7 Suggestions When Running A Restaurant Startup

My family was on holiday in beautiful Taiwan a fortnight ago when we had a conversation with our young tour leader. She told us about her dream of starting her own bakery. Naturally, I was happy with her ambition but at the same time, kinda concern.

I have met many ambitious young men and women who aspire to have their own business. Although most of them came from a various background like tourism, marketing, engineering, accountancy, nearly all of them looked forward to starting an F&B business, especially a restaurant business. What the heck were these people thinking? I have even known chefs who lost their pants because of their entrepreneurial involvement in the restaurant and cafe business. And yet these people were thinking of becoming the next restaurant mogul without any formal training in this line.

Running A Restaurant or Cafe Is A Full Time Business

This is a no brainer. When people dream of starting their own cafe or restaurant, they are prepared to quit their day job. The problem with many restaurateur wannabes is when they think that their job is harder than running an eatery outlet. I read one article by a former banker who started a chain of coffee cafes in Malaysia. This guy said the gravest mistake he made when he opened the business was thinking that his life would be easy sipping premium coffee daily after leaving banking. When the article interviewed him, he had sold his coffee chain.

Tonkotsu Ramen

I am sure you have seen a lot of eateries catering only to the crowd in the evenings. The hours may start from 6 pm to 10 pm but the operation may start much earlier. Prepare your day early buying stuff and ingredients from the wet market. In case your retail serves authentic cuisines like Ramen that uses meat and bone stocks, you may even need to simmer the broth a day before serving to your customers.

You Need To Understand Simple Finance and Accounting

You don’t need corporate finance to run your restaurant. In fact, too much financial hoo haa could be detrimental to the well being of your F&B business. Please know your daily fixed cost and operating costs like your rental, depreciation (the cost of your renovation, fixtures, equipment, major utensils, etc), utilities (electricity and water weigh heavily in bakeries), overheads and sundries. Make sure the food price you charge your customers and the number of servings are more than enough to offset the daily cost of the above.

Treat and Train Your Staffs Well

There are two things more important than growing your restaurant from a single outlet to a chain. This is one of them. The truth is, this is the single most crucial “ingredient” in running a F&B retail before having great dishes for your restaurant.

I have a customer who operates a chain of bakery cafe in the heart of my home state. We visited their flagship outlet during my mum’s birthday and ordered some ala-carte dishes. We waited for twenty minutes for our dishes and when the dishes finally arrived at the service counter, the cashier asked us to go take the food ourselves. Boy, I understand that you have an SOP but would it be too much to ask to just bring us the food when your cook had run late on us? Needless to say, although I continue to sell my merchandise to this client, I did not set foot into their outlet the second time. Honestly, I pray to God that they continue to do well despite my misgiving so that I could continue to profit from this customer.

Implement service enhancement programs. While I was working with the bakery in Adventist Hospital, we had this SHARE program that drilled into us an important element of customer service philosophy. Of course, this kind of drilling down has to continue persistently to develop lingering habits in the soul of everyone for it to be effective.

Continuous Improvement

This is the second most important aspect of running a food service retail. It’s not enough to have a few flagship and signature dishes to pull in loyal customers. As the owner of your shop, you should preferably be the head of R&D to ensure that your signature dishes are not ruined by your staff’s carelessness or even sabotage by disgruntled workers. And that brings us back to treating your staff well.

Continuous improvement does not mean changing the umami taste of your flagship dishes. Nope, that’s recipe for disaster. Instead, research on new offerings like side dishes, just likes how french fries compliment the fried chicken and burgers. As a retailer, you don’t want to leave money on the table. Capitalize fully on the taste buds and desires of the customers that come sitting on that table of yours. Train your girls and boys behind the counter to ask the extra questions like “would you like dessert to go with your plate of the chicken combo” and “try our new wholesome green tea ice cream that aids digestion”. Let rewards linked with performance.

Try Out In Small Setups If You Ain’t Ready

In fact, the goal of this blog is to drill into you the beauty of starting and remaining small. Who said you need to rent that awesome corner lot down Brooklyn Street to start your first restaurant cum cafe outlet? Listen to your gut feeling my friend. You can still bootstrap to start your dream food outlet.

If you lack confidence due to financial constraint or to the lack of culinary offering, rent a small five footer at a great location with busy pedestrian and ply your trade there. Starting a small setup reduces your failure risk tremendously and at the same time, offer you the valuable experience of running a business.

Small Setup

Focus On One Shop Before Thinking About The Second And The Third

Many business strategists champion expansion to achieve economy of scale. The reason that a single restaurant needs to scale into a chain of outlets is franchising. Even if your strategy is to franchise your business, it doesn’t hurt to spend some time in the first outlet before opening the second and the next outlet at breakneck speed.

A Cozy Cafe With A Theme to Match

Avoid taking up big funding because big fund investors will invariably take control and pressure the entrepreneur to scale rapidly. If you can do awesome in the first outlet and your results speak for itself, you take control. Then you could go for the second round of funding to expand the outlets with more confidence.

Monitor Your Restaurant’s Wastage

It is difficult to be wealthy in the restaurant business and unprecedented wastage can kill your dream. Ain’t kidding you, my man. You may have the best efficiency strategy in your menu creation but if your cook hates you, he could easily waste your business into the red by giving every diner a bigger portion daily for an hour.

Apart from quality control, another reason why most restaurants operator set up a central kitchen is to control the portion size of their servings. A central kitchen effectively avoids both intentional and unprecedented wastage. You will be surprised that by keeping wastage in check, the savings could easily justify the cost of setting up the central kitchen if the restaurant chain has numerous branches.

It is not enough to justify starting a restaurant or other F&B outlets just because you love cooking. Hey, my wife can cook too. Be aware of the many challenges that may come from various factors because things can get ugly if you lose control.

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