Start-up central

Rule number one: get the best staff you can, and get them early.

Rule number one: get the best staff you can, and get them early.

The five things you need to know about starting a restaurant (or starting again) from the best in the business. And the twelve classic mistakes

“The  potential owners who are thorough have usually talked to industry professionals, can be realistic, objective and often quite disciplined in their approach, and we like dealing with them. The  majority come with quite unrealistic expectations, and despite warnings, they often go ahead and buy or open a business that is doomed to failure right from the start.”— Tony Eldred, restaurant consultant and principal of Eldred Hospitality Consulting

What you need to know about staff

Get the right key people in, and employ them early.

“People are your best investment. People will frequent an establishment because of how they’re treated. It’s all about creating that feeling of warmth and hospitality—food comes second. A restaurateur needs to assemble a team of people to serve the public, and back of house is just as important as front of house.”— Harry Ferrante, owner of Simons Seafood Restaurant in Perth

“Finding and managing staff is a minefield in so many ways. You have to have your workplace agreements worked out and recognise that the market substantially determines pay rates, which can be quite different depending on where your business is. I actually recommend using a recruitment agency for key staff, particularly if you are inexperienced. Potential staff know when you’re new to the industry, and while some will simply not work for ‘amateurs’, others can use your ignorance unscrupulously.”— Ken Burgin of Profitable Hospitality

“It’s important to reward good staff. Syracuse has been going for 10 years and in that time we’ve only had two chefs—and one of them became my business partner at Mini.” — Charlie Sirianos, owner of Syracuse restaurant and wine bar

“Everyone I employ knows nothing. Therefore it’s my responsibility to provide them with the knowledge and attributes they need to become the best that they can be. If they fail, I have failed. Everyone who walks through my door is a customer and every customer is there to spend money—there is no window shopping or wasting my time. It is the  responsibility of the employee to realise this and my responsibility to empower them to sell. If our sales are down, I have failed my staff and my customers.” — Kristian Livolsi, R&C Young Achiever 2008

What you need to know about equipment

“Save yourself a lot of trouble and buy the best equipment you can afford. Cheap equipment underperforms and keeps breaking down. It can end up costing you twice as much as the expensive model.” — Harry Ferrante, Simons Seafood Restaurant in Perth

One very simple tip

It is easier to move prices down than up, and you should consider this when you create your first menu.

A list of sensible suggestions

1. Don’t try to be all things to all people. A restaurant for every-one is a restaurant for no-one

2. If there is something not working, focus on it and work on it until it is fixed

3. Equipment breakdowns happen to everyone. Deal with it

4. Don’t let suppliers hassle you. Do what works for you

5. Don’t sweat about people coming through the door in the first weeks. Focus on whether your product is meeting the mark

6. When something goes wrong (and it will), think it through before reacting

What you need to know about systems and planning

Plan for success

“One of the most important things to remember is to always bring the business back to a systems-based operation, and keep coming back to that. This is something you have to be meticulous about, and just keep coming back to the rules. Once that is understood, everything then just happens and all the procedures become habitual. And that is the only way to run a business.” — Nino Zoccali, Pendolino

Have a break-even analysis

“In order to run a business profitably, it is essential to understand the break-even concept, and it needs to be a clear weekly business objective. It might be tempting to think you are making a profit on the very first coffee you sell on Monday morning, but you don’t start to make a profit until your sales total reaches your break-even point—which might be on Thursday.” — Ken Burgin of Profitable Hospitality

Know the rent-to-advertising ratio

There should be an inverse relationship between advertising and rent. And combined, these two costs should add up to no more than 12 to 13 per cent of your turnover. If you’re in an unpopular area, savings you make on your rent can become part of the advertising budget, which may be necessary to draw people to your establishment. If you’re in a heavily populated area, your rent will be higher and you’ll have less to spend on advertising—but you’re not likely to need it as much.

Plan for things to go wrong

“You must be confident that even with the worst-case scenario, you still have a reasonable business. I have seen so many people go into business with a capital expenditure so large they would have to be full every day just to make it work.” — Nino Zoccali, Pendolino

What you need to know about stuff

Get a uniform

“It’s important that you can recognise the waiters straight away. And I’m not just selling food and wine, I’m selling a lifestyle.” — Maurice Terzini, owner of Icebergs

“Don’t go for pretty and expensive crockery and cutlery, go for durable—unless you’re a fine-dining restaurant. I have a 100-seat restaurant and on busy nights, that can mean 200 to 250 covers. With staff rushed off their feet, breakages are inevitable. A lot of stemmed glasses get knocked down. And expensive cutlery tends to disappear along with the food scraps when plates are scraped clean. You’ll be replacing it often.” — Roz Chow of House of Chow, Adelaide

“If you spend a million dollars on the fit-out of a restaurant, you’ve got to sell a huge amount of food and beverage at a very high margin to get your money back in a reasonable time frame. Without understanding the basic economics, the end result is your business will probably collapse after haemorrhaging money for some time, and you are forced to sell the whole thing for the auction value of the fixtures and fittings because there is no profit.” — Tony Eldred, restaurant consultant and principal of Eldred Hospitality Consulting

  • DO check every detail of the site
  • DO ensure you have adequate facilities
  • DON’T follow current design trends—you don’t want a use-by date on your overall concept
  • DON’T spend money on lots of paintings—that’s what art galleries are for
What you need to know about advertising and PR

1. Let advertising and media coverage happen when the time is right;


“Before you open, have your website visible in the window. Nearly everyone Googles a restaurant before they go to it these days, and you need a strategy ready for this.” — Ken Burgin, Profitable Hospitality


2.  Listen to all feedback, and learn from it;


3. Grow a thick skin and don’t worry about the feedback in that first month;


4. Don’t be complacent about advertising. Make sure your advertising dollar is working.

Keep it simple

“There are basic rules to running a good restaurant and keeping customers, but everyone interprets them differently. I’ve learnt that the basics haven’t really changed and probably never will. You need to welcome your customer with a smile and kindness. To keep your place clean and dignified. To offer value for money. The secret to our longevity is a balance of consistency and continued inspiration. We change our menu every season and design it according to what’s available. But people also want to see something familiar and reassuring.”— Lucio Galletto

“There has to be a point where you feel a strong passion about what you are doing. There has to be something in it that you love, and I really don’t think you can be in this industry unless you are really passionate about what you do. It might be about making money. It might be about the food and the industry. Possibly it is a combination of all of that, but it has to be something that you love.” — Nino Zoccali

This great content is produced for members of the Restaurant & Catering Association. Find out about becoming a member here.

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