bottomlineprofitsconsulting

Customer Service and the Bottom Line

Tue, 06 Aug 2024 16:39:07 GMT

What are you doing to enhance the customer experience?

How much do you care about your customers? Are they important to your business? Or are they just revenue in human form? Too often we forget why customers come to our restaurants. Is it just for the food? Perhaps if your food is that good and memorable. But why they really come is for the experience; to interact with your staff, enjoy the ambiance you have created and yes, for sustenance.

How do we make the customer experience work in our favor? Of course we want them to have a good time, but we need to make a profit. No one denies that. It’s an elusive concept. If I do too much for my customer they may be ecstatically happy when they leave but I won’t have enough money to pay my employees and purveyors. If I cut service and quality to a minimum, I’ll make a handsome profit but I won’t have much repeat business. There’s a happy medium in there somewhere.

Bottom Line Consultants can help you find that happy medium; making customers extremely happy and making a good profit for you. First we have to have a look at your business and how it runs. Once we understand that, we’ll get to work on the bottom line on customer service.

Here’s something to think about. In Will Guidara’s book “Unreasonable Hospitality”, he talks about the 95/5 rule. He suggests that you watch your budget like a hawk for 95% of it. I mean down to the penny. This involves having systems and procedures in place that really work for your business. But the last 5% is for something special for your guests. What can you do for them that is just for fun or enjoyment. Think of things like adding a special cookie for when they leave, free valet service or just a small thank you glass of wine when they sit down to dinner. These little customer service items stick out in a customer’s mind and make them want to return to your restaurant. It’s not always the food. It’s how you make them feel that will keep them coming back.

How do I know if I need an Consultant?

Mon, 08 Jan 2024 16:50:25 GMT

Get some help with your business

You notice your labor cost is increasing. You see the price of ingredients for your menu going up. The rent is the same, but you see areas of your restaurant where improvements should be made. What should you do? In some cases, a consultant is the best answer. You’re thinking that margins are so close as it is. Do I have the money to spend on a consultant? You do. It’s worth investing in yourself.

A consultant can give you a fresh set of eyes. They will come into your restaurant and see things you and your staff won’t see. Immediately they’ll see things on your menu that should be repriced and recosted. A consultant can look at your whole menu and find things that should be dropped and maybe add some new items that fit in with your concept. Every item on your menu should be making money. If they are not, they should be gone. The consultant can identify where to make those cuts without the emotion that an owner or their staff might bring to the menu.

A consultant can pinpoint how much labor is needed for your restaurant. They will apply controls that will lower your labor cost. They can go into your cooler and find where you can reduce the cost of your goods. Working with purveyors, they can get you the best price on your items. And if it’s needed, they will show your staff how they can get the best yield from your food.

The bottom line is that the consultant can help you make your food better and make you more money. You have an opportunity to make your business better and make it thrive. Give BottomLine Profits a call today. We can show you what we can do.

How can we help you today?

Tue, 07 Nov 2023 17:38:04 GMT

BottomLine Profits Consulting has experience

Good day restauranteurs,

I wanted to talk to you today about experience. We all have it in one form or another. We can use our experience to help others with their businesses. I’m sure you have experience in your area of expertise. Well, at BottomLine Profits, we have over 100 years combined experience in our consultants.

We have over 20 new restaurant start ups, we bring training and technical excellence to your business when you engage our services. What ever your needs are, we can help you. Costing, inventory control, price controls, labor training, equipment are just some of what we do.

Please do give us a call today. If you’re even just thinking you might need some help, please reach out. We can talk and determine what the plan for you should be. We can identify problems you might not have even seen yet. We’re a full service group for all restaurants needs and getting things started from start to finish. We hope to hear from you soon.

Chef David Wennerly, President BottomLine Profits

Chef Tom Beckman, Assistant Culinary Director

Does your restaurant have a culture? Develop it!

Thu, 03 Aug 2023 15:50:04 GMT

Developing a sustainable restaurant culture

One of the more unseen factors that affect a restaurant's success is restaurant culture. It’s easy to say you have a good culture at your restaurant. But do you really? Think long and hard about whether your employees, both back and front of the house, value and understand what your long-term goals are. Do they buy in to where they are working?

Today I want to talk about developing your employees' interest in your restaurant. I’m sure your employees come to work with the intent of maximizing profit and containing costs. But employees who truly care about where they work are to be valued. Getting that feel of when everyone is on the same page in a restaurant is difficult. But it’s also easy because you do it with some simple actions on your part.

Communicate : We always talk about how important it is to communicate with your employees. But really do it honestly and heartfelt. That may be difficult for some employers. They don’t want to share too much with their employees. I get that. But sharing your goals in a genuine manner can make people feel like they are more involved with your business.

Be Honest : I’m not saying you’re not being honest. But when you’re talking with employees, treat them with respect and in a friendly manner. Too many times, employers hide parts of the business from their employees. They don’t need to know everything about the financial dealings of the business, but when they feel part of changes and improvements, they are going to be more apt to buy in to the culture.

Trust : Build trust between employees by delegating responsibilities amongst every employee. Build teamwork by giving everyone a key role in the success of your business. This tends to help everyone feel part of the team. Watch out for negative elements in your team though. One disgruntled employee can sour an entire team. Everyone should be watching everyone else's back.

Show a Sense of Purpose : Show your team that you are in it for the long haul. You’re with them on this journey. First you must remind yourself why you started the restaurant in the first place. Showing your team the “why” can lead to them becoming a stronger team. Give them a reason to be excited about being at their job.

Using these simple ideas can help you to get on to the next level in your restaurant. It takes a little more effort on your part as an employer. But it can lead to a stronger, more profitable business. Thanks for taking the time today to read what I had to say. Let me know what your experience is with building a restaurant culture.

David Wennerlyn

August 2023

Can I Offer Some Help?

Tue, 01 Nov 2022 16:26:49 GMT

Sometimes you just have to reach out for help.

Hello there! I want to ask you a question. Can you run a restaurant or any food service operation by yourself? Of course not, you need a team; a group of people who care about your business and want it to succeed. Do you have all the answers when it comes to making your business profitable? You may think you do and you could be right. But in most cases bringing more brains to think about what will drive your business to the next level is the way to go.

What I’m saying is you can’t and shouldn’t do it by yourself. Sure, bring in the best minds on your team to brainstorm new cost saving/revenue increasing ideas. Ask your friends and family what they think and synthesize those ideas into a plan for yourself. But there is another way that you might not have thought of yet.

Bringing in a consultant to look at your business is one of the best ways for you to increase profitability. It’s a new fresh set of eyes to see things you may not be seeing. It’s a person who can look at your business objectively and let you know where you can trim the fat or apply more pressure to an aspect that needs attention. The restaurant consultant can dig into your menu and find the stars and the dogs. But they’ll also be able to suggest how to make the menu work best for your restaurant.

The menu is just the start. Labor is the other high cost and high stress item on any restaurateurs mind. The consultant can show management and the staff how they can work smarter for you as the owner of the business. All of your labor dollars can be targeted towards making the restaurant make more money.

Think about calling a professional restaurant consultant
Bring in a fresh set of eyes to look at your business
Increase revenue and reduce costs

But the time to act is now. If you are even thinking about calling a consultant, call Bottom Line Profits. We can tailor a program that is specific to your restaurant or food service business. Don’t just think about it for a while. Let us know what your interests are and we’ll figure out how best to serve you. Bring in the professionals.

David Wennerlyn

Is Your Menu Costed?

Fri, 02 Sep 2022 18:40:49 GMT

Is your menu costed?

Hello there! When was the last time you costed out your menu from top to bottom? Have you always done it? Or maybe never done it? For your sake, I hope it’s the first one. Costing your menu, and doing it often, is integral to increasing profit in your restaurant. If you have never done it, you need to get started today. Go right now, I’ll wait.

Good, you did it? I am so happy you got started today. Well, even if you didn’t, you should do it soon. Go through your entire menu. When you cost your menu, you’ll find out so much about your business. You have a handle on costs as well as your profit. With costs rising every day because of inflation, labor and supply chain issues, you need to have a way to control the things you can control.

Identify high food cost items and find a way to reduce their cost
Locate low cost/high profit items and find a way to promote them on your menu
Keep a watchful eye on items that are starting to rise in cost

Look for items that are causing your recipes to spike in cost. I know you don’t want to change the menu but if your food cost percentage is too high, it could be the price on the menu that is holding you back.

Low cost/high profit menu items can provide a great way to improve your profits. Is that garlic bread a popular item? Have some samples out for customers to try. Then they might be inclined to order it when they get to their table. Look for those items that servers can promote when they are taking orders. This will help to subsidize those lower margin items.

As we have seen, the cost of most things is going up. A good restaurateur will be keeping an eye on all of the costs but most importantly, the cost of food. Don’t just let it go. Suppliers want to keep you as a customer. It’s in their best interest to keep you buying from them.

There are a myriad ways to make your menu and your ordering work for you. Work with your supplier but the real responsibility is on you. Costing and standardizing is the best place to start. See you next month.

David Wennerlyn

Pest Management

Thu, 28 Jul 2022 15:37:17 GMT

Let's focus on good sanitation practices and pest control.

I know you don't want to talk about it. But controlling pests is a necessity in restaurant kitchens and operations. No matter how hard we try, there is no way to eliminate pests. We can only control and limit access by pests. Many restauranteurs think they can do it on their own. Sure, by following good sanitation practices, employee training and diligent observation, we can do a lot on our own. But the pests always come back. A pest control operator is needed. It's a fact of the business. If you get on a regular program of pest control with a reliable pest control operator, you'll see a big decrease in pests in your operation.

But what can you do on your own. Sanitation in the kitchen is essential. It starts with employee training and coaching. You need to have a culture of sanitation. If you let some of your employees cut corners or not really follow good sanitation, it will send a message to other employees and new hires that it's ok to ignore good sanitation. Everyone in the kitchen should be watching out for each other. Ask kitchen staff to watch for potential sanitation problems. This might include temperature abuse of product all the way to being aware of where potential pests could enter the operation. It's everyones job including yours the owner operator. Model good sanitation behavior and your employees will follow.

As a consultant, I see lots of different operations and they differ in their styles and approaches to sanitation. I always mention to them that customers are watching. They always see things we may not see as owners. We have to be hyper aware of what the customer sees. Keeping the operation clean and safe will insure higher profits every single time.

Let me know if you would like to go over your restaurant's sanitation plan. We can help you see things you may not be seeing. Good luck to you.

David Wennerlyn

Employee Training

Wed, 08 Jun 2022 20:48:39 GMT

Make your labor cost work harder for you.

Your employees are your biggest expense but also your greatest resource. Sometimes it seems like labor costs just keep going up. Put that money to good work. The best wa y to do that is through excellent employee training. If you’re not training your employees on every procedure and looking for their feedback, you are not using that labor dollar to its fullest.

Getting started on a training program for your operation may seem to be a daunting task. But you can start small. Inquire with managers which tasks need the most focus on training. Your managers know what they see every day and what requires immediate attention. Not only will they be able to pinpoint what needs work, they can also help implement the training. A well trained employee is usually a happier one. Training can help reduce turnover. Training will make your operation a more desirable place to work.

The training grows on itself as well. Once you have some programs in place for basic procedures, you can have the employees train each other. You can implement a hierarchy of trainers and managers. They can be cross utilized. You’ll see employees take more pride in their work. I have seen employees really grow when they are training and being trained.

When you begin a training program, this assumes you have standardized procedures and policies in place. If you don’t already have them, it’s time to get to work on those as well. We can talk more about those in upcoming blog posts. Thanks for taking the time to visit the site.

David Wennerlyn

Please Reach Out

Thu, 13 Jan 2022 21:31:38 GMT

Restaurant Consulting can help...

To those restaurant professionals who don’t yet realize they need help but wait till the last moment and then it’s too late, please reach out to a restaurant consultant to help you with making your business more efficient and profitable.

How Important is Location to a Restaurant?

Fri, 05 Nov 2021 19:45:01 GMT

Maximize profitability with location

Good Friday afternoon!

It’s David Wennerlyn and I want to talk about how vital location is to a restaurant. It’s often said the location is the most important where a restaurant is located. Without proper research into location, restaurants have a much higher chance of failure.

Determining a location is much more than just signing a lease. Extensive research must be done to identify your potential customers, employees and your competitors.

What considerations should you be looking for in a site? I believe the four to be: 1. Customer base 2. Personnel availability 4. Site characteristics 3. Competition

We’ll be looking at the first two in this post. We’ll explore the last two in the following weeks.

Customer Base

The area in which a restaurant can draw its customers will vary greatly. It has also been shook up by the pandemic. Many people will travel a great distance to eat at a restaurant that is a local institution, whereas a lunch operation in an office building may only draw customers from an area no bigger than a city block. When evaluating the customer base, although it is important to understand the total number of people in an area, it is even more important to identify the number of potential customers. Temporary Population Potential customers include both full-time residents and the temporary population. The temporary population is made up of people who live elsewhere and visit, or work, in the area. This can be an important source of restaurant customers.

However, it is important to note the source of the temporary population. Office workers, rather than factory workers are typically a better source of customers. Check with the local chamber of commerce; most likely they can provide you with data to help you quantify the size and nature of temporary populations. The more that is known about the potential customers, the better chance there is of establishing a restaurant that will appeal to a larger audience. This can be done by analyzing census and other data available online or from the local chambers of commerce. Observation of the traffic patterns at other restaurants in the area can also help in identifying potential customers.

Personnel Availability

An owner considering an additional or new operation should ensure that there is a sufficient number of willing workers available. In many locations, this is not a major consideration since there will be many people who are willing to work in restaurants. However, in some parts of the country, restaurant workers are in very short supply. Site Characteristics Once you have determined that the area you have selected has enough potential customers to be successful; the first step is to evaluate the proposed site.

Well, that's enough to chew on this weekend. I hope you enjoy talking about restaurant success. I sure do. Give me a call if you would like to talk further.

David

Staffing to Business Needs

Tue, 21 Sep 2021 20:55:10 GMT

How are you determining your staffing needs based on current business?

Are you just posting last weeks schedule with minor adjustments? Or is there a method to your scheduling, such as being based on data you have collected through business reports and analyzation? Things like SPLH or Sales Per Labor Hour, are ways of determining a starting point, along with other factors such as events you have planned or are planned around your business. Weather is always a determining factor as it can drastically affect your outdoor business.

These are the things that need to be taken into account when producing a working, living schedule to operate on efficiently. If you are not doing these things for your scheduling needs as well as many other factors, you should be talking to BottomLine Profits for assistance in making efficiencies for your business and managing profits moving forward.

Don't think it will fix itself or work itself out in the weeks to come as once the time has passed, you cannot go back and fix or make it better. It is always better to be proactive in all of your business planning than to be reactive!

Call us today at (773) 470-8239. Get the professionals on your side and your bank account.

Are you taking inventory often enough?

Wed, 01 Sep 2021 15:38:01 GMT

How often do you take inventory?

I was thinking about inventory this week as I was working on an inventory project. It’s a good time to think about inventory and how it can help your business.

When was the last time you took inventory? Be honest with yourself. If it was the last time you ordered product, good on you! If it’s been a while, I have some ideas that might help you a bit. Technically, you need to take inventory as frequently as you order. So if you order produce five times a week, you should inventory produce five times a week.

When it comes to a fiscal inventory…that is, counting everything on hand and extending the value of the stock on hand…you should do that at least once a month for accounting purposes. Some operators take weekly inventory to keep on top of food and beverage costs, especially if they’ve been having a problem.

Some operators take inventory after each meal period to pinpoint product theft, but once a month is enough to calculate the cost of goods consumed for the income statement.

When you take inventory before calling in an order to a supplier, you do it to determine the amount required. The amount you need to order depends on how much you will use between successive deliveries. Still some operators take a fiscal inventory only once a year, which is all that is necessary for income tax purposes. But the operators who take a fiscal inventory only annually have no idea what their food cost is running the other 11 months of the year.

I’ve learned over time that not taking a monthly fiscal inventory is fairly common among many independent operators. Many believe that they have a consistent level of inventory that never changes. There’s a fallacy in that logic, even if the operation has the same amount of sales volume every month and the menu-sales mix remains constant…neither of which is a realistic expectation. Inventory levels will fluctuate for various reasons.

With a little organization of your inventory records and storage areas, the inventory process can be made an efficient and painless process. One should approach inventory taking with the same intensity and attention given to counting each day’s sales receipts. The process of counting everything on hand should not take more than two hours, depending on the size of the restaurant. Techniques such as zoning and having a process of inventory taking known as sheet to shelf, are ways of streamlining the process of inventory taking and can aid in further organization and time spent, which always translates into dollars saved.

The extension of the value of inventory may take another two hours if extended manually or just seconds if you do it with a computer. Just remember: There are no shortcuts for accuracy in inventory: You must count everything in order to give yourself an accurate picture of your restaurant's financial health. A further practice of always having two people do inventory, to cut down on mistakes made is a prudent practice and aids in speed of inventory.

Those are just some simple ideas that can be implemented if you take the time to do inventory as often as you should. We’ll be getting in a bit deeper into inventory in future posts. Just know that we can show you how keeping on top of your inventory can make your business more profitable. Give us a call for a consultation.

David Wennerlyn

Are You As Profitable As You Can Be?

Thu, 26 Aug 2021 15:10:18 GMT

Maximize profits while lowering food costs.

When you look at your business and are truthful to yourself, do you think you could be even more profitable. The answer is probably yes. Any business can improve with pr oper analysis and introspection. The problem is we kid ourselves into thinking this is as profitable as I can be. BottomLine Profits can help with that. BottomLine Profits can be objective and identify areas that can improve. They may be simple solutions that can be implemented quickly. There may be some areas that take a longer look at long term growth. But the bottom line is that every business can benefit from some analysis.

Controlling food costs is a never-ending challenge to restaurant owners and managers. The ability to control the purchase, production and sale of food items often will determine the very survival of the restaurant. With the increasing amount of costs in other areas of the operation, controlling food costs has become even more critical. Also, consumers do not understand the increasing costs you face and are reluctant to pay higher prices. Because of this, it is not easy to pass on higher costs to your customers. We will look at ways you can take to shore up your food cost controls.

One area food service businesses often overlook is accurate receiving procedures. Make sure you get what you pay for. If you do not receive the quality merchandise you paid for, you are beaten before you start. Accurate receiving seems straightforward because there is so much common sense involved, but the system often breaks down because of a lack of management commitment. Make sure you implement the following procedures.

∙ Compare weights received to weights on the invoice

∙ Compare the number of items received to the invoiced number

∙ Compare sizes and physical characteristics with those stated on invoices

∙ Compare quality received with quality specified

∙ Compare purchase price with invoice price

∙ Check all mathematical computations for accuracy

∙ Make sure all corrections, damaged goods and wrong items are credited and that the credit information clears both your accounting department and supplier’s accounting department.

You can more quickly anticipate market and other irregularities in the market. Lobster tails, fried chicken pieces, steaks, orders of prime rib and many other traditional entrees are fairly easy to control by the portion. They can be held fresh or frozen until needed. As restaurateurs offer more complex menu items prepared on site, however, they must pay more attention to forecasting. Weather conditions, seasonal variations in product availability and other factors all affect food cost levels. For example, the marketplace may not be able to provide uniform ingredients (size, weight, shape, chemical composition, and other physical properties) for certain perishable items. Nature is often not too cooperative either. Seafood and fresh produce may vary considerably from shipment to shipment, and different brands can yield very different results.

We’ll explore more ways to lower food cost and make your business more efficient in future posts. Just know that we can help you be as profitable as you can be. Give us a call for a consultation.

Restaurant Consulting

Mon, 02 Aug 2021 19:48:32 GMT

Some thoughts on a Monday afternoon

You may have a new restaurant that is doing well or could be doing better. Many brave restaurateurs got to work in 2020 against very high obstacles. Some are off and running. They are making profits and are ready to expand. Others may find themselves struggling. If you find yourself in this place or just need some suggestions to improve your business, Bottomline Profits is here to help.

One of the fundamentals of our success is to provide clients with restaurant consulting services that exceed their expectations. We can identify what clients need today and think down the road long term. We offer a range of restaurant consulting services with specific objectives and measurable outcomes.

At Bottomline Profits, we don’t just give you the same cookie cutter advice you might find elsewhere. Our services give you custom solutions because we closely examine your operation in person. Our team of experts have over 100 years experience in food service. They will guide you through proven and logical steps to improve or start your business. They will make sure you have the tools to make it profitable.

When you call, we’ll set up a meeting time for you to discuss how we can improve your business. Costs and timing are based on your unique situation. I look forward to meeting you.

Have a great rest of the week and I hope your business is always profitable.

David Wennerlyn,

President Bottomline Profits

773-470-8239

Identifying Your Objective

Wed, 09 Jun 2021 19:07:01 GMT

What are your objectives?

What is your objective? This is the first question that needs to be asked of anyone seeking consulting help. What is the client’s objective should be the focus of the client/consultant relationship. In order to achieve the desired outcomes of any project (big or small), clear and concise objectives and outcomes must be agreed upon.

Reducing food or labor costs is not an objective. It is just a means to an end. Increasing cash flow so I can send my kids to college or take that long sought after vacation sitting on a beach sipping margaritas may be your real objective. Objectives can be business or personal; they usually overlap in one way or the other.

Maybe you want to start a new restaurant. My first question would be “why?” Maybe you have always dreamed of owning a restaurant. By discussing your objectives it is important for us to understand what success will look like. Visualize it…. Will it improve your life? What advantages will a successful restaurant have on you or your family? Your long-term objective may be to develop a chain of successful restaurants…maybe franchise your concept? What will that mean to your financial future?

These are the discussions that need to be discussed with all clients before beginning on any project. It is important that clear objectives and outcomes be discussed, established, and agreed upon in order to achieve maximum outcomes and values.

Call me 773-470-8239 today so we can discuss Your Objectives.

Identifying Your Goals

Wed, 09 Jun 2021 18:36:31 GMT

What is your goal?

What is your goal? This is the first question anyone seeking should ask himself or herself as a business professional while seeking consulting help. What is the client’s goal should be the focus of the client and consultants business relationship.

In order to achieve the desired outcomes of any project (large or small), clear and concise objectives and goals should be agreed upon, such as reducing food or labor costs, developing realistic budgets and revenue reporting to track you business performance. Possibly, examining and developing inventory procedures to pursue accountability of goods purchased and distributed are the goal? These are some of the areas to investigate to find sound business practices.

These costs, such as food and labor costs, are not the primary objective. It is a way to achieve the proper profitable results. Increasing cash flow so one can achieve personal successes or take that much desired vacation, enjoying the fun and sun and drinking margaritas, might be your real objective. Objectives can be business or personal; they usually overlap in one way or the other.

Perhaps a new restaurant start up is the goal. The first question to ask would be “why?” Perhaps you have always dreamed of owning your own restaurant? By discussing your business objectives, it is important for us to understand what your success vision will look like. Picture your restaurant success…. Will it improve your life? What advantages will a successful restaurant have on you or your family? How will you accomplish the necessary tasks to achieve the success needed to make it profitable and successful enough to offer you and your family the means to a good life?

Your long-term goal may be to develop more than one stand-alone business, a chain of successful restaurants. Perhaps a franchise to your concept would be the route needed to accomplish further prosperity? What will that mean to your financial future?

These are the discussions to have with all clients before we begin any project. It is important that clear tasks and goals be discussed, established, and agreed upon in order to achieve maximum outcomes and values.

Call me at 773-470-8239 today so we can discuss Your achievable goals and dreams.

How Often Should You Take Inventory?

Wed, 09 Jun 2021 14:49:18 GMT

How often should you take inventory? The answer depends on your purpose for taking inventory. Technically, you need to take inventory as frequently as you order. So if you order produce five times a week, you should inventory produce five times a week.

Some operators take inventory after each meal period to pinpoint product theft, but once a month is enough to calculate the cost of goods consumed for the income statement.

With a little organization of your inventory records and storage areas, the inventory process can be made an efficient and painless process. One should approach inventory taking with the same intensity and attention given to counting each day’s sales receipts. The process of counting everything on hand should not take more than two hours, depending on the size of the restaurant. Techniques such as Zoning and having a process of inventory taking known as sheet to shelf, are ways of streamlining the process of inventory taking and can aid in further organization and time spent, which always translates into dollars saved.

The extension of the value of inventory may take another two hours if extended manually or just seconds if you do it with a computer. Just remember: There are no shortcuts for accuracy in inventory: You must count everything in order to give yourself an accurate picture of your restaurants financial health. A further practice of always having two people do inventory, to cut down on mistakes made is a prudent practice and aids in speed of inventory.

How To Improve Your Food Costs

Wed, 09 Jun 2021 14:49:16 GMT

1. Record all sales. Although this may seem unrelated to controlling food costs, think about the effect unrecorded sales have on your food costs. For example, if a restaurant has sales of $20,000 per week and operates at 38 percent food cost, the restaurant will spend $7,600 for each week. If 10 percent of these sales are not recorded for whatever reason, the food cost percentage will climb from 38 percent to 42.2 percent. The basic procedure is to record all sales in the POS system. Ideally, each day’s food production will be compared to actual sales, and any variances will be reconciled.

There are a variety of POS systems on the market. Choose the right one that meets your requirements. However, if any system is to work, it will require discipline. All food sales must be rung up, and no food should leave the kitchen without a ticket. The people most likely to violate this policy are operators and managers. If you violate the system, sooner or later your employees will do so too.

2. Accurate receiving procedures. Make sure you get what you pay for. If you do not receive the quality merchandise you paid for, you are beaten before you start. Accurate receiving seems straightforward because there is so much common sense involved, but the system often breaks down because of a lack of management commitment. Make sure you implement the following procedures. ∙ Compare weights received to weights on the invoice ∙ Compare the number of items received to the invoiced number ∙ Compare sizes and physical characteristics with those stated on invoices ∙ Compare quality received with quality specified ∙ Compare purchase price with invoice price ∙ Check all mathematical computations for accuracy and ∙ Make sure all corrections, damaged goods and wrong items are credited and that the credit information clears both your accounting department and supplier’s accounting department.

3. Be sure the salad bar or buffet is profitable. Many restaurateurs offer a salad bar or buffet because of its customer appeal. All too often, however, they pay little attention to profit considerations and, consequently, food cost problems arises. To stay in control of your food costs, begin by knowing how much you are spending on your salad bar. To determine the food cost of a salad bar or buffet chooses a moderately slow day. Record and cost out all items used to set up and replenish the salad bar. After service is completed, record and cost out any products that are left over in prime condition giving maximum credit of 50 percent of the original value. Subtract the returned merchandise value from the original issue and replenishment cost. This will result in the total cost of the salad bar or buffet. Next, divide the cost of the buffet or salad bar by the number of customers served. The resulting figure will give the cost per customer. Compare the cost to the revenue produced, and determine if your profit levels are appropriate. If your profit level is not acceptable, here are some possible changes you can implement: ∙ Revise pricing ∙ Change ingredients offered ∙ Change china sizes ∙ Change ingredients’ portion, size or composition ∙ Change ingredients’ location ∙ Change ordering procedures, making them tableside rather than self-service ∙ Change amount of product displayed and/or ∙ Change serving utensils These changes do not mean you must cut back on food quality. Instead, the emphasis is put on reducing waste.

4. Anticipate market and other irregularities. Lobster tails, fried chicken pieces, steaks, orders of prime rib and many other traditional entrees are fairly easy to control by the portion. They can be held fresh or frozen until needed. As restaurateurs offer more complex menu items prepared on site, however, they must pay more attention to forecasting. Weather conditions, seasonal variations in product availability and other factors all affect food cost levels. For example, the market place may not be able to provide uniform ingredients (size, weight, shape, chemical composition, and other physical properties) for certain perishable items. Nature is often not too cooperative either. Seafood and fresh produce may vary considerably from shipment to shipment, and different brands can yield very different results.

5. Food estimations should reflect current prices. Too often restaurateurs use estimations of the cost that are based on prices that are years old; perhaps going back to when they opened the business. This can cause serious problems in controlling food costs. Restaurateurs should know current costs for each menu item by staying up to date with each ingredient cost change. This is time well spent. Be particularly careful if you use a single ingredient in a variety of forms as, for example, ground beef in hamburger, meat loaf, spaghetti sauce, lasagna or Swedish meatballs.

Many operators develop financial trouble by not charging full cost to one or more users of a versatile ingredient. Many operations lack the staff, time, energy and interest to revise menu costs frequently, so they estimate the cost of minor ingredients. In addition, operators often estimate yields on consumption per customer for a variety of products to arrive at a fair price for their menu item. This is frequently done for butter, salad dressing, pancake syrup, crackers, bread and many other items. One quick way to check your estimations is to track your consumption of salad dressing for a week. Take a salad dressing inventory at the beginning of the week (use ounces or gallons or dollar price). Add any shipments you receive or dressing you manufacture during the week. At the end of the week, subtract the remaining dressing. Divide this by the number of salads served or perhaps your guest count. The resulting figure will be your salad dressing consumption per customer. The actual consumption may be quite different from your previous estimations. Use current, more realistic estimates and repeat the process periodically. If the difference is significantly greater, revise your operating systems. Too often restaurateurs discount products and end up losing money. Leftovers are one example. There is no reason why barbecue beef from leftover roast beef, creamed chicken from leftover banquet service chicken, and soups made from a wide range of ingredients should not command a fair market price. If you are regularly overproducing; forecast more accurately to reduce production levels. Try to design menu items that utilize leftovers and consider using quality leftovers in the bar at happy hour. Often the value can be significant, particularly for a successful, high volume happy hour operation.

6. Beware of the hidden ingredient cost. In most restaurants there are some ingredients that are used frequently, represent considerable dollar expenditures and are generally ignored by chefs, managers and owners. These ingredients can generate serious food cost problems. Typical examples of problem products include deep-frying shortening, salad oil, sour cream, breading, crackers and cooking butter, but they will vary depending on your menu and production methods.

As a quick rule of thumb, keep track of any ingredient that represents more than three-tenths of one percent of the cost of food sold if it is not directly related to a single entree, appetizer, and dessert or beverage selection. For a $1,000,000 sales operation with a 40 percent food cost, for example, this would include any ingredient that would cost you $1,200 or more a year. When you identify these hidden costs on your menu, review how your purchasing, receiving, production and service personnel handle them. Are these items being used judiciously in proper proportions and in the right dishes? These items are deceptive because their unit cost is generally low. Yet the amount times the larger number of portions creates an expense problem. Butter used in cooking is likely to be a hidden cost product. It is fairly expensive, yet cooks use it so often they take it for granted. Crackers are another hidden cost item. The unit cost is low and consumption would appear to relate to soup and salad sales. Actual consumption is more likely to be several times the projected consumption due to extra service, breakage and employee snacking.

7. Beware of administrative cost adjustments. Discounts, promotions, transfers, errors, walkouts and trade outs all effect the food cost percentage. Make sure you do not hold production people responsible for these costs. Their moral will improve and their commitment to your business will increase if you monitor and adjust for these costs. These are the seven areas that are often overlooked in the effort to control food costs. Take a close look at each one. Perhaps one of them will help you to solve a problem. If you need more information on the subject of food cost control,

Please contact us at: BottomLine Profit Restaurant Consulting, LLC. 773-470-8239

How To Start A Restaurant

Wed, 09 Jun 2021 14:49:15 GMT

Starting a new or acquiring an existing restaurant is an enormous undertaking. There are several steps you must take in order to begin the venture, and to have a successful opening. Months and months of careful planning are essential.

Defining the Restaurant Concept ; The restaurant concept or theme is essentially the image you want to convey to the public. But before you can even begin the process you must decide on the concept. During the early stages, some of the specifics of the restaurant concept will be tentative. However, once you have identified a potential location and worked through some of the financial and operational issues, you may need to make modification to the concept. Nevertheless, it is still necessary to develop a working idea of the restaurant concept so that you can begin determining the requirements for starting the operation. Many of the decisions that must be made when starting a restaurant will be driven by your initial decision about the restaurant’s concept.

Defining the concept includes determining the operations: 1.Menu 2. Atmosphere 3. Prices 4. Target customers. The Menu, although the concept is more than just the food served to most observers, the menu is the shortcut way to describe the concept. It certainly is the most important element to consider when developing a potential restaurant’s concept. At the early stages, it is not necessary to determine a precise menu or recipes; however, a general idea of the menu is necessary so that the restaurateur can evaluate the following:

1. Potential competitors . The number of restaurants offering similar menus will be an important aspect of selecting a location.

2. Sources of supply . This is especially important if the proposed menu requires special or hard to find ingredients.

3. Equipment or layout requirements . Kitchen equipment needs will vary depending on the concept. For example, the equipment required to serve Mexican food differs substantially from the requirements of a steakhouse.

4. Special personnel skills . Especially especially skilled kitchen personnel must prepare some menu items. The Atmosphere, A restaurant’s atmosphere, such as formal or casual, is another important element of the overall concept that must be considered when making start-up decisions. Some of the issues related to atmosphere include: Special personnel skills. In some cases, the atmosphere may dictate that employees with special skills must be hired. For example, you may need special servers to serve some items that require tableside preparation. In most cases, the specific decisions relating to restaurant atmosphere, such as furniture or china purchases can be deferred until after the site is selected. However, the intended design of the operation may have a bearing when considering the suitability of a potential site, which we will discuss later

5. Design elements . Typically, atmosphere is reflected throughout a restaurant by its furnishings, china, glassware, servers’ uniforms, and menu style. Accordingly, the atmosphere may dictate the type and expense of various items.

6. P rices A restaurant’s price structure is affected by its menu and its atmosphere. Generally, however, specific prices are not considered until the restaurant has established the final menu. Menu Range, In most cases, a restaurant offering a full range of menu items will require a much larger kitchen area to prepare all of the items. It is important to determine if the kitchen and storeroom areas are adequate for the planned menu range.

7. Target Customers A restaurant’s choices in menu, atmosphere, and prices are generally made with the objective of attracting a specific type of customer, such as young families, young professionals, or senior citizens.

8. Other factors related to concept include: Level of service. a. Full table service restaurants, in which servers are employed to take and deliver orders. b. No table service restaurants, which do not employ servers. In these establishments customers place and pick up their own orders, and often bus their own tables. The planned level of service will affect the decisions made in starting a restaurant in the following area.

9. Restaurant layout . When selecting a site, the level of service will affect the way the restaurant is configured. b. Staffing levels. The level of service will affect the number and type of employees hired. Determining a Location;

One of the most important steps in starting a restaurant is selecting a proper location . Determining a location is much more than just signing a lease. Extensive search must be done to identify your potential customers, employees and your competitors.

What considerations should you be looking for in a site? I believe the four to be: 1. Customer base 2. Competition 3. Personnel availability 4. Site characteristics

Customer Base The area in which a restaurant can draw its customers will vary greatly. Many people will travel a great distance to eat at a restaurant that is a local institution, whereas a lunch operation in an office building may only draw customers from an area no bigger than a city block. When evaluating the customer base, although it is important to understand the total number of people in an area, it is even more important to identify the number of potential customers. Temporary Population Potential customers include both full-time residents and the temporary population. The temporary population is made up of people who live elsewhere and visit, or work, in the area. This can be an important source of restaurant customers.

Restaurant Statistics Each year, restaurant business magazines publish statistics that indicate the potential of restaurants in various major metropolitan areas. The two statistical measures are the restaurant activity index and the restaurant growth index. a. Restaurant Activity Index (RAI). This measures the tendency of the population in the area to eat out. An RAI of 100 means that the willingness to eat out is the same as the national average. An RAI of less than 100 indicates a less than average tendency to eat out. b. Restaurant Growth Index (RGI). This measures the relationship of restaurant supply and demand. An RGI of 100 indicates an adequate number of restaurants relative to demand. An RGI of less than 100 is a situation where supply exceeds demand. Conversely, an RGI greater than 100 indicates that the area could support additional restaurants.

One major problem with these statistics is that they encompass entire metropolitan areas. They are not particularly useful when trying to determine a specific neighborhood location. Therefore, it is sometimes necessary to conduct some informal research to gauge the potential of a new restaurant in a specific area. One of the most effective ways to evaluate the potential for a new restaurant site is to consider the competition.

Since it is unlikely that existing owners or managers will talk about their operation to a potential competitor, you must accomplish this task by observation. This involves: a. identifying all the restaurants in the immediate area and estimating the total number of seats. b. Identifying the “like competitors” (i.e., those restaurants identified in “a.”) that have a similar menu prices, concepts, or target audiences. c. Narrowing the like competitors down to five restaurants that are considered to be direct competition. This is usually done based on one or more of the following factors: Reputation Similarity of concepts Similarity of menu prices Proximity to the proposed location.

You will also need to document the following information for each direct competitor you identify: a. Concept b. If liquor is sold c. Menu price range d. Distance from proposed location e. Visibility compared to proposed location f. Accessibility compared to proposed location g. Hours h. Observed percentage of capacity at: 1) Breakfast, 2) Lunch and 3) Dinner Generally, the most effective way to obtain this information is by visiting each of the identified competitors.

Personnel Availability An owner considering an additional or new operation should ensure that there is a sufficient number of willing workers available. In many locations, this is not a major consideration since there will be many people who are willing to work in restaurants. However, in some parts of the country, restaurant workers are in very short supply. Site Characteristics Once you have determined that the area you have selected has enough potential customers to be successful; the first step is to evaluate the proposed site.

Site selection cannot be overemphasized. Countless restaurants have failed because of unsuitable locations. Two of the most important aspects of selecting a site are: a. Visibility. In short, being able to see the restaurant will motivate many potential customers to try it. This is especially important when starting a new operation.

A restaurant located in an out-of-the-way location loses a ready source of free advertising in its visibility to pedestrians and motorists passing by. b. Accessibility. Although visibility is an important aspect of developing public interest in a restaurant, its accessibility will often determine if the customer actually dines there. Although customers may be able to see a restaurant, they may not even try to get there if access appears difficult. Visibility and accessibility are usually considered together. The following are some factors to consider when evaluating a potential site’s visibility and accessibility.

Convenience. This is the measure of the site’s proximity to potential customers. Some of these sources include: 1. Residential areas. 2. Shopping centers. 3. Educational facilities. 4. Recreational areas. 5. Central business district. 6. Industrial centers. 7. Mass transportation stops. 8. Freeway exits. b. Traffic Count. This is primarily a measure of visibility that involves measuring the number of pedestrians and cars that pass by the site. The speed of passing cars should also be considered. Unless the restaurant is visible for some distance, cars driving by at speeds greater than 35 to 40 miles per hour may not be able to react in time to actually stop at the restaurant (although this can be overcome by having easy access and strategic placement of advertisements).

In addition to location, the physical design (physical attributes) of the site should also be evaluated. This includes: a. Physical suitability. The physical layout of the site must be suitable for the envisioned restaurant concept. If another unit of an existing concept is being opened, it is preferable to have the new unit the same size and configuration as the other units. This helps lower the costs of finishing out the space, since many of the design decisions and specifications can be carried over from previous experience. b. Parking facilities. Adequate parking facilities are an important consideration for almost all restaurants. Unless you are locating a restaurant downtown, adequate parking should be available for both customers and employees. c. Adequacy of utilities. The ability to obtain electric, gas, water, and waste disposal services is also important. d. Municipal services. The adequacy of police and fire protection, as well as sanitation services, must be considered. These services have an effect on the restaurant’s ability to attract customers and employees and may also affect the restaurant’s insurance rates.

Zoning considerations . Although appropriate zoning is a concern for any business, restaurants may face additional requirements. This is especially true if the restaurant plans to serve liquor. Once a site for a new restaurant has been selected, the restaurateur must determine how to secure its use. For most new restaurants, this will entail the negotiation and execution of a lease. A commercial real estate lease will probably be the single largest legal and financial commitment that a restaurant will have.

Since restaurateurs do not often have the knowledge or the bargaining leverage necessary to ensure that the best possible lease terms are obtained, they usually need good legal and business advice. The following are some of the more important features of a lease agreement: a. Term. The length of the lease should be consistent with the plans and objectives of the new restaurant. b. Flexibility. The following questions may be asked to determine whether the lease provides the restaurateur with the necessary flexibility. 1. What are the renewal provisions? 2. If additional space is not available when needed, and relocation is necessary, can the tenant sublease? 3. If subleasing is allowed, are there any restrictions? c. Cost. A gross lease excludes taxes, insurance, and repairs while a net lease passes some or all of these expenses to a tenant. If escalation clauses are included in the contract, the lessee should have a through understanding of how increases are calculated. It should also be clear who pays for improvements and what aspects of the cost are negotiable. d. Tenant common expenses.

When space is rented in locations where common areas are shared with other tenants, such as in shopping centers and malls, each tenant is often responsible for a portion of common expenses. These costs can be significant and should be carefully considered. e. Exposures. Two major exposures that usually can be mitigated to some degree are (1) the risk of bankruptcy or insolvency on the part of the landlord and (2) the risk of rental to undesirable tenants at the same location. Financial condition of the landlord generally can be verified and then a relatively narrow limit on undesirable tenants (e.g., competitors or unsavory businesses) can be negotiated. The high failure rate experienced by new restaurants means that, in most parts of the country, there are usually a number of vacant restaurants available for lease.

Many failed restaurant locations are reopened by new owners who think they can succeed with their own concept. However, all too often, the new operator fails because the negatives of the location can’t be overcome. Available locations, often fully equipped, presents an opportunity to the careful operator. The following are some of the advantages and disadvantages of converting a vacant restaurant into a new one.

Advantages : • Rent concessions. In many cases, landlords are willing to offer attractive rates to another restaurant to occupy the empty space. • Fixtures and equipment. Often, the proposed site includes a fully equipped kitchen as well as the fixtures in the dining area. At the very least, the site will usually have a useable floor plan in place for food preparation and serving. This can be beneficial because the less work that a new operator has to do to prepare the site, the lower the start-up costs will be. • Reducing potential competition.

The possibility of rent concessions and the availability of an equipped site may lure potential competitors who might not otherwise have the financial resources to open a restaurant. Therefore, leasing a former restaurant site may improve a restaurateur’s changes of success by keeping out one more competitor. Disadvantages: • Suspect location. The reason that the restaurant site is available may be that the location was so suspect and its chances of success were crippled from the start. Occupying such a site should be done with great caution. The owner choosing to do so should develop a plan of action for overcoming the location problems. Some tactics might include marketing, more visible signs, valet parking, and increased security.

A full demographic study should be completed before signing the lease. It has been my experience that visibility and access plays an important role in the chances of success for any restaurant. • Public memory. Some restaurants fail because the food or the service is especially bad. In some extreme cases, incidents of food poisoning or health code violations may have caused the operation’s failure. The public tends to remember such incidents and may regard any successor operation with suspicion. A poor public perception may be very difficult, if not impossible to overcome. In order to change public perception you will be required to allocate a considerable amount of funds toward local store marketing. • Design difficulties. Sometimes a restaurant fails due to flaws in the restaurant’s design; causing higher than necessary labor costs to cook and serve meals. A restaurant looking to convert an existing site should be careful not to inherit someone else’s problems.

Also, a restaurant design that is suitable for one concept may For example, the preparation areas of an oriental restaurant will have a substantially different layout than those of a steak house. Therefore, it is important that a restaurateur consider how the existing layout can be adapted to the planned concept. I would recommend calling in a design consultant to analyze what layout changes would be necessary. Restaurant Fixtures and Equipment Whether an existing restaurant is purchased, or a new operation takes over a previously occupied space, some or all of the fixtures and equipment may be offered for sale to the new owner.

Regardless of the concept, many of the fixtures and equipment found in a typical restaurant are common to all restaurants. For example, some concepts may require that a certain style of furniture be used or that the kitchen include certain specialized equipment. But the need for much of the higher cost kitchen equipment, such as refrigerators, freezers, and stoves, is common to virtually all restaurants. Ordinarily, the new operator should evaluate the suitability of the fixtures and equipment by: a. Obtaining (or compiling) a complete list of the available furniture and equipment. b. Noting the age and condition of each item. c. Identifying any equipment that is unusable or unsuitable for the new operation. d. Determining if any of the fixtures and equipment is leased.

Starting a new restaurant is not cheap. In fact, the cost of building and outfitting a freestanding, full service restaurant can easily exceed $1.50 million (not including land costs). Converting an existing restaurant site, therefore, can result in large savings. However, you should approach any conversion with caution. There are reasons why restaurants fail, and understanding those reasons is critical. With this in mind, taking on a former restaurant site may not be a good bargain if the costs of overcoming the flaws are too high. Operating Considerations There are literally dozens of steps that must be completed after deciding on the restaurant concept and determining where to locate it, before it is ready to open. These considerations are divided into the following categories: a. Administrative matters. b. Accounting and control systems. c. Marketing and promotion. d. Purchasing and inventory. Hiring personnel. f. Fixed asset acquisition. Adopting an Operating Plan…

The time from the original decision to open a restaurant to the actual opening can stretch for many months. Failure to consider a step early enough in the process could impact the success of the opening. For example, in some cases, a liquor license may only be obtained after negotiations with the local municipality, which can last for several months. If the application is not started in time, the operations may not have a liquor license in place by opening day. Accordingly, it is imperative that the restaurateurs adopt a plan that includes a timetable to ensure that the operation’s opening is successful. Administrative Matters. Like any start-up business, a new restaurant must address a variety of administrative matters.

Some of the more important issues include: a. Restaurant name. b. Form of entity. c. Permits and licenses. d. Insurance coverage.

The restaurant name . In most cases, the restaurant name is determined when the restaurateur decides on the restaurant concept. However, before ordering signs and menus, the owner should register the name and determine that no other entity has the rights to that name. A restaurant that inadvertently uses a name that has been reserved by another entity could be forced to incur the expense of changing signs, menus, and any other feature in the restaurant that carried that name. Also, any marketing efforts that focused on building name recognition for the restaurant would be wasted if the name is changed.

Trade names are generally registered with the state agency that handles incorporations. In most cases, an attorney should be consulted to register the name. Form of entity. The owner will also have to consider the advantages and disadvantages of the various forms of entity that can be chosen. Restaurants typically choose one of the following forms of entity: a. Proprietorship b. General partnership c. Limited partnership d. Corporation (either S corporation or C corporation)

Once the form of entity is decided, the restaurant can apply for the identification numbers, including the Employers Identification Number (EIN) from the Internal Revenue Service. The restaurant must also obtain certain permits and licenses that are unique to their operations including: a. Health permits b. Liquor license c. Music copyright license. The requirements for health permits vary substantially between jurisdictions, with some areas being stricter than others. Virtually all health permits are granted only after the restaurant passes a health inspection. Therefore, it is important to understand the local requirements early in the process to ensure that any planned kitchen or dining room configuration will be in accordance with the local health department rules. The local restaurant association can often provide information about required permits and licenses.

A word about music copyrights. If the restaurant plans to play live or recorded music (including music played on a iPod), it must obtain a copyright license from the appropriate music-licensing agency. The two primary agencies are the American Society of Composers, Authors & Publishers (ASCAP) and Broadcast Music, Inc. (BMI). Insurance Coverage. Restaurants typically have a significant amount invested in their facilities. Accordingly, the restaurateur should arrange for appropriate insurance coverage. Some of the common coverage includes: a. Liquor liability. b. General liability. c. Worker’s compensation. d. Fire. e. Business interruption. f. Burglary. g. Glass breakage. h. Contents. i. Sprinkler damage. j. Key person. Fidelity. l. Employee benefits (life, health, disability).

This step is typically accomplished by consulting with the restaurant’s insurance agent. Accounting and Control Systems A restaurateur can expect to incur substantial costs as part of preparing a restaurant for opening. Accordingly, it is important to establish an accounting and control system early in the process to ensure that expenses are properly tracked. Establishing an account system includes the following steps: a) Adopt a chart of accounts and general ledger. b) Establish banking relationships and cash handling procedures. c) Designate persons responsible for cashier function. d) Adopt a weekly profit and loss report and other forms. e) Assign responsibility for preparation of reports. Adopt a Chart of Accounts and General Ledger.

What must be decided is whether or not the restaurant will employ a bookkeeper to maintain the ledger and accounting records. Many restaurants choose to have their CPA write up the monthly transactions and update the ledger. Establish Banking Relationships and Cash Handling Procedures. While the restaurant is preparing for opening, it will be necessary to pay contractors and other parties, such as suppliers and employees involved in the remodeling. Therefore, most restaurateurs will establish a banking relationship early in the start-up process. Designate Persons Responsible for Cashier Function. It will be necessary to make certain cash disbursements as the start-up phase progresses.

In many cases, the owner personally writes those checks. In other cases, especially if the owner is not always present, he or she may delegate the authority to pay start-up expenses. Although the restaurant has not opened, the restaurant should determine how the cashier function will be handled. A restaurant can have a central cashier or have a server that acts as a cashier. That decision may affect the restaurant’s layout and personnel hiring decisions. Adopt Weekly Profit and Loss Report and Other Forms. Although it is not strictly necessary to adopt a weekly profit and loss format until the restaurant is ready to open, a restaurateur should have an idea of the type of information that he or she wants from such a form before the point of sale system is ordered. Assign Responsibility for Preparation of Reports. Although preparation of the weekly profit and loss report (and its

Will not occur until after the restaurant has opened, the owner should decide who would be responsible for preparing the various reports prior to opening. By assigning this responsibility early, the owner is able to establish the workflow for information, and determine if the restaurant’s information needs will impact the level of staff needed or the type of point of sales system to install. Marketing and Promotion Some strategies that you may want to consider are the opening of a new restaurant, which includes: a. Print Advertising. b. Radio and TV advertising. c. Direct mail. d. Neighborhood fliers. e. Coupon programs. f. Public relations. g. Special banners and signs on the restaurant. h. Special meals or promotions. i. Pre-opening meals served for selected parties (such as charitable groups or reporters). j. Social Media The level of promotion that will be necessary to publicize a newly opened restaurant will depend, to a large extent, on the restaurant’s location and its reputation. A restaurant that is located on a corner at the intersection of two busy streets may only need to place a “Now Open” banner on the building to attract customers. Similarly, an established restaurant that is opening at another location will not need to work as hard at name recognition, since the operation’s name is familiar with the dinning public.

A restaurant that is not well known or well located will have to develop a budget and marketing plan to alert the public to the fact that the restaurant is now open. Once the site has been determined, the restaurateur should evaluate the menu and determine its effect on purchasing and inventory requirements. This usually requires that you: a. finalized the menu. b. Establish a recipe file. c . Price the menu. d. Place initial food and beverage orders. Finalize the menu.

Typically, when determining the restaurant concept, the preliminary menu is confined to the entrees that the proposed operation plans to serve. For example, a steak house concept might formulate a preliminary menu based on the types of steaks to be served and the planned cooking method. As the restaurant prepares for opening, it is necessary to round out the preliminary menu by deciding on the specifics of the menu, including: a) Appetizers b) Salads c) Entrees d) Desserts e) Non-alcoholic beverages f) Beer, wine, and liquor selections Once the menu is finalized, the restaurateur can develop the recipes that will be used for each item. Establish a Recipe File. A recipe file is an important part of establishing portion standards. As you prepare for the opening, one of the most important tasks is to develop recipes for each menu item.

Generally, there are a variety of different ways to prepare a menu item. The chef often goes through a process of testing and refining recipes until he or she settles on the recipe that will be included in the file. Obviously, the primary objective of the testing phase is to develop a recipe that will taste good to the public. However, there are two other important objectives. a) Develop preparation standards. A recipe will not be suitable if it cannot be prepared efficiently in the kitchen. Therefore, for that reason the chef should set standards for the length of time needed to prepare the entrée. For example, a restaurant might set a standard of 4 minutes to prepare a lunch item and 12 minutes to prepare a dinner item.

By setting a preparation standard, the chef can identify overly complex recipes that require simplification. If the revised item cannot meet the preparation standard, it should be dropped from the menu. b) Develop portion standards. Once the recipe if finalized, portion standards can be developed. Setting standard portions permits you to accurately price the menu and determine initial inventory needs. The bar manager should also develop a recipe file for all alcoholic beverages included in the bar menu. Purchasing and Inventory

The process of pricing the menu is no different for a start-up restaurant than for an established operation. The restaurateur determines the portion cost of each item, and calculates the menu price using one of the approved methods for menu pricing. Unlike an established restaurant, a start-up operator will have no direct knowledge of the target customers’ price resistance, and runs a risk of setting its menu prices too high. In such a situation, the initial patrons may not come back, and additionally, they may complain about the prices to their friends. However, if the start-up restaurant’s menu prices are in line with the prices of near-by restaurants, price resistance is generally not a major problem.

Once you have established the prices, the menus can be ordered. Depending on the style selected, printing a menu can take up to two months. Accordingly, you should take printing time into account to ensure your menus are ready for opening day. In most start-up situation you should consider the amount of inventory needed for pre-opening testing. The preopening-testing phase allows the kitchen staff and the servers to work together in ordering, preparing and delivering actual meals. It is an important part of preparing a restaurant for opening because this phase often identifies bottlenecks or rough spots in the operation that require fixing or fine tuning before opening day.

Pre-opening testing can also be made a part of the marketing and promotion program by inviting parties, such as newspaper reporters or charitable organizations, to the restaurant. However, if the public is served as part of the preopening phase, all business and health permits should be in order. Make sure you complete a physical inventory of all food and beverage inventories on the night before the restaurant opens. Doing so provides a starting point that allows you to track food costs accurately from day one. Hiring Personnel although the basic considerations for hiring restaurant employees in a start-up situation are the same as for established operations, the task is complicated by the fact that an entire staff must be hires at once. The steps that are typically followed when initially hiring personnel include: a. Identify required staffing levels. b. Develop procedures to ensure that: • Job application process is in accordance with the ADA • Forms I-9 are obtained for all employees. c. Develop job descriptions for all employees. d. Develop a job application form. e. Develop personnel policies and adopt a pay scale for all positions.

Place ads and signs to inform potential employees that the restaurant is hiring. g. Interview and select employees. h. Schedule training and orientation sessions before opening date. i. Prepare the schedule for opening week. Required Staffing Levels Staffing levels can be efficiently determined using the Labor Staffing Chart, which provides a pictorial representation of the restaurant’s personnel needs. One difficulty facing a manager completing this form for a start-up operation is that he or she will have to guess as to which days or periods will b

As a practical matter, most patrons allow a new establishment a few weeks to refine their procedures. Therefore, although it would be nice to have the staff performing flawlessly on opening day, it probably will not happen. You should attempt to strike a balance that provides as much training as financially possible. Opening Week Schedule One of the ingredients to the success of a new restaurant is adequate scheduling of staff. However, it is not always possible to predict opening demand with certainty. Therefore, many operators elect to schedule their opening week staff levels on the heavy side to ensure that there will be enough people to adequately serve customers. This is probably necessary if the restaurant only trained a core group of employees in the pre-opening testing phase. In such a case, the other employees can be training during the opening week. One major pitfall to scheduling so many employees is that it can hamper your operation. You must look for balance.

Financial Considerations The expense of starting a restaurant, coupled with the high failure rate associated with new restaurants, dictates a very careful evaluation of the financial aspects of any restaurant start-up or acquisition. Banks and other lenders are traditionally very wary of lending money to beginning restaurateurs. Consequently, the owner’s capital, as well as that of his or her family or friends is frequently at risk. If the restaurant is not properly capitalized from the beginning it may fail because it is often not possible to obtain loans to tide it over until the operation gets established. My recommendation to anyone considering starting a restaurant is to complete the following: a. Carefully evaluate the financial feasibility of your restaurant b. Project your total capital needs c. Project your operating results d. Assess operating results e. Determine worst case scenario. d. Get the proper assistance from the experts Starting a new restaurant venture is an enormous undertaking.

Please feel free to contact us at 773-470-8239 if you have any questions, or if we can provide additional assistance.

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Does your restaurant have a culture? Develop it!

Can I Offer Some Help?

Sometimes you just have to reach out for help.

Is Your Menu Costed?

Is your menu costed?

Pest Management

Let's focus on good sanitation practices and pest control.

Employee Training

Make your labor cost work harder for you.

Please Reach Out

Restaurant Consulting can help...

How Important is Location to a Restaurant?

Maximize profitability with location

Staffing to Business Needs

How are you determining your staffing needs based on current business?

Are you taking inventory often enough?

How often do you take inventory?

Are You As Profitable As You Can Be?

Maximize profits while lowering food costs.

Restaurant Consulting

Some thoughts on a Monday afternoon ﻿

Identifying Your Objective

What are your objectives?

Identifying Your Goals

What is your goal?

How Often Should You Take Inventory?

How To Improve Your Food Costs

How To Start A Restaurant

Some thoughts on a Monday afternoon