A New Restaurant

After months of bad economic news, and hearing of restaurant struggling and even closing their doors, we are starting to finally hear some good news.  Some people may even be considering if now is a good time to take a risk and start a new restaurant.  Before you do anything too hasty, you may want to take a minute and analyze what the reports are really saying.

Before you rush right out and start making plans to start a new restaurant, consider the news that is still coming out.  First quarter earnings reports cited that several of the national restaurant chains turned a profit.  That sounds encouraging, but is it really a sign of good times to come?  Well, consider this; Of the restaurant chains that reported profits, the majority were in the fast food sector.  This is good news if you are considering a budget, fast food type concept.  However, it may not be such good news for other restaurants.

Money is still tight, and when money gets tight one of the first areas to take the hit is the entertainment budget.  People that are still going out to eat are hitting fast food and low cost restaurants more often.  While people are still going to nicer, more expensive restaurants, they are not doing it as frequently as they did before.

Look at restaurants in your community.  Sure, the parking lot is full during prime time on Friday and Saturday night, but how is it looking on a Tuesday night.  You also need to pay attention to how quickly the parking lot empties once the dinner hour is over.  The customer counts are down, and that means fewer profits for you.

On the other hand, there are some nice bargains to be had if you have the resources to ride out the economic woes.  If you are starting a new restaurant there are some very good prices on used equipment that you can take advantage of.  Even if you are just looking to replace some equipment in your existing restaurant, check with  your local restaurant supplier and see what they have available.

While it may not be the right time to start a new restaurant, there are some signs that point to a brighter future.  The economy will turn around eventually, so be patient.  Stating a restaurant is a big investment and you do not want to rush in before the time is right.  Work on your business plan, and when the economy does improve, you will be ready to take advantage, and to hit the ground running.

Your management style can have a lot to do with your success in running a restaurant, or any other business. While people can debate all day long about which is the best management style to use in different situations, one thing people will agree on, if you get it right (or wrong) it can have a big affect on the success of your business.

There are a variety of management styles, and most effective managers use a combination of styles to handle different situations. A firm approach might work in one situation while different circumstances may be better handled with a softer approach. It largely depends on you and your personality.

It is when managers spend too much time at either extreme of the management spectrum, micromanagement and laissez-faire management, that problems can start to arise. While there may be times where either of these styles can be effective, too much time will lead to difficulties with your staff.

Micromanagement is a style that refers to a very hands on approach. It is typified by a manager that wants to control even the smallest details of every employees job. They want to know the details of every thing that goes on in their business. While this is not necessarily a bad thing, if it is the defining factor of a manager the staff may start to feel like everything they do is under scrutiny. They begin to feel like they have no power to make any decisions on their own.

The biggest downside is that supervisors and employees will not take ownership in their jobs, and without any ownership, there is very little pride in the work that they do. Over time, employees will feel frustrated to the point that they will start looking for a new place to work. While some employee turnover is a natural part of the restaurant industry, too much turnover can really disrupt your business. You will spend so much time in training that you will not have the time you need to move your business forward.

The other end of the spectrum is the laissez-faire manager. This is the complete opposite of the micro manager. Rather than trying to control every detail, the laissez-faire manager allows employees to make most of the decision on their own. The manager makes very few decisions about the running of the business. Most of the day to day operation is handled by supervisors or by the staff themselves.

Employees need to have some responsibility, if there is no management control the inmates will begin to take over the asylum. If left unsupervised employees may begin to start making decisions that look out for their own best interest, and not the best interest of your business.

Like in so many area in life, you need to have balance in your management style. Rather than have one style that you force onto every situation, you will be better served to use a variety of styles that you can use in different situations.

Asking “How much does it cost to open a restaurant?” is like asking how much to buy a house, or to buy a car.  While there are some guidelines to consider, the actual answer is determined by so many different factors, there is no way to set an accurate price that covers all different situations.  Each restaurant is unique, and the price tag for each restaurant will be unique.

When you begin to examine how much it costs to open a restaurant you first need to have a very clear idea of what, and where you want your restaurant to be.  Where you locate your restaurant will be partially determined by where you are already located.  That will be a big determining factor on the price of your location.  In general, major metropolitan areas are more expensive.  The cost per square foot in New York City area is significantly higher than what you would pay in the mid-west.

You will also have to consider the type of restaurant you want to open.  This will determine the size of the dining room and kitchen you will need, the type of equipment you will have to use, and the atmosphere and décor.  Setting up a dining room for a deli or a casual family-style restaurant will be less expensive than decorating the same room for formal dining.

Back in the kitchen you will need to consider the menu you are planning on serving.  Will fryers, a broiler, and a stove be enough for your operation, or will you also need convection ovens, and a salamander? Commercial kitchen equipment can be very expensive, so the more pieces of equipment you need, the more it will cost you.  Fortunately, some pieces of commercial kitchen equipment will last a long time.  You may be able to find the equipment you need at a used restaurant supply store.  This can save you quite a bit of money.

Don’t forget to figure in storage space.  The more extensive your menu is, the more space you will need to store all of the necessary ingredients.  Walk in coolers and freezers cost between $5,000 and $20,000 depending on the size, so make sure you have it budgeted in.

All that has been covered so far are just a few of the basics to set your building up.  It hasn’t begun to get into how much it will cost to actually get your business up and running.  You need to consider the legal feels in getting your business established. There are also marketing costs so your customers will be ready when you open your doors.

How much does it cost to open a restaurant?  It all depends on what you want your restaurant to be.  Remember, the number one reason restaurants fail is because the owner did not have enough money to adequately fund the project.  Make sure you do your homework and know how much you really need before you start down the path of restaurant ownership.