Opening a Restaurant

If you think that starting a restaurant (no matter small or big) is an easy task, and all you need is just to hire a good executive chef, this article will dispel your illusions. Opening a restaurant is the same as if to build up a fleet and make up ground forces within one country, start a war against your awful neighbor than, and win it. Are you ready?

Here is a custom marketing plan for all types of business:

  1. market research;
  2. finding an empty market niche;
  3. entering the niche and working in it.

All the experts are unanimous in the opinion that this plan doesn’t work for restaurant business. A good restaurant will be successful in different niches only if it will be really a good restaurant.

How Much Does It Cost to Start a Restaurant

It all depends on the goals that you are going to achieve. It will cost owner from $850 to $1500 per square meter for building and equipping a restaurant on a turn-key basis, including all commercial premises, production facilities and other rooms. Add to this amount the commercial property price and you will get the cost of average-sized restaurant opening (200 square meters approx.). It will do something about 400 thousand dollars.

An investment’s payback period for a restaurant is equal to 1-5 years.

The First Steps

Make a list of all suitable food premises, buildings or lands. The restaurant’s location often determines its concept.

On the other hand, locating in the center, on the crossing of transport or walking routs, is not suitable for a premium class establishment with haute cuisine and expensive dishes. The location will better be occupied with a restaurant with moderate prices, as a family-based restaurant, which stakes on the number of customers or their turnover.

Give up the idea of recreating the copy of restaurant that you’ve especially liked somewhere abroad, kind of a restaurant of your dream, for it will inevitably lead your establishment to the verge of closing.

The restaurant living period is short. It makes three or five year at best. You will have to grow confident in customers’ retaining skills. As famous restaurateurs say, if a customer returns for the third time, you may call yourself a lucky man.

Cuisine

At first, you should research the market and than evaluate truly your chances. If you are eager to start a small restaurant with exquisite Mumbo Jumbo island’s cuisine think about providing a translator for your executive chef. Who will guarantee that the hired employee is a world class chef, but not a cheater, who was a dishwasher in an eats on his motherland? Where will you buy fresh seafood and vegetables?

Dealing with construction permits

List of all needed licenses and permits:

  • Building permits. It is required for new construction and renovations to existing structures. It is obtained from local municipalities. The requirements may vary in different cities and states.
  • Business license. It is obtained from city’s Finance Department and gives an official right to conduct business.
  • Employer identification number (EIN). It is obtained from the IRS and is required for taxation.
  • Food service license. It is required in all countries. It regulates proper food handling in sphere of food business. It is obtained from local Health Department after your future restaurant’s inspection.
  • Liquor license. It is required for alcohol distribution and is obtained from state’s Alcoholic Beverage Control agency. This license’s getting is a long and challenging process, so you had better obtain it before restaurant official launch.

Restaurant Equipment

You must define the set of kitchen equipment for your restaurant and order it at the very beginning of its construction. Keep in mind that ventilation system is the most complicated equipment.

As for restaurant equipment purchasing and arranging, food technologist must be responsible for this process. A food technologist is usually recommended by a restaurant architect designer. But in some people’s opinion, it must be executive chef who selects and arranges restaurant equipment.

So, don’t try to save money on the equipment. If you buy cheap furniture, it will break down a year later. Drinkware is broken even by Christians, and water-closet tank works like a beaver, how you may guess. So, trust all this to qualitative products suppliers only.

Don’t forget to speak to experienced restaurateurs. It won’t do harm to anybody, if a newcomer spends a quarter of an hour in a restaurant kitchen and talks to its executive chef.

Executive Chef and Crew

The number of members in the executive chef’s crew depends on a restaurant dining room seating capacity. For example, one Kiev-based establishment possesses 100 seats and kitchen staff consisting of 20 employees that work in two shifts 10 workers each.

Besides, you must hire prep cooks, who will make semi-products ready to cook, cut off the ends or clean meat from streaks and so on, before providing it to cooks.

You also must have kitchen personnel, that will peel potatoes, wash skillets, etc.

A foreign executive chef may apply for so-called compensation package that gives the right to visit his family on the motherland twice a year, and housing allowance. You will have to go to the executive chef’s native country in order to choose and hire him or her anyway. Chef must pass through your examination on the place in order to confirm skills.

Usually the rest staff is hired by a manager. Candidates are searched according to friends’ recommendations, through advertisement, and by means of staff agencies. The first way is more preferable for the key positions in the restaurant: manager, accountant, and chief security officer. The rest personnel are hired though ads of by means of staff agencies: these are servers, bartenders, procurement agents, technician workers and office employees.

The special attention must be paid to experienced servers recruitment. They are the ones who contact with inadequate customers all the days through. Inexperienced servers won’t cope with responsibilities and spoil your reputation.

Products Sourcing

A newly-opened restaurant may count on 10-15% occupant load. The executive chef estimates how many products he needs for the first time. You can trust sourcing the initial libation stock for a lead bartender in the same way. Some managers prefer to do it by their own means taking in account the high cost for alcohol.

A good restaurant’s wine list must include no less than 70 items and a sommelier.

Menu

Composition

It is considered that six meat, six fish and 3-4 poultry mains are enough for a mid-market restaurant.

A top-of-the-market restaurant’s menu must include more items, but not plenty of them in order not to confuse unsophisticated customers.

The menu must be oriented for the restaurant’s maximum yield. Unpopular dishes must be excluded time after time.

Prices

As a rule, restaurateurs choose only one pricing strategy – to compare it with nearby restaurants. This rule is especially significant for the restaurants located in the center.

In the past restaurateurs used to say that people don’t care dishes prices for they visit the restaurant to show off their status or with purpose to make a gift or eating out at somebody else’s expense. Today they operate another pricing formula: “give the best at reasonable price.”

The lowest price level is defined according to the consumer price index, the highest depends on the director’s imagination. The markup varies from 10% to many hundred of percents. There are dishes with obligatory minimal markup – business lunch and kids menu.

Food Service Vendors

The first enemy of the restaurant is unstable product sourcing. Today customers see the dish on the menu, and the other day a vendor says that he can’t deliver the ingredients required for this dish. A good procurement agent must have 3-10 restaurant supply sources for each products group in order he could change them any time.

It is better to choose retail vendors. Though, some people consider that vendors must be divided in groups. This will help you in case one vendor has some troubles, you will be able to deal with others.

This, however, is not the case. All procurement agents have to put up with monopoly and high prices of 3 or 4, and sometimes less number of vendors. But all of them are unanimous in the opinion that it is costly to buy the products from vendors in stead of dealing with custom house and certificates.

Every evening each cook supervises what products are in lack, makes an order and give it to executive chef. Chef unifies the order and gives it to procurement agent. Procurement agent is a person who must maintain an order in the evening and source all needed foods to the restaurant in the next morning an hour before its opening. In the afternoon he must source the foods that are still available in the stock but may over during the shift. Procurement agents must always have several variant of sourcing products in case of vendor’s failure. It is impossible to supervise a procurement agent in all this mess. Who knows the prices of this or that product he bought today in the market? That is the reason why the restaurant directors have mixed feeling about them.

The foods with a long shelf life are sourced by a stockman, who also maintains kitchen staff orders. He calls vendors and asks to deliver the needed products instead of visiting them as procurement agent does.

Bar

The bar provides 40% of restaurant daily sales.

Bar is a some kind of Inner Mongolia of each restaurant. It is a state in state. Sometimes, bar counter habitués never leave it or take a table in the dining area. They don’t need it because servers may serve them a dish right on the bar counter. The bar must have all types of libation, starting from classic and ending with foreign latest.

The restaurant starts from the desire to open it. If the owner pursues the goal to earn money, he will fail. The future owner must decide whether to buy the promoted brand or to create its own. The beginning owner had better choose the first variant. Besides, the restaurant needs the constant developing.

Tips to Avoid Mistakes

  1. Don’t try to build the restaurant concept in the way it could satisfy your desires only. It will not be you, who visit the restaurant. It will do other people.
  2. Don’t save. Remember, that cheapskate pays twice.
  3. Pay attention to your management staff. It’s all about the people.

New Dishes and its Tasters

You may invite familiar executive chefs for tasting and conduct a survey. If the dish doesn’t meet the price strategy of the restaurant, manager suggests the executive chef to reduce the expensive ingredient amount or to substitute them with cheaper ones.

The further step of a new dish developing is to create a recipe card, containing the information about the ingredients and cooking techniques. This card will allow the cook the dish by means of other cooks but not only by executive chef, who has created it.

Post Scriptum

What is the main thing in any restaurant concept? Customers will forgive you the absence of a dish on the menu, the lack of specialties, and poor wine list. They won’t forgive you if you will meet them in another way if you have treat the guest. What is the difference between a restaurant and a fast food establishment? The main principle of the fast food service – is to serve a customer in a proper way, but a server must be unnoticeable. As for restaurants, people visit them in order to feel the family atmosphere, the atmosphere of club or pub… No matter the restaurant and pubs are as different as planets, they have a common feature – an atmosphere of love, that embraces a customer as soon as he or she walks through doorway. Even a newcomer must feel that she was let into family and everybody likes him or her. As a rule, restaurant habitués are a very solitary people…

Related Links

Start an Online Store

This is a step-by-step guide to implementing commercial ideas on the Internet and an answer for a question how to start a business for free. This is a blueprint for everybody. Even if you live in a small town, all you need to do is to get web access and stay online. Starting an online store/boutique from your home, where you could sell dozens of different products, is quite easy. But before you start, you should know several things about the process of a webstore’s creation. Take this article for a partner who will support you and give easy-to-follow framework for doing business on the Internet, evaluating the costs and creating a website.

Continue reading ‘Start an Online Store’ »