CFOBusiness, a website providing restaurant accounting services, conducted meetings with successful restaurants’ managers and consultants to hear their success stories, identifying what challenges they faced and how they succeeded to overcome them. In this article, we choose to talk about some of these stories so that you, as a restaurant manager, would benefit from their experiences. In the following lines, you will find great tips for running a restaurant from successful restaurants’ managers and consultants.
Draw up your own business plan:
Paul Morgan, A Restaurant Consultant, always tells his clients, who are going to open a restaurant, to start with a business plan, “because it is the plan that lays out the roadmap to take you from where you are to where to go”, Paul says.
According to Paul, the modern business plan consists of five components and it, basically, depends on the financial forecast.
Here are the components of the modern business plan, as Paul mentioned them:
A business plan shall begin with a clear concept, not just an idea. You should clarify what you are planning to do and how are going to do it. As Paul stated, “A concept is something that is so clear in your mind that you can close your eyes and see yourself working in your restaurant a year from now”. The concept shall cover every aspect of your business, even the colors of your menu and the music you will play.
2. Financial Forecast:
After identifying your concept, you have to test it according to the financial forecast. It defines whether your concept is a convenience or not. Your forecast shall be based on numbers, built from the ground up.
- How many clients will you host daily and monthly?
- What will they spend every meal?
- What revenue do you predict to gain?
- What is your cost of goods sold?
- How much may labor costs be?
- What other expenses do you project to have?
- What is your bottom line?
According to Paul, “In reality, you have to build your first year’s P&L before you have even rented a space.”
3. Start-up Costs:
Before opening your restaurant, you have pinned down all your pre-opening costs like utility deposits, rents, capital, equipment, suppliers, inventory, staff training, marketing, and any other costs.
You shall start with an active marketing plan. The revenue you will generate depends on the budget you allocate for marketing.
5. Strategic Partners:
To streamline your job, you shall have a strong skilled team, including lawyer, accountant, business advisor, manager, chef, and any other member who may make your job easier.
Be patient and believe in your concept:
Andres Avayu, the Chef/Owner of Piccolo Ristorante, has learned that he has to stay true to his concept and believes it is the right thing to do.
He planned to create a small Italian restaurant with Mediterranean influences where customers can eat in a relaxed and pleasant atmosphere.
Andres knew that it is important to be social in order to attract different customers. Accordingly, he focuses on creating an ambiance where customers do not only get food but also relax and spend time without feeling rushed or anxious.
He embraced the traditional approach in cooking since he believes that “there is still a calling for traditional, authentic flavors and that is why I have chosen traditional Italian and Mediterranean foods.”
Opening up a new restaurant is a time consuming and very demanding process that takes very hard work. Consequently, Andres and his partners aimed to open in time for the tourist season. They benefit from opening in such a season as they were able to attract the tourists and the locals where locals tended to come back with friends.
Despite technology and social media, Andres still thinks that word-of-mouth is the best technique for marketing and advertising a new restaurant. They succeeded to satisfy customers and make them repeat customers by offering a complimentary drink or dessert. Andres’ advice for new restaurant managers is to never lose the enthusiasm of the beginnings.
The Keys to Menu Success:
Tuhin Dutta, a Restaurant Consultant, said that your menu is the driving force behind your success. He found that designing an exceptional menu is built around many factors, including the study of your potential customers, the location you where are planning to open your restaurant, a suitable budget, and a convenient concept.
Your concept must be in harmony with your location to be viable. Accordingly, you should study the neighborhood in order to make sure if it is profitable to open your restaurant in such a location. “If you want to serve French food in an area saturated with French restaurants than you are going to have to work twice as hard as anyone else often for less profits.”, says Tuhin.
Here are some problems Tuhin managed to solve for restaurants:
1. Direct competition with four other restaurants with the same concept:
They were making the best version of French food but no one showed up in their restaurant.
Tuhin saw that the problem was that innovation was a missing ingredient on their menu. Accordingly, it can be solved by serving the traditional dishes in a new unique way that sets them apart from the competition.
“We were able to remove poor sellers, increase the quality of old favorites and introduce additional unique offerings ideal for the more adventurous customers”. Says Tuhin.
2. Negligible traffic:
A restaurant suffered from a lack of customers showing up at their restaurant.
Tuhin still had to address the needs of the neighborhood that they were aiming to host and look at the menu to see where they could adjust it to better meet their audience.
The steps to solve the problem were:
- Adjust the menu for a better dining experience.
- Looking for cheaper suppliers without compromising the quality.
According to Tuhin, “Your menu has to incorporate a “wow” factor introducing an unparalleled depth of flavour that makes you the only choice for customers in your neighborhood.”
What role could your budget play?
If you are planning to provide a fine dining experience, you have to look for fresh, high-end ingredients while at the same time have a strict policy to avoid waste.
These fresh ingredients must directly find the way to the customer’s table, fulfilling the needs of your daily menu and special dishes so that they would use them without not sacrificing quality or contributing to waste.
Your budget must include every item you use to prepare a dish from salt to herbs and meat to vegetables. You may find that restaurants tend to raise the cost on each menu item. However, menu prices shall meet the spending power of your customers.