Restaurant Hospitality & Leisure Small Businesses Services

I find the restaurant business fascinaI find the restaurant business fascinating and not just because I love good food but becuase I see so many similarities in process and workflow with some of the other industries I am in (e.g the custom home and remodeling industry). Unfortunatly the restaurant hopitality and Lesiure industry is it plagued with a a very high failure rate often for the same reasons so many builders & remodelers fail: The E-Myth Problem (a misconception that leads many entrepreneurs to believe that expertise in a specific skill, such as cooking in the case of a chef, is all that’s needed to run a successful business.

For instance, a talented chef might decide to open a restaurant, assuming that their culinary skills will guarantee success. However, the reality is that running a business involves more than just being good at the core skill….

This misconception leads to three critical misconceptions:

  • Technician’s Perspective: The business owner (often referred to as the technician) becomes so engrossed in the technical work (e.g., cooking, in the case of a chef) that they neglect the other essential aspects of running a business, such as marketing, finances, management, and systems development.
  • Managerial Workload: As the business grows, the owner may find themselves overwhelmed by the managerial tasks, unable to delegate or systematize work effectively. This can lead to burnout and a struggle to maintain the quality of the core product or service.
  • Lack of Systems and Processes: Without proper systems and processes in place, the business becomes overly reliant on the owner’s involvement. This dependency limits scalability and makes the business less resilient to changes or challenges.

To overcome the e-myth problem, entrepreneurs need to approach their business with a strategic mindset. This involves creating and implementing efficient systems, delegating tasks, focusing on working on the business (rather than just in it), and constantly striving to improve and innovate processes. It’s about recognizing that expertise in the core skill is just one aspect of a successful business and that equal attention should be given to the managerial and entrepreneurial aspects.

Some of the things a restaurant entrepreneur needs to consider and think about:

  • The profit margin for a decent restaurant usually is below 15% profit, meaning you have very little room for error and sometimes you cannot even afford a marketing budget.
  • Many first time restaurant owners do not understand how to get customers or how online marketing works. Essentially they rely on foot traffic and word of mouth to get new customers.
  • Social Media is extremely important, most businesses do not understand how useful Instagram, Facebook, and Google Listings are for generating new leads
  • You will be stressed out just about everyday when first starting out. About money, food prep, money, guests, and did I mention money..etc..etc
  • Hiring workers and managing them will make you feel as if the $ is not just worth it to run a restaurant. When workers/employees quit, good/bad reason, you have big holes to fill, especially with training new employees.
  • Organization and efficiency will mean the difference between having customers eating there once vs coming back. For example, if the chef’s station is organized, it will help to facilitate better flow of food going out to customers, faster and also more efficiently. (there’s a lot of kitchens out there that are messy af and chefs struggle to produce orders within a reasonable time frame)
  • Most owners do not do proper food costing, which goes a long way to determine if your menu is extremely profitable, profitable, break even, or losing money. Some people don’t understand how much food is wasted everyday and they lose money from that. If the chef in your restaurant can balance the cost of ingredients vs the quality of the recipe/food for you, it would be better, but ultimately as the owner you need to keep an eye on food costs.
  • Ordering food/logistics is a huge pain. You need to constantly meet with suppliers/new suppliers to ensure that you’re going to be receiving deliveries for the food items on your menu. You also need to keep up with new food suppliers so that you have backup sources in case your old ones have any issues.
  • Running out of food on any given day is a huge pain/hassle that most owners do not realize until they start running their first restaurant. For example, if a customer only eats pork but you end up selling out all pork ingredients and only have beef, the customer will simply walk out of your restaurant.
  • $ investment is one of the most stressful aspects of owning a restaurant because most owners will take on a business loan to start their restaurant and possibly mortgage property to finance it. Most restaurants can have up to $1m USD invested into it at the start. More upscale restaurants will budget $2-5m for 2-3 years.
  • Location, location, location. It’s basically what will decide if your business struggles or not with getting new customers. If you have a bad location, you can still manage with decent marketing campaigns, but if its too far or inconvenient from your primary customer base, you will encounter a lot of difficulties with getting new customers.
  • Dealing with angry customers is something that we often overlook. Many friends have had to put aside their ego and try to keep the customers happy because everyone is watching how you handle it. If you treat a customer poorly, it can either reflect poorly on you or maybe just poorly on the customer, depending on the situation. In most cases, you’ll be prioritizing your customer’s happiness over your own.

My Own Experience In The Restaurant Hospitality & Leisure Industry

It was back in 1997 my company was doing the interior finish work on a development of custom luxury home in Armonk NY while also building and painting scenery for two professional theatre companies when Fred Brush of Frederick Brush Design Associates a well known restaurant designer called up the now defunct An Evening Dinner Theatre in Elsmsford NY and asked them to build some sencic elements for a themed restaurant project he was designing for Glastonbury CT. They told him “Well, we have this guy…” and that guy was me and my company Paradigm Building & Remodeling.

We ended up building several elements for what would become The Great American Cafe where different sections of the restaurant building were designed to represent different culinary regions in the U.S. Our fabrications and installations included two Saguaro Cacti and two Washingtonia Palm Trees to hide the steel columns holding up the dance floor’s lighting grid, a road Arizona Roadside Gas Station, A Chinese Street Lamp for the SF Chinatown section of the restaurant. And the star of the restaurant a giant wave breaking over the tables in the Southern California section of the restaurant .

We went on to interiors for other themed restuarants prividng giant pasta shapes and a giant fork with spaghetti wraped on it which became part of the railing on a spiral staircase. Interior waterfalls and ponds with Japanese Koi in them for restaurants and even a Koi Pond for residental home in Hewlett Harbor NY for the owner of a commerical kitchen fabrication company.

And when Starbucks began their expansion into the eastern United States in the early 2000s we began doing installations and remodels for them too.

 While we were primarly involved with the interior designs of these spaces my own curiosity had me reading and studying the business of restaurant management too especial as it relates to the princiles of Lean Thinking.

Some articles of interest regarding Lean Thinking in restaurant management:

Restaurant, Hospitality, & Leisure Small Businesses Articles:

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