Getting Money for your Restaurant Concept !!!

I have had several readers enquiring about where to get the money to start their restaurant. While I would love to say that you can go to a bank and get a loan easily or go to a particular angel investor group and get the money, the real answer is what you already know - you will need to find the money on your own.

For a concept on paper, you will need to dip into your own savings, get money from friends and family (either as debt or as equity - I prefer debt as it is clean and you are very clear in your mind that this is a loan that you need to pay back, preferably with interest). If you own a property, banks will lend you money not so much for your business, but based on the value of your property. Essentially the property will be the collateral for your loan. Even these loans are not too easy to get as banks will be worried about the usage of the funds and need to be convinced about your ability to payback the monthly dues. They may want someone to underwite the loan - i.e. someone else takes responsibility of paying the monthly dues if you fail. Of course, if you have a few wealthy friends, you can coerce them into funding your business idea or underwriting your bank loan.

VCs typically look at this space once you have established your business, are operationally profitable and have demonstrated execution and scaling abilities. So you will need to get to a 8-10 unit level before getting any serious interest from VCs. Angel Investors may not have the appetitie for large Capex restaurant concepts.

In summary, you are pretty much on your own to find the funds required for your restaurant business concept.

How to Create Successful Partnerships with Your Food Suppliers !!!

Restaurant owners and managers know that their food suppliers are critical to their business.  However, the ability to rely on suppliers to consistently provide fresh and high-quality products at the right price point also comes with its challenges.
In a QSR magazine article, “The Supplier Marriage,” Richard Leivenberg, executive vice president for Jody Maroni’s Sausage Kingdom in Venice, California, states his relationships with food suppliers can sometimes feel like a rocky road of emotions.
“It’s very much like a marriage, there’s love, hate, and everything in between,” Leivenberg says. “With a good supplier, you can complain or argue and at the end of the day, you’ve corrected any problems and made up. If you can’t maintain a good relationship with them, if problems aren’t corrected, you have to reevaluate the situation and consider a divorce.”
And with the growing pressures of managing food costs and inventory, while continually meeting the discerning expectations of your guests, industry experts agree that building trusting and long-term partnerships with their food suppliers is the best path toward profitability.
As you navigate through your own food supply issues, below are tips to improve your supplier success.

• Communicate: as with any strong relationship, open, honest and regular communication is paramount. When entering into any new supplier relationship, it’s best to be clear, honest and upfront in your needs and expectations. To make sure that both parties are on the same page, get it in writing. Any and all agreements should be written and formalized in a contract and signed by both parties to avoid confusion.

• Don’t just let price drive your decisions: of course, staying on budget is important for any restaurant business, but choosing a supplier simply based on price can be dangerous. A good food supplier will help you to work within the parameters of your needs and budget in order to provide the best possible quality and freshest products to your customers.

• Keep the number of suppliers to a minimum: while you won’t be able to get everything that you need from one supplier, when you start trying to manage multiple vendors, things might start falling through the cracks and make your job more difficult.

• Closely monitor your inventory: keeping close tabs on your food inventory is the best way to make sure that you don’t overpay for extra food supplies that eventually get wasted. Talk to your supplier about your inventory challenges to determine a better strategy.

• Negotiate product quality and cost expectations at the very beginning: when speaking to potential new food suppliers, don’t be afraid to negotiate and set your own expectations. You are entitled to get the level of product quality and service that you need at a price that will work for your business.

• Put yourself in your supplier’s shoes: a WIN-WIN relationship works both ways and both parties have to feel good about working together. Get to know your supplier and their needs/expectations from the relationship. Ask what challenges they face and invite them to voice any concerns about working with you.

• Go local when possible: choosing a local supplier that sources products from local farms is often the key to ensuring product freshness while keeping costs down.

Do you have a supplier challenge or success story to share? Drop us a comment below! Next up in our Operations & Management Series: theft and security/surveillance systems.

8 Ways to Make Your Restaurant Family Friendly !!!

When a family comes into your restaurant, how do you and your staff react? Are you already annoyed, anticipating the extra mess and possible screaming tantrums? Instead of viewing families full of children as a bummer, try looking at them as a business opportunity. It can be hard for parents to find restaurants that accommodate their kids, so if your restaurant is ready and willing to handle them, you’ll have a leg up on the competition. Read these tips and tricks for some ideas to make your restaurant more family friendly!

1. Train your servers.

If your servers are annoyed by kids, it will definitely show, and your customers probably won’t bother to come back. Train them to treat all customers with respect, regardless of age. Also make sure that they give families larger tables when possible. Since families often have lots of gear, they’ll appreciate having some extra space to spread out.

2. Give kids stuff to do.

This can include crayons and coloring books, digital arcade games, or toys. But always be sure to ask the parents first if they want you to bring these things out! If a family has to wait for a table, try to make sure any children have games or toys to keep them occupied then, as well.

3. Have plenty of high chairs and booster seats.

The last thing you want to do is run out! If you truly anticipate lots of families coming in, you’ll want to have enough seats for every small child.

4. Have a kids-eat-free day.

This is one simple way to attract families to your restaurant. For every adult meal purchased, offer a free kids meal. Since kids meals are relatively small and cheap to prepare anyway, you won’t lose much money on this deal.

5. Be flexible.

As you probably know, kids are picky, and these days more and more children have food allergies. Always be willing to offer substitutions. You should also be prepared to give ingredient information to curious parents.

6. Offer healthier kids meals.

With the current child obesity epidemic, many parents want to provide their kids with healthier choices. Although you don’t have to remove the typical French fries from your kids menus, you should also offer some lighter options, like veggies or sliced fruit.

7. Serve food quickly.

No one likes waiting a long time for their food, and this goes double for children. By bringing out food as quickly as possible, you can minimize temper tantrums and boredom.

8. Don’t forget about the parents.

Remember that the parents brought their children to your restaurant so that their entire family could have a great meal. Be sure to check in with them often and make sure they have everything they need.

Going out for dinner can be an ordeal for families. If you can make it easier on them by following these tips, you’ll be their go-to spot!

Top Things All Bartenders Should Know !!!

Being a bartender can be a tough job. Although learning how to make drinks is obviously important, there are tons of other little things that bartenders need to know in order to really take it to the next level. Read on to find out ten things all bartenders should know.

1. Happy customers are your number one goal.

Don’t focus too much on getting tips—your most important task is making sure customers are happy. If you can keep them happy, you’ll be sure to get tips, and they’ll be sure to come back.

2. You’re in the spotlight.

As a bartender, people are watching everything you do all the time. Sound like a lot of pressure? It can be! Remember that all eyes are on your, so you need to make sure your behavior is always professional.

3. Looks are important.

Of course, your dress code will depend on where you work. But no matter what, you want to make sure you look clean and put together. No one wants to buy a drink that’s mixed by someone with dirty fingernails or stained clothing.

4. The environment matters.

Is your music too loud or too quiet? Is the bar too hot or too cold? These things can make a big difference in the bar’s environment, which can make a big difference in your business! If you have any control over these elements, make sure you’re keeping customers comfortable.

5. Wash your hands often.

Think about it…you’re preparing tons of drinks and touching the ingredients. You want to make sure you’re not spreading germs. Wash your hands often, but make sure you’re doing it in a place where customers can see you.

6. Be careful when you sneeze or cough.

Cover your mouth when you cough and sneeze into your elbow. All those things your mom taught you when you were little are doubly true when you’re a bartender. And definitely don’t wipe your nose on anything. Customers will notice stuff like this, and they’ll be grossed out.

7. Keep your bar clean.

Keep booze organized and make sure there aren’t spills or crumbs everywhere. Dirtiness and sloppiness will turn customers away.

8. Learn to small talk.

You don’t have to be a comedian, but you do have to know how to banter with customers. Your service is how customers decide how much they’ll tip you, so you want to be on their good side. And it’s way easier to build up a loyal clientele when you’re actually getting to know people.

9. Keep your hands out of the drink.

Even if you’re washing your hands regularly, customers still won’t like it if you’re regularly dipping your thumb into their drink as you hand it to them.

10. Keep glasses clean.

Nothing’s a bigger turn off than dirty or lipstick-stained glasses.
By keeping these tips in mind, bartenders can keep customers happy and keep them coming back!

Billing System & Printers for Restaurants

Do you need a billing system and a billing printer for your restaurant?

The answer is "YES" - any restaurant (however small) will need to give its customers a printed bill. A manual bill looks ugly, is prone to errors and misuse and you pretty much can't track anything. So you would atleast need to buy a bill printer, if not an entire billing system which you can connect to a bill printer.

You have fancy "Restaurant Software" with tools for billing, inventory management, Order management etc. (A google search will give your some results). You will need a standard computer to run these applications. The software if used well, can give you extensive reports for analysis e.g. Revenue by item, Revenue by time of day etc. From an investment perspective, such software will cost you between 15K to 50K atleast with an annual maintenance contract of 15-20% of the license value. In addition you will need to invest in a computer with a genuine Operating system (totally about 20-30K) and a bill printer for printing out the bills (about 4-10K). You will need to buy a POS (Point of Sale) printer (Wipro Peripherals, TVS Electronics & Epson offer quite a few options at various price points)

For starters, I highly recommend the standalone Wipro Retail Billing Units and NO - I don't have any relationship or commission arrangements with Wipro for this. In my opinion, they just have a great & unique product suited for practical Indian needs - especially for small retail units. Their system does the job well, is inexpensive (around 8-10K) to buy and run (cheap cartridges and printing paper rolls), does not need a computer or any software, provides basic reports for analysis.

Once your operations are stabilized, you can evaluate and buy a good system patiently. If your overall project is large, then evaluating and buying a suitable system upfront will be required.

Will a first floor not really work out? !!!

Will a first floor location for my restaurant business not really work out? I keep getting asked this question often.

The answer is simple & straight-forward: "No, It won't work out - Don't do it". The sooner you accept this the easier your decision making process will become. It is not worth the Risk, especially for a first generation entrepreneur with a new business concept. Wait till you find a place that meets your needs and your budget. Be prepared to make some compromises such as taking a smaller space in a ground floor prominent location.

There is a huge-huge difference between a ground floor and the first floor. It is a case of minimizing your chances of failure and maximizing your chances of success.

Check out for yourself how many successful restaurants are in the first floor - pick 100 and I will bet that over 95 will be on the ground floor. There is obviously a very specific business reason for this - every business would love the lower rentals of a first floor, but they still don't do it - How many McDonald's, Dominos or Coffee Days have you seen on a first floor?

Am I saying that there is no way you can be successful by opening a restaurant on the first floor? I am sure you can invest in a penny stock and become a billionaire - it is just a question of the probability of success and failure.

Tips To Attract Customers To Your Restaurant !!!

Generally a restaurant is place to enjoy food and spend a memorable time with friends and family. The ability to attract and maintain customers is essential to the success of a restaurant. You need a constant flow of customers coming into your restaurant on a daily basis. Just posting an”Open” sign in the front window is not enough to attract customers. You need to have a strategy to bring in customers.The following are a number of tips to attract customers to your restaurant:
Market your restaurant: There are a number of different things you can do to market your restaurant. You can market at nearby hotels, motels, and other accommodations. You can provide a discount coupon for hotel guests. Use local flyers and newspapers to advertise special discounts. Hand out restaurant menus in public places or though the mail. You can also sponsor different events such as sporting or charity functions. You can also enter your staff in a charity event. The publicity will be very beneficial. Holding contests such as the chance to win a meal or gift certificate will attract customers.
Food: The food you serve is a key element to attracting and keeping customers. Make your dishes unique and stand apart from the other restaurants. Quality at a reasonable price is essential. Because more people are embracing a healthy life, offer some healthy dishes. Try serving samples in public areas such as supermarkets. As well, hand out a menu flyer with the samples.
Staff: It is essential to hire vibrant, friendly, and hard working staff. They are on the front lines of the restaurant and reflect the restaurants vision. Customers will return to a restaurant that has great staff. Colors and decorations should be appealing. Restaurant atmosphere: Make sure your restaurant is warm and inviting. The restaurant should be clean, including the bathrooms. The temperature should be comfortable and the seating should be relaxing and comfy. A dirty table should be cleaned and reset quickly. Special deals: It is important to offer special deals regularly, even daily. This will keep the customers returning. You can even often free appetizers such as bread, chips, or finger foods. You can also have special such as a free meal on one’s birthday.
Gift certificates: A gift certificate is a great way to acquire new customers. They also make for great gifts for such holidays as Christmas. Make sure you have an expiry date on the certificate. Customer loyalty programs: Loyalty programs are a great way to build a customer base. You can send out newsletters, special deals only for them, coupons, or a complimentary meal deal such as a buy 2 get 1 free meal. You can also send out a discount offer on a new menu item. Acquiring customer emails is a great way to keep in contact with them.
Without new business, your restaurant won’t be able to grow. You need a constant stream of new customers to replace those you lose as a result of customers relocating, switching jobs, or changing dining habits. A restaurant’s success depends on the volume of customers coming through its doors. It is important that you implement a plan that shows customers that their patronage is appreciated and valued. Actively promoting your restaurant will result in long term success.