I'm Opening a Restaurant (Part 3)

So what makes me think I'll be successful? I mean, everyone knows that new restaurants have a high failure rate. I believe this is because most new restaurant owners do not spend enough time planning upfront prior to opening and then responding to change after the doors open.

First, we will emphasize our unique positioning in the market: everything on our menu will be made from scratch. Nothing will come from a can. I expect this to lower our food cost but increase our labor expense since we will be spending more time on preparation.

Second, we will be frugal where it counts. Fixed costs - those expenses we have little control over changing - are the most important element of success after providing customers with wholesome, delicious food and legendary service.

• I negotiated aggressive terms on our lease. Frankly, the rent is so low that it's going to be hard for us to screw things up.
• Partners' salaries fluctuate with the cash balance. Both of us will be working managers. I anticipate working open to close, 7 days a week for the foreseeable future. Our goal is that we will pay ourselves a $1,000 weekly salary each, but my salary will range between $250-$2,000 per week depending on our bank balance.
• We will be conservative with other expenses as well. At least until we see how business goes, we aren't spending a lot of money on technology, benefits or other costs. We will buy a simple cash register, manage our own accounting and payroll, and not provide ourselves or other employees with additional benefits.

There are things that we won't be frugal with. We will never cut corners on food quality. That would be shooting ourselves in the foot. And, we will pay our employees what they are worth. If I have an employee who works twice as hard as the other employees, I believe he should be paid twice as much, or close to it. Retaining good employees will help grow the business.