become more proficient and experienced, cash generation becomes more and more consistent. “There is simply no better entrepreneurial opportunity on the planet than the restaurant business,” he says.
When Redding enters the doorway of Amy Ruth’s every morning, he feels confident that, even in an industry where 81% of the entrants fail, the restaurant — which is named after his grandmother and culinary inspiration — will continue to draw a steady stream of clientele with its honey-dipped fried chicken and corn pudding. With three years of success under his belt, he’s thinking about a new ice cream and pastry venture. He knows that this time around he has experience on his side. “For years I helped others make their restaurants successful,” says Redding. “Now I’m doing it for myself, my community, and my God.”
12 STEPS TO A SUCCESSFUL RESTAURANT
Howard Cannon, author of The Complete Idiot’s Guide to Starting Your Own Restaurant (Prentice Hall, $19.95), suggests that aspiring
restaurateurs go through this 12-step checklist one year before opening a restaurant.
- Research types of restaurants, the competition, and the number of restaurants in the area. Pay attention to voids in the marketplace.
- Visit other restaurants and take notes on the pros and cons of the menu, pricing, décor, and service style.
- Determine which restaurants are thriving and which are failing, then spend time analyzing why.
- Network with other restaurant owners and operators, lawyers, accountants, bankers, and marketing firms.
- Create a solid business plan that includes the business concept, information about your management team, market analysis, and financial needs and sources.
- Do a preliminary location selection and site-analysis process.
- Assemble rough financial statements and projections, and investigate sources of funding.
- Determine minimum, maximum, and optimum square-footage requirements for your facility.
- Build your recipe file and start putting together your menu. Consider issues like menu size, portion control, and product consistency.
- Get a handle on equipment costs by networking with equipment dealers who sell new-and-used items.
- Investigate the various legal issues and hurdles involved with starting a restaurant – including securing health permits, liquor licenses, fire permits (a restaurant can’t operate without one), and building permits.
- Determine a structure for your restaurant (sole proprietorship, corporation, limited liability corporation, etc.) and select a name. (See “Incorporating Facts,” Enterprise, this issue.)