1 and 2 touch on some points you should clarify before beginning your business plan. Chapter 3 begins with a brief overview of the business plan, then moves on to describe the feasibility study: the gathering of demographic information, the competition analysis, and the assessment of potential demand/revenue generators. Chapter 4 deals with the financial plan, details the financial statements required for your business plan, and concludes with a list of resources.
1
Before You Start
Starting a restaurant involves many decisions. A prospective restaurateur must consider both the concept and the business aspect of his or her new venture. This chapter briefly highlights some important areas to think about before developing your plan for your new operation.
1. The Restaurateur as Entrepreneur and Entertainer
The successful restaurateur is a combination of entrepreneur (or businessperson) and entertainer (at times, even a magician). Your success depends on your ability to entertain your customer in your personalized theater. A restaurant or pub is simply a retail business that has been decorated and staffed to fit a specific production, as in a theater. Your menu is your script, your employees are your players, and your ability to balance finances determines the success or failure of your season. 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, and you are wise to listen carefully to their comments. Survey your customers while they are dining in your operation; often they will provide you with valuable tips on ways to improve your operation. You can trust plates returning from customer tables, and even the garbage can be an indicator of success or failure. If customers are dissatisfied with their meal and tell you, you have a chance to make corrections and keep them as patrons. Continue to operate without making changes and you run the risk not only of losing your loyal customers, but also of them telling their friends about their negative experience with your establishment.
2. The Menu
The menu is the most important document you will ever prepare. The following are only a few of the reasons your menu is crucial to your success:
• It describes your dream to your potential customers.
• It highly influences your location selection and marketing plan.
• It clearly influences your décor plan.
• It influences the design and layout of your kitchen and restaurant.
• It determines who your customers will be and influences your employee selection.
• It is a starting point for developing your pro forma income statement.
Everything, including your choice of partners and staff, is built around your choice of menu items.
If, for instance, your specialty will be the best Buffalo wings in town, your menu then necessitates a deep-fat fryer, an exhaust system, and a fire-extinguishing system in your kitchen. A casual décor usually complements such a menu, and your restaurant should be located near a family population base. Your employees’ skill level will be less important than it would be if you have a more sophisticated menu. You will probably have a fast turnover of customers and a low check average. One simple decision influences a great deal of your dream.
Before you look for partners to invest in your operation, prepare a draft menu for discussion. Place items on that menu only if they are within your personal capacity to prepare. Co-author Brian Cooper, in all his years of operating his own restaurants, 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.
(For more about menus, see Chapter 10, “Your Menu.”)
3. Trends
It is important for you to differentiate between trends and fads. At the time of writing this book, there has been a trend toward light and healthy foods and away from deep-fried foods and heavy sauces. These trends take years to develop, and some will become part of the food culture for decades. Many restaurants, however, have bucked these trends, to their great success. On the one hand, your ability to anticipate or initiate these trends will lead you to fame and fortune. Fads, on the other hand, are short term and disappear quickly once they saturate the market or when the public tires of them. The current fad of sandwich wraps in quick-service restaurants may or may not become a trend, depending on customer support. 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 restaurant business is constantly looking for new ways to draw in customers, and is therefore always changing and evolving with the trends of the day. For example, today’s customer would not be impressed with the “noveau cuisine” offerings of the 1980s. Fusion was the word in the 1990s, when we saw a strong Asian influence blending with North American or Californian cuisine. This decade took multiculturalism from the streets and neighborhoods to the table. This movement is still reflected in today’s menu offerings, and customers are demanding true ethnic cuisines and indigenous ingredients. They are clamoring for authentic food that represents its country’s fare and flavors. Malaysian, Vietnamese, and Taiwanese menus are growing more popular than before as this trend increases.
Another trend that continues to grow as our population ages is “heart smart” menu offerings. Health food is no longer an alternative cuisine, offered only in “veggie” restaurants. Customers are demanding menu choices that are not only delicious, but are also low in both saturated fat and cholesterol and are healthy. Organic foods are now becoming mainstream as more people demand that food producers and those preparing foods act responsibly.
We have also seen a shift in where the food is prepared. The trend has been to take the kitchen out of the back of the house and bring it to center stage. Chefs are now celebrities, and the customer wants to be part of the action, often sitting at tables in full view of the kitchen. To be successful in this industry you will have to be continually prepared to grow, stay current with your clientele, and have fun!
4. Types of Restaurants
There are dozens of restaurant concepts from which you can choose in planning your dream. It is unlikely that any one concept will meet all the goals you have in mind, but try choosing the one from those mentioned below that most closely describes your operation and work with it throughout this guide. We have purposely limited the kinds of restaurants discussed here to a few general types, but with careful research, experience, and a lot of perspiration — and even some luck — you will develop a unique style of operation that fits your vision and strengths.
4.1 The gourmet- or fine-dining room
This restaurant is best described as a formal dining room, usually with tablecloths and linen napkins (hence the term “white-tablecloth operation,” which is sometimes used to describe this sort of restaurant). These restaurants were often found in hotels, where the higher costs of operating can be absorbed into a larger operating budget. The prices tend to be high; the customer turnover, low.
The entire meal is a performance event that can
