Restaurant owners guide
Be prepared to work hard
Owning your own business is great fun and it is nice to know that you are making money for yourself rather than filling someone else's pockets and the best part is that you get to choose your own hours, decide whether you want to trade on weekends or not and perhaps even work from 9am to 5pm.
If you have chosen to open a restaurant, then be prepared to work long hours and to spend most of your time in your business because the only way for it to become successful, is if you are there.
Running a restaurant takes a lot of patience, money and time but if it is run correctly, it can be very lucrative.
There are a number of things that you need to know before you open a restaurant as ignorance could cost you a lot of money and wasted time.
Having a restaurant means having an open mind with a vision to reinvent yourself when necessary as well as being open to new and fresh possibilities each day that you trade.
Health and safety are important, having the correct licenses are also very important and knowing your menu is a must in the business.
As an owner you should be able to cook the food, serve the customers, communicate and clean so learning every single aspect of the business is essential.
Restaurant Owners guide
If you are new at the restaurant game then don't pretend to know everything but get ahead of the game and find someone that does know as you do not want to invest in a business that you are going to go blindly into.
You have got to know every little detail about the restaurant industry before you open the doors.
Staff and labour relations, health and safety rules and regulations, licenses, storing, buying, cashing up and most importantly, food costings.
Without the knowledge on how to work with a food cost, your business could end up never making a real profit.
Staff training is also vital and if you do not know what you are doing, then you wouldn't be able to train staff which could make or break your restaurant.
We will start off with what you should know before you get the keys to your business:
What sort of business do you want to own?
Lease agreements, contracts and licenses
Signing a lease is not as easy as putting pen to paper, you need to be sure that the lease agreement works in your favour, which means asking every possible question that you can about the property before you even have a contract or agreement drawn up.
The location must work for you and if you do not have a big branded name then getting premises in the most secluded part of the mall, will be to your detriment. It could be cheaper but you will have to ensure that the shopping centre works to promote you and you need to have this listed in your agreement.
You need to find out how much the electricity, water and refuse removal is and if it is included on your rental.
Check that they have a maintenance team for the centre.
Marketing fees are usually added to a lease agreement as the centre does advertising, you need to know if this is included, what they do and how much they plan to do for you.
There is also a clause in lease agreements which allows the centre to take a percentage of your turnover, this is important to note and to find out how much they take.
The average marketing fee is 2% and the turnover clause usually allows for 10% at the most.
If it is higher than that, then you need to rethink signing the lease.
Extraction in a restaurant is important so you need to check that the centre is aware of your exact plans.
Maintenance and upgrades to the centre are important for you to have success and you need to have it noted that there will be maintenance and improvements to their building for the time that you are there.
You will also have to check if the centre has a policy where each business has to do an upgrade. Here you will have to think very carefully as this could cost a fortune and take whatever profit you have managed to make. Check what kind of upgrade the centre would be expecting and ensure that you it is noted in the lease agreement.
An upgrade is a good idea but some centres demand a huge expansion or upgrade that would not be realistic. Have a clause in your contract to state that you will upgrade according to your profit margin an do not sign if you have agreed to upgrade at their level.
Signing a contract or lease agreement should be done with an attorney so that they can read through it carefully to make sure that you are covered in every way possible.
Licenses that you need to run a restaurant is something that you need to know about and have before you obtain a lease and if you are going to be selling alcohol on your premises you will need a seperate license for it.
Check what licenses you need before you decide to open a restaurant as this can be costly.
Insurance is important in a restaurant so ensure that you have some.
Labour contracts must be carefully written and planned in order to protect both you and the staff. You also need to be well educated on labour procedures in your business and if you do not know, then learn or get someone who does.
Learn about health and safety
Health and Safety
It is important to know about health and safety when opening a restaurant as your premises have got to abide by the codes or the health department will continually harass you if you are not complying.
Go for a course in health and safety or appoint someone that has the knowledge to abide by the health and safety rules for your restaurant.
You need to have an experienced first aid official on your premises at all times.
Should someone get burned, fall or injured at work, you have got to have someone there that knows what to do.
You also need to learn about the law for accidents and emergency procedures in order to prevent a huge lawsuit to you.
Health departments need to check that you have a clean and safe environment which is naturally very important when working with food.
Learn about colour coding your food labels and the storing procedures, date labels, chemical usage and hygiene in the kitchen before you open the doors.
In the restaurant game there will be many a time where someone will try their luck by letting you know that they received food poisoning from your venue and it is vital to be on top of your game when it comes to controlling food and storage of it.
Hygiene and safety are very important and all your staff need to know the rules and how to follow the procedures before they work for you.
Your staff could make or break your business and training is extremely vital in order for your business to become successful.
Placing staff in the correct position is necessary for your business to grow and each member of staff should know each position equally should they need to be moved around.
Restaurant staff come and go but if you train them well enough and have better opportunities or room for them to grow, they will stay longer and hopefully become loyal to you.
You have to treat them well and they need to learn and understand exactly what is expected of them before you sign them up.
If you do not know how to train staff then hire someone to do it for you as training is essential.
Training should be done continuously as people get lazy or too comfortable and begin to develop bad habits, which training can prevent.
Before you train your staff you need to establish standards for your business which can be passed on to your staff to maintain.
Check lease agreements and have an attorney draw up contracts
Keep food and labour costs low in order to make a profit
Staff training is essential
Establish standards for your restaurant and adhere to them
A business needs standards to avoid chaos and angry customers. Restaurants need return customers and if you have high standards that are maintained, then your customers will become regulars.
You need to be consistent and stick to the recipe because if a customer has returned for the same item and it doesn't look or taste the same, they will not return again.
Consistency is important and in order for you to have consistency, you need to have recipe guidelines and well trained staff to ensure that the quality of the food coming out of the kitchen is good.
From the time the customer walks into your restaurant it should be good experience for them. Establishing standards to meet customer demands is easy if you think like a customer and there are a few ways to protect your brand by developing standards for you and your staff to follow.
Do you want to be greeted at the entrance
How long are you prepared to wait to be seated
Are your chairs and tables comfortable and clean
Do you wish to have your drink order taken straight away
How long are you prepared to wait for your drink
How long are you prepared to wait for service
Are you expecting quality or quantity when you order a meal
Do you want an option for dessert
Do you have something for the children to do
Are your staff friendly and efficient
Is there something specific you would like your staff to do to bring customers back
A few examples but this is an easy way to establish standards and implement them.
Think like a customer when you create standards and ensure that each and every staff member works at it.
Costings for Restaurants
This is the hard part because if your costings are wrong then you will not make a profit. Planning your menu is crucial in order to have a low food cost.
Too many items and too big variety of dishes will make your food cost high.
Remember that you will need to keep all the stock and if you are not using it, there is a chance that it will go off and you will lose money.
Be clever with your menu and avoid having too many items on the menu. The more you have the higher your food cost will be.
Think about what type of restaurant you will want to own and if it is a steakhouse, then don't sell pizza. Should you want to own a pizza place then avoid having steak and fish on the menu, unless you serve that on the pizza.
Keeping a menu small can avoid big food costs but you do need to give your customers variety, which means that you have to plan your menu intelligently.
Learning about stock control and wastage is essential to keeping a low food cost and buying is also something that you need to learn to do well.
Check your sales and see how much of an item you sell and on which days, in order to buy properly. There is no point in buying kilo's of cheese if you only sell 200grams.
Avoid stock going off by learning about rotation and if you see that there is too much of something then promote it for the day in order to get rid of the product before it expires.
Stock takes are important for two reasons;
For your staff to be aware that they cannot steal or lose a product
To see how much you have used and bought to understand what your food cost is
Every little bit of anything that you have in your restaurant must be counted, controlled and managed for you to make a profit.
Labour costs are also important because there is no point in hiring too many staff members if you do not need them. This will effect your bottom line and leave you with less profit.
Have an estimated amount that you can afford to pay for staff which includes taxes, incentives etc, so that you know where you stand every month and if you can afford to cut down or increase staff take.