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                 Restaurant Report E-mail Newsletter

         For Hospitality Professionals and Food Connoisseurs

                     Issue #134  March 11, 2001

                   http://www.restaurantreport.com
                   newsletter@restaurantreport.com
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In This Issue

*   Question of the Week - Returning Food
*   Feature Article - Opening a Restaurant: It All Starts With Passion
*   From the RR Archive - The Importance of Restaurant Reviews
*   Reader Feedback - Common Mistakes
*   Bulletin Board


    (This publication may be freely redistributed in its entirety)
               (Back issues are archived on the website)



     ***** Newsletter Sponsorship...click below to learn more *****
      ** http://www.restaurantreport.com/advertising/index.html **




_____________________________________________________________________

               QUESTION OF THE WEEK -- RETURNING FOOD
_____________________________________________________________________

One situation which comes up occasionally is a customer saying "I
don't like this." I ask if there is something wrong with the dish and
they say "No, I just don't like it." I ask if they would like
something else and suggest dishes that will come out quickly.

The problem I have here is what is a reasonable way to handle charging
them for the rejected dish? They expect to have it taken off the bill
but that can be expensive for us.

What do you suggest as a reasonable policy? How do we let customers
know of our policy regarding refused food or wine?

 - sumadyer

*****
Send comments/feedback to mailto:newsletter@restaurantreport.com


_____________________________________________________________________

                          FEATURE ARTICLE
_____________________________________________________________________

Opening a Restaurant:
It All Starts With Passion
by Maren L. Hickton

Many waiters, chefs, and others who share a delighted interest in
gastronomy, often have dreams of opening a restaurant of their own --
or sharing a venture with a partner. Some soon to be restaurateurs
decide to leave their big job in the corporate mill to go back to an
earlier period in their life, a much simpler time, where they worked
in the restaurant industry. So they take their savings and
wholeheartedly decide, this is it, this is what I've always wanted to
do, and they begin to scan local newspapers and commercial real estate
listings in a variety of publications. Or they drive past the shell of
an old restaurant on their way to work each day and dream about how
they can make it: "That owner never knew what he was doing. With all
of my business experience, I can really do a better job." Creative
Chefs and General Managers, who have risen to an executive level
within an operation, often have these same visions: "Why should I stay
here? Not only am I bored with the same old, same old, everyday. I
think I could really make an impact by opening my own restaurant."

I've met many of these people. Some have succeeded and others have
not. Interestingly, the common denominator for all those that I have
met who have succeeded can be reduced to one defining characteristic:
passion. By definition, passion ranges from the obsolete word
suffering, to an intense driving feeling or conviction about
something, a goal that is undistinguished from reason. Restaurateurs,
the good ones, all seem have this kind of ethereal drive and when I
meet with these often-animated stunners, they are literally bursting
with a flood of ideas, painfully trying to contain themselves, where
pathos prevails leading me to immediately want to help them. A
restaurants is like a blank canvas or piece of clay, the medium for
the restaurateur, ready to be turned into a sensational art form. And
like all artists, restaurateurs must be fueled just like I've
described -- to create, to choreograph, and to execute what ultimately
ends up being a major production, requiring a lot of hard work and
discipline, to promote food as the star.

There is nothing as wonderful, as marvelous, than to participate with
an eager new owner in this synergism. My job, our job, as people who
support these wonderful owners, is to make sure that the passion does
not get lost in the process:    

1. Think right. One of the pitfalls in the creation of a new
restaurant is an obvious left and right brain dichotomy where the
business head gets so tangled up in paper planning that it does not
focus enough energy on the creative aspects of development.
Restaurateurs often begin to construct elaborate business writings,
pay someone for an evaluation of their marketplace, set up meetings
with firms to secure financing, hire lawyers to review lease and/or
purchase agreements with real estate agents, and begin to contact
major equipment vendors with only a cursory sketch of what kind of
restaurant they plan to create. Many times, prospective owners fail to
find a chef-for-hire to develop some of their own basic menu ideas. Or
they don't know how to go about finding a good architect or designer
to aid them in the real development of their concept. The reality is
that some skilled restaurateurs have started wonderful restaurants in
concrete block basements, empty warehouses, kiosks on sidewalks, and
even garages -- with simple, but wonderful menus and limited decor so
that the focus remains on the food. What is on the menu, how it is
presented and the related ambiance is the product that attracts
patrons to  restaurants. Finding a good chef and designer to assist in
concept planning is the first step, unless, of course, you are a
chef/designer yourself -- and they do exist.

2. Think slow. Being enthusiastic about your restaurant is fine.
Obsessing about growing fast and being huge is not. Your restaurant
venture should opt for a slow course of solid and steady development,
so that it will grow roots, so that it will have longevity in your
marketplace. The saying that, "Relationships that start with a bang
usually end with a bang," applies. If you want to promote a
relationship between your restaurant and your marketplace that is
lasting, it takes hard work, a lot of personal attention and time.
Same goes for the careful hiring and cultivation of your staff.

3. Think realistic. As a passionate first-time owner, you will likely
be working 365 days a year, and thinking about your restaurant 24
hours a day. You must be prepared to work in every position in your
restaurant, so that you can completely familiarize yourself with all
of the nooks and crannies of your operation and until you can afford
to hire and marshal a full house.   

4. Think conservative. After you pay the startup costs and hire the
best chef that you can afford with adequate support staff, you may
find there is little money for much else. As the CEO of your
restaurant, you must watch your cash and keep all expenditures to a
minimum with an active eye towards good investment futures. Spending
money on labor, for example, if business is not there to support it,
is financial foolishness, but I've seen it happen everywhere. The
restaurant should, at minimum, support itself, and ideally, support
you, plus. Continually pumping your own money into the restaurant
will only distort the restaurant's financial picture.

5. Think ahead. Personal cash reserves should be set aside to pay your
salary and expenses for at least the first six months of operation, or
the second six months -- in case you have a grand slam opening and
then business tapers off, as it sometimes does. You should also have
on hand a minimum of three months of projected revenues for lean times
-- at all times. 

Being a good restaurateur requires the total immersion of yourself
into the operation, at least until success reigns and you can
comfortably entrust your responsibilities to one of your subordinates
and cheer from the sidelines. Without passion for your product,
without enthusiasm for this business, without devotion to your staff
and customers, and the zeal to reach your goals, all the business
planning, paper agreements, operational checklists, and money, will
not produce success.

            
*****
Maren L. Hickton is the principal of Maren Incorporated, a 
Full-Service Hospitality Consulting and Marketing Firm based in 
Pittsburgh, PA. Maren writes about a variety of business challenges 
that independent restaurants encounter. Maren can be reached by 
e-mail at info@mareninc.com.


*****
Send newsletter feedback and comments to us at
mailto:newsletter@restaurantreport.com


_____________________________________________________________________

                       FROM THE RR ARCHIVE
_____________________________________________________________________

POINT/COUNTERPOINT - The Importance of Restaurant Reviews

The public as a whole is an armchair restaurant critic, and as much as
we enjoy chatting about our own dining experiences, we have always
appreciated the good, the bad and the ugly, dished out each week by
the savvy, legitimate restaurant reviewer.

Link: http://www.restaurantreport.com/greatdebates/critics.html


_____________________________________________________________________

                READER FEEDBACK - COMMON MISTAKES
_____________________________________________________________________

**Original Question:

What are common mistakes that owners make when starting a restaurant
business?

 - kotterc


**Next Post

The inexperienced new owner's greatest mistake is not having an idea
of how much gross income they will need to be profitable or they have
an unrealistic projection (I'll do a million in sales).  I've spoken
to many new operators and have had to go through the numbers with
them.

* How many meals will you serve a day
* What is your average ticket price
* What is your projected food cost
* What are your projected fixed costs

Its amazing to see the person's reaction after going through these
questions when they realize what they will have to do to generate
their projected gross.

Experienced operators usually have a handle on this.

CAO


**Next Post

As a  food service design and planning consultant I most commonly see
"soon to be restaurant owners" fail in the in the pre-planning stage
of the design/planning and build out.  This would include in a weak or
non-existing business plan,  three (3) year sales and cost
projections, projected food cost and menu food and beverage cost
breakdown, cash flow and labor projections, project build out budgets,
demographic/location studies. In addition, not allowing a sufficient
time window to properly study the design space planning phase,
equipment layout and how it will impact the ability to properly cook
and serve the clients "start up" menu during both the busy and slow
times.

Many of the above listed failures are very important to begin on the
right foot.  From the opening of your bank account to the selection of
your partners and key staff members, the pre-planning business
documents and budget schedule's serve as your bible though out the
entire start up period and for years ahead.  It also shows your
investors, bankers and key staff members that you have carefully
crossed your "T's" and dotted your "I's".  This will drive home the
point that you are a experienced and careful food service operator
leaving nothing to chance. Too many operators think they will have the
time to fine tune/complete the budgets and schedules through out
the construction build out process.  Not the case as the owner will be
swapped with numerous issues that require your full time attention
during this phase. Your job during this phase is to market and build
your customer base

An experienced owner/operator will be focusing his/her efforts on the
marketing documents and promoting the new facility to make sure that
every one  they come in contact with is treated as a potential
customer - yes, this includes your General Contractor and all the
sub-contractors.  So often the owner/operator will become upset with
the a GC or sub-contractor on a minor issue and assault them in a
manner that they will never be a customer of yours and most important
they will tell their friends and family what a jerk the new
owner/operator is.  This is usually related to cost overruns because
of improper budget planning referenced in paragraph one. Every
successful restaurant operator has one common trait - they have strong
customer service skills and value the importance of every potential
customer and market their facility with high-energy and
professionalism from day one, not two weeks prior to your opening.

In close, the most common mistake made in the weeks prior to opening
is failure to properly provide a sufficient training period for your
staff members.  Most owner/operators are seeing $ signs and want the
revenue to start. You have one chance to win your customers as most
customers will give you only one chance to win them over. From service
to food quality to interior ambience, make it right the first time and
create an enjoyable dining experience and you have found a long term
customer.  Do it wrong and they will not give you a second change!

Rusty Smith
Landmark Kitchen Design
rusty@landmarkphx.com


**Next Post

First, with no close challenger: vastly underestimating the amount of
money that will hemorrhage out of your business account while you're
trying to comply with pounds of red tape and officials who's sense of
urgency is not as well, sensible as yours; overestimating their
enthusiasm for working 14 hour days with no salary for an
indeterminate period of time, under training a staff that will take
you way more time to find than you expect, failing to have a concrete
vision of what you hope to accomplish, and in what time frame, and
getting so enmeshed in the day to day details of running a business
that you don't take time to "restock the well".

That being said, I've been in it for 20 years...

Celia Milton
Owner, Epicure Catering


**Next Post

1.  Hanging out with the staff
2.  Not firing for stealing
3.  Under staffing to reduce cost
4.  Cutting too many corners
5.  Turning over the keys to a key employee to get a night off
6.  Charging servers for mistakes (illegal)
7.  Not paying overtime wages
8.  Illegally employing minors

Selene


**Next Post

As a professional opener for the hospitality industry I should have a
lot to say about new opening priority concerns of owners, but I don't,
for its really very simple. Let me explain:

CBS Radio recently had a blurb on the fact that for the first time in
years (in the New York Metropolitan Area) more restaurants opened than
closed. Amazing!

Why do so many restaurants close?  What is the most important factor
other than inadequate financing? Is it food, theme, presentation,
comfort, service or what?  The answer is the same as in any other
business, "Success = Management"!  It's experienced prudent management
that going to make the difference.

CBS said that most of the owners of New York's newest restaurant were
not restaurateurs.  They were entrepreneurs who knew how to make a
deal and wanted their name is lights on a restaurant marquee. Putting
egos aside these entrepreneurs want their restaurant business ventures
to be financial successes. To insure their investment they hire the
best consultants available. They invest in management and management
will explain to  these new restaurateurs that the restaurant success
battle will be won or lost on the dining room floor.  Forty-nine
percent of the public return to food establishments because of
service...Twelve percent due to food...Eleven percent because of
comfort and atmosphere and twenty-eight percent for miscellaneous
reasons (convenience, price, theme, nepotism, etc.).

Like any other industry, these consultants must advise their clients
that the number one priority is "Service"!  Of course you've got to
have good food and clean, pleasant and comfortable surroundings and/or
a novel theme, but all this is destroyed by The Restaurant Nemesis,
"Bad Service"!  Service = Sales and Service = Training, therefore
Training = Sales.  Only through standardization and constant training
will the service battle be won.  Your opening and annual budget must
include service training.  There is only One Right Way to serve and in
America we've developed American Service Standards.  Teach them and
practice them and your operation will be rewarded with service
success. Hire a service consultant.  Develop an on-going
service-training program. Hire a full-time trainer and train,
supervise, critique, test and train again until you have a staff that
has developed "Service ESP"!  Your staff must be able to anticipate
the needs of the guest, spot the mistakes before they happen, care
about the guest, fight for the guest and exercise the Platinum Rule of
Service: "Do unto others as you would have them do unto themselves!" 
Service is the key and professional restaurant managers will tell 
owners that all the money they've invested in location, building,
chattels, table-top equipment, great chefs, quality raw materials,
uniforms, publicity, etc., will all be wasted if you don't invest in
Service Training.  That's your insurance policy to restaurant success.

Now that I've expounded on my passion for the best service through
constant service training, let me give you a few other points for
consideration before you open: Find your location...Decide upon your
concept or theme...Formulate your menu...Build your kitchen to produce
your menu...Allow at least 60% of the total space for production and
storage...Now develop policies that will make the difference between
you and the next guy, besides having an "I'll kill for the guest,
service policy".  What is your Bread Policy, Butter Policy, Water
Policy, Hot Beverage Policy, Appetizer Policy, Entree Policy, Dessert
Policy, etc.?  How are you going to present and serve these items so
that guests will drop dead for them?  What makes you different?  After
you figure all this out, rehearse and practice and get the bugs out
before you open. "Break a leg!" "86"

Ian Maksik,
Professional Opener, Hospitality Consultant and "Professor of
Service".   


*****
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mailto:newsletter@restaurantreport.com




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