START UP FOOD - SERVICE BUSINESS PART I

PREFACE

Food is a basic need. Though tastes and trends will change, technology will advance and demographics will shift, people will always need to eat.

Now that doesn’t mean that starting and running a profitable food – service business will be a proverbial piece of cake.

Quite the contrary: This will probably be the hardest work you’ve ever done. But it has the potential to be tremendously rewarding – both financially and emotionally – and it can be lots of fun.

There are many ways you can enter the food – service industry, from buying a small coffee cart to building a high – end restaurant from the ground up. In this book, we examine six basic food – service businesses: a generic restaurant, a pizzeria, a sandwich shop / delicatessen, a coffeehouse, a bakery, and a catering business. It’s important remember that these are not mutually exclusive businesses; they can be customized and combined to create the specific business you have in mind.

Perhaps you know exactly what type of food – service business you want to start, or perhaps you haven’t made a final decision yet. Either way, it’s a good idea to read all the chapter in this book – even those that pertain to businesses you think you aren’t interested in. If you read with an open mind, you may get ideas from one type of operation that you can apply to another.

This summary will give you the basic information you need you need to start a food – service business. You’ll learn how to develop a business plan; what the day – to – day operation is like; how to set up your kitchen and dining area; how to buy and maintain equipment and inventory ; how  to deal with administrative, financial, personnel, and regulatory issues; and how to market your venture.

Because the best information about business comes from the people who are already in the trenches, we interviewed successful food – service business owners who were happy to share their stories. Their experience spans all type of food – service operation, and several of them illustrate in practice that you can successfully blend more than one type of operation. Throughout the book, you’ll read about what works – and doesn’t work – for these folks and how you can use their technique in your own business.

You’ll also learn what the food – service business is really like. The hours can be flexible, but they’re usually long. The profit margin are good, but only if you’re paying attention to detail. The market is tremendous, but you’ll have a substantial amount of competition, which means you’ll need a plan to set yourself apart. The opportunity to express yourself creatively is virtually limitless, but sometimes you’ll have to do what the market demands – even if it’s not your preference.

Like anything else, there’s no magic formula, no quick path to success. Thriving in the food – service business takes hard work, dedication and commitment. But it can be well worth the investment of your time, energy and resource. After all, everybody’s got to eat – including you.

1

INTRODUCTION

As increasing numbers of consumers want to dine out prepared food home, the number of food – service operation has skyrocketed from 155.000 about 30 years ago to nearly 900.000 today. But there’s still room in the market for your food – service business.

Shifting demographics and changing lifestyles are diving the surge in food – service businesses. Busy consumers don’t have the time or inclination to cook. They want the flavor of fresh bread without the hassle of baking. They want tasty, nutritious meal without dishes to wash. In fact, the rise in popularity of to – go operations underscores some clear trends in the food – service industry. More and more singles, working parents and elderly people are demanding greater convenience when it comes buying their meals.

Though the future looks bright for the food – service industry overall, there are no guarantees in this business. Even the most successful operators will tell you this isn’t a “get rich quick” industry. It’s more like a “work hard and make a living” industry.

A hard reality is that many restaurants fail during their first year, frequently due to a lack of planning. But that doesn’t mean your food – service business has to be an extremely complex operation. In fact, the more streamlined you can make it, the better your chances for success. Robert V. Owen, owner of RV’s Seafood Restaurant, a casual seafood restaurant in Nags Head, North Carolina, observes: “the restaurant, a business is a simple business that people make complicated”. His formula for success is quality food, good service, and great people – an approach that’s worked for him for nearly a quarter century.

WHO ARE THE DINERS?

No single food – service operation has universal appeal. This is a fact that many newer entrepreneurs have trouble accepting, but the reality is that you will never capture 100% of the market. When you try to please everyone, you end up pleasing no one. So focus on the 5 or 10% of the market that you can get, and forget about the rest.

Whit that said, who is eating at restaurant? Let’s take a look at the main market categories of food – service business customers.

GENERATION Y

This generation, also tagged the “millennial generation”, the “echo” or the “boomlet” generation, includes those born between 1980 and 2000. Generation Y is the most ethnically diverse generation yet and is more than three times the size of Generation X. Generation Y teenagers have an average of $ 100 per week of disposable income, and 40% of them hold at least a part – time job. One in four lives in a single – parent household, and three out of four have working mothers. They are a prime market for food – service business.

Members of Generation Y go for fast – food and quick – service items. About 25% of their restaurant visits are the burger franchises, followed by pizza restaurants at 12%. This group’s food – consumption behavior is not significantly different than previous generations at the same age.

GENERATION X

               

                Generation X is a label applied to those who were born between 1965 and 1977. This group is known for strong family values. While earlier generations strove to do better financially than their parents, Gen Xers are more likely to focus on their relationship with their children. They are concerned with value, and they favor quick – service restaurants and midscale operation that offer all- you – can – eat salad bars and buffets. To appeal to this group, offer a comfortable atmosphere that focuses on value and ambience.

BABY BOOMERS

                Born between 1946 and 1964, baby boomers make up the largest segment of the U.S. population. Prominent in this generation are affluent professionals who can afford to visit upscale restaurants and spend money freely. During the 1980s, they were the main consumer group for upscale, trendy restaurants. In the 1990s, many baby boomer families were two – income households with children. Today, those on the leading edge of the boomer generation are becoming grandparents, making them a target of both restaurants that offer a family – friendly atmosphere and those that provide an upscale, formal dining experience.

EMPTY NESTERS

                This group consist of people in the age range between the high end of the baby boomers and seniors (people in their early 50s to about 64s). Empty nesters typically have grown children who no longer live at home, and their ranks will continue to increase as the baby boomers grow older and their children leave home. With the most discretionary income and the highest per – capita income of all generations, this group typically visits upscale restaurants. They are less concerned with price and are focused on excellent service and outstanding food. Appeal to this this group with elegant surroundings and a sophisticated ambience.

SENIOR

                The senior market covers the large age group of those who are 65 and older. Generally, the majority of seniors are on fixed incomes and may not be able to afford upscale restaurants often, so they tend to visit family – style restaurants that offer good service and reasonable prices. “Younger” seniors are likely to be more active and have more disposable income than “older” seniors, whose health may be declining. Seniors typically appreciate restaurants that offer early – bird specials and senior menus with lower prices and smaller portions, since their appetites tend to be less hearty than those of younger people.

INDUSTRY TRENDS

                In the 1980s – by many accounts the decade of greed – new restaurant were typically upscale establishments that centered on unique and creative dished by famous chefs. Young, professional baby boomers, often with liberal expense accounts, supported these concepts. The 1990s brought a trend to the restaurant industry that is continuing into the 21^st century: an appreciation of value. There’s no question that family – minded Generation Xers and baby boomers are concentrating on stretching their dollars.

                Some other industry trends include:

·         Cart and kiosk. Eating establishments no longer require customers to come to them. In many cases, the restaurant goes to the customer in the form of a cart or kiosk. Many limited – service mobile facilities are operating at locations that attract large numbers of people, such as small, universities, airports, sports stadiums, and arenas. These restaurants typically offer very limited menus but attract customers with their recognizable names.

·         Co – branded operations. Especially popular in the fast food market, “Co-Branding” or “Dual-Branding” is when two or more well - know restaurants combine their menus in one location to offer customers a wider selection of items. The concept of co-branding began in the 1990s and continues to be a strong trend.

·         Nutrition – conscious customers. Restaurant – goers are showing a heightened interest in health and nutrition. Many are looking for low – fat dished and fresh foods.

·         Popular menu items. Barbecued foods and appetizers remain two of the most popular menu groups. Barbecue appears to satisfy customers seeking spicy foods and regional cuisines. Appetizer order are increasing thanks to customers who omit entrees and choose starters instead. Customers are also increasingly looking for menu items that are compatible with weight-loss trends such as the low-carb, high-protein diets and Weight Watchers.

·         A focus on children. Because many baby boomers still have children living at home and an increasing number of them are dining out with grandchildren, the majority of their restaurant experiences are family-oriented. Food – service operations wanting to reach this market are offering children’s menus and children’s value meals with smaller portions. Some offer child – friendly environments with booster seats, toys, balloons, crayons, menus featuring games on them and even free table – side entertainment in the form of magicians and clown.

MENU TRENDS

                As you put together a plan for your food – service business, be aware of some of the trends in menu content and design. These factors could – and, in fact, should – influence the type of food – service business you open.

BRIGHT IDEA COMBINE TWO OR MORE TYPE OF FOOD – SERVICE BUSINESSES FOR MAXIMUN PROFITABILITY. FOR EXAMPLE, CUISINE UNLIMITED, CATERER “MAXIME TURNER’S SALT LAKE CITY OPERATION, IS A COMBINATION UPSCALE CATERING BUSINESS AND DELICATESSEN. THE BISINESSES COMPLEMENT EACH OTHER; DEL COSTUMERS OFTEN USE THE CATERING SERVICE,AND CATERING CUSTOMERS VISIT THE DELI.

                Restaurant operators report that vegetarian items, tortillas, locally grown produce, organic items, fusion dishes (combining two or more ethnic cuisines in one dish or one plate), and microbrewed or local beers are gaining in popularity. Pita dishes and wraps continued to be in high demand, too, as an easy – to – consume alternative to sandwich. You will also see a strong demand for bagels, espresso and specialty coffees, and “real meals”, which are typically an entrée with a side order. Consumers are also eating more chicken, seafood, and beef dishes than they have in recent years. At the same time, people expect to see meatless alternative on the menu.

STAT FACT The most popular items on children’s menu are: 1.       Chicken nuggets or strips 2.       French fries 3.       Hamburger 4.       Pasta 5.       Grilled cheese sandwiches 6.       Hot dogs 7.       Pizza 8.       Fish sticks 9.       Cookies 10.   Shrimp 11.   Pancake 12.   Milkshakes

                Customers also are demanding “comfort food”: the dishes that take them back to their childhoods, when mothers baked from scratch, and meat and potatoes were at the center of each plate. Creative chefs are looking for ways to redefine and reinvigorate comfort food favorites. Instead of the traditional version of shepherd’s pie, for example, you might see one made with mushrooms, spinach, carrots, and lobster sauce.

                Menu are also showing a number of ethnic dishes and spice – infused offering. It’s not surprising to find Thai, Vietnamese, Creole, Italian, and even French cuisines on the same menu and even on the same plate.

                At the same time, be sure to keep the kids in mind as you plan your selections. If families are a key part of your target market, you’ll want to offer a range of four or five items in smaller portions that youngsters will enjoy, such as a half portion of pasta or a small hamburger. If you serve a snack items as well as entrees, note that kids are choosing healthier snack more often than they did a few years ago, thanks to concerned parents. For example, while salty snack remain popular, yogurt is the fastest – growing snack food based on consumption frequency among kids under 13.

                The average child in that age group eats yogurt 11 times more in a year today than five years ago. Fruit cups and applesauce cups are also growing in popularity among children and teens. While most restaurants still offer fixed kid’s meals, you might consider allowing your young diners to choose among a selection of nutritious options.

                Though menu variety has increased over the years, menu themselves are growing shorter. Busy consumers don’t want to read a lengthy menu before dinner; Dining out is a recreational activity, so they’re in the restaurants to relax. Keep the number of items you offer check, and keep menu descriptions simple and straightforward, providing customers with a variety of choice in a concise format.

                Your menu should also indicate whether dishes can be prepared to meet special dietary requirement. Items low in fat, sodium, and cholesterol should also be marked as such.

                Most large chains do a significant amount of market research before adding new items to their menus. Occasional visits to popular chain outlets (or just paying attention to their ads or visiting their web sites) can help you benefit from their investment. For example, Applebee’s has teamed up with Weight Watchers International to develop menu items for diners who are counting “points”. T.G.I. Friday’s has partnered with Atkins Nutritionals Inc. to offer Atkins – approved, low – carb menu items. The newest concept in the Darden Restaurants chain (Olive Garden, Red Lobster, Smokey Bones) is Seasons 52, which offers nutritionally balanced, lower – calorie menu items and desserts in bite – sized portions. When P.F. Chang’s China Bistro sponsored a marathon, it also created special high – carb, high – protein entrees for participating athletes. Even the fast – food outlets, which aren’t known for nutritious fare, are offering healthier options. Pay attention to these trends, and make adjustments to your own menu when the market demand it.

                “We took successful items from a lot of the major chains and incorporated them into our menu”, says Bill Ellison, co – owner of Frasier’s, a sports bar and restaurant in Apopka, Florida. But he and partner Frank Perez also came up with some of their own dishes. “Every restaurant should add their own signature items”, Ellison says, “things you can’t get anywhere else.”

UNDERSTANDING TAKEOUT CUSTOMERS

                Research conducted by the National Restaurant Association indicates off-premises consumptions of restaurant food is on the rise. Of respondents to a survey conducted by the organization, 21% who use off-premises restaurant services purchase one or more such meals a day; 26% purchase off-premises meal every other day; 22% purchase them about twice a week; and 31% buy them less than once a week.

                Fast food restaurants (operations that prepare food quickly) represent the largest share of off-premises dining, followed by carryout restaurants (operations that target the off-premises diner in part or exclusively). However, full-service establishments are increasing their takeout services. A growing number are allowing diners to call in their order the food to them in a designated parking area. What motivates consumers to buy prepared food to consume elsewhere? Mainly, they are in a hurry and want easy access, fast service and reasonable prices. Another reason is that they’re just tired to shop for and prepare food themselves. Often, consumers looking for a special treat are inclined to buy takeout food, particularity ice cream, snack, and gourmet coffees. Another strong motivator of takeout costumers is the desire to eat something that is good for them. These people tend to order takeout from full-service restaurants. They also get takeout items from grocery stores and cafeterias or buffets for tasty, fresh food. Interestingly, studies show that consumption of takeout food increases during times of national crisis, when people are hungry for information and want to get home to their TV as quickly a possible.

WHERE IS THE COMPETITION?

                Competition in the food-service industry is widespread, varied, and significant. When you open a restaurant, you’ll be competing not only with other similarly themed restaurants, but also with every restaurants in the area you serve. In addition, your customers themselves are a form of competition, because they make their own meals at home if they choose. Take a closer look at the primary competition category.

                                                              

CHAINS

                Chain restaurants may be the biggest threat to independent operators. Chains are growing as private companies ad franchises take over a greater portion of the market. With well-known names and large advertising budgets, chains enjoy significant consumers recognition.

                What this restaurants do not offer is the personalized attention that many small, independent operations provide-this is where independent restaurants have an advantage. Many restaurateurs become acquainted with their regular customers and build relationships with them. This is not to say that chains do not offer personalized service-indeed, many of them excel in this area. But there is a difference when customers know they are dealing directly with the owner.

                Independent restaurants have several other competitive advantages over chains. For one thing, independently – owned fine – dining establishments are often willing to take reservations, while chains usually are not. Independents may also offer live music, experienced chefs and creative foods and beverages. While chains have the advantage of a well-known name, many independents offer the atmosphere customers prefer.

SUPERMARKETS AND CONVENIENCE STORES

                Supermarkets and convenience stores are fairly recent competitors for restaurants. These businesses offer customers food that is freshly prepared and ready to go-although not always healthy. Their menus typically include fried chicken, sandwiches, side dishes, salad, and dessert. The primary  concern of costumers who visit these establishments is convenience,

 So supermarket and convenience stores offer serious competition to quick- service restaurants that also compete on the basis of convenience and value.

EATING AT HOME

                Dining out is not a necessity for most people. Restaurants like other service businesses, sell convenience: They perform a task that consumers could otherwise handle themselves. Some consumers perceive dining out as something to do only on special occasions, which may be the attitude of a large portion of upscale restaurant customers. Quick-service and midscale restaurants must appeal to value – and time – conscious consumers. They must stress how eating out cane save customers the time and trouble of cooking and how customers can relax while they eat and not worry about cleaning up afterward.

2

OPERATIONS

                                Owning a food-service business may seem like an entrepreneurial dream come true. Even the smallest operations have an element of glamour: On the surface, it looks like the owners make their living greeting guest and serving meals while becoming recognizable figures in the community.

               

STAT FACT LUNCH IS THE MOST POPULAR MEAL FOR PEOPLE TO EAT AWAY FROM HOME. POPULAR LUCNH ITEMS INCLUDE: PIZZA, HAMBURGERS, WRAPS, SALAD, SOUP, AND ETHNIC FOODS.

                And as more celebrities enter the food-service industry, they enhance the restaurant business’s image as an exciting, lucrative opportunity.

                But dealing graciously with customers and playing the role of elegant host is only part of a restaurant’s many duties. Food-service business operators spend most of their time developing menus; ordering inventory and supplies; managing personnel; creating and implementing marketing campaigns; making sure their operation is in compliance with a myriad of local, state, and federal regulations; completing a wide range of paperwork; and doing other administrative chores. Certainly the financial opportunities are there – as are the fun aspect of the business. But starting, running, and growing a food – service business is also hard work.

                Regardless of the type of food – service business you intend to start, the best way to learn is to work for a similar operation for a while before striking out on your own. Doing so will give you significant insight into the realities and logistics of the business.

               

Closed for business

If you have a retail food-service business, you may find you don’t have time to spruce up facility during the year. For this reason, many independent restaurants close for one to two weeks every year so the owners can look over their facilities and make any necessary changes. They may add a fresh coat of paint, repair ripped upholstery and inspect all the equipment. Since there are no customers or employees in the facility, repair people can work quickly and without interruption. This annual closing period also allows employees to take vacations.   To maintain good relations with your customers, give them advance notice of you upcoming closure. Post a sign on your door stating the dates during which you will be closed and the date you will reopen. Record an outgoing message on your answering machine or voice mail with the same information. While you’re closed, check your answering machine or voice mail regularly in case a supplier for anyone else needs to get in touch with you or someone on your staff.   Generally, restaurants close during the slowest time of the year, when the closing will have the last impact on revenue and customers.

                                                                  

                As you can see, reading examples of entrepreneurs in the food industry, is several ways to get started in the food – service business. You can purchase a franchise, build an independent operation from the ground up, buy an existing operation, or lease space in an existing structure. Each approach has its advantage and disadvantage, which you need to consider carefully before making a final decision. But regardless of how you get started, there are some things you need to know about operations that are common to virtually all types of food – service businesses.

Smart Tip

Be sure each square foot in your restaurant generates income. You’ll pay the same rent for the Kitchen and closets as you do for the dining area, so you should have absolutely no wasted space.

SETTING HOURS OF OPERATION

                Your hours of operation will vary depending on the particular type of food-service business you have. Ultimately, it is up to you to determine the hours for your business.

                Most quick – service restaurants are open for lunch, dinner, and the post dinner crowd. Typically, they open at 10:30 or 11:00 A.M. and close anywhere between 9 and 11 P.M. Some national fast-food franchises and chains also serve breakfast and open as early as 6 A.M. Others stay open until well past midnight on weekends, and some are open 24 hours a day.

                The hours of midscale and upscale restaurants vary depending on the concept. A restaurant that offers only a buffet will, most likely, not serve breakfast and may only be open from 11 A.M. to 9 P.M. Many family-style restaurant, on the other hand, specialize in serving breakfast and typically open at 6 A.M. They continue serving meals until after dinnertime, closing around 9 P.M.

                Casual-dining restaurants tend to cater to the lunch and dinner crowds. These establishment open around 11 A.M. and stay open late, especially on weekends, to appeal to the post –dinner crowd. During the week, they tend to close at 10 or 11 P.M. On Fridays and Saturdays, they open until midnight or 1 A.M.

                Often, upscale restaurants that just serve dinner are only open from 4.30 or 5 P.M. to 23 P.M. These businesses are able to survive on dinner sales because they have found a concept that works, and they’re sticking with it. Most full-service restaurants, however, are open for both lunch and dinner, six or seven days a week. Those that are only open six days a week usually close on either Sunday or Monday.

                Hours vary somewhat among full – service restaurants. If you open such a restaurant and do not plan on offering cocktail service, start off with a split – shift operation: Open for lunch from 11 A.M. to 2 P.M. and then open for dinner hours but serve appetizers and drinks at all hours, say from 11 A.M. to 23 P.M. If you have just a beer – and – wine bar, as opposed to a full bar, the split – shift system can work well.

                Sandwich shops, delicatessens, and pizzerias are typically open for lunch and dinner six or seven days a week. Hours vary depending on location and market, but most open from 10 or 11 A.M. to 6 or 8 P.M. (for sandwich shops) or as late as 23 or 24 P.M. (for pizzerias and full service delis).

                Commercial bakeries begin baking the day’s products as early as 2 or 3 A.M.; some even operate 24 hours a day. Retail bakeries and coffeehouses tend to open early enough to capture the breakfast crowd.

                Caterer typically have an office staffed during normal business hours, perhaps 8 or 9 A.M. to 8 P.M. The actual hours people work depend, of course, on their particular jobs and span all hours of the days of the week.

SCHEDULING EMPLOYEES

                When you’ll need employees to report to work depends a great deal on the type of food-service business you have. As a general guide for restaurants, the first person to arrive in the morning should be your head cook or chef – the person responsible for the kitchen. He or she should arrive a few hours before the restaurant opens to begin preparing the side dishes that you will serve throughout the day. These items can include soups, vegetables, sauces, homemade breads or biscuits, rice, and generally anything else you might serve in large quantities over a span of several hours. The preparation of side dishes should be completed 30 minutes before the doors open of business.

Smart Tip

Be around and visible. Of course, large chain restaurants are run by managers, and you may want to hire managers to help your run operation. But most successful independent food-service operations have an owner who works in the business every day. They’re in touch with their customers and their employees, they know what’s going on the day-to-day operation, and they’re available to make decisions as needed.

                The head chef or cook might also be responsible for accepting an inspecting deliveries, or, if you prefer, your manager or assistant manager can arrive at same time to take care of paper-work and deliveries. If you chief cook comes in before opening, he or should be able to leave after the lunch or dinner crowd ha been served, with the second cook carrying on until closing. The second cook will be responsible for cleaning the kitchen so it is ready for the next morning.

                Your dining – room manager, maître d’, or chief host or hostess should arrive 30 minutes to an hour before opening to make sure that everything in the front of the house is in the order. This will allow time for him or her to check the dining – room table settings, napkins, salt and pepper shakers, and any other elements that will make the front room more presentable to the public.

                The person in charge of these front-of-the house pre-opening chores can work through the lunch hour and dinner hour – if you serve both meals – or from dinner hour through closing if you only serve dinner. This employee can also close out the cash register.

                The bar manager should come in 30 minutes before the restaurant opens for business. He or she will be responsible for the appearance of the lounge area, stocking the bar and keeping track of liquor inventory, making sur free bar snack are out, and preparing to open the bar.

                The bar manager will also likely be your chief bartender. This person will continue working through the early-evening shift, and your second bartender will usually handle the late – evening crowds. Because weekend evenings are the busiest for both bars and restaurants, schedule your bar manager to work Tuesday through Saturday to cover the most hectic times. In addition to the bar manager, one or two-part – time bartenders can assist with the weekend crowd.

SERVICE PROCEDURES

                Regardless of how formal or casual your operation is, your goal should to treat costumers like royalty, and you can meet this goal by providing strong, professional service from the moment your customers walk in the door. Because your team of employees will be responsible for how well your customers are treated, they should reflect the policies you’ve established as the owner.

Smart Tip

To build a profitable food-service business, you need system. Approach your operation with the understanding that, regardless of how creative or fun it might be, it is a businesses are built on system that produce consistent, reliable results.

                Uniforms will help develop a sense of identify and pride among your staff, as well as project a professional image. All employees who work at the same level should wear an identical uniform. For example, all bus-persons should wear the same uniform, and everyone on your wait-staff should wear the same uniform.

                Set Standards for your businesses appearance. Everything from the restrooms to your plates and utensils should receive the same careful consideration. If you find spots on your glassware or plates, then you have failed to meet high standards. If toilet tissue and towels are strewn about the restroom, then you have failed to meet high standards. If you want to create a dining experience that people will remember, make it a good one.

                The actual service should range from polite to ingratiating. The host or hostess should greet    costumers with a cheer-full hello and ask how many people are in the party and whether they prefer smoking or non-smoking (unless you’re located in an area that prohibits smoking in public place). If a line forms, or if all the tables are full, the host or hostess should take costumers’ name and let them know how long they should expect to wait. Unless you take reservations, customers the option of waiting there. Make menus served basis. If you have a bar, give customers the option of waiting there. Make menus available to people who are waiting so they can thinking ahead about what they’d like to order.

                Once customers are seated, promptly present them with a menu and inform them that their server will be with them in a moment. The bus-person should fill their water glasses immediately (unless you are in an area with water restrictions). When the server arrives, the first thing he or she should do inquire if the costumers would like anything before ordering their meals, such as a beverage or an appetizer.

                After giving the costumers time to review the menu, the server should come back to answer any questions and take meal orders. The server should be thoroughly familiar with the menu and many special so he or she can answer any questions. All orders should be recorded on a check and should be repeated back to costumers to make sure they are correct.

                Servers should remove food from the left and beverage from the right and should never reach in front of a costumer to serve or remove anything.

                The wait-staff and bus-persons should always be in their stations checking to make sure costumers have everything they need for a satisfying meal. They should refill water glasses regularly, supply the necessary condiments and ask if the food is satisfactory after costumers have had time to start eating. After the guests have finished their entrees, servers should ask if they would like dessert or coffee. Only when the server is sure the costumers is finished with the meal should the check be presented.

                If there has been a service failure of any sort, even an unavoidable one, do your best to make amends, perhaps with a free dessert or after – dinner drink. If a costumer complains about a particular dish, offer to replace the item at no charge. Above all, never argue with a customer. When you do, even if you win, you lose, because chances are that costumer will never return, and you will have created negative word – of – mouth advertising that might prevent other customers from visiting your establishment.

WHEN THEY DON’T COME IN

                More and more restaurants are offering drive-thru service. Lunch is the most frequently purchased meal in the drive-thru lane, and 53% of meal purchased at drive-thru windows are typically eaten at home, not in the car. In general, households with children use drive-thrus more than those without.

Stat Fact

Eating and drinking establishments are mostly small businesses. Seven out of 10 have fewer than 20 employees.

                There’s more to creating an efficient drive-thru than just setting up a window in your building and a lane in your parking lot. Consider this: For every 10 seconds saved serving drive-thru customers, you can add € 1000 in incremental sales.

                To keep the line moving quickly, have a clear, easy – to – read menu board positioned before the ordering station. Assure accuracy by having employees confirm each order before the customer proceeds to the payment / pickup window. To speed up payment, have the customer’s change ready before he or she to the payment windows.

CLEANING YOUR FACILITY

                At the end of every business day, you most clean your facility. You can either have your staff or an outside commercial cleaning service handle this task. Your cooks can clean the grill and mop the floor after closing. The wait-staff and bus-persons can refill condiments and clean the tables, booths, and floors in the dining area. The dish-washer should finish the day’s dishes and restock dishes for the cooks and wait-staff.

                If you cannot afford to pay your employees to complete all these duties or would simply prefer not to, a commercial cleaning service can take care of them. For a set fee, a cleaning service will visit your restaurant every night after the employees have left. They can clean the entire restaurant, including the kitchen, wait stations, dining area, and restrooms. If you decide to use a cleaning service, ask for reference and check the company out before making a final decision. It’s also a good idea to find out what cleaning product they use. You wouldn’t want someone to clean the grill with the same product they use to clean the restrooms. A growing number of janitorial and commercial cleaning services are expanding to target the restaurant market. Ask other restaurant owners for recommendations, or check your telephone directory for companies.

                Details on operational issues relating to specific types of food-service businesses will be explained in later chapters.

   

3

DEVELOPING

YOUR PLAN

             Whether you’ve got years of got years of food-service experience behind you or you’re a novice in the industry, you need a plan for your business – and you need to have it in place before you buy the first spoon or crack the first egg. This chapter will focus on a few issues particular to planning food-service businesses, but they are by no means all you need to consider when writing your business plan. Start Your Own Business by Rieva Lesonsky has completed guidelines on how to put together a general plan.

           Many entrepreneur view writing a business plan with even less enthusiasm than they had for homework when they were in school. But if you’re excited about your business, creating a business plan should be an exciting process. It will help you define and overall feasibility of your concept, clarify your goals, and determine what you’ll need for start –up and long-term operations.

           This is living, breathing document that will provide you with a road map for your company. You’ll use it as a guide, referring to it regularly as you work through the start-up process and then during the operation of your business. And if you’re going to be seeking outside financing – your business plan will be the tool that convinces funding source of the worthiness of your venture.

              Putting together a business plan is not a linear process – although looking at the final product may make it seem that way. As you work through it, you’ll likely find yourself jumping from menu development to cash – flow forecast to staffing, then back to cash flow, on to marketing, and back to menu development. Take your time developing your plan. Whether you want to start a coffee – and – snack cart or gourmet restaurant, you’re making a serious commitment, and you shouldn’t rush into it.

CARVING YOUR NICHE

            Before you can begin any serious business planning, you most first decide what specific segment of the food-service industry you want to enter. While there are many commonalities among the various types of food – service businesses, there are also many differences. And while there is much overlap in the knowledge and skills necessary to be successful, your own personality and preferences will dictate whether you choose to open a commercial bakery, a coffee cart, a fine – dining restaurant, or another type of operation. Then, once you have decided what business best suits you, you must figure out the niche you’ll occupy in the marketplace.

           Chances are you already have a pretty good idea of the type of food-service business that appeals to you. Before you take the actual plunge, read through the chapters that describe the various operations and see how they suit your particular working style.

          For example, are you an early riser, or do you prefer to stay up late and sleep late? If you like – or at least don’t mind – getting up before dawn, your niche may be a bakery or a casual breakfast – and – lunch operation. Night owls are going to be drawn to the hours required for bar – and – grill types of restaurants, fine – dining establishment, and even pizzerias.

             Do you like dealing with the public, or are you happier in the kitchen? If you’re a people, choose a food – service business that gives you plenty of opportunity to connect with your customers. If you’re not especially gregarious, you’ll probably lean more toward a commercial type of business, perhaps a bakery or even a catering service, where you can deal more with operational issues than with people.

            Some other types of questions to ask yourself include: Do you have a passion for a particular type of cuisine? Do you enjoy a predictable routine, or do you prefer something different every day? Are you willing to deal with the responsibilities and liabilities that come with serving alcoholic beverages?

           As you do this self-analysis, think about your ideal day. If you could be doing exactly what you wanted to do, what would it be? Now compare your preferences with the requirements of each type of food – service business and come up with the best match for yourself.

          Once you have decided on the right niche for you as an individual, it’s time to determine if you can develop a niche in the market for your food-service business.

RESEARCHING YOUR MARKET

          You must do an in – depth examination of your market. Market research will provide you with data that allow you to identify and reach particular market segment and to solve or avoid marketing problems. A thorough market survey forms the foundation of any successful business. Without market research, it would be impossible to develop marketing strategies or an effective product line. The point of doing market research is to identify your market, find out where that will convince them to patronize your business.

          Market research will also give you important information about your competitors. You’ll need to find out what they’re doing and how that approach meets – or doesn’t meet – the needs of the market.

          One of the most basic elements of effective marketing is differentiating your business from the competition. One marketing consultant calls it “eliminating the competition”, because if you set yourself apart by doing something no one else does, then you essentially have no competitors are and why your customers might patronize their business.

ARE YOU ON A MISSION?

          Your mission statement is the foundation of your business plan. Most food-service business owners have a reasonably clear understanding of the mission of their company. They know what they are doing, how and where it’s being done, and who their customers are. Problems can arise, however, when that mission is not clearly articulated into a statement, written down, and communicated to others.

         A mission statement defines what an organization is and reason for begin. Writing down your mission and communicating it to other creates a sense of a commonality and a more coherent approach to what you’re trying to do.

         Even in a very small company, a written mission statement helps everyone involved see the big picture and keep the focused on the true goals of the business. At a minimum, your mission statement should define who your primary costumer are, identify the product and the service you offer, and describe the geographical location in which you operate. For example, a caterer’s mission statement might read “Our mission is to provide businesses and individuals in the Raleigh area with delicious food delivered to their location and set up and served according to their instruction. “A coffeehouse’s mission statement might read “Our mission is to serve the downtown business community by providing the highest – quality coffee, espresso, baked good, and sandwich in an atmosphere that meets the needs of customers who are hurry as well as those who ages and food.”

           A mission statement should be short usually just one sentence and certainly no more than two.

Bright idea

Update your business plan every year. Choose an annual date when you sit down with your plane, compare how closely your actual operation and results followed your forecast, and decide if your plans for the coming year need adjusting. You will also need to take your financial forecasts out for another year, based on current and expected market conditions.

 

           A good idea is to cap it at 100 words. Anything longer than that isn’t a mission statement and will probably confuse your employees.

        Once you have articulated your message, communicate it is often as possible to everyone in the company, along with customers. Post it on the wall, hold meetings to talk about it, and include a reminder of the statement in employee correspondence.

          You should also make it clear to your supplies. If they understand what you’re all about, it will help them serve you better. It’s more important to adequately communicate the mission statement to employees than to customers. It’s not uncommon for an organization to use a mission statement for promotion by including it in brochures and in invoices, but the most effective mission statement are developed strictly for internal communication and discussion. Your mission statement doesn’t have to be clever or catchy – just motivating and accurate.

Bright idea

Your business plan should include worst-case scenarios, both your own benefit and for your funding sources. You’ll benefit from thinking ahead about what you’ll do things don’t go as you want them to. You’ll also increase to comfort level of your lenders/investor by demonstrating your ability to deal with the unexpected and potentially negative situations.

  

           Although your mission statement may never win and advertising or creativity award, it can still be a very effective customers – relations tool. For instance, you could print your mission statement on a poster sized panel, have every employee sign it and hang it in a prominent place so customers can see it.

           A critical part of your plan to open a food – service establishment will involve setting up your facility.

NEXT STEP

4 STRUCTURING YOUR BUSINESS

5 LOCATING AND SETTING UP YOUR BUSINESS

6 HUMAN RESOURCES

7 REGULATORY ISSUES

8 EQUIPMENT

9 MARKETING

10 FINANCIAL MANAGEMT

11 TALES FROM THE TRENCHES

12KITCHEN AND DINING ROOM BASICS

13 RESTAURANT

14 PIZZERIA

15SANDWICH SHOP / DELICATESSEN

16 COFFEEHOUSE

17 BAKERY

18 FOOD AND PARTY CATERING

19 INVENTORY BUYING, STORING, AND TRACKING SUPPLIES