By Roger Robinson, Ph.D., SCORE, Mentor
In the last of our series on Starting Your Own Restaurant, especially for budding restaurateurs, we pull everything together in a checklist.
Making a profit is the most important— some might say this is the only objective of a business. Profit measures success. It can be defined simply: revenues less expenses = profit. So, to increase profits, you must raise revenues, lower expenses, or both. To make improvements, you must know what’s going on financially at all times.
Secrets of Success for Restaurateurs
- CONTROL (168 hrs./week)
- KISS – keep it simple stupid (menu / concept / etc)
- WORKING CAPITAL / CASH FLOW
Here’s the checklist:
- Plan no profit first year – caveat debt service
- Initially request credit – negotiate for 7-30 days
- Try to avoid signing personally – especially not for ongoing product and supplies
- Negotiate all prices –insist on credit for spoiled food not seen on delivery or goes bad
- Good accounting system important (QuickBooks – we hold regular classes on using Quickbooks. Check out the schedule here.)
- Sandwich shops belong in industrial / commercial area
- Take out food service important potential source of income.
- Caveat location / competition / competitive advantage
- Should change menu every three months if possible
- Permit / license consultants available
- County courses available for bar employees re. Dram Act responsibilities / liabilities
- Employee food – 50% discount (on selected items) or special separate food free
- Caveat theft and waste / use of leftovers
- Portion control (advanced preparation) particularly for sandwiches (Subway model)
- Request credit on bad food
- Weigh / check in all food delivery – especially produce (check bottom layer of box)
- Caveat Health Dept. (utilize former Health Dept. employee to ensure up to code)
- Remember food handler’s card
- Advertising Resources – ValPak, local/weekly papers, Guerilla Marketing, social media, videos
About the Author:
Roger Robinson, Ph.D. has been a SCORE mentor for over 16 years. His specialties include non-profits, business planning, specifically in restaurants and hospitality, recreational and arts and Entertainment verticals. Read more about Roger here. Click here to schedule a free mentoring session with Roger or another SCORE mentor.