All About Starting a Restaurant

ARE YOU DREAMING ABOUT OWNING A RESTAURANT OR STARTING ONE?
• Do you think you have extra time and want to utilise it to make some money?
• Do you have the passion to indulge yourself with the restaurant business?
• If yes, then read on...
• Before you do jump into the restaurant business explained below are few attributes

ATTRIBUTES
• Drive energy and willingness to take responsibility and risks, make decisions, and accept the consequences.
• Personal initiative and the ability to not rely on others to get the ball rolling or defer decisions to others or to committees.
• Personality and human relations ability. This includes emotional stability, sociability, and cheerfulness in adversity; co-operation, tact, and considera-tion for others.
• Organizational ability with an eye to detail so that those around you don’t have to guess what needs to be done and who has to do it.
• Communication ability both written and oral. You have to be able to com-municate with employees, suppliers, customers, bankers, and all the other people you have to deal with daily.
• Administrative ability in planning, setting goals and objectives, deciding how to measure results, controlling the business, interpreting financial statements, and similar matters.
• Technical knowledge about the restaurant business. This means not only knowing what you do know but also where you may be deficient in certain skills and technical abilities so that you can upgrade yourself or hire em-ployees competent in that area.
• Good judgement, patience, and restrain.
• Leadership.
• Looking over that list you might think that nobody could ever survive in the restaurant business. However, this is only a list of desirable characteristics that are helpful in most situations, it is not necessarily indicative of failure if you don’t possess one or several of them.

1. WILLINGNESS TO WORK HARD
• One characteristic is generally absolutely essential: a willingness to work hard.
• Without that, you are almost certainly doomed to fail in the restaurant business.
• If you do work hard, you should achieve success. That success will be measured not only in having a profitable restaurant, but also in the rewards that are less easy to measure, such as being your own boss, having pride in restaurant ownership, enjoying status in the community, and owning an outlet for creative ideas.

2. OTHER QUESTIONS
• Now, honestly answer the following questions:
• Do I have the mental and physical stamina to run my own restaurant?
• Am I prepared to sacrifice my present lifestyle to this new venture?
• Are my spouse and family (if any) willing to accept the change and possible upheaval in lifestyle?
• How much income do I need to survive during this period of change?
• Can I survive if all my income has to come from a new restaurant venture that may not be successful?
• If the answer to each of these five questions is not a definite yes, it is pos-sible you may be acting on emotion rather than in an objective way. In that case, if you do not succeed, you have only yourself to blame.

ADVANTAGES AND DISADVANTAGES OF STARTING A NEW RESTAURANT
• The main emphasis will be on starting a new restaurant from scratch. There are both advantages and disadvantages to starting a new restaurant, and you might want to be aware of these in order to consider the alternative of purchasing an already existing restaurant that is for sale.

1. ADVANTAGES
• Some of the advantages of staring your own restaurant are as follows:
• You can select a location that takes advantage of current economic or market conditions.
• If your plans include constructing a new building, you can have it designed to your specifications to suit the type of restaurant you plan to have, and the type of restaurant you plan to have, and the type and size of building can also be designed for conditions as they exist today.
• There may be an appeal to potential customers about a new restaurant being opened. Curiosity alone may help you attract a good starting clientele.

2. DISADVANTAGES
• Some of the disadvantages of starting your own business are as follows:
• If land and building are involved, the time required to put together a fi-nancing arrangement to buy the necessary land and put together a building package can be long and the financing itself fairly complex.
• A clientele will have to be built up.
• This takes time – anywhere from a few months in some restaurants to two to three years in others. Starting a new restaurant does not, by itself, create an immediate new clientele or market.
• Building up a clientele also delays a return on your own investments, and during this time interest will have to be paid on borrowed money. In addition, it may require you to keep advancing the company new cash to keep it in op-eration.
• Any new restaurant suffers an additional risk since it will probably have to compete with already existing competitive restaurant whose sites and/or locations are more favorable and whose business is already successfully es-tablished.
• If you feel that the above disadvantages outweigh the advantages, you should then seriously consider the alternative of purchasing an already successful restaurant business. If that is the case, another alternative might be to try to reduce the risk by starting your restaurant on a franchised basis.

ADVANTAGES AND DISADVANTAGES OF FRANCHISING
• Buying a franchise can be a quick way to set up your own business without starting from scratch. But there are also a number of drawbacks.
• When it comes to starting a business, many people think of buying a franchise as a shortcut to success. While there is some truth to this, not all franchises are created equal, and not everyone is cut out to be a franchisee.

1. ADVANTAGES
• Your business is based on a proven idea. You can check how successful other franchises are before committing yourself.
• You can use a recognised brand name and trademarks. You benefit from any advertising or promotion by the owner of the franchise - the 'franchisor'.
• The franchisor gives you support - usually including training, help setting up the business, a manual telling you how to run the business and ongoing advice.
• You usually have exclusive rights in your territory. The franchisor won't sell any other franchises in the same territory.
• Financing the business may be easier. Banks are sometimes more likely to lend money to buy a franchise with a good reputation.
• You benefit from communicating and sharing ideas with and receiving sup-port from other franchisees in the network
• Relationships with suppliers have already been established.

2. DISADVANTAGES
• Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor.
• The franchise agreement usually includes restrictions on how you run the business. You might not be able to make changes to suit your local market.
• The main disadvantage of buying a franchise is that you have to do it their way - sometimes right down to the way the napkin holders are filled. As a franchisee, you are not the one actually running the show, and some fran-chisors exert a degree of control that you may find excruciating
• The franchisor might go out of business.
• Other franchisees could give the brand a bad reputation.
• You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.
• All profits are shared with the franchisor.

If you know about restaurants available for franchise speak to the owners, you might find one that suits your budget.

FRANCHISE APPLICATION, INTERVIEW AND CONTRACT
• The first step in buying a franchise is to contact the franchisor operating a franchise that you’re interested in. Usually when you express an interest, the franchisor will expect you to complete a questionnaire or application form.
• Do not be surprised that the franchisor’s questions include detailed questions about your finances. A franchisor will want to know about your personal assets, for example, because he or she wants to make sure you have a fall-back position to carry the business in case it runs into financial difficulty.
• You will probably also be asked about your spouse’s financial situation. Once again, the franchisor wants to be sure that both of you are prepared to make the financial commitment necessary to start and run the franchise successfully.
• You’re also sure to be asked questions about your experience, background, and even aspirations, questions designed to help the franchisor determine whether or not you’re the kind of person he or she feels will be able to run the business successfully and fit into the franchise model.

• For more details