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How to Open a Restaurant the Modern Restaurateur’S Guide to Starting & Growing a Restaurant Business Alison Arth

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How to Open a Restaurant the Modern Restaurateur’S Guide to Starting & Growing a Restaurant Business Alison Arth How to Open a Restaurant The Modern Restaurateur’s Guide to Starting & Growing a Restaurant Business Alison Arth OpenTable - How to Open a Restaurant 1 Table of Contents 50 Introduction 4 How to Create a Brand 55 How to Write a Business Plan 5 How to Design Your Restaurant Construction 55 Why Writing A Business Plan Is Not Optional 5 Kitchen Design 57 What Your Business Plan Should Cover 8 Interior Design Building a Pitch Deck 11 58 62 How to Fund Your Restaurant 14 In the Weeds: Amanda Cohen Setting Up Your Business 14 How to Order and Purchase 64 Overview of Common Business Structures 15 What Do You Need? 64 Figuring Out How Much Money You Need 16 Key Considerations 65 Structuring Investor Payback & Ownership 17 Post-Opening Ordering & Purchasing 67 What to Expect from the Fundraising Process 20 69 More Financing Options 21 How to Build Your Team Recruit the Right People 73 How to Identify Locations, Choose a Interviewing 74 Site & Negotiate Your Lease 27 Assembling Your Team 75 Location vs. Site 27 78 Choosing a Site 29 How to Train Your Team How to Negotiate Your Lease 33 Start Early 78 Classroom Training 79 In the Weeds: Aaron London 40 Prepare Written Materials 82 How to Deal with Legal Regulations 42 Preview Events 83 Licenses, Permits, Inspections & Certificates 45 In the Weeds: Sean Heather 87 TEST CASE: Chez Ruth 46 OpenTable - How to Open a Restaurant 2 Table of Contents cont’d How to Create Your Menu 88 How to Create Buzz 106 Start with Trust 88 Get Your Story Straight 106 Art vs. Commerce 89 Find the Key Players 107 Building in Profitability 90 Communicate with Intention 108 Working with Purveyors 91 Love Thy Neighbor 109 Menu Design 92 Host a Media-Specific Preview Event 109 Avoid Oversharing 110 How to Use Technology 95 Start Your Social Media Feeds Early 110 Technology Solutions to Consider 95 Build Relationships 111 Guest & Reservation Management 96 Respond to Reviews 111 Tips for Choosing & Using Tech Solutions 100 Get the Most Out of Your PR Company 112 Managing Your Web Presence 101 How to Build Your Website 102 Glossary 114 How to Manage Your Presence on Online Sample P&L 116 Review Sites 103 Contributor Bios 119 OpenTable - How to Open a Restaurant 3 Introduction Throughout my career, I’ve been fortunate to work alongside some of the most talented and visionary hospitality professionals in the world. Regardless of years of experience, size of the team or location, there’s one constant: opening a restaurant is among the most challenging and rewarding projects a person can take on. I founded my hospitality consulting company Salt & Roe to help current and aspiring restaurateurs across the country gracefully open restaurants. By helping tackle everything from drafing a business plan to menu design and staf training, my career is all about taking on projects and setting them up for success through opening night and beyond. Since graduating from Cornell University’s School of Hotel Administration, I’ve participated in 16 openings -- ranging from Michelin-star concepts for Chef Daniel Boulud’s Dinex Group in New York City and James Beard-nominated Spoon and Stable in Minneapolis to neighborhood and fast-casual restaurants in my native San Francisco. Along the way, I’ve learned that while the process is far from formulaic, there are numerous best practices that can ensure your restaurant has the best shot at success. I’ve teamed up with dozens of restaurateurs in the United States and abroad to collect cautionary tales, dos and don’ts, and “If I only knew...” stories, and deliver them in one comprehensive resource on how to open a restaurant. I am humbled by the time and honesty every contributor gave to this project, and it’s an honor to be able to share their hard-earned insights. I hope this book will guide and inspire anyone who’s ever dreamed of becoming a restaurateur to follow their passion. Alison Arth OpenTable - How to Open a Restaurant 4 How to Write a Business Plan Why Writing A Business Plan Is Not Optional Your business plan will be the road map from which “The point of a business plan is to show that you’ve done your new restaurant develops. No matter how much your homework,” says Charles Bililies, owner of Souvla, a fine thought you’ve put into your concept or how many casual Greek restaurant in San Francisco that has received trusted colleagues have assured you of its greatness, you national acclaim since opening in the spring of 2014. absolutely must write a business plan. It will prove the viability of your concept to potential investors and provide them with a clear and engaging answer to the question: “You have to show any potential investor that you “Why does the world need this restaurant?” have an actual plan, you know what you’re talking about, it looks professional, and you’re not just First, ask yourself questions to ensure that your restaurant screwing around.” actually is financially sustainable and truly does ofer Charles Bililies unique value in the market you’re hoping to enter. Creating a business plan will guide you through the process and help you find inconsistencies and potential road blocks, allowing Crunch the Numbers you to make adjustments before you’ve presented your idea A restaurant, first and foremost, is a business. Guests will to prospective investors and partners. Here’s how to show only get to experience your creation if you’re able to build that you’ve thought through every aspect of the business. OpenTable - How to Open a Restaurant 5 Crunch the Numbers cont’d it in a financially sustainable way. This requires research, brutal honesty, and in almost every case, outside help to “Are your fnancial terms reasonable? Are they not figure out. only within the realm of possibility, but do they err on the side of conservatism? If everything needs With a few rare exceptions, you’ll need to engage an to go exactly right in order to generate proft, accountant to help you put together the financial that’s not good enough. Just because it’s your projections that any potential investors will expect to dream doesn’t mean the numbers work.” see. Even if you have a background in finance, soliciting a Mike Harden third-party, emotionally-detached opinion from a CPA who has experience with restaurant clients will ensure you’ve covered all your bases. You must be able to demonstrate clearly that in the market you’re hoping to enter, you’ll be able to produce enough Charles retained an accountant while assembling Souvla’s revenue -- based on your projected number of guests per business plan, despite having three years of relevant day and your average check -- to cover your expenses, and financial experience at Mina Group, a national restaurant have money lef over. group with more than 20 concepts, under his belt. He says, “It’s very helpful when you can turn around to the investors and say, ‘We have retained the services of this firm, they Paint the Picture have verified all of these figures, and they’ll be handling our accounting moving forward.’” The writing that comes before and afer those financial charts and numbers is equally important. Mike notes, “The Mike Harden, Co-Founder and Senior Partner at venture average person who invests in an independent restaurant is capital firm , has invested in successful ARTIS Ventures someone that wants to go there. They want to get paid back restaurants like Tacolicious in San Francisco and is and make money, but they also look at it as an investment presented with countless restaurant business plans every in a community, an investment in the people around them, year. When someone is on the other side of his desk hoping and a way to have fun.” for investment, he wants to know: OpenTable - How to Open a Restaurant 6 Paint the Picture cont’d With that in mind, your business plan needs to be engaging Establish Your Brand and give the reader a clear picture of what you, your brand, and your restaurant are all about. Roberta Economidis, When it comes to establishing a brand, clarity and Partner in the law firm of Georgopoulos & Economidis, consistency are always best -- and your business plan is your LLP, has been representing restaurants in the Bay Area first chance to get of on the right foot. Brett Traussi, the Chief for more than a decade, which means she’s laid eyes on Operating Oficer of Daniel Boulud’s Dinex Group based in hundreds of business plans. New York City, is a leader in creating new concepts for the company and, as a valued mentor, also reads business plans She says, “A business plan, in my mind, is the first date. for concepts all over the world from former employees. What I do as a lawyer is the prenup. You need that romance factor to get people bought in with solid numbers that can back it all up.” “The places that go on to be really successful aren’t the concepts that are trying to reinvent the wheel; When the reader can so clearly feel, taste, hear, and they are the ones that are easy to understand.” visualize the experience you’re promising that they’re Brett Traussi craving it just afer seeing it on paper, you know you’ve got a solid business plan. Try to describe your concept completely in one short This is the first, but far from the last time you’ll hear me sentence.
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