown versus suburban 2.1 Suburban 2. 2. 5.1 Tables 2.
2. 4.1 Sourcing the pros 2. 2. 4.1 Log books and incident and accident reports 9.1 Wine pricing 4. Keeping customers satisfied Service styles Front-of-the-house considerations Dealing with difficult customers 12 Marketing 1. x Start & run a restaurant business .3 Resource guide 103 107 107 108 109 112 113 113 115 117 117 118 119 120 123 124 124 126 126 127 127 128 129 11 The Art of Service 1. and what they have to offer 2.2 Designing your wine list 4. 8.3 Merchandising 1. 5. 4. Selection Orientation and training Policy and procedure manuals Reward and discipline Performance appraisals Pay scales Management communications 9.5 Promotions Professionals.1 Advertising 1. 7. 3. 9. 3. 6.3.2 Managers’ meetings 88 91 91 95 95 96 96 96 100 Part III: Managing Your Operation 10 Your Menu 1.2 Sales 1. Ongoing marketing strategies 1. Types of menus Menu pricing Menu design and development Developing a wine list 4.4 Public relations 1.
3 People 4. Par stocks 7.3. Cash control 12. Service area control 12.3 Skims 13. Standard recipes 3.1 Product 4.4 Counterfeit money Contents xi . Building your marketing base 3.2 Daily sales reconciliation 12. Standard purchase specifications 4. Supplier selection 5. 6.2 Place 4. 13 Cost Control 1. Till procedures 13. Receiving 8.2 Spotters 13. Keep control systems simple 2.5 Promotions The restaurant critic: Friend or foe? Web opportunities 130 130 132 132 133 133 133 133 133 134 134 137 137 140 143 143 144 146 146 147 148 151 151 153 153 154 154 157 157 158 158 158 4.2 The role of service in marketing Increasing sales by using the five “Ps” of marketing 4. Purchasing 6.4 Price 4. Issuing 11.1 A loyal customer is free advertising 3.1 Cashing out 12.3 Floats 13. Storage 9.1 Pulling the till 13. 5. Perpetual inventories 10.
Conclusion Bibliography Checklists 1 2 3 4 5 6 7 Business plan checklist Market feasibility study checklist POS system Hiring/interview checklist Orientation procedures Floor training checklist Analyze your readiness to start and run your restaurant or bar 177 179 22 28 76 90 92 93 175 xii Start & run a restaurant business .1 Bar service 3. 6. 3. Responsible service of alcohol Handling difficult situations Bar service and products 3.3 Disposable goods 4.2 Bar products Bar equipment and small wares 4.1 Bar equipment 4.1 Advertising 8.14 Bars and Pubs 1.3 Public relations 159 160 160 162 162 162 164 164 165 166 166 166 166 167 168 169 170 170 171 173 4. 7.1 Mechanical controls Entertainment Advertising and Promotion 8. 8. 5.4 Bar condiments and juices 4.2 Promotional strategies 8.2 Small wares 4. 2.5 Garnishes Glassware Control Systems 6.
Samples 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Construction budget cost summary Equipment list (Generic) Income statement Kitchen small wares Job description Job specifications Job ad Performance appraisal Meeting agenda Standard recipe Food cost form Purchase order Inventory Perpetual inventory/bin card Server cash-out sheet Bartender’s summary 34 36 39 80 87 88 89 97 101 141 142 145 149 150 155 156 Worksheet 1 Competition analysis 26 Contents xiii .
Survey your customers while they are dining in your operation. A prospective restaurateur must consider both the concept and the business aspect of his or her new venture. Your success depends on your ability to entertain your customer in your personalized theater. and even the garbage can be an indicator of success or failure. as in a theater. even a magician). This chapter briefly highlights some important areas to think about before developing your plan for your new operation. and you are wise to listen carefully to their comments. Your menu is your script. Predicting which of the latest trends will keep your customers coming back when there are so many restaurants competing for their time and money is theater at its best. Your customers act on a daily basis as your critics. The Restaurateur as Entrepreneur and Entertainer The successful restaurateur is a combination of entrepreneur (or businessperson) and entertainer (at times.Chapter 1 BEFORE YOU START Starting a restaurant involves many decisions. 1. often they will provide you with valuable tips on ways to improve your operation. and your ability to balance finances determines the success or failure of your season. your employees are your players. you have a chance to make 5 . If customers are dissatisfied with their meal and tell you. A restaurant or pub is simply a retail business that has been decorated and staffed to fit a specific production. You can trust plates returning from customer tables.
The current fad of sandwich wraps in quick-service restaurants may or may not become a trend. is built around your choice of menu items. It is critical to recognize whether your new idea is a trendsetter or merely a fad that will come and go within a season. The Menu The menu is the most important document you will ever prepare. Co-author Brian Cooper. and is a It determines who your customers will be and influences your employee selection. The following are only a few of the reasons your menu is crucial to your success: a It describes your dream to your potential customers. your ability to anticipate or initiate these trends will lead you to fame and fortune. (For more about menus. only put items on a menu that in a pinch — or in a snowstorm or whenever his cook gave him an ultimatum — he could prepare himself until a replacement could be hired and trained. Everything. Your employees’ skill level will be less important than it would be if you have a more sophisticated menu. to their great success. your menu then necessitates a deep-fat fryer. in all his years of operating his own restaurants. At the time of writing this book. If. The restaurant business is constantly looking for new ways to draw in customers. have bucked these trends. These trends take years to develop. Trends It is important for you to differentiate between trends and fads. are short term and disappear quickly once they saturate the market or when the public tires of them. a It clearly influences your décor plan. One simple decision influences a great deal of your dream.”) 2. your specialty will be the best Buffalo wings in town. a It is a starting point for developing your pro forma income statement.corrections and keep them as patrons. there has been a trend toward light and healthy foods and away from deep-fried foods and heavy sauces. depending on customer support. A casual décor usually complements such a menu. “Your Menu. You will probably have a fast 6 Start & run a restaurant business . and your restaurant should be located near a family population base. and some will become part of the food culture for decades. on the other hand. however. but also of them telling their friends about their negative experience with your establishment. including your choice of partners and staff. and a fire-extinguishing system in your kitchen. Before you look for partners to invest in your operation. Many restaurants. Continue to operate without making changes and you run the risk not only of losing your loyal customers. Fads. a It influences the design and layout of your kitchen and restaurant. turnover of customers and a low check average. a It highly influences your location selection and marketing plan. prepare a draft menu for discussion. see Chapter 10. Place items on that menu only if they are within your personal capacity to prepare. an exhaust system. 3. for instance. On the one hand.
but try choosing the one from those mentioned below that most closely describes your operation and work with it throughout this guide. specialty coffee. The entire meal is a performance event that can take several hours.or fine-dining room This restaurant is best described as a formal dining room. where the higher costs of operating can be absorbed into a larger operating budget. This movement is still reflected in today’s menu offerings. These restaurants were often found in hotels. Another trend that continues to grow as our population ages is “heart smart” menu offerings. who leaves his or her imprint on the restaurant’s menu. experience. commissioned salespeople paid a gratuity based on a percentage of the total bill presented at the end of the performance. offered only in “veggie” restaurants. in effect. since customers will often go out of their way to come to such a destination restaurant. the customer turnover. The ability to merchandise that profitable appetizer. the second cocktail or bottle of fine wine. but are also low in both saturated fat and cholesterol and are healthy. that sinfully rich dessert. Customers are demanding menu choices that are not only delicious. 4. Location is not usually the key to the restaurant’s success. Chefs are now celebrities. stay current with your clientele. and customers are demanding true ethnic cuisines and indigenous ingredients. They are clamoring for authentic food that represents its country’s fare and flavors. The prices tend to be high. Types of Restaurants There are dozens of restaurant concepts from which you can choose in planning your dream. Vietnamese. or after-dinner beverage will turn a fine meal into a profitable feast. when we saw a strong Asian influence blending with North American or Californian cuisine. We have also seen a shift in where the food is prepared. Malaysian. To be successful in this industry you will have to be continually prepared to grow. 4. today’s customer would not be impressed with the “noveau cuisine” offerings of the 1980s. but with careful research. The wait staff are. Health food is no longer an alternative cuisine. For example. and have fun! It is unlikely that any one concept will meet all the goals you have in mind.1 The gourmet. usually with tablecloths and linen napkins (hence the term “white-tablecloth operation. who is skilled in building a high guest check. low. We have purposely limited the kinds of restaurants discussed here to a few general types. Before your start 7 .therefore always changing and evolving with the trends of the day. Organic foods are now becoming mainstream as more people demand that food producers and those preparing foods act responsibly. This decade took multiculturalism from the streets and neighborhoods to the table. Service is provided by a well-trained wait staff professional. The trend has been to take the kitchen out of the back of the house and bring it to center stage.” which is sometimes used to describe this sort of restaurant). and a lot of perspiration — and even some luck — you will develop a unique style of operation that fits your vision and strengths. and the customer wants to be part of the action. The artistic features are provided by a well-known chef. and Taiwanese menus are growing more popular than before as this trend increases. often sitting at tables in full view of the kitchen. Fusion was the word in the 1990s.
Usually 4. and therefore the labor costs can be kept down. ambiance. Providing food and service at a family restaurant doesn’t require as much of a performance on the part of you and your staff as the fine-dining experience would. In most cases these restaurants are chef driven. eat. There has been a growth in the number of this kind of restaurant. dual-career families. The style of service is minimal so that a fast turnover of customers will be possible. The skill level of the cooks will be minimal.Care must be taken so that when your chef leaves. These establishments rely heavily on the business-expense-account and specialoccasion diners.3 The quick-service or fast-food restaurant This style of restaurant usually features paper napkins and little or no service. you want to encourage adults to order alcoholic beverages and family members to order highly profitable desserts. Specialization in a quick-service restaurant is important. you don’t lose your clientele to his or her new location. You will need to design a menu that aids the customers in quickly making choices from a list of profitable items. Your challenge is to find ways to distinguish your concept from the similar operations in your marketplace. making way 8 Start & run a restaurant business . unless you have had extensive hands-on experience. and the chef would have some ownership. targeted menu that encourages customers to make up their minds. and revenue must be generated by high turnover. casual restaurant (also known as the bistro or grill) These restaurants lend themselves to owner operation and will rely on the local population for support. At the same time.2 The family. as people eat out more frequently due to longer working hours. and higher incomes. mid-size. Here is where the design. The owner’s personality can be an important factor in making this difference. Most quick-service restaurants feature take-out and/or delivery. 4. location is key to success. and quality of both food and service can be used to do just that. and a visit to such a restaurant often serves the customer as an evening’s entertainment. Family restaurants share characteristics with both the quick-service restaurant (discussed below) and the fine-dining restaurant (discussed above). We do not recommend that you choose a fine-dining concept for your first venture into the restaurant industry. The food is often purchased frozen and fully prepared so that the menu items can be quickly cooked and served. The average checks are much lower than in other types of restaurants. assisted by a friendly and helpful server. but you will want to get to know your customers personally and make them feel at home. Locating even a donut or bagel shop on the wrong side of the street or highway can doom an otherwise excellent concept. and vacate the premises as quickly as possible. in both the front and back of the house. You want to present a small. in several wellrun fine-dining operations. Costs are very high. who again is a commissioned salesperson. Here. you do not want to make your guests so comfortable that they will stay so long as to prevent you from re-using the table for enthusiastic waiting guests.
and dinner. quickservice.4 Social and contract caterers Although not dealt with specifically in this book. In a situation like this one. One of Brian Cooper’s most successful restaurant friends had a business located in a large office tower. eagerly waiting clients. Preparing for a large catering contract provides additional. are underused.for new. highly skilled and expensive employees Before your start 9 . In the slow periods between breakfast. and fine-dining restaurants find that adding home. wedding. Many family. 4. much-needed revenue. social and contract caterers are a major part of the restaurant industry. Whether located in a small or large hotel. you must always take care that the supermarket doesn’t decide that it can open its own deli and cut you out. a school. however. Many fastservice restaurants fail because of the addition of unneeded and unprofitable items that are not compatible with the original concept. lunch. He found that catering to office parties and boardrooms became the most successful and profitable part of his business. Another friend found that preparing specialty (take-home) meals and featuring them in a local supermarket became so successful that a separate facility was needed to produce sufficient take-home items. they form part of a fast-growing industry. and also provides management and staff with variety in their daily routine. or business catering allows them finally to be profitable. a hospital. or a retirement home.