Opening a Restaurant
07-02-2012, 11:01 AM
Everyone beat me to it.
A restaurant, a successful one anyway, is dependent on the tripod of 3 individuals who know exactly what the fuck they are doing. They are:
The Chef
The front-of-house manager
The office person
Is it possible to do it otherwise? Yes, but your chances at success drop massively. Traditionally, there are mom and pop restaurants all over the world. One of them cooks, one handles the dining room, and the two of them handle bookkeeping at the end of their 12 hour day and exhausted. It's a bit of an outdated and romantic notion.
It's crucial that none of the three are related to each other or have personal ties. The triad, ideally, is formed from networking after years of working in the restaurant business and each member is aware of the competence of the other two. Being successfull in any of the three positions means a BARE MINIMUM of 5 years of doing what they do. I'd say 10 years is more like it (I've got 12 under my belt)
A chef has to know much more than how to cook (which in itself takes years upon years). He needs to know how to manage people, ensure consistency, monitor food cost, maintain a reasonable inventory, monitor labor cost, maintain health standards, know how to fix a commercial dishwasher with a soup spoon, formulate recipes. It's not uncommon for chefs to regularly work 80+ hours a week to handle all this shit and STILL have time to do all the fish and meat butchery, do some expediting, and fill in on stations if he's short staffed.
The same goes with the floor manager, except this poor fuck has the misfortune to have to deal with the dining public face-to-face. If you've never waited tables, you have no idea how awful humans can behave once they sit down in a restaurant. Their sense of decency evaporates and suddenly, because they have to PAY for a meal, they adopt a sense of entitlement that would have you think they deserve to have their feet kissed. Hopefully you have staff that can handle it, if you can manage to find staff that actually show up to work every day.
Finally the bookkeeper. You have no IDEA how much paperwork is involved in running a restaurant. From deal with city permits, licenses, insurance, taxes, fees, lawsuits, etc etc etc. Employee payroll, worker's comp, unemployment tax, with new shit bombs dropping every day from every direction. If you want to actually be successful, you need to very very closely monitor how money moves through your restaurant. From tips and cash drops, to calculating expenditures and sales, to drawer counts, there is money flowing in many different directions, to servers, bartenders, vendors, probably the owners (over 90% skim from their business, try taking account for that)
You need to know something about building code, about the equipment that you need, about POS systems.
You should know something about PR so you can get the word out and actually fill your dining room.
You should know how to handle special events when a young couple decides they want to get married in your restaurant, or some local business wants to do lunch for 100.
And at the end of the day, you STILL have to maintain a passion for what goes out on the plate, otherwise you have no customers. And then what's the point?
I've worked in everything from michelin starred restaurants, to 5 star 5 diamond hotels, to little mom and pop places. I've worked with owners that didn't know shit, and managers who were absolutely cutthroat and completely perfect well-oiled machines at doing what they do. If you have any further questions hit me up
To answer your question about funds, it's always done through investors. You need a business plan like any other in which you have a very serious and thorough outline about what your concept is. What's the product? And I'm not just talking about the food, though that's important too. What does the restaurant look like, smell like, sound like. Imagine the finished product in your head and work backwards, and then get it all on paper. Next you need to talk about numbers, because that's what investors really like. What's your projected check average, your projected net sales, your operating costs. Coming up with a solid business plan should take a month. Most restauranteurs find investors because they have a proven track record as either a chef or a manager. Other than that, hell if I know how it happens. There are a lot of fools parting with their money out there in the restaurant world.
Edited one more time: VERY few restauranteurs are as financially successful as they'd like with just one restaurant. You can get by on it. If you have a medium volume restaurant that does $2.5 million a year gross (not too shabby, that's a restaurant serving 140 guests a day with a 50 dollar check average that's open 365 days a year) and you are REALLY fucking good at what you do, you can earn a 6% profit margin by your second year (the odds aren't good, this is like a seasoned vet getting 6% by the second year, but it happens) that's $150,000 profit, and probably your paycheck. If you break even your first year you're doing very well, that means all of your vendors are up to date, you have no serious outstanding balances, and your invenstors are 1/3 to 1/2 of the way paid off. Fewer than 10% of restaurants are in this status, and the vast majority close by their 3rd year, if they make it even that long. But there are a lot of dreamy eyed goofballs in this industry.
That said, the money really starts flowing in once you're a multi outlet brand. You get 3-4 restaurants under your belt, all of them earning 4-6%, maybe even hiring a manager who manages to squeeze 8% out of your businesses, then you're earning serious cash. But the resources and knowledge it takes to run 4 successful outlets would make your head spin, unless you've been doing this for decades and this shit is just in your bones.
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