Category: Continuing Education for Food Professionals

SHARPEN YOUR CONTROL PENCILS – EVERYONE IS GUILTY UNTIL PROVEN INNOCENT

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Most of you are probably thinking: “what an awful statement to make”. The American mantra is always the opposite and has become the basis for our legal system, yet from experience, I would state that the best approach is to plan for the worst in an effort to prevent it. Allow me to explain how this works in restaurant operations.

The reality for management must be that everyone could be dishonest if given the opportunity. It becomes important to realize that managers should thus focus on taking away the temptation in an effort to help your employees and customers remain honest.

“There’s an old saying that’s long been accepted in fraud prevention circles called the 10-10-80 rule: 10 percent of people will never steal no matter what, 10 percent of people will steal at any opportunity, and the other 80 percent of employees will go either way depending on how they rationalize a particular opportunity. The good news is that there is much a business can do to sway this 80 percent to their side.
Another widely accepted theory is that of the late Dr. Donald R. Cressey called the “Fraud Triangle.” According to this theory, there are three factors — each a leg of a triangle — that, when combined, lead people to commit fraud.
One leg is an individual’s financial problem or need that they perceive is nonsharable; i.e., a gambling debt. The second leg is this individual’s perception that there exists at the place of business an opportunity to resolve the financial problem without getting caught. The third leg is the individual’s ability to rationalize or justify the intended illegal action (“After all I did for my company, they mistreated me. I was entitled to that money.”). In shorter terms, PRESSURE plus PERCEIVED OPPORTUNITY plus RATIONALIZATION equals FRAUD.”

http://www.businessknowhow.com/manage/employee-theft.htm

What is most telling about this quote is both the need to take away temptation and the employees’ mindset that they might be able to justify their dishonesty based on “after all I did for my company”. Let’s look at 100 (not literally) ways that people can and do steal from restaurants.

• Theft of cash from a register
• Servers or bartenders shorting the till by not recording certain items that are sold to guests
• Accepting favors from vendors in exchange for over-ordering or buying items at a cost that should be lower
• Walking out of the operation with product
• Over-portioning, not portioning, giving away free drinks (theft of service)
• Taking small equipment
• And the list goes on and on

By nature, most of us want to trust our staff and co-workers. To this end, restaurants in particular, tend to be physically set-up under the premise of trust. Look at your own operation in this regard:

• Do you have locks on your cooler doors?
• Do you require your cooks to requisition product from a central receiving area?
• Do you have a system of checks and balances where more than one person (from a different department ideally) is responsible for ordering, processing bills and taking inventory?
• Do you perform unscheduled inventories on alcoholic beverages?
• Do you require your cooks to scale out ingredients, especially high-cost center of plate items?
• Do you clearly state that those responsible for ordering abstain from accepting any gifts from vendors?
• Do you require those who order to solicit bid prices from various vendors?
• Do you use a system using purchase orders that match up to invoices?
• Have you implemented a portioning system in your bar?
• Do you limit only one person to access the cash register on any given shift?
• Do you require your staff to leave backpacks, or large carry bags in their cars or at home rather than bring them to work?
• Do you conduct daily inventories on high cost, portioned proteins?
• Do you conduct weekly or at least monthly inventories of all products used in generating sales?

If the answer is no to any of these questions, then there is an opportunity for your staff to steal. This does not mean they will, it simply points to a weakness in your system and a responsibility that you have not taken to help your staff to stay honest.

There are answers to this dilemma that allow trust in the workplace to exist and create an environment where employees (management included) are part of the solution, not the problem.

• Limit access to coolers and storerooms either by using locks or incorporating a system of planning using requisitions and delivery to various stations in the kitchen or bar
• Use cash registers that require employees to enter a password and management to lock out others during a shift
• Have cashiers count and sign for their bank at the beginning of a shift and sign off on their drawer at the end of a shift
• Require regular inventories conducted by two parties who do not report to each other
• Have all employees sign a terms of employment document that states that they are not allowed to accept favors from vendors
• Install a method of portioning in both the front and back of the house
• Watch patterns of over/short daily cash reports
• Offer orientation and training sessions for staff that outline your control procedures and how important it is for all to participate in the financial success of the business

The key to a successful program is to make it participatory rather than allowing employees to feel that they are being watched and pre-judged. Restaurants are businesses with very small margins for profit and they can only be successful if all staff members’ buy-in to the need for control. Control is a word that oftentimes poses negative connotations. Control should not be designed to control people, but rather control the environment that they work in. If it is presented in this fashion, your staff will see the merit and understand their role.

COOKS and CHEFS NEED to TAKE CARE of THEMSELVES

COOKS and CHEFS NEED to TAKE CARE of THEMSELVES

The excuses are all around: “I don’t have time to eat properly; I’m around food all day, a meal just doesn’t appeal to me; I can’t watch what I eat, my job requires that I taste everything; A real meal will slow me down; I know I should eat better and exercise, but it doesn’t fit my schedule”; etc., etc., etc.

Think of it this way: professional cooking, which is a physically, emotionally, and mentally taxing profession; is similar to a professional sport. Athletes cannot perform at any level of competence without conditioning. This conditioning includes an appropriate diet, an exercise regime, and a balance of work and rest. If cooks and chefs are to perform at the highest level (what is expected every day on the job), then he/she MUST take care of their bodies. For far too long this was not the rule of thumb, in fact, we have long subscribed to the adage that” “you can’t trust a skinny cook”. Regardless of your frame size, a healthier life style will allow you to perform at a higher level and withstand the physical abuse that is oftentimes associated with a career in serious kitchens.

The typical cook or chef is rarely scheduled for an 8-hour shift. Cooks may work 10-12 hours on busy nights and chef’s even more. Your body burns excessive calories during that period of time under intense heat, constant movement, being on your feet without rest, and seemingly under attack by the stressful monsters of time and unrelenting communication. This environment can easily take a toll on a person’s body and mind. What is the typical response to the body’s need for energy replacement? Carbohydrates and caffeine are the fuel to fool the body into believing that you are responding appropriately to its needs.

After hours, the cook’s respite is to grab a few beers simply because the body and mind were drained but the adrenaline was mountain high, reinforced with lots of caffeine. If a cook eats a meal while on the job, it is typically something next to him or her at their station during the final few minutes before the tickets start flooding the kitchen. The thought of sitting down to a balanced meal and taking 30 minutes to replenish before cranking out 150 dinners just doesn’t happen. To many cooks, dinner might be a few bites of pasta and a cigarette out back by the dumpster.

I confess to falling into that trap. A meal to me was oftentimes a sandwich while standing over a trash can to catch the crumbs, wolfing down this quick carb meal within 2-3 minutes and moving back to work. There even was a period of time when my diet was chocolate chip cookies for a sugar boost and 8-10 cups of coffee during a 12-hour shift. I never exercised, rarely slept for than 5 hours a night, and usually forgot to hydrate (aside from coffee which doesn’t really help). The result was weight gain and a few medical issues that are fortunately now under control.

When a cook or chef refuses to take care of him or herself, the damage is cumulative and WILL, WITHOUT a DOUBT, catch up to them. Far too many of my friends and co-workers have found themselves in dire health because they lived in the moment and avoided the necessary maintenance that would allow them to be productive cooks for a long period of time and enjoy their lives at the same time.

In a recent article by Harry Kimball, a writer for Newser Staff, http://www.newser.com/story/76322/how-skinny-chefs-stay-that-way.html

reference was made to some foundational rules that will allow any professional cook to maximize their effectiveness and feel much better at the same time. These rules include:

TASTE: Yes, chef’s and cook’s do need to taste many items. “The key word is taste”, which does not take the place of building in a balanced meal as well.

EXERCISE: Every cook, just like an athlete in training, needs some type of exercise regime. It may be running, walking, biking, skiing, snow shoeing, yoga, or a workout at the local gym. Whatever you choose, it must become an integral part of your daily life.

Eric Ripert, chef/operator of Le Bernadin in New York (one of the finest restaurants in the world) walks 2-3 miles to and from work every day, regardless of the season. This is a time for his body to prepare and recover from a work shift, an opportunity to clear his mind for the day ahead, and an emotional break from the stress of the kitchen.

HAVE A PLAN AND STICK TO THE PLAN: Just like every cook lives by his/her mise en place list, so too must a successful cook live by his/her personal wellness plan. You owe yourself this commitment.

DON’T SELF-MEDICATE WITH FOOD: Just as many cooks starve their bodies of good nutrition, just as many use food, any food, as the prescription to take care of energy slumps, stress, mental lapses, and depression. “Eat when you are hungry, not freaked out.”

SIT DOWN: Grabbing a bite here and there will lead to excessive amounts of the wrong calories, too much sodium and an imbalance of nutrition that leads to peaks and valleys in performance. There are numerous cookbooks out today that focus on the staff meal in restaurants and how certain operations invest in this time to share with other members of the staff and enjoy balanced, great meals in preparation for a busy shift. From my experience, this rarely happens as it does in these wonderfully thought-out books. A staff meal that receives similar attention to the restaurant menu will help to build team work and energize cooks and service staff for a high performance lunch or dinner shift.

Allison Adato recently released a book of interviews with a handful of prominent American chefs entitled: “Smart Chefs Stay Slim” published by: New American Library. Chef’s talk about their regiments and “tricks” for balancing the demands of the professional kitchen with a healthy life. This is definitely worth the read.

http://www.amazon.com/Smart-Chefs-Stay-Slim-Americas/dp/B00B1L7FT6/ref=sr_1_1?s=books&ie=UTF8&qid=1382351462&sr=1-1&keywords=Smart+Chefs+Stay+Slim

Although my daily routine does not parallel what I did when full-time in a busy kitchen, I have changed my habits and created enjoyable health routines that include balanced diet, appropriate balance of calories, fat and sodium and everyday exercise. The result is a healthy weight for my age and size, comfortable energy levels, a clear mind and feeling better about my wellbeing than I have in many years. I implore every professional cook to incorporate this type of lifestyle change into their daily routine – the payback is worth the effort.

THE DIFFERENCE BETWEEN A COOK AND A CHEF

THE DIFFERENCE BETWEEN A COOK AND A CHEF

A few years back I read of an interview with a prominent chef who was asked: “what is the difference between a chef and the millions of cooks throughout America.” The response, to me, was a perfect definition: “Most reasonably intelligent people can follow a recipe with mixed results, a chef can be given a basket of ingredients and is able to create something wonderful.” Although this is an over-simplification, there is a real element of truth to this statement. A chef is certainly a manager and a leader, a cost accountant and a marketer, a social scientist and an organizational guru; but above all, a chef is a passionate and accomplished cook.

The ability to “create something wonderful”, stems from a persons ability to draw from his/her flavor memory. A serious cook must be a person who has experienced a full array of flavors, taste combinations, foods at their peak of maturity, seasonings, and texture combinations. Without this “data bank” it would be nearly impossible to create magic with food. To go even further, chefs have life experiences that are filled with an understanding of history and various cultures. It would be difficult to cook wonderful Spanish foods without understanding the culture of Spain, it would be challenging to understand classical French food without studying Ferdinand Point, Larousse, Escoffier, Careme, Bocuse, Robuchon and Verge. To cook French you must feel like you are French, to cook Italian, Mexican, Scandinavian, or Thai, you must understand the culture of those countries and most importantly have cooked with those who were born into those cultures.

“A recipe has no soul…..” was a quote from Thomas Keller, truly one of America’s great chef’s of the past few decades. This should not be viewed as an endorsement for kitchens without structure; just the contrary. I am sure that Keller has his own version of the standardized recipe, however what he and most accomplished chefs know is that a recipe does not create a cook. The recipe is a reference, but the cook must draw from his/her flavor memory and understanding of culture to build the recipe into a great dish. There are just far too many variables that come into play (seasonality, maturity, size, terroir, brand, shipping, storage, etc.) to rely on a recipe as the consummate guide in cooking. Some of the best cookbooks that I have used such as: “Le Repertoire de la Cuisine”, only list the ingredients in a dish without procedure or amounts. The ingredient list is a reminder for the chef who knows, though experience, what a dish should look and taste like, and the method of cooking that is appropriate for the outcome of that dish.

Those who have a desire to become great cooks and chefs must live the following: taste everything, experience as many different cooks work as possible, travel and experience cultures, read about the history of food, learn from the best, taste again and record your experiences. Keep recipes as a guide but cook with your soul.

Kudos to Thomas Keller for getting it right.

SAY IT’S NOT SO……….

SAY IT'S NOT SO..........

I guess we all have our heros – people who in our professional or personal lives have helped us to set a course and continue to inspire us on a daily basis. To some it may be a musician, a painter, an athlete, a teacher, an inventor, or a parent, friend, or sibling. To thousands of chefs, including myself, it has been, and always will be the great chef Escoffier.

Escoffier, afterall, defined the organization of a kitchen (called the brigade) that is still used nearly 100 years after his prime, he introduced service a’la russe (service by course), brought dignity and professionalism to the kitchen and wrote Le Guide Culinaire, the chef’s cookbook.

I remember one of my first trips to France when I was fortunate enough to visit the Escoffier museum (his former home) in Ville neuf Lobert, near Nice. When I came across the great chef’s desk I placed my hand on top and felt the electricity of his influence. The following year I was honored to represent the United States at a conference that focused on the future of culinary education in Escoffier’s home town with his great-grandson, Michel Escoffier. I will never forget the experience.

In my office I have proudly hung a portrait of Escoffier to remind me every day of the importance that he placed on cooking and those who choose to make a career in the kitchen.

So, naturally, while visiting London last week I had to get my picture taken in front of the Savoy Hotel where Escoffier and his front-of-the-house partner: Cesar Ritz once held court and re-defined cuisine for the British.

Upon returning to the States I undertook a bit more research on the Savoy and Escoffier’s tenure there only to find an article pertaining to a BBC documentary that was prepared on the chef’s life. The writer had apparently completed some research that, taken at face value, is quite disturbing. He claims to have proof that Escoffier and Ritz were fired from the Savoy for misappropriation of funds that they used their positions to wine and dine and convince investors to set them up in the Carlton Hotel for significant personal gain. According to the writer, their is proof including signed confessions by both parties. He claims that the British Royalty ignored the incident and subsequent punishment for reasons of probable collusion or fear of public outcry.

“Escoffier and Ritz were sacked by the Savoy on February 28, 1898. the reasons were that the pair had been dining – and especially wining – potential investors in the new Carlton Hotel that they opened that year at the Savoy’s expense. ……Escoffier, moreover, cofessed to taking “commission”, gifts or kickbacks from the Savoy’s suppliers amounting to a (sizeable amount of money in today’s terms).”
by: Paul Levy
June 2012
The Telegraph

Escoffier is my professional hero and as such I choose to deny the validity of this story. His work and standards have been my searchlight as well as a beacon for thousands of chefs over the decades, so let’s give him the benefit of the doubt and turn a blind eye, at least until more is revealed. 🙂

In France the Fundamentals are Strong

Bread, Cheese and Wine – all products of fermentation, products that require an artisan to prepare properly, products of passion and commitment and products that represent the foundations of a great cuisine.

Having just returned from a far too short week in France, I relish the experience of realizing that no mater where you travel in this country, the people are fully committed to these foundations. They understand them, appreciate them, live by them and communicate every day using bread, wine and cheese as the common denominator representing not just a country’s cuisine, but the core of its culture as well.

Paris, of course, has more than it’s share of great boulangeries, wine shops and cheese vendors, but it is the countryside that serves as the bounty for a country defined by great food foundations. Even the smallest town in Burgundy will have at least one if not two or three excellent bakeries. Look to the left, look to the right and you will find wine vines producing sometimes exceptional, but always great local wines. Finding world class cheese is not difficult, in fact it is so essential to life in France that it is as much a staple in shops and homes as eggs and milk are in the United States.

The most impressive thing is that the French are serious about their food. As America enjoys a food integrity metamorphosis, we can look to the French countryside for inspiration. The French have been buying local, using grass-fed animals, avoiding the use of chemicals, enjoying the work of artisans and planning their menus based on the seasons for as long as time.

Bread in particular is simply extraordinary in France. From petite dejunier to late night dinner, cafe latte with baguette or croissant and confiture to croustades with your rillette- bread plays a central role in the meal.

Drinking wine is not reserved for those who have the resources and wine knowledge to purchase from the best wine shops; wine in France is all about knowing the vintner, visiting and touching the vines, breaking bread with the wine maker who is your neighbor, and clinking glasses while tasting in their private wine cellars. In the country, every home has a wine cave – the most treasured part of the family estate.

To truly understand the foundations of cuisine (bread, wine and cheese) you MUST visit the countryside of France. This is a right of passage for any serious culinarian and food lover.

Each time I visit France, it is time in the country that leaves me truly appreciative of the impact that food can have on culture. It is so wonderful to see Americans turning back to an understanding of this and an appreciation for the foundations.

I can hardly wait to return.

Beginning in the fall of 2013, Harvest America Ventures in conjunction with the Weissberg family of France will be offering educational wine vacations in the Burgundy Region. Stay tuned for more information soon, but visit our website in the meantime at: http://www.harvestamericaventures.com and click on “Food and Wine Vacations” for a sampling of content. If you are interested simply send me an email: psorgule@hotmail.com and I will place you on the information mailing list.

How Important is Food Cost

Lets be realistic – the primary job of a chef is to make money for the restaurant. Now the ways to get there are through creating a product that drives sales, exceeding customer expectations so they return, training the staff to be consistently great, and controlling costs. To this end, YES, food cost is important, however it is critical that chefs and managers understand that it is really contribution margin that holds the key to making money once the guest arrives.

Contribution margin refers to what the individual menu item contributes to the overall profitability of the restaurant. This can be tangible (the amount of money remaining after the expenses associated with making and serving that item are subtracted), and/or intangible (the item encourages the complementary sale of other items that are more profitable or helps to bring in future sales). Although I am not a great fan of “loss leaders” (items sold at or below cost to help generate volume), I do understand and support using certain menu items as a marketing tool.

Let’s first look at the tangible nature of contribution margin. Here comes the basic math…..
A menu item using chicken breast on your menu sells for $12 and costs the operation $4 to prepare. $4.00/$12.00 = 33% cost of goods. This falls within the normal range for food cost in full-service restaurants. Everyone is happy and the menu item contributes $8.00 to cover all other expenses in the restaurant (CONTRIBUTION MARGIN). A Veal Chop entree sells for $32.00 and costs $17 to produce. $17.00/$32.00 = 53% cost of goods. This is far beyond normal “acceptable” food cost for full-service restaurants. Management is not happy. Now here is the kicker: $32-$17=$15 CONTRIBUTION – much greater than the $8 from chicken, yet the other costs of operating the restaurant remain the same whether you sell chicken or veal. The veal is a greater contributor to the financial success of the restaurant even though the food cost % appears to be unacceptable.

The intangible is even more interesting: it is not always fair to make generalizations, yet if you were so inclined to build a statistical study you would probably discover that the person buying chicken is less likely to buy expensive wines, appetizers and desserts than the veal guest. So, one could assume that there is a greater likelihood of selling high profit “extras” with veal orders and contribute greatly to the overall profitability of the restaurant even though the food cost % seems out of whack.

One last measurement: as stated in a previous article: “The Top Line Drives the Bottom Line” – it is very important to convince your servers to up sell and increase sales volume. The 53% food cost veal chop is a natural tool to help sell all of the extras and raise the top line. For the server, the base for gratuity also increases: End of story – everyone wins!

Back to the original question: How Important is Food Cost? There is a case to be made for effective menu planning leading to better contribution. In either case, control to any budgeted percentage is essential for long-term success.

Do you need help with sales and cost of goods? Contact Harvest America Ventures for assistance. Look for Harvest Deep Dive Seminars for restaurateurs coming to a city near you. Coming to: Boston, Albany, Lake Placid, Burlington, and Rochester.

Visit our site for more specifics:

http://www.harvestamericaventures.com

More of: The Top Line Drives the Bottom Line

The hardest task for any restaurateur is convincing a potential customer to walk through the front door for the first time. This takes considerable effort in the form of image building, identifying target markets, use of social media, advertising, building an effective website, selecting the right physical location, etc. Convincing a customer to make that leap means that they are willing to take a risk, sit down and spend some money. After all of that effort how much time do you spend on convincing customers to buy and set the stage for a return visit?

Keep in mind that your service staff are your ambassadors and sales force. Have you taken the time to train them how to sell and have you provided them with the tools that they need to be effective in that role? Your job is not to simply make a sale, it is to build a relationship that will result in steadily increasing sales, check averages and return guests. Your service staff holds your future in their hands.

That initial customer visit will likely result in “safe” purchases until your operation is able to demonstrate trustworthiness. The server is the portal for information, the front-line expert on your menu, the friend who can make great suggestions, the connection to others in the restaurant and the gatekeeper to your profitability.

Yes, the top line drives the bottom line and the server’s primary job is to sell, however, to accomplish this they must be able to provide exceptional value for the guest. Does you service staff known the menu, the ingredients, the source of those ingredients, the methods of preparation and the flavor profile of every item on the menu? Does your service staff have a working knowledge of wine and can they make great pairing suggestions for the novice wine consumer? Is your service staff comfortable communicating with the chef about special requests and can they offer those to a guest with confidence that the property can deliver? Is your service staff willing and able to sell the bookends: appetizers and desserts? If not, the fault lies with management and ownership.

The average restaurant in America spends less than 1% of its budget on training, yet it is training that will result in greater sales, higher check averages and return guests. The top line does not happen simply because your marketing efforts have led customers to walk through the door.

Are the tools in place to allow servers to up-sell with confidence? Is the dining room comfortable, is the menu attractive and user friendly, is the wine list understandable, do you offer on-going training to keep staff informed about the menu, do you require daily pre-meal information sessions, do you have a sommelier or a manager with a strong understanding of wine and the ability to build a list that works well with food, do you have the right glassware and china to complement the wine and food, do you take advantage of customer profile systems such as Open Table so that your server can track the preferences of return guests? The answer to each of these should be YES.

The top line drives the bottom line, but the process of setting the stage is the only thing that will allow this to become a reality.

Watch for information on “Deep Dive” Seminars by Harvest America Ventures coming to a city near you. Learn about the opportunities and pitfalls associated with restaurant operation.

Visit our website at: http://www.harvestamericaventures.com

The Top Line Drives the Bottom Line

The Top Line Drives the Bottom Line

This is a first post in a series demonstrating what Harvest America Ventures does to help restaurants reach their goals.

The restaurant business is quite simple on paper, the challenge is transitioning some simple rules into effective processes and great results. The first rule of thumb is that “sales rule”! All the cost controls in the world cannot compensate for a lack of business and customers who are not given the opportunity to spend more than they had anticipated.

How to reach and eventually exceed your sales goals is a complex mix of contemporary marketing, understanding and tracking customer expectations, producing consistently exceptional products, providing breakthrough service, and setting the stage for return guests. Simple isn’t it?

Let’s look first at the production of a consistently great product. There are a handful of restaurateurs and chefs today who have ruined it for everyone else. They are creating that WOW factor with their product every time a guest arrives. They are obsessed with a constant state of improvement. They are, without a doubt, their own worst critics and act not too dissimilar to obsessive artists.

I remember reading that in his later years Picasso was not allowed to walk, unaccompanied, through a museum that carried his work. His obsession with constantly critiquing his own work would lead him to try and correct his paintings on display. I know chefs and restaurateurs with a similar outlook. The customer is head over heals in love with the food and the experience, but the chef and owner are already trying to figure out how to fix it.

Steve Jobs was an obsessive character that drove his staff crazy with getting everything beyond right. He wanted perfection and realized that he would likely never get there. Even so, the best always strive for that goal.

There is little question that the pursuit of excellence in restaurant product development, production and service will always be a door for those few operations to be successful.

Good restaurants are able to develop menu items and produce them at a level of consistency that makes people comfortable. Great restaurants are constantly looking at pushing customer expectations higher each time they choose to spend money.

How good is your product? Do you obsess over it? Are you familiar with what the spoilers are doing to make your life more difficult and challenging every day? Do you follow David Chang, Daniel Boulud, Gavin Kaysen, Rick Bayless, Marcus Samuelsson, Danny Meyer, Drew Nieporent, and Grant Achatz to see what they are doing next? If not, you had better start.

Is your staff fully versed on what your food is, how it’s prepared, how it tastes and which wines form the perfect complement? Do they know how to up sell and build that check average?

Filling restaurant seats is critical, but developing a product that is fresh and always new and designed to draw people back in time and again is the key.

The top line drives the bottom line.

Stay tuned for more quick tips. Harvest America Ventures is a consulting and training company focused on the restaurant business. We are here to help you reach your goals.

COMING SOON: Deep Dive Seminars in an area near you!

http://www.harvestamericaventures.com

The Odds are Against Them, Yet People Continue to Open Restaurants

There are more than 965,000 free-standing restaurants in the United States. That does not include Business and Industry foodservice, Schools, Hospitals, or home-meal replacement from your local grocery store deli-counter.

Most data points to a 66% failure rate for free-standing restaurants in their first year of operation and 90% failure rate for those who manage to make it to year five.

What is most ironic is that despite these figures the number of restaurants continue to grow each and every year. When one restaurant closes, another is ready and willing to take its place.

Let’s take a moment to unscientifically evaluate why this is so:
WHY DO PEOPLE OPEN RESTAURANTS?

1. Chefs open their own restaurants (usually with another persons’ money) because it is their dream to show the world what they can do. The restaurant, to them, is a canvas waiting for the artist to paint.
2. Restaurant managers open restaurants because they believe that they have the formula for success that no one else has discovered.
3. So called – smart business people who have made their mark in other industries, open their own restaurant because: “how hard can it be”? this must be a quick and easy way to get rich – look at what they charge!
4. Family members open another restaurant because dad had his own and he was successful! It must be in their genetic make-up.
5. Some people open restaurants because they like to eat out and they really “know” food.
6. Some open restaurants because it would be great to have a place where their friends could come and have a terrific meal. (be careful of “friends” who expect something for free)
7. Some open restaurants so that they can have their own personal bar.

…and the list goes on. What many don’t realize is how hard, demanding, unpredictable and fragile this business is. To that end, here is a primer for all would be restaurateurs:

RESTAURANT REALITY:
1. Location is still everything. Make sure you are visible, close to lots of foot and vehicular traffic and flush with parking spaces.
2. You will be in the service business which means that YES – the customer is right.
3. The top line drives the bottom line. SALES, SALES, SALES.
4. Quality, interesting and flavorful food is an expectation. It is the price of admission.
5. Be aware of what is trending: local, sustainable, nutritious, healthy and fresh.
6. Value is more important that price.
7. At best, restaurants can expect to make 5% profit. That is only possible if you minimize waste, theft and spoilage and continually attract enough guests.
8. Rent will kill you! A good rule of thumb is that your annual rent should not exceed 6% of gross sales and total occupancy costs should not exceed 10%.
9. Food spoils!
10. People steal! (customers and employees)
11. Free drinks will put you out of business.
12. Family members should pay for their food and drinks like everyone else.
13. Taxes must be paid on time.
14. Dining rooms generate sales and kitchens incur cost. Make your dining rooms larger than your kitchen.
15. Chefs are frustrated artists, but unlike many famous artists you want to sell product while you are still alive. Menus should reflect what people will buy.
16. Cash flow is king. Make sure it is coming in faster than it is going out.
17. Cash may be out of style but remember it costs you money for the privilege of accepting credit cards. You must accept credit, but smile when they pay you in cash.
18. Pick your vendors wisely – they are the basis for great tasting food and can even be viewed as a bank that gives you 30 plus days to pay back the loan of supplies.
19. Guests come initially for the food but return because of your service. Select employees well, train them constantly, treat them well, support them, measure their performance and reward them when you can.

…once again, the list goes on. Do you still want to own a restaurant? If so, let Harvest America Ventures help you to minimize many of those factors that lead to failure. Contact us today!
Harvest America Ventures, LLC
Restaurant Consulting and Training
http://www.harvestamericaventures.com
psorgule@hotmail.com

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