Sunday, August 6, 2017

Restaurant Success by the Numbers- by Roger Fields, CPA- review of the first few chapters


My plan is to post on this blog regularly, iA.

I was recently approached to invest in a restaurant at a local mall. I bought Roger Fields' Restaurant Success by the Numbers book on setting up restaurant as a reference tool to orient me to this industry.

I read the first five chapters and glanced through the remaining 10 chapters. I will share some of Fields' thoughts below:

Fields provide a decent framework based on his experiences and other case studies. I found the case studies most useful and made the material more engaging. His methodical discussion on developing the restuarant concept. identifying the target market, securing the appropriate location and making pro-forma statement based on reasonable assumptions was useful and pertinent to gain an insider's prepspecitve of launching a restaurant.

Fields splits the book into three sections:

  • Dreaming for success (Chapters: The rules of the game, The restaurant concept, Your target market, Location, location, location, Dollars and sense) 
  • Developing The Details (Chapters: Constructing the menu, Fashioning designs & ambiance, Setting the table, Raising the bar, Designing the kitchen, Staffing) 
  • Getting Down to Business (Chapters: Getting the Money to Make it a Reality, Setting up Your business, Taking it to the street, Opening Day and beyond) 

Fields begins the book with the assertion that it is a myth that 90% restaurants fail by the first year; his assertion is that 26% fail in the first year ans that 59% fail within three years. Fields asserts the following reasons on why independent restaurants fail:

  • unrealistically high rent and occupancy costs 
  • undercapitalization and lack of working capital 
  • lack of attention to details in managing financial resources 
  • poor operational management 
  • excessive investment in construction, equipment, renovation, and acquisition costs 
  • poor choice of location 
  • poor choice of concept 
  • poor or inconsistent food and service 

Fields lists a few basic rules to consider for an aspiring restuarant owner/investor:

  • Keep your foot firmly planted in realities of business and the other in your passion for your restaurant
  • Consider starting small event you've had previous experience as a chef or a manager 
  • Set initial realistic goals and objectives 
  • Recognize from the get-go that the amount of financial resource you have access to will limit the type and size of restaurant you can realistically open 
  • Make a commitment to find and surround your self with the right people to help you get the job done

In regards to my thoughts on making the investment into a restaurant, I offer the following recommendations to the operator that reached out to me:
  • Consider finding a co-founder who is familiar with local laws and jurisdiction
  • Since, the restaurant concept is Mediterranean and target market is individuals who seek out halal meat options, consider approaching existing halal meat stores and figure out if there is opportunity to collaborate in their existing location
  • Draft a well-thought out forecast and projections

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