How to Open and Operate a Profitable Restaurant
- Description
- Product Details
- Read an Excerpt
- Table of Contents
ISBN-13: 9781452061153
Media Type: Paperback
Publisher: AuthorHouse
Publication Date: 07-26-2010
Pages: 368
Product Dimensions: 8.25(w) x 11.00(h) x 0.76(d)
Owning a restaurant can be an immensely gratifying and rewarding business for those who are educated, experienced and prepared. For those who are unprepared, it can be a painful and expensive venture. As the primary stakeholder in your business, you will be significantly affected by the positive or negative outcome of your business venture. Your new startup is completely dependent upon you to succeed. Therefore, it is critical that you to lay out a plan to move forward. Many new experiences will come your way and you will have many problems to solve as the project progresses. Although you will work many hours and face many obstacles, you will also feel the pride and gratification of knowing that you own your business. The restaurant industry Anyone considering starting a restaurant should have a basic working knowledge about the restaurant industry. Like any entrepreneurial effort, owning a restaurant is a risky business. You should not get involved in the restaurant business unless you can accept the risk. You must have an unwavering vision for success and you must be committed to working many hours. If you are not committed to the business venture, your restaurant will most likely fail. The restaurant business is a difficult business. You must know how to do everything yourself in case the chef gets sick on a Saturday night or two of your waiters quit the same week. You must be in charge and capable of filling in when necessary. As the reader of this guidebook, you would be wise to incorporate as many of these tips and techniques as you can into your new or existing restaurant. Written by a restaurant professional with over 30 years in the industry and over 100 successful restaurant openings to their credit. The time to learn about the restaurant business is ideally before you enter the industry. However, many entrepreneurs get into the business underprepared for the challenge. This guidebook will be a valuable tool for addressing your profit or systems related problems. Cornerstone of the U.S. economy The restaurant business is a vital and growing part of our national economy. The following information is provided courtesy of the National Restaurant Association: Restaurant-industry sales were forecast to advance 5% in 2007 and to equal 4% of the U.S. gross domestic product. The overall economic impact of the restaurant industry is expected to exceed $1.5 trillion in 2009, including sales in related industries such as agriculture, transportation and manufacturing. Just under half (45%) of all food dollars spent in the U.S. are spent eating outside the home. Every dollar spent by consumers in restaurants generates an additional $2.02 spent in our nation's economy. Every additional $1 million in restaurant sales generates an additional 33 jobs for the nation's economy. Each additional dollar spent in restaurants generates an additional .82 in household earnings throughout the economy. The average household expenditure for food away from home in 2005 was $2,634, or $1,054 per person. Eating and drinking places are mostly small business - with 91% having fewer than 50 employees. More than seven out of 10 eating-and-drinking places are single-unit (independent) operations. Number one employer: The restaurant industry employs an estimated 13.1 million people, making it the nation's largest employer outside of government. Eating-and-drinking places are extremely labor-intensive. Sales per full-time-equivalent employee were $73,436 in 2007 and notably lower than other industries. The restaurant industry provides work for more than 9 percent of those employed in the United States. The restaurant industry is expected to add 1.8 million jobs over the next decade, for total employment of 14.8 million in 2019. Although very few young people aspire to working in the foodservice industry as a career, nearly half of all adults have worked in the restaurant industry at some time during their lives and 32 percent of adults got their first job experience in a restaurant. The typical employee in a foodservice occupation is: Female (55 percent) Under 30 years of age (53 percent) Single (66 percent) Working part-time and averaging 25 hours a week Living in a household with two or more wage earners (79 percent) Ladder to management opportunity: Women and minorities represent three of five owners of eating and drinking place firms, compared to less than half of all U.S. firms. One-quarter of eating and drinking establishments are owned by women, 15% by Asians, 8% by Hispanics and 4% by African-Americans. The number of foodservice managers is projected to increase 11 percent from 2007 to 2017. Roughly three out of five foodservice managers have annual household incomes of $50,000 or more. Three out of five first-line supervisors of food preparation and service workers in 2005 were women, 16 percent were of Hispanic origin, and 14 percent were African-American. Two out of five quick service operators will increase the proportion of their budget allocated to training in 2007. Restaurants by the numbers: $1.5 billion restaurant-industry sales on a typical day in 2009 69 percent of adults who said purchasing meals from restaurants, take - out and delivery places makes it easier for families with children to manage their day to day lives. 52% of adults who said they are likely to make a restaurant choice based on how much a restaurant supports charitable activities and the local community. Four out of five consumers agree that going out to a restaurant is a better way to use their leisure time than cooking and cleaning up. 38 percent percentage of table service restaurant operators anticipate that takeout will represent a larger proportion of their total sales in 2009 43 percent of table service restaurant operators offering organic menu items anticipate that they will represent a larger proportion of their total sales in 2009. 37 percent of consumers have used curbside takeout at a table service restaurant. 59 percent of table service restaurant operators offer televisions for guest entertainment. In 2009 the nations 945,000 restaurants are projected to hit $566 billion in sales. Chef's Survey: What's Hot in 2010 A survey done by Nations Restaurants Association of more than 1,800 chefs concluded in 2009, ranked 214 items according to how trendy they would be in 2010. Top 20 Trends for 2010 1. Locally grown produce 2. Locally sourced meats and seafood 3. Sustainability 4. Bite-size/mini desserts 5. Locally-produced wine and beer 6. Nutritionally balanced children's dishes 7. Half-portions/smaller portion for a smaller price 8. Farm/estate-branded ingredients 9. Gluten-free/food allergy conscious 10. Sustainable seafood 11. Superfruits (e.g. acai, goji berry, mangosteen, purslane) 12. Organic produce 13. Culinary cocktails (e.g. savory, fresh ingredients) 14. Micro-distilled/artisan liquor 15. Nutrition/health 16. Simplicity/back to basics 17. Regional ethnic cuisine 18. Non-traditional fish (e.g. branzino, Arctic char, barramundi) 19. Newly fabricated cuts of meat (e.g. Denver steak, pork flat iron, Petite Tender) 20. Fruit/vegetable children's side items Top Trends by Category Appetizers/Starters 1. Amuse bouche 2. Mini-burgers/sliders 3. Appetizer combos/ platters 4. Appetizer salads 5. Asian appetizers (e.g. tempura, spring rolls/ egg rolls, satay, dumplings) (Chef's Survey, cont.) Main Dishes/Center of the Plate 1. Locally sourced meats and seafood 2. Half-portions/smaller portion for a smaller price 3. Sustainable seafood 4. Non-traditional fish (e.g. branzino, Arctic char, barramundi) 5. Newly fabricated cuts of meat (e.g. Denver steak, pork flat iron, Petite Tender) Sides/Starches 1. Quinoa 2. Braised vegetables 3. Brown/wild rice 4. Steamed/grilled/roasted vegetables 5. Buckwheat items Desserts 1. Bite-size/mini desserts 2. Artisan/house-made ice cream 3. Dessert flights/combos 4. Savory desserts 5. Gelato/sorbet Breakfast/Brunch 1. Ethnic-inspired breakfast items (e.g. Asian- flavored syrups, chorizo scrambled eggs, coconut milk pancakes) 2. Traditional ethnic breakfast items (e.g. huevos rancheros, shakshuka, ashta, Japanese) 3. Fresh fruit breakfast items 4. Seafood breakfast items (e.g. smoked salmon, oysters, crab cake) 5. Prix fixe brunches Kids' Meals 1. Nutritionally balanced children's dishes 2. Fruit/vegetable children's side items 3. "Kid cuisine"/gourmet children's dishes 4. Children's entrée salads 5. Ethnic-inspired children's dishes Produce 1. Locally grown produce 2. Superfruits (e.g. acai, goji berry, mangosteen, purslane) 3. Organic produce 4.. Exotic fruit (e.g. durian, passion fruit, dragon fruit, paw paw, guava) 5 Micro-vegetables/ micro-greens Ethnic Cuisines and Flavors 1. Regional ethnic cuisine 2. Ethnic fusion 3. North African/Maghreb 4. Latin American/Nuevo Latino 5. Southeast Asian (e.g. Thai, Vietnamese, Burmese, Malaysian) Other Food Items/Ingredients 1. Artisanal cheeses 2. Black garlic 3. Ancient grains (e.g. kamut, spelt, amaranth) 4. Flatbreads (e.g. naan, papadum, lavash, pita, tortilla) 5. Flower syrup/essence Preparation Methods 1. Liquid nitrogen chilling/ freezing 2. Braising 3. Sous vide 4. Smoking 5. Oil-poaching/confit Culinary Themes 1. Sustainability 2. Farm/estate-branded ingredients 3. Gluten-free/food allergy conscious 4. Nutrition/health 5. Simplicity/back to basics Nonalcoholic Beverages 1. Specialty iced tea (e.g. Thai-style, Southern/ sweet, flavored) 2 Organic coffee 3. Agua fresca 4. Green tea 5. Flavored/enhanced water Alcohol and Cocktails 1. Locally produced wine and beer 2. Culinary cocktails (e.g. savory, fresh ingredients) 3. Micro-distilled/artisan liquor 4 Organic wine/beer/ liquor 5. Food-beer pairings Additional Questions: What will be the hottest kitchen equipment trend in 2010? Environmentally friendly (e.g. saving energy, conserving water) 55% Productivity-enhancing (e.g. speeds cooking, labor-saving) 23% Multi-purpose 15% Specialty/novelty 4% Mobile/portable 3% Other 1% What will be the hottest restaurant concept trend in 2010? Restaurants with gardens (e.g. rooftop, back-yard, communal) 33% Cooking classes/demonstrations 18% Street food and mobile food trucks/carts 15% Restaurants on farms 13% Gastropubs 12% Other 6% Featured butchers 3% What is the best source of hot, new food/beverage ideas? Television (e.g. Food Network, cooking shows) 23% Trade shows/conferences/seminars 22% Independent restaurants 21% Magazines 14% Other 7% Culinary schools 6% Celebrity chefs 6% Retail 2% Chain restaurants 1% Methodology Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which is comprised of 945,000 restaurant and foodservice outlets and a work force of 13 million employees. Together with the National Restaurant Association Educational Foundation, the Association works to lead America's restaurant industry into a new era of prosperity, prominence, and participation, enhancing the quality of life for all we serve. For more information, visit their Web site at www.restaurant.org. The American Culinary Federation, Inc., established in 1929, is the premier professional organization for culinarians in North America. With more than 22,000 members spanning 230 chapters nationwide, ACF is the culinary leader in offering educational resources, training, apprenticeship and accreditation. In addition, ACF operates the most comprehensive certification program for chefs in the United States. ACF is home to ACF Culinary Team USA, the official representative for the United States in major international culinary competitions, and to the Chef & Child Foundation, founded in 1989 to promote proper nutrition in children and to combat childhood obesity. For more information, visit www.acfchefs.org Reasons for success and failure Myths have circulated that new restaurants have a failure rate as high as a 90%. Fortunately, this is not true and your likelihood of success is better than you may think. According to the Bureau of Labor Statistics, for all new businesses started between 1998 and 2002, the survival rate was 66% for two years after they started. Furthermore, a Cornell University study of restaurants in three major markets showed a first year failure (or closure) rate of 27% with only a minor (4%) difference between franchised and independent restaurants. According to the best statistics available, approximately 30% of all new, first year, independently-owned restaurants go out of business. This means you have a 70% chance of success in your first year, if you have a viable, well-thought-out concept in a good location. Note that of those 30% of restaurants that close during their first year, most of the operators were either undercapitalized, under-educated in the industry, or were unwilling to make the time commitment necessary to be successful. Some of the most common reasons for restaurant failure are: Undercapitalization. Lack of capital to open your restaurant or to run it properly. Invalid initial assumptions. Not understanding that a restaurant is a difficult retail business. Lack of proper preparation. Entrepreneur performs no feasibility study, business plan or financial calculations to validate the concept or justify the location or cost of starting the venture. Owner not on premises. Unsupervised or under-managed employees are running the business. Hiring the wrong people. Poor or non-existent training, follow up, and supervision of employees. Negotiating a bad lease in terms of location, terms, fees or rates. Rent may be too high relative to restaurant sales. Over-designing your restaurant. Under-designing your restaurant. Making poor vendor choices. A poorly conceived or non-existent marketing program. Why are we concentrating on survival during the first year of business? Because the statistics indicate that if you make it past your first year, the likelihood of success is in your favor. You may be a gourmet cook, or you may have run an entire front-of-the-house operation for decades, but these general job-specific skills do not qualify you to own and operate a restaurant business. What qualifies you is having the desire, talent, dedication, skills and financial resources necessary to own and run a complicated business. I am going to cover this subject much more a bit later, but we'll close this section by mentioning that the primary reasons for success in this competitive business are having a high level of owner commitment and a system of controls to assure success. Five different types of restaurant sites When you decide to start a restaurant business, you have many different choices about how to go about getting it open. You can: Purchase a closed restaurant Purchase an open restaurant Purchase a franchised restaurant Build a new restaurant from a "vanilla shell Build a new restaurant from the ground up (Continues...) Read an Excerpt
How to open and operate a profitable Restaurant
A complete guide to starting, managing and improving your profitable restaurant
By Steve Malaga
AuthorHouse
Copyright © 2010 Steve Malaga
All right reserved.
ISBN: 978-1-4520-6115-3
Chapter One
What You Need to Know about the Restaurant Business
Excerpted from How to open and operate a profitable Restaurant by Steve Malaga Copyright © 2010 by Steve Malaga. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
<
Table of Contents
Contents
Introduction....................8
What You Need to Know about the Restaurant Business....................8
Opening Your New Restaurant....................21
Developing Your Concept....................27
Business Planning....................35
Funding Your Venture....................64
Site and Location Matters....................73
Menu Considerations....................89
Lounge and Alcohol....................102
Marketing Your Restaurant....................109
Human Resources....................115
Running a Profitable Restaurant....................144
Soft and Grand Openings....................158
Expansion and Growth....................161
Exit Strategies and Planning....................170
Restaurant Consultants....................173
Show More