Starting, Owning and Marketing A Restaurant Blog|Starting and Owning a Restaurant - Construction, Planning, Marketing, Opening and Managing a New Restaurant

As a restaurant owner, author and entrepreneur, I get dozens of questions about various aspects of owning a restaurant. Invariably, the questions that come from people who have never been in the hospitality business revolve around food. They want to know about competitive pricing, menu ideas, food suppliers, inventories and how to get guests in the door to taste their creations. Sadly, most of these well intentioned entrepreneurs are asking the wrong questions.

When you start a restaurant, no one expects you to serve “bad” food. Few new restaurants ever do. Customers assume you know what you are doing in the kitchen. They may not like your type of food, your concept or your interpretation of a particular menu item, but it is rare when a new restaurant misses the mark on the food itself.

The questions a new restaurant owner should be asking are about structure, service and cash flow. These are the subjects that will put you out of business - not bad food.

Structure creates consistency, which brings people back. Service is part of marketing. If you can’t deliver your product (food) properly, it makes no difference how good the food is or is not - the guest won’t be back. Cash flow is the life blood of your operation. More restaurants fail because of the owner’s lack of understanding their cash needs to keep the doors open. Profitable restaurants can, and do, fail because they didn’t understand cash flow.

While construction slows to a snail’s pace as we wait on permits and inspections, we are working on some of the mundane and admittedly boring parts of starting a new restaurant such as:

• forms and procedures like server guidelines, inventory sheets, server sidework, work flow and employee packets when they start employment.
• a marketing plan that will encompass the first six months of operations.
• new products for cleaning and sanitation.
• producing our kitchen recipe book.
• cash flow needs in the best case and worst case scenarios.
• procedures for the most efficient method to get food to the table and be able to turn tables.

The projects listed above are not fun. They are repetitive, common sense and in some cases, I have to almost be strapped to a chair to keep focused long enough to complete the task. However, each of these areas will impact the success or failure chances of any new restaurant.

If you are following this blog to learn about starting a restaurant or keeping your operation alive, pay close attention to the details of structure, service and cash flow. Collectively, they are more important than the food you will serve. There are a lot of restaurants who get away with mediocre food because they have all the other details perfected with consistency, good service and cash flow to meet their needs.

Those of you dreaming of your own restaurant or trying to find ways to improve the one you have, learn as much as you can about each of the subjects above. If you want some help buy the comprehensive guide to operating and marketing a restaurant The Restaurant Ebook. Yes, this is a blatant advertisement for one of my books, but it is a very small investment in your future. If you don’t get this book, buy a few others on the subjects discussed here. The knowledge will save you thousands of dollars and increase your chances of success.

This week has been a lesson in patience and persistence that culminated in the signing of the lease for the new restaurant yesterday. To put the whole lease negotiation behind us is a relief, but not without some misgivings about the “recession” we appear to be in and the closing of thousands of restaurants across the country.

The doubts, fear of failure and even a “slick-willie” attempt by the landlord’s attorney to get a long term personal guaranty on the lease from me, all have to be put aside and concentrate on getting the construction done and the restaurant open.

The events this week that have occurred include;

• Received a quote on a hood system of almost $12,000. Need to get second quote. $2000 higher than expected.
• Bank account opened.
• Security deposit and first months rent paid at lease signing totalling over $8000.
• Architect complaining about how long it has taken to get lease signed and now he is very busy with another project. Falling on deaf ears as far as I am concerned!
• Son has numbers plugged into business plan and completing text.
• One contractor is out of town until Tuesday, but did send forms to landlord for a “Notice of Commencement”. This is a document filed with the county that puts everyone on notice that construction is starting and the contractors have lien rights until work is done and paid for. Common form necessary for permits.
• Scheduled meeting with another contractor due to the lack of communication from the original contractor. Need a “plan B” if I continue to have problems.

Next week’s goals are;

• Pull permits for demolition of existing walls, ceiling and materials.
• Check on condition of existing walk-in box at the location.
• Meet with contractor and architect to move project along.
• Start getting ideas on wall finishing.
• Watch for bargains on equipment and seating from closed restaurants.
• Get electric switched on at the location.
• Start working on marketing plan and creating “buzz” during construction.

With the economy deteriorating and consumer spending patterns shying away from restaurants, I will be looking at ways to preserve cash in the construction and pre-opening phase. While the plan is to build the restaurant from cash reserves, I must remember I have three restaurants to watch cash flow and be able to weather any drastic change in revenues.