Running a Restaurant for Dummies

Michael Garvey is the former general manager of Grand Central Oyster Bar. He is currently a restaurant specialist for Vision Wine Brands. Heather Dismore is a professional writer who has extensive experience in the restaurant business. Andrew G. Dismore is an award-winning professional chef.

Introduction 1

About This Book 1

Conventions Used in This Book 2

What You’re Not to Read 2

Foolish Assumptions 3

How This Book is Organized 3

Part 1: Getting Started 3

Part 2: Putting Your Plan in Motion 3

Part 3: Preparing to Open the Doors 4

Part 4: Keeping Your Restaurant Running Smoothly 4

Part 5: The Part of Tens 4

Icons Used in This Book 4

Beyond the Book 5

Where to Go from Here 5

Part 1: Getting Started 7

Chapter 1: Grasping the Basics of the Restaurant Business 9

Getting a Feel for the Restaurant World 10

Laying the foundation 10

Setting up shop (with a little help) 11

Welcoming the world to your restaurant 11

Finding Out Whether You Have What it Takes 12

Monitoring your motivations 12

Evaluating your expectations 13

Tracking key traits of successful restaurateurs 14

Chapter 2: Deciding What Kind of Restaurant to Run 17

Figuring Out Where to Start 18

Buying into a franchise 18

Taking over an existing restaurant 19

Partnering up with your current employer 20

Starting from scratch 21

Choosing the Right Type of Restaurant 22

Dining in style 22

Kicking back casual 24

Placing an order — to go! 24

Selecting self-service or fast-food 26

Running a bar — with or without food 27

Providing catering and banquet services 27

Creating Your Concept 29

Positioning your restaurant for success 30

Identifying the emotional connection 31

Creating a unique selling proposition 31

Using consumer insights to develop and test your concept 32

Developing your positioning statement 33

Putting it All Together 34

Thinking about theme and concept 34

Choosing a name 35

Creating a logo 37

Signing off on signage 38

Chapter 3: Researching the Marketplace 41

Getting Your Mind Right: Profits Matter 42

Exploring the Consumer’s Buying Decision: The Big Why 42

Identifying and Analyzing Potential Customers 44

Figuring out who your customers are: Target segmentation 44

Creating a profile of your Superfan, or brand hero 45

Focusing your research 47

Keeping an Eye on the Enemy 48

Identifying your competitors 48

Figuring out who they think their customers are 49

Reconnaissance: Mystery shopping till you drop 50

Developing and Implementing Your Battle Plan 52

Doing a competitive analysis 52

Acting on your information 54

Adjusting to a changing battlefield 55

Chapter 4: Writing a Business Plan 57

Don’t Fly Blind: Understanding Why a Business Plan Matters 58

Laying Out a Business Plan 59

Articulating the concept and theme 61

Creating your menu now 61

Analyzing your market 62

Identifying your target audience 63

The Bottom Line: Focusing on Financials 63

Forecasting sales 64

Forecasting expenses 67

Breaking even 72

Estimating profits 73

Projecting cash flow 74

Creating a balance sheet 74

Selling Your Plan: The Unwritten Part of Your Business Plan 76

Part 2: Putting Your Plan in Motion 77

Chapter 5: Show Me the Money! Finding Financing 79

Knowing How Much Money You Need 79

Calculating start-up costs 80

Opening with operating reserve 81

Looking at How You Can Contribute 81

Working with Investors 83

Looking at types of investors 83

Compensating your investors 85

Getting a Loan 87

Visiting your local bank 87

Finding government assistance 88

Chapter 6: Choosing a Location 89

Looking at the Local Real Estate Market 89

Examining Location Specifics 90

Considering access and visibility 91

Paying attention to traffic 92

Knowing which locations to avoid 93

Looking at other businesses in the area 94

Considering security 94

Factoring In Cost Considerations 95

Chapter 7: Paying Attention to the Legalities 97

Identifying the Help You Need 98

Looking at the roles to fill 98

Setting Up Shop on Legal Grounds 99

Going it alone: Sole proprietorships 100

Teaming up: Partnerships 100

Almost teaming up: Limited partnerships 100

Playing it safe: The corporate entity 101

Blend of three: The LLC 101

Knowing Your Local Laws 101

Getting Permits and Licenses 102

Acquiring a liquor license 103

Heeding health codes 105

Paying attention to building codes 106

Considering fire codes and capacity 107

Checking out other permits 107

Taking up trademarks 108

Buying the Insurance You Need 109

Part 3: Preparing to Open the Doors 111

Chapter 8: Creating the All-Important Menu 113

Making Some Initial Decisions 114

Matching your menu to your concept 114

Considering customers: Feeding the need with an insights-driven menu 115

Matching your menu to your kitchen 116

Cutting your chef (if you have one) in on the action 117

Figuring Out How Much to Charge 118

Determining your menu price points 118

Using food cost percentage to set prices 119

Creating dishes and recipes and then costing them 121

Dealing with price fluctuations 122

Mixing your menu to meet an overall percentage goal 123

Deciding When to Change Your Menu 124

Staying flexible when you first open 124

Revisiting your menu later on 125

Offering specials 126

Highlighting new news 126

Choosing Your Menu Format 127

Counting your main menu options 127

Considering additional presentations 130

Selling the Sizzle: Setting Up a Menu with Sales in Mind 132

Directing eyes with menu engineering 132

Getting people salivating: Considering visual representation on the menu 133

Money for ink: Using lingo that sells 134

Validating Your Menu before You Go Primetime 135

Chapter 9: Setting Up the Front of the House 137

Digging into Design 138

Identifying pros who can help 140

Getting the scoop on potential pros 141

Thinking outside the Box: The Exterior 142

Laying Out the Interior 144

Allowing space for the flow 145

Building your floor plan 145

Creating space to wait 147

Keeping Service Support Close 148

Wait stations 149

Point of sale (POS) stations 150

Tabletop settings 151

Setting Up a Reservation System 152

Taking traditional reservations 153

Accepting online reservations 154

Reviewing Restrooms 155

Providing public facilities 155

Earmarking areas for employees 156

Chapter 10: Setting Up the Back of the House 157

Planning a Kitchen with the Menu in Mind 157

Figuring out what you need to fix the food on your menu 158

Reviewing the basic kitchen stations 159

Taking control of your prep 164

Laying out your kitchen 168

Considering Your Water Supply: Why Water Quality Matters 170

Adapting an Existing Kitchen 171

Acquiring Your Kitchen Equipment 172

Deciding whether to buy or lease 173

Moving beyond name-brand equipment 175

Getting purchasing advice 176

Chapter 11: Setting Up a Bar and Beverage Program 177

Setting Up Your Bar 178

Figuring out furniture 178

Selecting equipment 179

Selecting smallwares 181

Surveying supplies 183

Keeping Your Bar Clean 184

Drawing Drinking Crowds 185

Running promotions 185

Providing entertainment 186

Offering great bartenders 187

Get with the (Beverage) Program: Providing Liquid Refreshment 188

Creating your beverage program 188

Developing a robust nonalcoholic beverage program 189

Becoming Beer Brainy 190

Winning with Wine 191

Creating your list 192

Pricing your wine 194

Storing your wine 195

Lapping Up Some Liquor Learning 196

Pour size and pricing 196

Liquor lingo: Understanding cost and quality 197

Serving Alcohol Responsibly 198

Chapter 12: Hiring and Training Your Staff 201

Deciding Which Roles Need to Be Filled 201

Managing your quest for managers 203

Staffing the kitchen 206

Filling the front of the house 210

Staffing the office 213

Finding the Right People: Placing Ads and Sifting through Résumés 215

Interviewing the Candidates 216

Round 1: The meet and greet 217

Round 2: Comparison shopping 218

Bonus rounds: The inevitable re-staffing 219

Hiring Foreign Nationals 220

Double-checking the documents 220

Evaluating the E-Verify system 220

Petitioning for an employee 221

Training Your Staff 221

The employee manual: Identifying your company policies 221

Operations manuals: Understanding specific job functions 222

Creating a training schedule 223

Chapter 13: Purchasing and Managing Supplies 225

Preparing to Stock the Supply Room 225

Listing what you need 226

Considering premade items 228

Finding and Working with Purveyors 228

Finding and interviewing suppliers 229

Comparing prices, quality, and service 231

Considering the size of suppliers 232

Getting the right quality at the right price 232

Getting what you ask for the way you ask for it 233

Building an Efficient Inventory System 234

Managing the inventory 234

Reducing waste 237

Eliminating spoilage 238

Chapter 14: Running Your Office 241

Deciding Where to Put Your Office 241

Creating a Communications Hub 242

Counting on your computer 242

Picking up the phone 243

Using e-mail and online services 243

Tracking sales with a point-of-sale system 244

Interfacing your different systems 246

Hardware (the Old-Fashioned Variety) 246

Processing Payments 247

Credit and debit card transactions 248

Gift cards 248

Contactless and proximity payments 250

Preparing for Payroll 250

Farming it out or doing it in-house 251

Deciding on a payroll period 252

Choosing salaries or hourly wages 252

Choosing a method of payment 253

Saving, Storing, and Protecting Your Records 254

Chapter 15: Getting the Word Out 257

Defining Your Message 258

Focusing on the consumer and tailoring your message 258

Communicating your concept 259

Keeping up with the competition 259

Getting tactical 261

Building Public Relations 262

Planning for the good and the bad 262

Your PR campaign: Going it alone 263

Getting some help with PR 265

Creating an Advertising Plan 266

Creating a Compelling Restaurant Website 268

Sounding Off on Social Media 269

Investigating your options 270

Responding to reviews both positive and negative 275

Part 4: Keeping Your Restaurant Running Smoothly 277

Chapter 16: Managing Your Employees 279

Selling Employees on Your (or Their) Restaurant 279

Educating your employees 280

Motivating your staff 281

Making Staff Schedules 283

Adding it all up: How many workers you need 283

Putting names to numbers 285

Setting Up Policies to Live (or Die) By 287

Scheduling and attendance 287

Smoking 288

Drinking or using illegal drugs 289

Uniforms and grooming standards 289

Social media policies 290

Disciplinary measures 292

Offering Benefits 293

Looking at health insurance 293

Considering other benefits 293

Chapter 17: Running a Safe and Clean Restaurant 295

Making Sure Your Food is Safe 295

Blaming bacteria and viruses 296

Battling illness: Time and temperature 297

Preventing cross-contamination 299

Monitoring food safety outside the kitchen 299

Monitoring food safety outside the restaurant 300

Critical control points: Following HACCP guidelines 301

Staff education: Picking up food safety tools 301

Implementing proper hand-washing procedures 302

Keeping the Restaurant Clean 302

Getting cleaning supplies 303

Scheduling your cleaning 304

Opening and closing procedures 309

Taking Precautions to Protect Your Customers and Staff 310

Food allergies and other dietary concerns 310

First aid 312

Exits: In the event of an emergency 312

Providing a Pest-Free Place 313

Handling the Health Inspection 314

When the inspector arrives 315

During the inspection 315

Avoiding a bad inspection 316

Chapter 18: Building a Clientele 317

Understanding Who Your Customer is 318

Meeting and Exceeding Expectations 319

Turning Unsatisfied Guests into Repeat Customers 321

Recognizing unsatisfied guests 322

Making things right 324

Making Social Media Work for You 325

Chapter 19: Maintaining What You’ve Created 327

Evaluating Financial Performance 328

Daily business review 328

Income statement 330

Cash flow analysis 330

Evaluating Operations 332

Menu mix analysis 332

Purchasing and inventory analysis 335

Evaluating and Using Feedback 337

Paying attention to customer feedback 337

Responding to professional criticism and praise 339

Listening to employee feedback 342

Part 5: The Part of Tens 343

Chapter 20: Ten Myths about Running a Restaurant 345

Running a Restaurant is Easy 345

I’ll Have a Place to Hang Out 346

I Can Trust My Brother-in-Law 346

The Neighbors Will Love Me 347

I’ve Been to Culinary School, So I’m Ready to Run the Show 347

I’m Going to Be a Celebrity Chef 347

My Chili Rocks, So I Should Open a Place 348

I Can Cut the Advertising Budget 348

Wraps are Here to Stay 348

I’ll Be Home for the Holidays 349

Chapter 21: Ten True Restaurant Stories That You Just Couldn’t Make Up 351

Déjà Vu All Over Again 351

Priceless 352

Free Pie Guy 352

Rat-atouille 352

Frosty the Newbie 353

Drinks are on Me 353

You Like My Tie? 353

Chefs Behaving Badly 354

Radio Fryer 354

(Coat) Check, Please! 354

Index 355

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