CHAPTER
1

Why Open a Restaurant?

In This Chapter

• Determine why you want to open a restaurant
• Discover personality traits and skills you need to open a restaurant
• Learn about the commitment, challenges, and rewards
• Find out what it takes to succeed in the business

In this chapter, we’re going to look at your motivation for starting a restaurant, and separate emotion from business. We’re going to talk about what personal qualities restaurateurs need, as well as the skills required to succeed.

The restaurant business is more than a business, it’s a life. We’ll discuss the commitment it takes to launch and run a restaurant and the challenges it entails. There’s no more rewarding career than working in the restaurant business, especially if you follow the right track to success.

DEFINITION

The word restaurant comes from the French word restaurer, meaning “to restore.” Restaurants were first referenced in print in Paris in the late 1700s.

Restaurants are the most mercurial of small businesses. Yet there’s no other industry that people march into with so little experience or preparation. Rather than start with a business plan, beginners leap in head first and are often fueled only by passion, excitement, or ego.

The words “let’s open a restaurant” inspire a rush of hope and energy. Once you experience the rush of starting a restaurant, it’s hard to stay away. Every day is new: the gleaming tableware arrives, the bar is installed, and the beer taps are primed and set in place. The chefs are experimenting with new dishes in the kitchen, and the sound system is starting to pulse. It’s very exciting.

There’s no denying that a certain romance has gilded the frame and misted the picture of working in restaurants. In movies, beneath a halo of gleaming copper pots, a handsome, charismatic chef wearing an expensive Oxford shirt casually chops carrots on a thick marble counter. The chef sips wine as his assistant, dressed neatly in a Martha Stewart-like apron, and arranges and rearranges a bowl of giant South African strawberries.

Unfortunately, the professional restaurant kitchen is far less glamorous, and far more volatile and ego-driven. It’s a high-pressure cauldron, where our chef, wearing thick rubber-soled shoes and a food-splattered apron, sweats profusely as he orchestrates the preparation of dishes at a table for 12. The shrimp hits the hot pan. The sherry ignites. The garlic is burned and the chef swears in two languages.

The first thing to figure out is, why do you want to start a restaurant? What are your goals and aspirations? Take a pen and paper and write down your top five reasons for wanting to start a restaurant. Let’s do it right now.

Far too often, the decision to open a restaurant is purely emotional. People don’t consider the overall commitment required. They don’t think about it from a business perspective. Your emotion should fuel your business, but use your business sense to keep an eye on the bottom line and make your restaurant successful.

Look at your list again and ask yourself, are your reasons emotional or business based? Are you caught up in the romance, the dream? There are a million reasons why people should not open a restaurant. Here are the top five reasons not to start a restaurant:

1. My hobby is fine dining. I know good restaurants.

2. My passion is cooking for my friends. I’m really creative.

3. I want to open a little bistro just like one I ate in while in Europe.

4. I love the Caribbean—if I had a restaurant I could live there!

5. I’ve got a great idea for a franchise that could go nationwide and make millions.

Now look at your list. Any overlap? Let’s take a closer look.

It’s funny the way enjoying dining in restaurants tends to build our confidence that we’re experts in what makes a good restaurant. But a good restaurant, no matter how subjective the view, isn’t necessarily a successful one.

Few dining locations have been more successful than McDonald’s. But does that make it a good restaurant? What makes a good restaurant is utterly subjective. Experience in dining out doesn’t mean you know how to start and run a successful restaurant, let alone a good one.

Your love of cooking and getting creative in your own kitchen isn’t enough experience, either. So you’ve mastered the art of cooking boeuf bourguignon, and friends around your table say it’s better than what’s served at your town’s top fancy French restaurant. But before your mind starts spinning out the fantasy of owning your own bistro, with its warm tone of ochre on the walls and the way the candlelight will make guests’ faces glow … STOP!

Remember, cooking and managing a professional kitchen requires solid business skills. A successful restaurateur’s focus is always on the dollar—purchasing and keeping an eye on inventory, price points, and profit margins. And opening and running a restaurant requires even more business skills—combining skills and abilities in finance, management, team leadership, marketing, customer service, equipment maintenance, and more. Without these skills, your best boeuf bourguignon will be lingering in a lonely dining room.

Right Brain vs. Left Brain

There’s a right brain/left brain struggle in running a restaurant. The right side of the brain thinks about the magic of the experience, obsessed with flowers, music, and lighting. The left side thinks of maintenance, organization, and systems. That’s why many successful restaurants and restaurant groups are collaborative ventures. Chef Jean-Georges Vongerichten and restaurateur Phil Suarez come to mind. Suarez has a great background in advertising, video production, and deal-making. He’s teamed up with Vongerichten, who excels at training a kitchen staff to flawlessly execute his recipes. Together, they’ve created some of New York City’s most talked-about restaurants.

An entrepreneurial spirit and attention to detail and discipline are essential for success in the restaurant business. If you’re not disciplined, you could be out of business in six months, yet not even be aware of that fact for a year. You can lose a lot of money, and a whole lot more.

New restaurateurs go out of business because they don’t treat the restaurant like a business. Restaurants can be profitable if careful attention is paid to controlling costs and managing details. If this is in your nature, then opening a restaurant is a good platform.

POTENTIAL PITFALL

If attention to detail is not in your nature, learning to pay attention and manage the details can be difficult and costly. The restaurant business may not be for you.

Personal Qualities

Personal qualities are important, too. Having a natural inclination for nurturing others is a good start. This is the hospitality business. Pleasing others, and getting pleasure from it, is the core of what restaurants must do.

You also really need to understand what a restaurant is and how it functions. Restaurants are like families. Getting your family all moving in the same direction can be the ultimate rush. If that fuels your passion, you’ve got the quality of a restaurateur.

You know you’re a restaurateur if you can smile while grinding out a busy night with a staff short one worker, and a dishwashing machine that won’t drain.

The moment of truth is when the last few guests are leaving, thanking you for a wonderful time. That’s the ultimate goal. It’s that moment, and afterward, as the tired staff begins to straighten up the dining room, the manager counts the till, and the sound of laughing as stories are told of the night, fills the empty dining room. If that fulfills your soul, if that’s what you strive for, you’re ready to start a restaurant.

Restaurateurs require a wide bandwidth of skills:

• An obsession with detail
• People skills
• Management skills
• Business skills
• Budget analysis
• Financial budget management
• HR practices
• Maintenance skills
• Cleaning skills
• Collaborative skills
• An aesthetic sense

This range is why teams are so important in restaurants. You need a range of skills and experience to execute a synchronized performance with perishable inventory, an uncertain number of guests, and a staff who often have little professional commitment.

SMART MOVE

Clogged drains, toilets, and grease traps will break your system. Keep on top of the maintenance. And more importantly, know how to fix problems yourself when an emergency crops up.

Time Commitment

Starting and running a restaurant takes a major commitment of time. It’s hands-on work in a constantly changing environment. Restaurateurs work hard 18-hour days and weekends. Forget about spending the holidays with your family. And don’t expect to go on vacation for at least a couple years.

Pre-opening and the first several months of operation will require the greatest commitment of your time as an owner. If you invest in this time wisely by finding the highest-quality staff and training them in your systems, which we will teach you in this book, you’ll be able to run a successful restaurant and make a decent living. And have a personal life.

First you must lay down the track properly, so that following it becomes rote, and the food, service, and culture you want to create accurately reflect your aspiration.

SMART MOVE

An owner’s time onsite is directly proportional to the amount of training and the quality of staff they’ve invested in up front. Hire high-caliber chefs and general managers who can lead their respective teams in harmony.

A profit margin of 20 percent is a model of perfection. For each dollar made in sales, 80 percent covers the total cost of running the restaurant, and the remaining 20 percent is profit. We’ll discuss profit scenarios and budgets more in Chapters 5 and 16.

It’s very important for the owner to be directly in charge of the financial management of the restaurant. You’ve got to keep an eye on food costs, labor, overhead, and much more. This is a business. Never forget that your purpose is to make a profit. Your financial goal is to reap a 20 percent profit. To achieve that, you need to set up good systems and have the discipline to follow them.

SMART MOVE

You don’t need to know how to cook to be a restaurateur. In fact, not cooking will give you more distance and the ability to analyze whether a dish is turning enough profit to be on your menu.

Achieving Success

Jody’s first restaurant was a failure. He had dropped out of college and toured the country with a rock band. Then his father lured him back east with the idea of opening a restaurant. His father was a creative director at an ad agency and he loved restaurants and design. So he started renovating a place while Jody took a university course in institutional food service.

Jody and his father opened The Stone House in Greenwich, Connecticut, in the 1980s. It was beautiful and busy, but it failed—in just nine months. Why? Because they didn’t have the experience of managing the expenses and the day-to-day dynamics. They were also too trusting, and people took advantage of them.

The restaurant had lost money and was closing. Jody’s father asked him what exactly he had learned in that food service course, which wasn’t much.

So his father hired a tutor who was a consultant from Restaurant Associates, a premier national food-services company that starts and runs restaurants and caters events at places like the Kennedy Center. Jody learned that apprenticeship was a more effective teaching model for him. In fact, apprenticeship is the traditional form of teaching in professional European kitchens.

Jody had passion and a ton of entrepreneurial spirit, but no business foundation. So he started working in chain restaurants, including one of the largest bakery-cafés in Canada. He had been a rock ’n’ roller, and his creative spirit chafed against the sterile corporate uniformity. But he soaked up all the knowledge he could. There was a lot to learn about the systems that allow restaurant owners to manage everything from inventory to plate cost indexing—the keys to making a profit in this industry.

Everything else Jody learned about the restaurant business came from working at restaurants. He started off managing other people’s restaurants, and then opened his own. He learned a lot from his mistakes. This book will share with you the lessons he learned and how you can prevent making the same mistakes.

You Can Do It!

If you haven’t worked in a restaurant, you’ll be at a slight disadvantage because you haven’t experienced the systems in play. You haven’t seen or used the equipment behind the scenes. Educate yourself. When you go to restaurants, watch the way the front of the house works. You can also ask a local restaurateur if you may observe how the back of the house works during service. You’ll have to stay out of the way.

The main skill you will bring to your restaurant is management. You need to lead your team to accomplish your vision. Your job is to make sure this happens profitably.

Make no mistake, this is a volatile industry, filled with egos and emotion. You will experience almost every scenario, learn so much from your own failures, and cautiously celebrate your triumphs … always keeping in mind that “you’re only as good as your last chicken salad.”

The Least You Need to Know

• Your commitment to your restaurant business is more important than your passion for food.
• A good restaurant is one that consistently delivers the promised experience, profitably.
• The sooner you educate yourself in what you don’t know, the more profitable your restaurant business will be.
• To build your dream of managing a successful restaurant, you must watch every penny.