(Blogger’s Note: This is the first of a three part series focusing on opening a family restaurant.)
Family owned and operated restaurants are like beautiful, red Ferraris: when they are running on all cylinders nothing could be better. However, when one small problem occurs within the fine tuned machine the entire experience turns into a nightmare.
And, since most Ferrari owners are aware of the pitfalls of before they accept the keys and are prepared to deal with the shortcomings of ownership, the family considering operating a restaurant together needs to have a clear understanding of the difficulties they will face as the obvious but unexpected challenges of owning a business present themselves.
That being said, family owned restaurants are often the most enjoyable to dine in and the most successful over time. Many of the famous, well known restaurants cross the country were originally family owned and operated before they were either sold or acquired by large corporations.
In many cases the reason the family restaurant was sold to a large corporation or another owner is because nobody discussed an exit plan at that very first family meeting. Often, that first meeting is one of the most enjoyable, as enthusiasm runs high and everyone is excited about the possibility of a new venture. It’s the one meeting where ideas are discussed and the fantasy of immediate success is within everyone’s vision. However, some subjects that are often distasteful need to be addressed and a plan needs to begin to develop. It will take numerous meetings to cover everything, but one rule of thumb at any meeting- make no promises yo can’t fulfill and write everythng down.
As in any business there must be a plan that has a starting point and an ending point. Usually at first meetings everyone wants to discuss the excitement of cooking and decorating and creating an environment that each family member will enjoy.
Unfortunately, this comes later in the process. First family meetings need to be focus on the business end of the business. There needs to be an agenda and it should cover these topics:
- Who is going to be the actual manager of the restaurant? Remember, there is no such thing as a democracy in the restaurant business. One person needs to be in charge and take responsibility for everyone else.
- What are the strong points and qualities of each family member and what role will they play in the business.
- Financing- although a very controversial subject, it needs to be openly discussed. How much money will each member contribute and how much ownership will they receive, if any, for that money. Not everyone needs to contribute financially. Some may chose to work for minimal compensation in lieu of ownership. This will eventually come in very handy.
- Concept: what will the style, location and theme of the restaurant be?
- Will you be buying a restaurant and remodeling it or will you be building a new facility?
- Design and Theme are extremely important and can often be the most stressful to agree on. Everyone has a different vision of the same color. Choosing something as simple as what color white to paint a wall can turn into a critical decision for many a restaurant family. And I speak from experience.
- Financial numbers and projections. Someone needs to develop projections on the business and work those into a business plan. Also, make sure the concept will support the family members who will be working and investing. Nothing breaks up a family faster than two chefs in the kitchen. This can be computed by calculating seats and turns throughout the day parts.
- Menu and day part ideas need to be discussed and decided upon.
- Dates for moving forward along with targeted projections need to be established.
- The business plan needs to be developed and that needs to include an exit pan section.
Having spent ten years with my wife, Kranston, in the restaurant business I can attest to the trials and tribulations of family run restaurants. It can be the most horrific experience in your life. Kranston and I were together for almost 24 hours a day for ten years, through eight restaurants in two states and six cities. It was not an easy way to operate a business. However, in many instances the owners need to be related or family, because it takes that bond to endure the surprises that will inevitably arise.
Let me add, we had no experience going into the business. But we certainly do now and probably wouldn’t trade the valuable experience that we gained.
Tomorrow: Alleviating family turmoil at your place of business.