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    Start Up Your Restaurant: The Definitive Guide for Anyone Who Dreams of Running Their Own Restaurant
    Start Up Your Restaurant: The Definitive Guide for Anyone Who Dreams of Running Their Own Restaurant
    Start Up Your Restaurant: The Definitive Guide for Anyone Who Dreams of Running Their Own Restaurant
    Ebook220 pages3 hours

    Start Up Your Restaurant: The Definitive Guide for Anyone Who Dreams of Running Their Own Restaurant

    By Jayanth Narayanan and Priya Bala

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    'This book is for every budding restaurateur, who, for some strange reason, insists on reinventing the wheel for lack of better guidance. It provides just the right insights and tips that may prevent one from committing mistakes that are committed all too often. It's a reminder that passion and hobby alone do not a restaurant make.'
    - Manu Chandra, Chef Partner, The Fatty Bao & Monkey Bar

    'Having overseen the launch and operations of flagship restaurants and witnessed the evolution of several other dining establishments, I can say it's one thing to start a restaurant, and another to run it like a charm. What pays off in both stages is preparation -- comprehensive groundwork coupled with a sound grasp of finances, regulations, team-building, infrastructure, aesthetics, and standards of service and technology. Start Up Your Restaurant has it all covered. Priya and Jayanth combine their priceless insights and practical knowledge in this invaluable guide to navigating the unique terrain of the Indian
    restaurant ecosystem.'
    - Gautam Anand, Executive Director, ITC Hotels


    'I should open a restaurant!'How frequently have you said that? Be it a cafe, a takeaway or a gourmet destination, the food business exerts a magnetic pull that few others do. Whether you are a food enthusiast or an entrepreneur looking for a clever business idea, the restaurant business promises adventure and endless possibilities. But creating that dream restaurant packed with happy people, which also rakes in the money, requires more than just passion - it calls for astute planning and rigorous execution.Choosing a smart ideaFunding and financePicking the perfect locationSetting up the spaceHiring the right peopleGetting licencesWorking with vendors and ensuring quality controlLaunching and marketingPacked with great tips and fun to read, this step-by-step guide from experts Jayanth Narayanan and Priya Bala will help you navigate therestaurant business with ease and efficiency.
    LanguageEnglish
    PublisherCollins
    Release dateFeb 10, 2016
    ISBN9789351777212
    Start Up Your Restaurant: The Definitive Guide for Anyone Who Dreams of Running Their Own Restaurant
    Author

    Jayanth Narayanan

    JAYANTH NARAYANAN is an entrepreneur and operates a quick service restaurant (QSR) chain, Mani's Dum Biryani, in Bengaluru. He is an engineer from BITS, Pilani and he completed his MBA from XLRI, Jamshedpur. His insights from his hands-on experience of running restaurants resulted in the launch of his blog 'The Restaurant Business in India' in 2011, and his posts continue to be a valuable source for aspiring restaurateurs. PRIYA BALA is a food writer and restaurant expert, and has edited several editions of the Times Food Guide (Bengaluru). She is also the author of Foodprints: A Trail of Meals and Memories. She consults with restaurant businesses and contributes to magazines and online sites, writing about food, travel and lifestyle.

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      Book preview

      Start Up Your Restaurant - Jayanth Narayanan

      PREFACE

      I

      f you’ve always dreamt of having your own restaurant, then you are not alone. Running a restaurant is on the bucket-list of an astoundingly large number of people. You could, in fact, say it’s the food lover’s equivalent of ‘I must go bungee-jumping’ or ‘I want to climb Machu Pichu’. The restaurant business is a beguiling thing, luring people with the promise of adventure and euphoric highs. Even as you conjure up images of your own restaurant, you are most likely picturing it packed with happy people having a great time. What other workplace could be as much fun? In your dream restaurant scenario, while the gaiety swirls all round, you’ll be raking in the money as well.

      In reality though, running a restaurant is far from the romantic, glamorous, cool pursuit it’s frequently made out to be. We’ve learned that from our combined experience, coming from actually running restaurants and reviewing them for more than a decade.

      There is no denying that owning and running a restaurant can be exhilarating, giving you the sort of gratification few businesses do. Those rewards, though, are hard won and belong only to those restaurateurs who convert that gleam in the eye into a successful business. Clearly, passion alone – no matter how ardent – is not enough to start a restaurant and make a success of it. Too many people, labouring under the misplaced notion that a love of food – eating, cooking, serving it – is the key to having a restaurant to call their own, dive in unaware of all that it really takes to start and run it as a profitable project.

      In the course of our association with the restaurant industry and on account of our own forays into the business – one which didn’t quite take off and another which did and is growing apace – we acquired sharp insights into the things that successful restaurants almost always get right, not to mention the mistakes most first-timers tend to make. It was to share these learnings with aspiring restaurateurs that the blog, The Restaurant Business in India, came into being. Its purpose was to help people avoid the early mistakes many inexperienced restaurateurs are prone to make. We have also seen big corporates investing in the restaurant business only to pull out a while later. Reliance Industries shelved their quick-service restaurant foray a year after making the announcement. Cavinkare from Chennai opened and shut down their restaurant business, Veg Nation, in about eighteen months. Seeing entities such as these failing in the restaurant business, despite having access to cash, resources and influence, made us realize that those getting into the business were making some wrong assumptions and underestimating the complexity of operating a profitable restaurant business. This, coupled with the huge interest in the blog and the flurry of questions it attracted from restaurant entrepreneurs, became the inspiration for this book.

      We have written this book so that it can serve as a practical guide for anyone who wants to turn that oft-expressed desire of ‘I want to have my own restaurant’ into a reality and make a success of it, while averting the errors of judgement new restaurateurs frequently display.

      So if you are thinking about starting your own restaurant, here’s what you need to do. The first step is to define your purpose, for this will determine the sort of restaurant you wish to create and the amount of time, effort and money you will invest in it. Once you’ve decided whether you wish to run a homey café, launch the next big quick-service restaurant chain or build a temple for the worship of gastronomy – and even gluttony! – you will require an unambiguous concept for your food business. This book outlines all the options that are worth exploring.

      The newbie restaurateur is bound to be overwhelmed by questions. How important, for instance, is a restaurant’s location and how does one pick the perfect spot? Our book will offer you some guidelines to help you choose.

      An important question: who will put in money to help you set up? With start-ups and internet-first restaurants attracting enough venture capital to make news, how likely is it for a new business to get funding? We provide a reality check and point you to the most feasible options.

      Come to think of it, finding the money is possibly an easier aspect of restaurant finances. How should you spend that money to run the business efficiently and profitably? That’s the tough part and we’ll tell you how to create a business plan.

      Ambience and interiors are crucial in attracting the right customers. While the design of your restaurant will vary based on the concept or the cuisine, we’ve also outlined the basics for the architecture and seating, with special emphasis on the layout of the kitchen and service areas.

      Manpower is the next crucial aspect a new restaurant must address. How many people do you need and from where will you hire them? Headhunting in this business doesn’t exactly happen in an organized way – as is the case in sectors such as IT, manufacturing, sales, etc. – and our tips and tricks for hiring will certainly come in handy, as will our guide to putting your supply chain in place.

      Licences and permissions are crucial for your business to take off. You need the right paperwork, approvals and documentation before your restaurant opens for business. Some of these are complicated, and vary across cities. We tell you how to get these as well.

      And since we’re in the twenty-first century, you might as well use superior technology to run your operations. We’ll give you a primer on improving efficiency in your day-to-day operations.

      In totality, Start Up Your Restaurant will hand-hold you through the entire process, right until the launch of your project, and follow it up with the nuances of operating the restaurant efficiently and the various avenues you can explore to market it and grow your business.

      In the following pages, you’ll also discover words of wisdom and mantras for success from some well-established names in the business. They speak from experience, offering valuable pointers for first-time restaurateurs on how to avoid the pit-falls and survive the vicissitudes of this trade. Their observations cover everything from financials to menu planning and standing up to competition.

      We also interviewed restaurant entrepreneurs – owners of multi-outlet chains, chefs-turned-restaurateurs and architects of hole-in-the-wall hits – and had them recount their journeys from concept to creation and eventual success. These first-person accounts will certainly inspire everyone who wants to take this route, tricky as it may be to negotiate at times.

      And now that eating out is clearly becoming a major lifestyle choice – almost a weekend habit – the food business in India is poised to skyrocket further and is brimming with possibilities.

      Start Up Your Restaurant is your dependable board for riding this wave.

      INTRODUCTION

      ‘I

      should open a restaurant.’

      How frequently have you said that? Few people feel the same desire to start, say, their own bookstore, Montessori school or laundry. There is clearly something fascinating about owning and running a food business, be it a quaint café, a take-away outlet or a gourmet destination. It’s not unlike the hard-to-explain attraction one feels for someone else. Why does this infatuation happen and why are so many people drawn to this business?

      Let us analyse the reasons first.

      We all think we understand the business

      The aspiring restaurateur is not unlike the average cricket fan in our country. Cricket is the unofficial national game of India and nearly everyone believes that they know its every nuance. While watching a match in a stadium or on TV, it is common for viewers to comment that the batsmen are not playing the right shots.

      Similarly, all of us who go to restaurants have opinions about what is good and bad at the places we eat in. We have ideas on how the things we dislike can be set right as well: the steak could have been more well-done, the pasta shouldn’t have been so bland, the butter chicken is greasier than it needs to be . . . This repeated exposure to the business as a customer leads us to believe that we understand its workings.

      ‘It’s a hard business. I see often – and it pains me – that people rush in blindly and without preparation. Your chances of success are much higher if you begin by taking up the franchise of an established brand, international or Indian. Working in a successful restaurant group is another way to gain understanding of the business. Also hedge your risks by having as much experience on your team as possible.’

      A.D. Singh,

      Olive Bar & Kitchen,

      SodaBottleOpenerWala

      The restaurant business seems quite successful, hence profitable

      We tend to go to restaurants that are popular, highly rated and seem to be doing well. So do other diners. What we see, then, is a crowded restaurant. Most of these restaurants have figured out the basics of the business and tend to be operationally profitable. But, given our incorrect sampling – even if we have visited over 100 places, most of them would belong to the same sample set –we tend to assume that most restaurant businesses are profitable.

      The entry barriers are low

      Most people who wish to start a restaurant believe that the only real barrier to entering this business is money. The widely held perception is that running a restaurant is fairly simple – cook, feed, make money – and making profits is easy, given the seemingly high gross margins on the products sold; the uninitiated see the gross profit as the difference between the sale price of the food item and the cost of the ingredients. (We’ll explain later why this equation is flawed.)

      The other common belief is that running a restaurant requires no real business skills. Many feel that producing food in a restaurant is not hugely different from cooking good food at home. Surely, you’ve heard someone at your table in a restaurant say, ‘I can make better salad than this’, or ‘My aunt makes the best dosa in the world. I can’t believe we are paying 100 bucks for this’.

      So, it is fair to conclude that money – or the lack of it – appears to be the only barrier to breach. People who have a real interest and passion in the business end up saving enough to be able to invest in a restaurant. In a number of cases, we have noticed that all it takes is a few like-minded friends to chip in and help open a restaurant.

      It’s high on cool quotient

      ‘How cool is that!’ That’s the response you know you will hear when you tell people you run a buzzing gastropub in Mumbai’s Bandra Kurla Complex (BKC), or that you’re the driving force behind Gurgaon’s most in-demand sushi place. In recent times, the restaurant business has acquired the sort of cachet that in the past belonged, say, to wildlife photographers and designers of haute couture. It just seems so glamorous, such fun and, yes, undeniably cool. That is the reason so many people – from high-flying corporate professionals to homemakers – want to have a restaurant to call their own.

      In most Indian cities, restaurants are spaces that not only serve food and drink, but also promise good times. The aspiring restaurateur wants to be the purveyor of those happy moments. Having a popular place means that scores of foodies will know about it and the people behind it. That definitely sounds cooler than telling people you work for XYZ company.

      The cool quotient also has to do with the opportunities a restaurateur has to invite friends and important people and show them a good time. What other business lets you do that?

      Advice from successful people

      Once you have developed an initial interest, you talk to a few restaurant business owners – preferably the ones that run the restaurants you frequent. You want to hear some success stories, ask for advice from people who have made a mark in the business. Some of you may even consider talking to failed restaurateurs – there could be some learnings there. What are the mistakes they made that you must avoid? They may even ask you to stay away from venturing into the business. But the successful people will encourage you; they will indirectly push you to take the leap. Perhaps the only word of caution that you’ll hear is that running a restaurant is a LOT of hard work. But come to think of it: is there any business that isn’t?

      No matter what you hear and learn, there’s no doubt about one thing: before taking the plunge, your reasons and plan-of-action for entering the restaurant business need careful evaluation.

      Here are some of the reasons which drive people to say ‘I want to start a restaurant’:

      ‘I am tired of sitting in front of a computer all day and want to do something different’

      Most people, especially those in jobs with fixed routines, wish to escape their monotony and feel that a restaurant is a ticket to freedom and fun. After all, they hear from restaurateurs of how ‘no day is like another’ in the restaurant trade and of the interesting people you get to meet in the course of the working day. Well, here’s a wake-up call for you: if you are practical, you will appreciate that sitting in front of a computer all day is entirely worth the effort, especially in terms of return on investment of time and effort. Think of the certainty of the salary being credited in your bank account, weekends off and annual holidays.

      The restaurant business offers you none of these assurances. A break from your routine is just not a good enough reason to start a restaurant. The food business makes almost impossible demands in terms of time and effort. If you start a restaurant with the express purpose of escaping the confines of your office cubicle, chances are you will go back to it in no time.

      ‘I am a great cook’ or ‘I am a foodie’

      Several aspiring restaurateurs are inspired by the belief that they or their spouse, mother, sibling – or someone close to them – is a great cook. After all, they host great parties and their culinary skills are much appreciated. This leads them to believe that they can run a restaurant successfully. While this is entirely possible, it is important to remember that running a restaurant is primarily a business and the demands it makes are quite different from cooking well and entertaining guests at home.

      For example, when you host a party, you begin planning a few days in advance – you shortlist and purchase all the necessary ingredients, clean and spruce up your house in advance and focus extensively on the cooking and serving. But if you want to run a restaurant (one that serves similar food), you will need to do this twice every day, through the week. Plus, you will need to rely on staff who are unlikely to be as passionate as you are. Even if the restaurant kitchen produces the sort of food you want to, there are service issues to be addressed. It’s practically impossible for you to do this in the same manner as throwing a party, or

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