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I just discovered your blog and have enjoyed reading your posts. I
just moved from Carmel after living there for the last 3 years to open
a restaurant back here in my hometown of Manchester, NH. After some
time of looking for space, I signed a contract to move into an existing
restaurant. We will be closing and re-opening under our own concept.
The current restaurant is a Vietnamese restaurant and the people are
selling because they want out of the business. I am very familiar with
the local market and have done a lot a research on operating costs. In
putting together the financial projections for our business plan, they
were coming out too rosy. I can’t shake my last experience in Carmel as the
opening GM at a restaurant in the mouth of the valley. We were doing
VERY robust sales and we were losing considerable amount of money no
matter how hard I worked the numbers into a favorable position. My
concern is that I am missing something but my due diligence says
otherwise. What kind of prat falls might I be facing that I haven´t considered?
Puzzled by Projections
You have officially taken the first step into becoming a restaurant owner: Rosy financials, blooming business plan, flowering future. What could be wrong? The unforeseen variables that will arise on a regular basis will be most predominant deterrent to profitability. Unfortunately, writing these elements into the equation is impossible.
Think of taking a step into a darkened Haunted House at Disneyworld. You anticipate darkness and fright with each step forward but never really know what lurks around each corner of the strobe-lit hallways. Once you turn a bend, and nothing appears, you seem relieved only to be frightened to high decibel screeches with the next step as the wax museum styled creature moves to the window with an outrageous roar.
That´s the restaurant business. A sturdy foundation, beliefs that everything will be smooth yet you know from all past experiences that lurkers may be lurkers could foil your plan.
If you feel comfortable with your budgets, if your rent is in line, and you priced your menu based on food costs rather customer perception, then you are on the road to a successful experience. Now all you have to do is to follow some simple steps in order to take the players, develop them into a championship team so that you can extract a profit out of the income. This is the most difficult part of the formula for success.
There are precautions to take that will make he venture less stressful.
Pay Attention- Don´t ever take your eye off the game. If you have surrounded yourself with the best people in the business, don´t think you can rest for a moment. Watch everything around you until it becomes instinctive. Keep the customer in mind at all times.
When you walk through your dining room, pan the tables to make sure the clothes, if you use them, are all hanging at the same length. If you have decided against table clothes, make sure the tables are cleaned and polished.
Check the doors for finger marks, the windows for clarity, and the floors for shine.
Make sure your bathrooms are spotless, your beer cold, your Martinis smooth, your steaks tender, your chicken moist, but cooked.
When you greet your staff, review their uniforms. Check for the aroma of smoke if they happen to be Marlboro men and women.
Checking the temperature of your walk-in box, to see if you are spending too much on electricity or losing produce means taken quick product inventory.
Check the inventory ordering sheets even if the chef´s responsibility is to check the ordering sheets.
Don´t ever pass a customer without saying "hello, good bye," or "may I help you?"
Mentor your staff in the business and life.
Respect the chef, and the dishwasher, and the busser, and the window cleaner equally. They are all part of the profitability equation and members of the team.
Draw the line at "we are all one family". NO, YOU ARE NOT. You are a team. Families drink out of the same milk bottle. Teams turn into champions.
Become part of the team. Don´t elevate yourself to ownership – as soon as you do, you won´t be. Always stay part a member of the team.
Finally, aside from training, the practice, the fine-tuning, the constant monitoring, the marketing, mentoring, and mistakes, keep your eye on the plates, the service and the numbers.
Your budgets, projections, and assumptions are guidelines. Refer to them weekly and compare the actual numbers to the projections. Tweak, fine tune, trim, cut, and shave costs without ruining quality and you should be on your way to a successful venture.
Keep in mind one of the most complex accomplishments to achieve is a profitable restaurant. However, the challenge is more exciting than any haunted house and the rewards are as invigorating as any winning season.
And, don’t ever forget you learned from one of the best reastaurateurs in the country.