so, welcome to the heart and soul of this podcast series. forget the 'expert' sprouting on about 'this is how you do...whatever' - this is me talking about what i've learnt. no soapbox in sight. after 14 years and a couple of business's, ive learnt a lot too. this podcast is simply about me sharing some of my experiences, in the hope that it can be of some help.
great week with lots of enthusiastic emails. so hello to our worldwide listeners , very exciting! alot of mail was regarding the money side of restaurants, and direction or help in starting up. so each week i'll be doing a segment aimed at thise of you who are wanting to open a restaurant. including a very passionate note from peru. also, this email from mark johnston, usa:
"Hey Paul, I have almost 30 years in the business; have worked everything from pot washer to GM in a variety of concepts and have opened and re-tooled a few in my day…. I have been on hiatus from the business for the past few years but doing a bit of consulting, the number one thing I find new restaurant owners are in need of is a “practical” understanding of key ratios… it amazes me that new owners, even schooled in restaurant management don’t really know where the ratios should be or how to fix them. They may know the math but can’t apply it to the restaurant. It would be great to see a lesson that starts with two concepts; one purchasing a lot of pre-prepped pre-packaged ($$) food, with low labour costs, the other a scratch kitchen with a nothing food cost and a large labour budget. If you showed how both of these can be manageable and successful but also show that they both have their own set of unique challenges. How inventory turnover, wastage and shrinkage as well as a hundred other variables will affect these two concepts differently. I think the pit that a lot of owners have learned themselves into is they think that there are one set of numbers and don’t realize that the numbers don’t have to be set in stone but the key ratios are… and if you can understand that concept, you can’t help but make money….
I would assume that most people would be less interested in learning 'the books' than the more hands on aspects of the restaurant. I know so many people just say “oh the account looks after that”…. They forget that the account is just providing valuable information and usually knows diddlysquat about what the numbers mean as they pertain to a food service company. Owner need to know how to interpret the numbers and how to change them.
I think the challenge is to show them how a shift that is 15 minutes longer than it should be, a menu that has too many ingredients or a sugar packet lost to the garbage ( per hour per day per year) affects the bottom line at the end of the year.
Just my two cents.Cheers, Mark."
(mark ok'd email being broadcast)
last week i gave homework. look at your business from your customers eyes - what do they get out of being there, and think of ways of giving them more of it. for my place, ive always pushed the fact that we make all our product in house, and work from scratch. these days theres so many convience food products (freezer/deep fryer/ serve) pre portiones froz desserts, even pre reduced cream - well we don't use any of it. but how is that relevant for our customers? so now, answering the question "whats in in for my customers" i'll be promoting, not just the flavour benefits, but also that most of our competition use these prefab products, and that by not using them, our customers are getting food from skilled hands, who are passionate about food, just like them.
some things ive learned about starting a restaurant:
having started 2 business now, the first thing ive learned is that there is no 1 way to do anything. marks email
eg. sydney business could be more specialized, regional one broader
syd bus was small, but affordable, but hard to grow out of
this bus is bigger, main street, high profile
ive learnt that nothing will expose you like a business, 'cos you have to be across everything
creative stuff
detailed, organised stuff
menus
ordering
front staff
kitchen staff
rostering
leases and business negotiations
equipment breakdowns. at wrong time (john mayer says bad news never had good timing)
bookwork
analysing figures
so its worked for me to do these business with my wife and bus partner who is strong where i'm weak.
dont know if i'd go into partnership with someone else???
doesn't mean i'm advocating hus/wife ptnrshps either. but its been fab for me
ive learnt to work on weak areas (equip maintenance, people management, planning and 'detail' stuff)
and keep improving my stronger bits. so if i was thinking of starting a business, i'd get a bus plan template, and add to it a section where, as best i could, id work out where i'm gonna need help
ive learnt it IS possible to love food and cooking, and still run a profitable restaurant. as i said before with so many pre fab products (not that there's anything wrong with them but they are not my style) its tempting to cut corners, but weve been able to stick to our standard, and still make money.
ive learnt the importance of scale.
if you are too small you can never grow past the max. read e-myth micheal gerber. but bigger scale is $$. i study benchmarks a lot (can you tell) to work out what an optimum size of a restaurant is. if i ever open another one, it'll be to this formula
ive learnt that i have to set values for my business. i have to sleep well. so we have made a total commitment to run an honest business. we pay all our entitlements (all sales go through the 'books, we pay our super and staff stuff, we pay our suppliers promptly, we don't syphen off cash and pay staff cahin hand to avoid tax. god, are we too straght? but i sleep well.
ive gone through all of this in my last 2 business, so the next one, i'm half way there already!
in coming weeks well look into some of the issues you'll need to know so you can open yr own place