Starting Your Operation Planning, Development, Operations, and Marketing.

Starting Your Operation

Planning, Development, Operations, and Marketing

Trends in 2008 - 2009

• There are no guarantees

• Not a “get rich quick” business

• Many restaurants fail in their first year due to poor planning.

Beware:The 3 Primary Reasons for Failure

• Undercapitalization

• Poor inventory control

• Poor payroll management

The Food Business• Meals and snacks sourced from

restaurants account for 1 in 10 meal occasions.

• Source: CREST/NPD Group; NPD Group Eating Patterns in Canada Report, and CRFA’s Foodservice Facts

• The average Canadian household spends 24.7% of its total food dollar on foodservice, compared to 43.5% for U.S. households

• Source: CRFA’s Foodservice Facts, Statistics Canada and the Bureau of Labour Statistics

• The most popular food and beverage ordered at Canadian restaurants are French fries and regular coffee.

• Source: CREST/NPD Group and CRFA’s Foodservice Facts

• The average check size at a restaurant is $7.10 including taxes, but excluding tips.

• Source: CREST/NPD Group and CRFA’s Foodservice Facts

The Market Place - The Clientele

Generation Y

EmptyNesters

Baby Boomers Generation X

generation Y - the millennium generation

• born 1980 - 2000 (10-29 years old)

• most ethnically diverse

• 3 x the size of generation X

• 1 in 4 from single parent household

• view prepared food as a staple, not a luxury

Generation X

• born between 1965 - 1977

• current age 33 - 44

• strong family values

• concerned with value

• favor quick service restaurants

Baby Boomers

• born between 1946 - 1964

• current age 46 - 64

• largest segment of the population

• many have become empty nesters

• many are beginning to retire

The Empty Nesters

• high end of the baby boomers

• early 50’s to 64

• grown children no longer at home

• most discretionary income

• less concerned with price than with excellent service

• elegant surroundings and sophisticated ambience

The 2009 Population Breakdown

by Age

Trends vs Fads

• Trends

• A trend is what is about to hit.

• It is big, bold and just beginning to impact consumers buying habits.

• Trends indicate real and widespread change.

• Fads

• A fad is a flash in the pan.

• It is here today and gone tomorrow.

• An example of a fad was Jolt cola.

Consumer Trends in Canada

Convenience

• Ready to eat/heat and eat foods

• One dish meals

• Custom quick foods

• Portability

• Snacks and mini meals

• Innovation for convenience

Health and Wellness

• Interest in low carbohydrate foods

• Lower saturated fats

• Trends in nutrient intake from food consumption

• Food safety

• Demand for organic and natural products

• Food and allergies

Pleasure

• Ethnic foods

• Indulgence or comfort foods

• Gourmet products

• Seasonal, regional and high flavour foods

Value

• “Fresh" - better taste, health and nutrition

• Energy, power and performance from food

• Premium private label products with lower prices

Trend Overview

• Dinning out, once thought to be luxurious, is now common.

• The nations population is wealthier, older, more educated, and more ethnically diverse than in the past and these changes are likely to become more pronounced in the next 20 years.

• Consumers will continue to demand new food products, new packaging, more convenience, new delivery systems and safer more nutritious foods.

• Therefore the key to success is to be innovative and on top of the consumer trends.

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sis8735

Restaurant Operations

Setting Hours of Operation

• Variable -depending on type of food service

• Quick service - tend to be open for lunch and dinner

• Breakfast - open earlier and require pre-opening prep

• Mid/Up scale - depend on concept -Upscale -only dinner

• Casual dining - lunch & dinner - possible break between service

• 6-7 days per week

• Bakeries begin @ 3am-4 am

Scheduling Employees• Kitchen prep should be

completed 1/2 hour before service begins

• Chef and prep cooks must arrive 2-3 hours prior to service

• Front of the house require 1/2 - 1 hour to set up before opening

• Staff are required after service for closing operations and cleaning

• Key personal work Tues - Sat

• Schedule 1st off, 2nd off, close

Service Procedures

• Goal - treat customers like royalty

• Formal vs Casual - determine what is appropriate for the style

• Uniforms-sense of pride and identity

• Consistency and training

Cleaning Your Facilities

1.Incorporate cleaning duties into employee tasks. Some tasks need to be done on a daily basis.

2.Hire an outside service to clean when the operation is closed.

Developing Your Business Plan

Carving your niche - Does the restaurant

suit your style?• Do you have a passion for a particular

cuisine?

• Do you prefer a predictable routine or do you like something different every day?

• Are you willing to deal with responsibilities and liabilities that come with serving alcohol?

Researching Your Market

• Provides data that allows identification of market segments

• A market survey forms the foundation of any business

• Identifies your market.

• Find out where the market is.

• Develop a strategy to communicate with prospective customers in a way that will convince them to to patronize your business

Develop a Mission Statement

• Defines what an organization is and its reason for being.

• Define: primary customers, products and services you offer, geographical location

• Keep it short - 1-2 sentences

"To produce high-quality, low cost, easy to use products that incorporate high technology for the individual. We are

proving that high technology does not have to be intimidating for

noncomputer experts."

"To become the world's leading consumer company for automotive products and

services."

"McDonald's vision is to be the world's best quick service restaurant experience.

Being the best means providing outstanding quality, service, cleanliness,

and value, so that we make every customer in every restaurant smile."

A ‘Metropolitan’

dining experience

offering exquisite food prepared

with attention to visual detail &

taste.

• The bakery

• Steakhouse

• Seafood

• Family

• casual

• Formal

• Ethnic

• Pizzeria

• sandwich

• Deli

• Coffee house

Styles of Restaurants

Dining Room Basics• Dining room design will

depend on your concept

• 40%-50% of sit down customers arrive in pairs

• 30% come alone or in groups of three

• 20% come in groups of four or more

• Set your dining room accordingly

• Use table that allow flexibility

Theme or Concept

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Inventory : One of the most mismanaged

areas• CONTROL

• BUYING

• STORING

• TRACKING

Finding Suppliers

• Proteins - Portioned or Whole

• Pre prepped Items - labour cost or food cost?

• Dry goods and consumables

• Produce - 1-6 days per week

Inspect What You Expect

RECEIVING

CONTROLLING BAR LOSSES

• Losses from spillage theft, and mistakes cost $$.

• Computerized system or rely on trained staff

Beverage Control

• Ensure inventory is preformed on a continual basis

• Restrict bar access

• Require all beverages to be rung in

• Back door security

• No belongings behind bar

• Make staff accountable for mistakes

• Incentives for loss reduction

• Cushion surfaces to reduce breakage

• HIRE CAREFULLY

Location, Location, Location

• Anticipated Sales - will the location contribute to sales

• Accessibility - traffic, entrances, exits, parking

• The best locations will command the highest rents.

• Pedestrian traffic and Parking

• Proximity to other businesses

• History of the site

• Future development

Signage

• A 1-inch letter can be seen from 10 feet away,

a 2-inch letter can be seen from 20 feet away,

and so on.....

The Virtual Door

• Customers want to access your establishment from the internet, as soon as you open!

Existing Operations

• Why is it for sale?

• Is the location suitable for your type of food service?

• Look at financial records.

• Observe daily business volume for a few days.

• Evaluate existing fixtures and equipment.

• Determine costs for remodeling and decorating.

Marketing