The Complete Idiot's Guide to Starting a Restaurant, 2nd Edition

by Cannon, Howard

• ISBN13: 9781592574162
• ISBN10: 1592574165
• Additional ISBN(s): 9780028641683
• Edition: 2nd
• Format: Paperback
• Copyright: 2005-12-06
• Publisher: Alpha
• More Book Details
• Purchase Benefits

Summary

The recipe for a successful restaurant—now revised …In this revised edition, aspiring restaurateurs will find everything they need to know to open a successful restaurant, including choosing a concept and location, creating a business plan, finding the cash, and much more. New content includes information on tips, tip-outs, and reporting for the entire staff, choosing the best POS system, setting up a bar and managing the wine list, and making the bottom line look good long-term. -Restaurants are a high-risk venture, but starting a bar or restaurant is still one of the most popular new business ventures (Cornell Univ/Mich State) -Overall industry sales are projected to hit $476 billion for 2005, a 4.9% increase -The industry employs a workforce of 12.2 million in more than 900,000 restaurants nationwide (National Restaurant Assn.)

Author Biography

Howard Cannon is the founder of ROI, an international consulting firm specializing in start-ups and turnarounds. He is a top expert on restaurant operational performance and is the publisher of Restaurant Profitability Magazine, a trade publication read by hundreds of thousands of restaurant owners and operators. Pamela Rice Hahn is the author of several books, including The Pocket Idiot-'s Guide to Acing the SAT Essay.

Table of Contents

Part 1: What You Don't Know Can Hurt You	1	(48)
Table for One: Is This for Me?	3	(10)
Why a Restaurant?	4	(2)
There Are No ``Typical'' Days	6	(1)
Wanted: Management Skills	6	(2)
Yourself	6	(1)
Your People	7	(1)
Your Business	8	(1)
The Great Money and Time Questions	8	(1)
Preliminary Start-Up Costs	9	(1)
Ask Questions	9	(1)
A Story About Service and Risk	10	(3)
Everybody Eats: The State of the Industry	13	(12)
Some Recent History	14	(1)
An Abundance of Opportunity	14	(2)
Strategies for Success	16	(4)
Get Past the Curse of Ignorance	17	(2)
Don't Plan to Fail	19	(1)
Get It Done	19	(1)
Find Some Money with Grit, Goals, and Guts	19	(1)
Restaurant Industry Challenges	20	(2)
Turnover	20	(1)
Minimum Wage Laws	21	(1)
Legal Issues	21	(1)
Site Selection	21	(1)
Saturation	22	(1)
If You Are Great, You Will Succeed	22	(3)
Choosing Your Restaurant	25	(14)
Start from Scratch or Buy an Existing Business?	26	(1)
Going It Alone Versus Franchising	27	(1)
Research Is Your Friend: Determining Your Concept	28	(1)
The Concept Design Team	29	(2)
Clearing Away Obstacles	30	(1)
Growing Ideas	30	(1)
Determining Feasibility	31	(1)
Determining Restaurant Flow	31	(1)
Making Everything Work Together	31	(1)
The Concept Decision	31	(1)
The Core Menu Concept	32	(3)
Your Menu Needs Professional Help	33	(1)
How Much for a Cheeseburger?	34	(1)
What Type of Service Will You Offer?	35	(1)
Dine In	35	(1)
Delivery and Carryout	36	(1)
Who Are You? Picking a Name	36	(3)
Is This Legal?	39	(10)
Business Structure	40	(1)
Uncle Sam's Rules	41	(2)
The IRS	41	(1)
The Department of Labor	42	(1)
The Department of Immigration and Naturalization Services	42	(1)
The Bureau of Alcohol, Tobacco, and Firearms	42	(1)
Local Laws	43	(1)
The Health Department	43	(1)
The Fire Department	44	(1)
The Building Department	44	(1)
A Typical Legal Process for Building a Restaurant	44	(1)
Other Agencies	45	(1)
You Have Your Permits, Now What?	46	(1)
Your Legal Name	46	(3)
Part 2: Building a Solid Foundation	49	(36)
The Plan Is to Plan	51	(10)
Why Build a Business Plan?	52	(1)
Who Reads the Plan?	52	(1)
The Basic Business Plan Components	53	(3)
A Cover Page and a Table of Contents	53	(1)
An Executive Summary	54	(1)
The Business Concept	54	(1)
The Management Team	54	(1)
The Market Analysis	55	(1)
The Process Analysis	55	(1)
The Organizational Plan	55	(1)
The Marketing Plan	56	(1)
The Financial Plan	56	(3)
Start-Up Cost Projections	57	(1)
The Proforma or Income Statement	57	(1)
The Timeline and Growth Plan	58	(1)
The Contingency Plan	58	(1)
The Supporting Documents	59	(1)
Your Business Plan Is a Living Document	59	(2)
Choosing the Right Site	61	(12)
What Makes a Site Work?	62	(5)
Make Sure Your Concept and Location Fit Together	62	(1)
Consider the Traffic	63	(1)
Make It Visible	64	(1)
Accessibility: Can Customers Get There?	65	(2)
Is Size Important?	67	(1)
How Do You Know Whether the Site Is Right?	67	(1)
What Should I Pay?	68	(2)
Let's Make a Deal	70	(3)
Shake the Money Tree	73	(12)
The Three Stages to Financing Your Restaurant	74	(1)
How Do You Get Money?	74	(3)
Develop a Funding Plan	75	(1)
Put Together a Strong Start-Up Team	76	(1)
Know How to Ask for the Money	76	(1)
Finding Cash by Looking	77	(6)
It All Starts with You	77	(1)
Begging, Borrowing, and Bartering	78	(1)
Angels with Money	78	(1)
The Wonderful World of Venture Capital	79	(1)
The Pluses and Minuses of Partnerships	80	(1)
Bankers Really Do Loan Money	81	(1)
Commercial Finance Companies	82	(1)
Lines of Credit	82	(1)
Equipment Leasing	82	(1)
Small Business Administration Loans	83	(1)
Knowledge Is Your Friend	83	(2)
Part 3: The Restaurant Operator: A Jack of Many Trades	85	(70)
Whoever Gets the Best People Wins: It's a People Game	87	(14)
Determining Your Staffing Needs	88	(5)
Determining Which Positions Are Critical Components	89	(1)
Building Your Ideal Staffing Chart	89	(2)
Paying Folks Fairly: Developing a Competitive Wage Guideline	91	(1)
Building a Starting Calendar	92	(1)
How to Find Good Employees	93	(2)
Relationship Recruiting	94	(1)
Reference List Recruiting	94	(1)
Determining Whether They Are Right	95	(4)
Knowing What You're Looking For	96	(1)
Ask Questions That Get the Applicant to Talk About Important Things	97	(1)
Get the Applicant to Ask You Questions	98	(1)
Check References	98	(1)
Finish the Job Right	99	(2)
Managing Your Risks	101	(10)
What's the Worst That Could Happen?	102	(4)
Write the Book for Your Business	102	(2)
Abiding by the Rules	104	(1)
Protecting Your Turf with Insurance	104	(2)
The Four Biggest Risk Factors	106	(5)
The Work Environment	106	(2)
Food and Beverage Service	108	(1)
Poor Employee Behavior	109	(1)
Injuries	109	(2)
Basic Accounting: It's More Than Just Counting the Beans	111	(18)
Cash-Control Systems	112	(3)
Cash Overages and Shortages and Possible Theft	113	(1)
Bank Deposits	114	(1)
Bank Reconciliation	114	(1)
The Power of Restaurant-Based In-Unit Accounting	115	(2)
The Books: Simplify Your Accounting	117	(2)
Understanding the Accounting Cycle	117	(1)
Deciphering Basic Accounting Terminology	117	(2)
The Three Most Important Financial Statements	119	(6)
The Income Statement	119	(2)
The Balance Sheet	121	(1)
The Cash Flow Statement	122	(3)
Taxes Can Be Taxing: What You Need to Know	125	(1)
Forms of Payment	126	(1)
Cash	126	(1)
Checks	126	(1)
Credit Cards	126	(1)
Keep Your Losses to a Minimum	127	(1)
Paying Your Employees	127	(2)
Purchasing: It's More Than Buying a Can of Corn	129	(12)
Choosing the Vendors	130	(1)
Negotiating the Particulars: Wheeling and Dealing	131	(3)
Product Guarantees	132	(1)
Delivery Schedule	132	(1)
Payment Terms	133	(1)
Price	133	(1)
Building Your Purchasing System	134	(2)
Par Level	134	(1)
Product Specifications	135	(1)
Personalized Yellow Pages	135	(1)
Order Guide	136	(1)
Determining How Much to Order	136	(2)
Inventory on Hand	136	(1)
Determining Your Usage	137	(1)
Calculating Your Order	138	(1)
Receiving the Order	138	(3)
Checking in the Order	139	(1)
Dating the Product	139	(1)
Shelving and Storing the Order	140	(1)
Restaurant Marketing 101	141	(14)
A Tactical Approach	142	(1)
Marketing Rules for a Start-Up Restaurant	143	(2)
Rule #1: Let Them Know You Exist	143	(1)
Rule #2: Get Your Customers Talking About You	143	(1)
Rule #3: Keep Messages Short, Clear, and to the Point	144	(1)
Rule #4: Community Involvement: Own It or Forget It	144	(1)
Rule #5: Start Right	144	(1)
Use Your Brain	145	(2)
The Cost of Marketing	147	(1)
Have a Great Grand Opening	148	(2)
A Preopening Countdown Campaign	148	(1)
The Grand Opening Campaign	148	(1)
Spread-the-Word Campaign	149	(1)
Three Long-Term Marketing Questions	150	(1)
What Are You Selling?	150	(1)
What Is the Core Message?	150	(1)
Who Is the Target?	151	(1)
Marketing Tips to Consider	151	(2)
The Performance Analysis	153	(2)
Part 4: The Basics of Operating	155	(76)
Get It Right on the Back End: The Back of the House	157	(10)
Equipment Needs	158	(3)
The Size of Your Equipment Does Matter	159	(1)
Rent or Buy?	160	(1)
Paper or Plastic? The Ware and Tear	161	(1)
Check It Out	162	(2)
The Food Manual	164	(1)
Back of House Organization	165	(1)
Point of Sales (POS) Systems	165	(2)
Upfront Effort: Setting Up for Service	167	(10)
The Dining Room	168	(1)
Matching the Space to the Concept	168	(1)
Turning the Tables	168	(1)
Go With the Flow	169	(5)
Organization and Storage	170	(2)
Zones of Service	172	(1)
Front of the House Equipment	172	(2)
Your Service System Guide	174	(1)
Other Stations	175	(2)
Dinner at Your House: Treating Customers Like Guests	177	(14)
Are You a People Person?	178	(1)
Do You Pass the Ho-Hum Test?	179	(1)
The Seven Basic Characteristics of Hospitality	180	(3)
Be Polite	180	(1)
Smile	180	(1)
Manage Eye Contact	181	(1)
Greet	181	(1)
Listen	182	(1)
Thank	182	(1)
Bid Farewell	182	(1)
The Four Critical Components to Better Hospitality	183	(3)
Committing to a Culture of Hospitality	184	(1)
Building a Hospitality Team	184	(1)
Being a Hospitality Leader	185	(1)
Improving Hospitality	185	(1)
Hospitality Scorecards	186	(1)
Comment Cards	186	(1)
Secret Shoppers	187	(1)
Customer Interviews	187	(1)
Do-or-Die Hospitality Points of Contact	187	(1)
One Priceless Question to Save Your Business	188	(3)
Operational Execution: Quality and Service That Sells	191	(20)
Quality Doesn't Just Happen	192	(2)
The Health Department	192	(1)
HAACP: A Proactive Approach	193	(1)
Understanding and Dealing with Food Contamination	194	(1)
FIFO: First In, First Out	195	(1)
Hold Times	195	(1)
Bar Safety and Quality	196	(1)
Shelf Life	197	(1)
Product Consistency	198	(2)
Temperature and Time	199	(1)
Visual Consistency and Appeal	200	(1)
Service and Hospitality Are Different	200	(1)
Concept Execution Takes Dedication	201	(1)
Speed of Service: Move It or Lose It	201	(2)
Accuracy Is Right	203	(1)
The Register Relationship	204	(1)
Analyzing Service Performance	204	(2)
Read the Customer	204	(1)
View Service from a Customer's Perspective	205	(1)
Make Service Consistent	206	(1)
The Art of Shift Management	206	(5)
Preparing for the Shift	207	(1)
Having a Restaurant Quarterback	207	(1)
Scoring and Analyzing the Shift	208	(1)
Following Up and Finishing Off	209	(2)
Clean Is Your Only Choice	211	(10)
How Important Is Cleanliness?	212	(3)
Lot, Landscaping, and Exterior Image	212	(1)
Door Glass and Entrance Area	213	(1)
Floors	213	(1)
Tables and Chairs	213	(1)
Menu Boards and Menus	214	(1)
Restrooms	214	(1)
Eating and Drinking Utensils	215	(1)
Employee Health, Sanitation, and Image	215	(1)
Find a Clean Freak	215	(1)
Clean as You Go	216	(2)
Spring Cleaning	216	(1)
The Little Things Make a Big Difference	216	(1)
Managing Maintenance Impacts Cleanliness	217	(1)
Pest Control and Maintenance	217	(1)
Never Give Up	218	(3)
Getting Into the Spirit of Wine and Spirits	221	(10)
Build Your Bar	222	(1)
Decide on Your Bar Menu	223	(1)
Developing the Wine List	223	(4)
Determine Whether a Wine List Fits Your Concept	224	(1)
How to Create a Wine List	224	(3)
How to Make Your Wine List Profitable	227	(1)
Presentation	227	(1)
Education	228	(1)
Controlling Inventory and More	228	(1)
Controlling Your Guests	229	(1)
The Pros and Cons of the Bar	230	(1)
Part 5: Now What? Growing and Optimizing	231	(100)
Retaining the People You Have	233	(12)
Do These People Like You?	234	(1)
Where Turnover Originates	234	(2)
When the Boss Gets Fired	236	(1)
The First Twenty-One Days Are Critical	236	(3)
Orientation as an Introduction	236	(1)
Training for Jobs Well Done	237	(1)
Some Different Types of Training	238	(1)
The Role of Development	239	(1)
Simplified Leadership	239	(2)
Giving Corrective Feedback	240	(1)
Making Decisions That Stick	240	(1)
When Discipline Is Necessary	241	(1)
Positive Feedback	242	(3)
The Art and Science of Sales Building	245	(10)
Competition Lives	246	(1)
Manage It Up, Not Down	247	(1)
The Crucial Roles of Hospitality, Quality, Service, and Cleanliness	247	(1)
To Build Sales, Focus on Sales	248	(1)
Ideas for Increasing Sales	248	(3)
Generating New Trial	249	(1)
Increasing Frequency	250	(1)
Increasing Check Average	250	(1)
Suggestive Selling Campaigns	251	(1)
Price Increase Decisions	251	(2)
Restaurant Sales Growth: What Does It Say?	253	(2)
A Restaurant Named Profit: Hit the Numbers	255	(12)
Beware the Dumb Decision	256	(1)
The Sales Coin Has Two Sides	257	(1)
The Consistent Path to Profit	258	(1)
Controlling the Big Two Costs	258	(6)
Controlling Food Cost	258	(4)
Hitting Labor Cost	262	(2)
Beyond the Big Two: Control Other Spending	264	(3)
Double Your Pleasure	267	(64)
Crossroads	268	(1)
Expansion	268	(6)
Thinking It Through	269	(1)
Some Things to Consider	270	(1)
The Evolutionary Process	270	(2)
What It Takes	272	(1)
Penetration Versus Saturation	273	(1)
Concepts for Quicker Growth	274	(2)
Growth Through Acquisitions	274	(1)
Growth Through Points of Distribution	274	(1)
Growth Through Franchising	275	(1)
Growth Through Merger	276	(1)
Copy the Blueprint	276	(3)
Appendixes
A. Glossary	279	(6)
B. The Preopening Calendar	285	(10)
C. Restaurant Checklists, Forms, and Guidelines	295	(26)
D. Additional Reference Materials	321	(10)
Index	331