show notes | i run a restaurant too.com

#6 starting a new restaurant

Mon, 22 Oct 2007 12:15:40 +1000

the first in a series. i will go through all the steps involved in opening a restaurant. today we cover the start of your plan - the fun bit. this is where you get to bash the idea into shape. what will be your governing factor? this will determine all the other parts of the plan. i only want to open a place where i have a high level of expertise in the core technical areas. this means replicating what we do now, but in another location. you could, however, use your local knowledge to open a place in your home town based on what you know of the existing food needs there.

#5 "dodgy or not"

Mon, 22 Oct 2007 12:10:20 +1000

ella ferris 'the professor' and i play the game 'dodgy or not'. are these practices ok, or pretty bloody suspicious?

1. floor food - it happens, but no amount of washing (!) flashing on grill or anything else makes it ok to send out. don't let yr chef tell you otherwise.

2. hollondaise left out at room temp for more than 4 hours is not ok

3. thawing bulk foods at room temp - not ok either. thaw in cool room.

#4 what ive learnt about opening a restaurant

Sun, 14 Oct 2007 10:32:56 +1000

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

#3 equipment trends at 'fine food 08' show in sydney

Sun, 30 Sep 2007 15:28:15 +1000

homework! look at your restaurant from your customers eyes. whats in it for them? what do they get out of visiting you? how can you give them more of it?

fine food 08. neil willis from sydney commercial kitchens saw lots of cool new equipment. wide underbench dishwasher from washtech. new sexy fridges from skope, including intellegent controllers for night and daytime use. combi ovens and blast chillers everywhere. no vacuum cleaners in sight, but a welcome introduction of the electrolux commercial range.

but where's the iFridge?

#2 food handling times - how long is too long?

Mon, 24 Sep 2007 11:45:14 +1000

i spoke with chef ella ferris, 'the professor' about food handling and safety. we spoke about what happens as your food ages. salient points:

vacuum packed meats should have red CLEAR juices

cooking food doesn't neccessarily make it safe

food can become dangerous as it ages, even at correct storage temperatures, therefore having a keeping time designated for every product is best practice.

any mould is bad. its definitely NOT ok to scape and serve. your chefs don't do that do they?

send me your food handling questions paul@irunarestauranttoo.com

#1 do you want to make more money?

Mon, 24 Sep 2007 11:14:09 +1000

those that answered 'no' should skip this and go straight to show #2!

for the rest of us, here's my chef's eye view of the mysteries of restaurant finances:

the 5 steps we use in our restaurant, that absolutely WORK are:

1. do a 'profit and loss' statement/report EVERY MONTH. although any accounting program will issue a report at the touch of a button, there are a few things to get sorted before you have an accurate report. most importantly you need to do a 'stocktake' at the end of every month. the program will then be able to add you month's purchases and deduct the stock that was there at the beginning to generate an accurate food and beverage cost.

2. understand EVERY LINE. sounds a bit glib, but true. depending on who does your books, the likelihood of entries needing explanation is high. no point in a report if you don't understand it!

3. get naked in the shower with other restaurant owners. or to put it another way - use 'benchmark' figures. these are territory specific, so get hold of some for your area. they are figures of other restaurants, just like yours. they'll give you a great idea of how you, ah, compare against others.

4. use the benchmark figures to make your own 'percentage compass' . get help with this if you need. the aim is to build a list of dream expense percentages. remember that the most important way of reducing the food cost percentage, for example, is to increase sales without spending more on food. it could look something like this example :

food and beverage 30%

general and admin 6%

marketing 2%

operating 5%

employment 35%

occupancy 7%

net profit (owners wage) 10%

owners invest return 5%

so play with the percentages! so long as they equal 100% you've got the start of a plan. already you can see how some lines need explanation, e.g. whats covered in 'operating'? I have a car lease, where do the repayments fit in? how do you work out owners investment return? chances are you'll need to sit down with someone 'in the know' to complete this, but once you do....

5. commit to achieving those goal percentages. this is a massive topic! i love the interaction between the sales and the expenses. put your prices up and reduce your expense percentages. but put them up too much and don't make as many sales! hmmm, there's a lot to think about in here. we'll be looking into all of this in upcoming episodes.