Running a Restaurant For Dummies

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