John James - Streetwise Restaurant Management: A Comprehensive Guide to Successfully Owning and Running a Restaurant

STREETWISE

The Small Business Solution

RESTAURANT
MANAGEMENT

A Comprehensive Guide
to Successfully Owning
and Running a Restaurant

JOHN JAMES & DAN BALDWIN

Copyright 2003, F+W Publications, Inc. All rights reserved.
This book, or parts thereof, may not be reproduced in any form without permission from the publisher; exceptions are made for brief excerpts used in published reviews.

A Streetwise Publication.
Streetwise is a registered trademark of F+W Publications, Inc.

Published by Adams Media, an F+W Publications Company
57 Littlefield Street, Avon, MA 02322 U.S.A.
www.adamsmedia.com

ISBN 10: 1-58062-781-1
ISBN 13: 978-1-58062-781-8
eISBN: 978-1-44051-922-2

Printed in the United States of America.

J I H G F E D C B A

Library of Congress Cataloging-in-Publication Data
James, John (John Randall)
Streetwise restaurant management / John James and Dan Baldwin.
p. cm.
ISBN 1-58062-781-1
1. Restaurant management. I. Baldwin, Dan. II. Title.
TX911.3.M27 J33 2003
647.95'068dc21
2002153897

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

This publication is intended to provide current and prospective business owners with useful information that may assist them in preparing for and obtaining business capital loans and investment funding. This information is general in nature and is not intended to provide specific advice for any individual or business entity. While the information contained herein should be helpful to the reader, appropriate financial, accounting, tax, or legal advice should always be sought from a competent professional engaged for any specific situation regarding your enterprise.

Many of the designations used by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book and Adams Media was aware of a trademark claim, the designations have been printed in initial capital letters.

Cover illustration by Eric Mueller.

This book is available at quantity discounts for bulk purchases. For information, call 1-800-289-0963.

Contents

Acknowledgments

This book would not exist without the knowledge, inspiration, and occasional tough love of numerous friends, mentors, family members, and associates. Special recognition is due Eula M. James, who was present at Introduction but did not get to read The End, and to Laura Baldwin and Mary Baldwin. Carol Gordy contributed an enormous amount of research, and her insights have proven invaluable. A special thanks is due Kathy Welton of A.K.A. Associates; she brought this whole thing together.

Authors Note

Since birth, my father is the only person who has called me John, my friends have always called me Randy. Hence the name John R. Randy James.

Introduction

O wning and managing a successful restaurant may be beyond some peoples wildest dreams. Harlan Sanders lost his restaurant when the highway moved. With little more than a few ingredients, a pressure cooker, and his dream, he took to the road, worked hard, and built a fast-food empire. Today we call him Colonel Sanders. More recently a young man named Randy James found opportunity in the trust of a mentor named Bill Atherton and turned a small restaurant job into a successful career owning and operating restaurants and clubs from Oklahoma to Florida.

If your dream is centered on a restaurant or even a chain of restaurants, this book can get you started on the road to a wonderful reality. The opportunities in the restaurant industry are only as limited as your vision. Ray Kroc was a traveling salesman when he met Dave and Mac McDonald, the owners of a small but popular drive-in featuring hamburgers. Today, McDonalds is the largest food-service organization in the world.

On the other end of the spectrum, a chef named Wolfgang Puck created a fine dining establishment called Spago that became internationally famous. Today, Puck owns a number of top-rated restaurants, writes cookbooks, has his own line of signature food products, and has a television cooking show reaching a national audience.

The person who said, Plan ahead: It wasnt raining when Noah built the ark, probably wasnt talking about the restaurant business, but the advice is still appropriate. Before you begin planning ahead, its wise to consider whether you should plan ahead. Clearly if this is your chosen profession, you will want to make plans. The most important question is, Is this really a course you want to follow? This book presents a number of topics and questions you should consider long and hard before taking any steps toward owning or managing a restaurant. The food and beverage industry is an exciting, challenging, and immensely rewarding career, but its not an industry to enter casually or without in-depth thinking and a good bit of soul-searching. So here are a few questions to help start some thinking:

Should you own your own or franchise?

Can you develop and implement a business plan?

Whats your marketing plan?

Whats your mission statement?

Which is better: single proprietorship, partnership, or limited liability corporation?

How will you arrange financing?

Where is the best location and how can you acquire it?

Can you develop a realistic budget and live within it?

What are the applicable laws, rules, and regulations governing your operation?

Are there sufficient suppliers and can they deliver on time and on budget?

Can you recruit the various types of talent you will need?

Do you know how to train people?

Can you keep your staff motivated?

What is your experience with inventory control?

Do you know accounting procedures?

Are you capable of managing different types of people and personalities?

Do you have a support group, such as an attorney, CPA, bookkeeping service, insurance consultants, and marketing professionals?

What equipment will you need?

Where are the support groups Ill need?

This is just a sample of the questions youll have to answer yourself or find the people and organizations that can provide them. But dont let this list overwhelm you. This book answers all those questionsand more!

Part One

Part Two

Part Three

Part Four

Part Five

Part Six

Chapter 1
Asking the
Hard Questions

Do You Have the Necessary Knowledge, Skills, and Experience?

Can You Live the Lifestyle of a Restaurateur?

Whats Your Vision?

Do You Have a Concept or a Menu That Stands Out?

Do You Have a Mentor?