Friday, March 30, 2007

Future Proofing Your Property

By John Burns

The economy is cyclical. The boom phase of the cycle will give way to a softer economy just a surely as a recession proceeded the prosperity we are enjoying today. As an industry we can prepare to weather the next downturn with the least negative impact possible including minimizing empty rooms, lost revenue, laid off employees and reduced profits. Future proofing is a combination of the following three elements.

Vigilance
Prosperous times sometimes can encourage a passive attitude to the future as managers focus (quite naturally) on making the best of the good times. The future proofing process begins with recognition that a downturn will eventually come. Once that recognition is accomplished the stage is set for ongoing watchfulness for signs of a developing decline. Several indicators are available for hoteliers to monitor, including:

The pace of new bookings for future dates in comparison with the pace in similar previous periods. Group booking pace provides a long-range indication, offering a view six, nine or 12 months into the future. Transient booking pace provides shorter-range but nonetheless valuable evidence of either continued strength or potential weakness.

National and international economic indicators such as those found in magazines such as Newsweek, Time, Business Week or the Economist as well as in numerous online sites. Downturns have dependable “hard” indicators that are reported by these sources and which are accompanied by the pessimistic buzz that prosperous times may be coming to the end of their cycle.

A vigilant mindset positions a hotelier to recognize downturns relatively early in their onset. That recognition enables them to act sooner and thereby take the steps needed to mitigate the impact of the demand drop that accompanies economic softness. Leaders can capture the early mover advantage in the marketplace as travelers shift their preferences to lower cost and higher value options.

Preparation
The preparation element of future proofing has many aspects. Those in this article relate to inventory and revenue management as well as to sales and marketing activities. Several areas within these disciplines invite examination and, where necessary, adjustment, to allow hotel management to move quickly and decisively when they see an economic downturn approaching.

Future proofing in the context of hotel sales and distribution begins with verifying that the property’s rate structure provides flexibility to quickly respond to changing demand in the marketplace. Achieving this essential flexibility is best accomplished through the creation of a series of rate tiers. The presence of these tiers, with successively higher rates moving from a lower to a higher tier, not only enables upward movement to a higher rate tier when demand is strong but also downward adjustment to a tier of lower rates when demand softens.

Each rate tier provides a coherent spectrum of FIT, corporate, group, promotional and other rates, allowing relatively easy movement from tier to tier rather than piecemeal adjustment of individual rates. Because of this ease, the multitier structure better protects corporate rate revenues while allowing lower (sometimes considerably lower) promotional rates.

The next area for review is promotions. Promotions (bed and breakfast rates, free Internet access, free parking at airport properties while guests are traveling) take time to devise, frame out and implement. Those devising and framing steps can be completed in advance, in anticipation of their potential implementation should negative conditions warrant. Partially completed promotions can then be left “on the shelf” for use if and when required.

Remember that promotions need not be developed from scratch or all be developed by you and your team. Now, when pressure to immediately respond is absent, is the time to ask questions such as: What worked well for our hotel during the last economic downturn? What would be required in order to repeat one or more of those successful promotions? What, if any, modifications might or should be made to them? What did our competitors do that worked well? Can we use the same ideas this time to gain advantage for ourselves by being the first hotel to introduce the promotion in our market?

Some promotions, such as fourth night free, may not only require internal accounting flexibility but may also stretch the capabilities of the hotel’s property management system. As promotions are considered and as some are prepared for potential implementation it is wise to verify the PMS’s ability to accommodate these possibly unconventional revenue allocations and, if changes in functionality are required, to move ahead with them.

Sometimes a package is a promotion, sometimes it is not. Regardless, packages are a powerful vehicle through which to offer highly attractive-and incremental revenue generating-propositions in the market. Packages bundle accommodation with one or more attractive add-ons at a price that drives business. Further, they can allow discounting without revealing the specific room rate, and so protect the integrity of the property’s rate structure.


Like promotions, package component pricing can challenge a property management system. Verification of the property management systems ability to accommodate the proposed packages’ rate structures in advance is prudent. If it becomes apparent that changes are needed in the PMS this is the time to take the necessary action.

If designing a flexible rate structure and preparing promotions and packages are step one in the preparation phase of future proofing, step two is validating the distribution plan. Future proofing demands a detailed understanding by sales and marketing, revenue management and reservations staff of all of the distribution opportunities in all of the available channels - both those in use and those currently unused. This begins with understanding the additional opportunities available via the central reservation system (CRS) in which the property’s availability and rates are stored. The CRS is operated by either the lodging brand with which the property is affiliated or the representation company used by the property.

The CRS is the gateway to selling the property through the brand’s central call centers, through the global distribution systems, and through the brand’s Web site. There may be additional exposure opportunities present, opportunities above and beyond listing rack, corporate and program rates. There may also be specific procedures, or sales prohibitions, with which property staff should be familiar.
In focusing on this area, they should ask these questions: What are the package and promotion loading procedures? What is the approval process (if one is required) for listing of a new promotion by a property? How quickly can a proposed new entry be considered, approved and loaded in the CRS and on the brand Web site? Are there any obstacles or prohibitions about the promotions that can be listed, i.e., packages with third parties such as concert ticket promoters that may be restricted by corporate policy?

Once the options and opportunities available directly from the hotel brand or representation company have been determined and figured into the future proofing action plans, the next step is to identify the options available from third-party Web sites.

This process involves still more questions.
What use is the property making of merchant model distribution options in the large Web sites such as Expedia, Travelocity or Orbitz?
Does the property now, and at what point in a softening economy should it, offer additional inventory or lower rates in certain circumstances?
What exactly is the forecasted occupancy or revenue point at which those actions should take effect?
How much, if any, use is currently made of opaque distribution sites such as Priceline or Hotwire?
At what forecasted occupancy or revenue levels should that use increase, if at all? Are there other Web sites in which participation that could benefit the property during an economic downturn? What are they? What is the procedure for becoming active in them?

Channel management is the term for maintaining rate and availability information in all of the distribution channels–the brand CRS, the large third-party Internet sites, and all of the small specialty Web sites in which the hotel appears. Rate volatility is common in soft business situations and the challenge for reservations and revenue management staff to maintain accurate rates and availability data in every channel and site in which the property participates grows larger. A variety of computerized channel management tools are now available to hotels with which to automate and speed this data distribution. As part of the future proofing process, the hotel’s need for a monthly subscription to one of these tools should be determined.


The next step is to search for potentially useful shared sales opportunities. Can city or regional clusters of properties promote themselves to jointly achieve greater visibility than would be possible for a single property? Are there alliances in place-possibly coordinated by the brand or representation company-to facilitate such joint promotions?

Finally, the property’s readiness for another type of distribution warrants examination–the hotel’s public relations program. Great rates, packages and promotions are of little benefit without an awareness of them by potential buyers. A public relations program that pairs an extensive and up-to-date distribution list of printed and online recipients with relationships with local and regional travel writers will substantially increase the likelihood of broad awareness of your property and the appealing offers it has available.

Responsiveness
Watchfullness achieved and preparations made, the third and final element in future proofing is responsiveness. When the indicators suggest and confirm that a period of demand decline is underway, the need is for prompt, measured response. Once the signs are clear, it is time to adjust group rates, complete the promotions, activate the packages, and become even more focused on the changing demand for accommodation.

By acknowledging the inevitability of an economic down turn, monitoring for signs for its arrival, preparation of tactics for use when that time comes, and timely implementation of those tactics, a hotel can weather the down cycle with the least disruption to its revenues, competitive position and internal resources.


John Burns is the president of Hospitality Technology Consulting. He can be reached for comment at John@burns-htc.com or by phone at (480) 661-6797.

Wednesday, March 28, 2007

Employment Opportunities

The Normaway Inn is a uniquely-appealing property located on 500 acres in the
Margaree Valley at the beginning of the Cabot Trail.  Accommodations range
from nine rooms in the Inn to self-contained cabins with woodstove fireplaces
and Jacuzzis.  We feature gourmet dining in a country setting where our five-
course meals include herbs and vegetables from our own gardens as well as
local lobster, trout, lamb, organic Highland and Angus beef.  

Before and after dinner, we welcome our guests to meet other travelers in our
living room for a chat around our spacious fireplace  where we are pleased to
provide nightly entertainment.  Bicycles and foot paths are available to
explore the property.

We are currently seeking individuals to fill the following positions:

Sous Chef
Waiters and Waitresses
Front Desk Attendants
Housekeepers
Grounds Keepers

If this setting sounds appealing to you, please contact us as follows and
visit our website at Normaway.com.  Accommodations can be arranged for
successful applicants.

Phone                1-800-565-9463 (Halifax 457-1131)
Fax:                1-902-248-2600
e-Mail:        normawayinn@lincsat.com

Disappearing front desk

By Jack Hagel, Staff Writer

CARY - Something is disappearing from hotel lobbies across the Triangle: the imposing, impersonal front desk.

Desks that resemble tables or podiums are replacing those long, marble barriers -- for decades the cold centerpiece of the American hotel lobby -- as more hotels experiment with new check-in procedures aimed at cutting down long lines and making guests feel more welcome. Consider:

* Plans for a Hotel Indigo in Durham include a circular, low-to-the-ground front desk resembling an information desk at the mall.

"If a front-desk person is checking someone in and they want to walk them to the elevator, they can do so very easily," said Natasha Gullett, an Indigo spokeswoman. In older hotels, clerks are "locked behind those front desks; they don't have that flexibility."

* The region's first Aloft hotel, to be built near Raleigh-Durham International Airport, is to include a circular "free floating" front desk that also will offer more flexibility.

* Durham's Wyndham hotel may be retrofitted with podium-like pods as part of a national redesign planned by the chain.

* Lifestyle Hospitality, which plans a boutique hotel in Durham, wants to do away with the front desk altogether. Employees with electronic tablets will greet guests, sign them in and walk them to their rooms.

"It's almost like walking into a private home, where the host approaches you," said Lifestyle CEO Steve Marx. "... You'd be crazy to think a traveler would not feel comforted or welcome by that."

Technology is a big part of the front-desk evolution. For years, clerks were tethered to the desk answering phones, working the cash register or guarding keys.

"Half the people who traveled wanted to write you a check," said Russ Smith, general manager at Embassy Suites in Cary. "It was a very mechanical process."

Today, kiosks allow guests to check in, get their keys, and check out without ever talking to a hotel employee. That unchains clerks from the desk, allowing them to pay closer attention to guests. They can walk guests to the fitness room, for instance, instead of just pointing.

At the Embassy Suites in Cary, those tasks are easier because of three check-in podiums that take the place of a traditional front desk.About a quarter of Embassy Suites hotels feature the pods. Eventually, all of them will, Embassy spokeswoman Dawn Ray said.

The pods still function as old-fashioned desks for guests who prefer face-to-face service, about 90 percent of those who visit the 273-room Cary hotel.

The design has made it easier for front-desk clerks to help guests who have problems with kiosks. "When you're in the grocery store, and you're stuck, someone will come up and help you," Smith said. "We do the same thing. We just come out from the pods."

Not all guests are keen on the kiosks. Take Jim Turiano, 34, a systems engineer from Allenwood, N.J., who stayed at the Embassy Suites in Cary last week. He prefers the face-to-face check-in at the desk.

But in Cary, "I didn't know where to go," he said. "I saw a couple of folks hanging around in ties at the little pods. It was really confusing. I like to know where to go and know what to do. It's one of those comfort factors when you get to a hotel."

At least the pods made it easier for hotel representatives to assist him Wednesday when the kiosks stopped working.



Staff writer Jack Hagel can be reached at (919) 829-8917 or jack.hagel@newsobserver.com.

Friday, March 23, 2007

What Will Not be Hot on the Restaurant Menu in 2007?

By Greg Morago and Linda Giuca, The Hartford Courant, Conn.McClatchy-Tribune Business News

March 22, 2007 --Pity the poor chefs who are still drizzling everything with truffle oil. Don't they know it's over?

At least that's what other chefs (perhaps even chefs who helped make it a common restaurant staple) say of the unctuous oil infused with the word's rarest of fungi.

Truffle oil, however, is only the latest victim in a long line of ingredients, spices, foodstuffs and preparations that moved swiftly up the restaurant menu ladder, only to become victims of their own provocative popularity. Remember when it was sun-dried tomato this and blackened that? We've weathered enough seasons of arugula, roasted garlic, balsamic vinegar, free-range chicken, preserved lemons and exotic salts to last a lifetime.

So who's to blame when wonderful foods become so pervasive that we turn our backs on them? Is it the restaurant chef who is eager to be considered hip by championing a trendy product? The zealous consumer, armed with magazine clippings, demanding the new gnudi? The television food personalities who suggest we demand Marcona almonds, Peruvian potatoes, Danish butter, Emilia-Romagna cheeses and Iberico ham? Or the food media machine so quick to tempt readers with the next new thing?

Probably all these forces work to make a foodstuff a hit and then a flop. But as anyone who lives to eat knows, food trends are cyclical. One day we're waxing eloquently about the glories of curried chicken salad, and 10 years later we're rhapsodizing curry-flavored ice cream. One day it's artisanal honey; the next day it's bee pollen. Goodbye, carambola (star fruit); hello, acai (the Brazilian super berry that's loaded with antioxidants).

We began the new year with plenty of predictions from a variety of food sources about what will be hot in 2007 on the restaurant menu and in the shopping aisles. The lists include: locally grown produce, high-end chocolate, flavored sodas and waters, pork belly and other artisanal pig products, better bread and whole-grain bread, molecular gastronomy and exotic mushrooms.

But even the food predictions for 2007 have some been-there/done-that redundancies. Some lists said burger bars and upscale salts would be new trends. In some cities, burger bars have reached a saturation point. And haven't we scoured the world for salt enough already?

Speaking of "enough already," we asked national and local chefs which ingredients they're absolutely tired of seeing in the kitchen. Yes, truffle oil was the first answer from more than one chef. But some of the other foodstuffs might surprise you. Here's what they said when we asked what they're weary of cooking and fed up with on restaurant menus:

* Aaron Sanchez, executive chef of Paladar and Centrico in New York: "Truffle oil. I think it's overused,and it's a distraction. If you're going to use truffle, use the real deal. The oil is like a bad perfume."

* Daisy Martinez, cookbook author and host of "Daisy Cooks!" on public television: "Today it seems like there's an overuse of cilantro and chorizo to make Latin food 'Latin.' Nobody has addressed that there are different types of chorizo that come from Portugal, Spain, Mexico. The chefs who are using those ingredients don't have a connection to it and it shows. And if I never saw another molten chocolate cake, I'd be happy. It's been done already, hello!"

* Roberto Donna, chef/owner of Galileo in Washington, D.C.: "Foam. I hate foam. I don't think foam should be involved in any kind of food. Make a sauce or use the ingredients in their own original taste. I'm against any technique that changes the taste of the ingredient."

* Luis Bollo, chef at Ibiza in New Haven and Meigas in Norwalk: "It doesn't happen that often,but I'm tired of codfish croquettes. Customers love them,but I get tired of them."

* Sean Dutson, executive chef, Hartford Marriott Downtown: "If I never cooked another grilled chicken breast or saw another fried calamari, I'd be happy. The reason for both is that everyone does these dishes. The chicken breast is something I always feel people are getting because it is culinary 'safe': They know how it is going to taste, and although it isn't particularly exciting, it is at least something they are familiar with. As for the calamari ... most places have figured out that if they don't screw it up too bad, it will win praises from their customers, so they offer it. I just don't really like doing it because people migrate toward it and forego some of the less common things we offer ... plus the way I prepare it ... it is a mess to clean up.

* Chris Schlesinger, cookbook author and owner of East Coast Grill & Wine Bar in Cambridge, Mass.: "Tuna tartare and edible flowers. They're ubiquitous -- everyone uses them. Tuna tartare is a way for chefs to use the scraps of tuna, but now everyone does the same thing."

* Noel Jones, chef at the Polytechnic Club in Hartford: "Truffle oil is a good example of something overused. Putting it on microgreens? No. Putting it in an egg custard? Yes. Some chefs think if you give people a lot of truffle oil, you will win them over. I say keep it simple."

* Jimmy Burke, chef/owner of Riva Restaurant in Scituate Harbor, Mass.: "We sell a ton of chicken parmesan. We do it well because we're an Italian restaurant. Our customers expect chicken parm on the menu, but I hate having it on the menu."

* Daniel McManamy, chef at Gabrielle's in the Centerbrook section of Essex: "The first thing that comes to mind is butternut squash. It's ubiquitous because it's cheap and plentiful. People like it, and almost everyone has butternut soup or butternut ravioli. I have butternut risotto [on the menu]."

* Kim Canteenwalla, chef for Elizabeth Blau and Associates in Las Vegas, and partner in Simon LA in Los Angeles: "I like them, but I'm bored with short ribs. They're everywhere, on every menu."

* Louis Lista, chef/owner of the Pond House Caf- at Elizabeth Park, West Hartford: "If I never have to be concerned about someone's carb count again, I would not be upset. This is coming from someone who could happily live on pasta, rice, potatoes and bread."

* Todd English, cookbook author, television personality and owner of multiple restaurants in Boston and New York as well as Tuscany at Mohegan Sun: "White truffle oil. It makes me gag. I had it on caviar, and I was like, 'Whoa! What's going on here?' It's overused."

* Mary Sue Milliken, cookbook author and owner of Border Grill in Santa Monica, Calif., and Las Vegas, and Ciudad in Los Angeles: "Boneless, skinless chicken breasts. I look at them in the grocery store and think: 'What are people doing with them?' It's the worst kind of chicken you can have. I hate them. Don't get me wrong: I love chicken -- the whole chicken."

* Jennifer Crescella, chef at Shea's American Bar & Grill, Manchester: "Tiramisu. It's everywhere in every shape, size and color. It's bastardized from the Italian version." Garlic mashed potatoes rub her the wrong way, too. "Let's go back to wholesome, good solid cooking. Simplicity is what I like."

* Sara Molton, executive chef of Gourmet magazine and television food personality: "I have mixed feelings about truffle oil. I like it, but it's been overused. It overwhelms whatever you put on it. Yes, I use it, but it's been overdone."

* Rob Maffucci, chef/owner of Vito's by the Park, Hartford: "My two ideas are unrelated: If I never saw another filet mignon well done, or saw another Olive Garden commercial ... A filet is a beautiful piece of meat; if you're a steak lover, it's the best. [But overcooking] takes an incredibly expensive and delicious piece of meat and turns it into a Salisbury steak. If you're going to order tuna or meat well done, you should probably order the chicken." As for the chain restaurant, Olive Garden spends "millions of dollars convincing you that Grandma is in the kitchen. My mother is in the kitchen [at Vito's restaurants]. When you come to Vito's or any chef-owned restaurant, the best compliment you can give to the chef is: Ask the chef to come out, and ask him what his favorite dish to make is. You'll have the best meal."

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Copyright (c) 2007, The Hartford Courant, Conn.

Distributed by McClatchy-Tribune Business News. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

Wednesday, March 21, 2007

Food & Beverage - Signs of Theft

Some people can feel when they are getting ripped off by someone inside. Trust your gut. If you have a strong suspicion there is a thief the problem is probably already chronic. Set and bait the traps.
One of my first assignments involved catching two thieves with their hands in the cookie jar. The first suspect was the closing bartender and the second was the closing chef. My client was sure the food cost was out of control. He felt the bartender was guilty of treating his friends to expensive wine.

Prices on shrimp and crab were dropping steadily in this restaurant with a New Orleans themed menu. A new vendor had joined the competition and prices at the Fulton Seafood Market were trending lower. The food cost percentage was steadily climbing to an unacceptable level.

Portions were very straight forward for both of these key items. The popular Jambalaya called for 6 pieces of Shrimp 16/20. Crab meat was only used in crab cakes (1/4 pound per cake). The Micros 2700 POS system was programmed for two crab menu items - a single cake appetizer and a two cake entree portion. The Jambalaya was only available as an entree.

If you run into a period when vendors are discounting prices on high volume purchase items, food cost should be in decline. This poor performance could not be blamed on the market. I had the owner go count the crab and shrimp. He gave me the phone number of the modem hooked to his POS system and I installed the polling package on my computer.

Based on recent sales activity, there were plenty of shrimp for the weekend. The freezer had 5 blocks of 5 pounds each. Since we were out of crab, an order was placed for 20 pounds. So the available portions were 75 Jambalaya and 80 crab cakes. Sales counts for the weekend were 44 Jambalaya and 72 crab cakes (30 apps and 21 dinners). I called the owner on Monday morning and asked him to count the shrimp and crab. He reported no shrimp and 7 crab cakes in the freezer.

I prepared the report for him to use in the discussion with the chef. After being confronted with the numbers, the chef responded. He told the owner he had donated two blocks of shrimp to a popular local charity. The owner knew the president of the association personally and began to dial his number. The chef stopped him and admitted to the theft. He was replaced and the food cost fell in line.

There were zero sales recorded on the Micros for an expensive California Merlot (the entire week). A fresh case had only 5 bottles instead of 12. The bartender said his friend asked him to charge his account for the week. He drank one bottle a night on each night. The friend would come by soon once he cashed his paycheck. The owner let it fly. I protested but he said bar sales were way up since this person had started. His friend started paying and still drank his nightly bottle.


Joe Dunbar
Dunbar Associates
P.O. Box 579
Fairfax, VA 22038-0579
800-949-3295
http://www.joedunbar.com
jdunbar401@aol.com

Tuesday, March 20, 2007

How to Start A Restaurant

You love food, but it takes more than that to start a restaurant. Here’s what you need to write your own recipe for success.
By Eileen Figure Sandlin
Entrepreneur.com
Updated: 11:00 a.m. ET March 16, 2007The Main Ingredients




For more information, see Entrepreneur magazine’s step-by-step startup guide #1400, Restaurant and 5 Other Food Businesses, available at www.smallbizbooks.com or by calling toll-free at (800) 421-2300.

From poultry to pirogi, steak to grits, Americans are hungry for good food and unique dining experiences. The National Restaurant Association says that in 2005 (the latest year for which statistics are available), the average household expenditure for restaurant food was $1,054 per person, or $2,634 per household. And considering the 300 millionth American was born in late 2006, it’s clear there will be plenty of customers both today and in the future. That makes owning a restaurant a good business opportunity for aspiring food-service entrepreneurs, even during economic slowdowns and when consumer prices are rising.

“Food dollars spent outside the grocery store are higher now than ever,” says former restaurant consultant Kenny Lao, 30, co-owner of Rickshaw Dumpling Bar in New York City, an eatery with 2006 sales of $1.3 million. “So if you have a strong concept and have your execution and operation strategies down pat, any time is a good time to open a restaurant--even now.”

The Cornell University School of Hotel Administration confirms that the most successful restaurateurs have a clear concept and the ability to implement it consistently, as well as the determination to succeed and the flexibility to adapt to changing market conditions (including economic downturns). At stake is an estimated $537 billion in industry sales projected for 2007--and your chances of success are better than you might think. A survey commissioned by Restaurant Startup & Growth magazine suggests that the failure rate for independent restaurants is 23 percent--a far cry from the 90 percent that has been the conventional and largely unsubstantiated figure exchanged in business circles and famously emphasized on the reality show The Restaurant. That’s significantly lower than the failure rate for all new businesses--only 50 percent remain operating after four years--so you have reason to be optimistic.

The key to success is service, says Randy Smith, president of Bottomline Hospitality Group in Scottsdale, Arizona, a restaurant corporation projecting $6.2 million in sales for 2007. “This is really a wonderful time to go into business,” says Smith, 33. “One survey I saw said that more than 70 percent of respondents believed service was the number-one reason they frequent and return to a restaurant, even if the food isn’t quite what it should be. If you can master the service and commit to selling good food, you have a good chance of success.”

Here’s how you can slice off a tasty piece of the restaurant profit pie.

Do Some Time

There’s a lot more to running a restaurant than schmoozing with your clientele and testing new recipes. That’s why industry experts advise working in a food-service environment first to learn the rhythm of the business and experience its inner workings. Any restaurant experience can be valuable, provided you spend enough time learning the ropes.

“It’s imperative to have hands-on experience in the many departments that make up a restaurant,” says Pete Hanning, 37, vice president and co-owner of The Red Door in Seattle, which had 2006 sales of just under $3 million. “I started in the restaurant industry at 15 as a dishwasher and learned by working fine dining, restaurant/bars and pizza places. You can’t quantify the amount of overall experience you need to succeed, but it’s hard to understand all the facets of the business unless you’ve worked them.”

In addition to this hands-on experience, you should surround yourself with people who understand the industry, from seasoned servers to an experienced operations person. A restaurant consultant can also be very helpful--but expensive, too. So you may want to turn to your local SCORE office, which provides expert business counseling on small-business issues at no charge. If they don’t have a former restaurant executive within their ranks, they may be able to refer you to someone who can answer your questions and dispense a little gratis advice.

Do Your Homework

Before you start planning menus, you also need to write a viable business plan. This recipe for success must outline your plans, goals and strategies in detail. It should include a detailed description of your concept (i.e., Indian, continental or sports-themed); a description of your proposed menu and pricing; a description of your target market and the marketing you’ll do to reach it; a discussion of staffing and how you’ll train and retain employees; and the pièce de résistance--an in-depth discussion of your financing, from startup funding and monthly cash flow to long-term income and expense forecasting.

“It’s way more romantic to think you can open a restaurant by the seat of your pants, but in reality, planning goes a long way,” says Michael Curcio, 29, owner of Pyrogrill in Jupiter, Florida, with projected 2007 sales of $2.2 million. “A business plan takes a ton of guesswork out of the startup process and is a good guide for getting your place off the ground. Make sure the plan is fluid and adaptable to market conditions and challenges.”

Ray Sidhom, co-owner of Four Food Studio and Cocktail Salon in Long Island, New York, with 2007 sales projections of $5.7 million, is one savvy owner who reviews his plan frequently. “We have so many details to watch, from the food and liquor to staffing costs,” says Sidhom, 41. “If they’re not where they should be, the business suffers. So we look at the intricacies of the business plan often and use analysts who do projections and models.”

A good business plan will also be useful when seeking financing, but it’s more common for aspiring restaurateurs to rely on personal savings and funds from friends, relatives and outside investors rather than bank loans.

So how much do you need? “This is such a capital-intensive business that it’s easy to underestimate the amount you need,” Smith says. “Don’t even think about starting with less than $100,000 in cash for a bargain-basement opening, or you won’t get even remotely started on the right path.”

The amount also depends on your location and the local cost of living. In pricey New York state, for instance, Sidhom says you’d better have $2 million for a restaurant with 200 seats if you hope to generate $1 million in sales.

“Steak” Out Your Spot



A good location is crucial to the success of a restaurant. Choose a building on a well-traveled street where it’s possible to install highly visible signage, but beware of historic districts, where there are restrictions on every aspect related to a building’s exterior. Check out the local pedestrian traffic, like Lao did. Because his restaurant is on a busy thoroughfare in the middle of New York City, he does a brisk carryout business during lunch hours--and attracts famous guests like Martha Stewart. Also, look for a building with a large, well-lit parking lot as close to your establishment as possible, and check out the other local businesses. If there are too many restaurants in the vicinity (especially if they serve the same type of cuisine), or if the other businesses don’t generate a lot of regular traffic themselves, you could find yourself short on customers.

As for leasing a building formerly used as a restaurant, don’t sign until you find out its history. There may be a very good reason why it failed--reason enough to make you invest your time and money elsewhere.

Finally, Hanning recommends buying used equipment when you start out, especially when it comes to big-ticket items like refrigerators. “In a few years, when your cash flow is better and you’re duct-taping your appliances together, then you can buy new,” he says. “Restaurant auctions often have good deals.”

Study the Menu

Probably one of the most exciting aspects of establishing a restaurant is coming up with a winning food lineup that dazzles diners. Naturally, menu selections should reflect your establishment’s theme consistently (i.e., no herbed couscous at a pizza parlor), and you should create signature menu items that set you apart from the competition. For instance, Lao built his dumpling empire on six varieties of dumplings (including a chocolate dessert dumpling) and simple add-ons like Asian salad, noodle soup and green-tea milkshakes. It takes approximately 2.5 minutes from order to delivery--and he sells about 1.4 million dumplings a year. “That’s more dumplings than I ever imagined I’d see in my life,” he says with a laugh.

At Four Food Studio, Sidhom and co-owner Jay Grossman, 34, avoid “menu fatigue” by rotating the offerings on a seasonal basis. They keep their loyal customers informed about the new selections through an e-mail blast sent just before the menu changes.

Anita Lo, chef and co-owner of both Rickshaw Dumpling Bar and Annisa, a contemporary American restaurant in New York City’s West Village with 2006 sales of $1.5 million, features a five- to seven-course tasting menu in addition to the regular menu to keep clientele interested in her culinary offerings. “I tailor the tasting menu to each table and never bring back the same dishes,” says Lo, 41. “I also keep a database of everything my regular customers have ever eaten, so they have a unique dining experience every time they come in.”

Pricing menu items is an art unto itself. Your prices should reflect everything from food costs to labor (both prep staff and servers) and overhead (i.e., utilities). You should also build in a profit margin of at least 10 percent to 15 percent to make sure the business is on a firm footing for future growth.

Tell Them About It

Seasoned restaurateurs are the first to admit they don’t spend much--if anything--on advertising. “In a fine-dining environment like New York, advertising makes you look desperate,” says Lo. “It’s better to make sure everyone who comes in leaves happy--that’s your best advertising.”

Curcio believes that if you have to spend more than 5 percent of your operating budget on advertising, then there’s something wrong in your business plan. Others think that print advertising isn’t particularly effective for drawing customers, TV and radio are way too expensive, and coupons don’t build repeat business--just business from customers who come in only when they can get a discount.

Even so, it’s important to get the word out to potential clientele when you are just starting out. Unless you are opening a linen-tablecloth restaurant, try announcing your presence in the neighborhood by distributing fliers (at 4 cents each or less) and by holding a grand opening. This is one event you’ll actually want to advertise in the local newspaper and by sending out news releases to the local media. Host the event a few weeks after the doors actually open to make sure all your equipment, cuisine and staff are up and running smoothly. Offer specials, give balloons to the kids and hold fun activities to make a favorable impression on new customers. Have business cards and printed menus at the hostess stand or cash register that customers can pick up, and consider giving away promotional items like pens or keychains imprinted with your business name and phone number. And don’t forget to invite the media. Free press from food critics, life-style writers, columnists and others is worth its weight in gold.

Word-of-mouth is another potent publicity resource. At Four Food Studio, the partners create their own buzz by holding special events, like Monday “Industry Night,” which attracts up to 500 people who want to network with other professionals. They also held a brunch recently that featured horses, a petting zoo and blow-up slides in front of the restaurant to attract families.

“It’s not the same old, same old,” says Grossman, the restaurant’s crea-tive marketer. “We try to create a place with a different feel, a different flavor every time someone visits.”

Reach the Next Level



Business plans and menus are crucial--but there’s one more essential ingredient needed for success as a restaurateur: passion for the business.

“This business is a highly competitive grind,” Smith says. “So if you’re not passionate about it down to your core, you won’t make it. You also have to make others buy into your vision and make them want to be part of something great. Those things, coupled with integrity and a really strong work ethic, are the keys to success.”

Where Everybody Knows Your Name

TV shows like Cheers have made bar ownership look easy and fun. But don’t be fooled—bars entail many of the same business responsibilities as restaurants. On the plus side, you can operate out of a fairly Spartan space and you don’t open until 4 or 5 p.m. You have far less perishable food on hand, and you need fewer cooks and servers. Profit margins on consumables are usually higher, too—for example, one bottle of spirits will yield a lot of shots, which can add up to a lot of money depending on the price point. For these reasons, it’s possible for a new bar to be in the black in about six months.

On the flip side is the reality that you’ll be working into the wee hours of the morning, which can take a toll on your personal life. You’ll also have to deal with unruly patrons and spend a lot of time coaching your staff on how to handle troublemakers. Plus, the bar industry is far more scrutinized by regulating officials. “You have to understand the laws, ordinances and political climate associated with selling liquor,” says Randy Smith, president of Bottomline Hospitality Group in Scottsdale, Arizona. “If we didn’t share a full-time lobbyist with other local business owners, it would be nearly impossible to do business.”

Selecting the right concept for your bar is crucial. Neighborhood bars are still the most popular type, although sports bars do very well in cities with professional sports teams. Other types of bars include specialty bars, like martini or cigar bars; brew pubs, which sell house microbrews; and nightclubs, which have entertainment on tap in addition to libations. Choose a location that has good traffic flow in the area and safe and convenient parking, and you’re on the way to becoming a fixture in the neighborhood.

What Not To Do When Starting A Restaurant

Don’t sign a lease if your rent ratios aren’t in order, or you’ll be working for the landlord.

Don’t commit to the project financially if you’re not already committed to it conceptually, culturally and logistically.

Don’t ever start a project that doesn’t have a genuine sense of purpose and concept credibility. It won’t stand the test of time.

Don’t lose sight of the fact that employees are the most important part of your business, and don’t skimp on training and development. A happy employee equals satisfied guests.

Don’t start believing your own hype! You won’t be able to make sound decisions.

Source: Randy Smith, president of Bottomline Hospitality Group

Eileen Figure Sandlin is an award-winning freelance writer and author who writes on business topics.

Copyright © 2007 Entrepreneur.com, Inc.
URL: http://www.msnbc.msn.com/id/17645308/


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Sunday, March 18, 2007

Room Service or is it Food Delivery?

By Kirby D. Payne
Friday, 16th March 2007


I admit I'm addicted to certain cartoons including some serial ones - As a result I regularly turn to the cartoon pages of the daily paper. I couldn't help but get an extra chuckle when I saw "The Family Circus" by Bill Keane. I wish we could reprint it here but they wanted $150 for that, which is reasonable, but wouldn't let us use it on the internet version of this column which is unreasonable.

The cartoon showed the kids looking out the door of their room into the hall of their house speaking to their mother. On the hall floor by the door was a scattered assortment of dishes, glassware and utensils. The kids were saying, "We were just playin' hotel."

We've all stayed at that hotel, haven't we? Getting room service picked up when the guest is finished is a challenge. In Hilton's and luxury resorts I've managed, I tried tent cards, calling back to the room after 45-60 minutes and other ideas with the goal of having the tray or table never pushed back into the hall. Every employee, particularly bellmen, security and housekeeping, has been trained to pick up room service, bring it to a service area, out of guest sight, and call the room service department. Bonuses have been offered and punishment meted out. In the end, one can still find a dinner room service table in a hall at 8am. They tell me the guest put it there when they got up in the morning and didn't answer the phone when they were called the evening before! Maybe so, but it still bothers me.

Why bother with room service? For full service and luxury hotels the answer is easy, it is a service people expect, enjoy and will pay for. Women travelling alone particularly appreciate it. Room service, like food and beverage service as a whole, can drive incremental departmental profit, attract more occupancy and help support a higher average daily rate for guest rooms.

Luxury hotels offer room service while most others offer food delivery. True room service can truly help make the guest feel special and the hotel seem luxurious and comfortable. Hot food hot and cold food cold, no condiments forgotten, the order correct the first time are just the beginning of room service. The crowning moments are the work of a caring professional server that presents the food, takes the covers off to display what is there, sets the table in the appointed place so the guest can dine in the comfort and security of their room. A good server can still sell dessert for delivery in a half hour when they may even remove the portions of the service the guest is finished with. This is service, this is hospitality.

It takes motivated and committed management training and motivating the hotel's staff. It, like all quality things in a hotel, takes effort and constant, constant monitoring. No room service in any mid-priced and better hotel should be any less than that. The difference between mid-priced, first class and luxury in this case should be the menu, the prices, the service setting, the servers uniform and the quality of the room furnishings. Within a range the quality of the service and what the server says and does should be recognizably from the same planet.

Where the challenge truly comes out is in limited feature hotels (aka limited service). The guest at a Holiday Inn Express or Hampton Inn who takes their deluxe complimentary breakfast back to their room is having self-room service! The guest in any hotel who orders in a pizza is contracting out room service for one reason for another. Choice Hotels International and other chains have worked with Pizza Hut to provide "Vrroom Service". Tent cards are placed in the guest rooms promoting the service. Local Pizza Hut restaurants pay a commission to Choice for the opportunity to be promoted in those guest rooms based on the volume of sales to the Choice affiliated hotels.

Many limited feature hotels have the menus for area restaurants available at the front desk or promote area restaurants in their guest directories. If the hotel has meeting space, these hotels have caterers lined up to serve functions.

One challenge hotels don't seem to be interested in is how to make money on these deliveries. Sure the front desk staff gets a free pizza once in a while, but that does nothing for the room attendant who has to clean up the occasional mess or the owner who has to pay extra to get a bed spread cleaned or a carpet replaced prematurely! Owners and managers must take the position the restaurant is being provided with marketing, additional seating capacity and bussing/cleaning services at no cost. While taking this position the, hotelier must be mindful that the restaurant has higher food service (delivery) expense. While this food service benefits the limited feature hotel by helping it compete with full service hotels, it is also benefiting the profits of the restaurant. If it doesn't, why would they do it.

Somewhere in this mix of needs and wants there is potential for additional income for the limited feature hotel. Why shouldn't this hotel make money off of room service just as its full service siblings do? The limited feature hotel's power to negotiate lies in the fact that its premises are private. The food delivery people don't have a constitutional right to bring food there without permission. In granting that permission, why can't the hotelier set standards and charge an access fee? Excessive demands can't be made but there is a deal to be made, particularly if the hotel promotes the authorized vendors more heavily and denies access to unauthorized vendors.

Imagine how much money could be realized in a busy 120 room hotel if just $1.00 were collected for each delivery along with an employee party once a year from each of the four largest vendors. While you're making the deal, set service standards that will help your guests feel special and your hotel look special. Make sure that the restaurant's delivery staff are dressed appropriately and cleanly. Make sure the delivery vehicle is well maintained from the inside and outside as your other guests will walk by the vehicle while it is in your entrance drive. The driver and the vehicle become part of your ambience so don't let them detract from your other efforts.

And just as a full service hotel, someone needs to monitor the hallway for discarded delivery items. Guests don't want to sleep with left-over food and its containers remaining in their guest rooms. Don't let this service bring down the appearance of the hotel for other guests.

And don't forget to inspect what you expect!

About the Author:
Kirby D. Payne, CHA, is president of Tiverton, RI-based HVS/American Hospitality Management Company, a full-service hotel-management company with offices in South Florida and staff in Minneapolis, MN. The company has operated hotels throughout the United States and served a multiplicity of clients, including lenders, airport authorities, law firms and individual investors.

Payne, a 30-plus-year hotel-industry veteran, served as the 2002 Chair of the American Hotel & Lodging Association (AH&LA), is a former director of the National Restaurant Association, and currently serves as a commissioner on the Certification Commission of the AH&LA’s Educational Foundation. For more information about the company, visit www.HVSHotelManagement.com

Wednesday, March 14, 2007

UB professor finds fast-food job is no picnic

By Anne Neville
Updated: 03/12/07 3:23 PM


"That's the lunch rush starting," says Jerry Newman as he spots a line of customers form in a Wendy's close to the University at Buffalo, where Newman is a SUNY Distinguished Teaching Professor in the School of Management. "You can almost look at the number of people in line and know what time it is."

Newman's knowledge of the ebb and flow of customer demand for fast food isn't limited to an academic study, or even to the view from a table in the dining room where he sits on this winter day. For 14 months, Newman went undercover as a fast-food worker, sweeping floors, making burgers and keeping an eye on the dynamics behind the counter in restaurants from Western New York to Florida.

After he changed the job title on his applications from "university professor" to the less intimidating "college teacher," he snagged short-lived but surprisingly difficult jobs in Wendy's, McDonald's, Burger King, Arby's and a Southern chain called Krystal.

In his new book, "My Secret Life on the McJob: Lessons from Behind the Counter to Supersize any Management Style," (McGraw Hill, 203 pages, $24.95), Newman says one surprise was, "the McJob isn't McEasy."

The difficulties range from the physical demands of carrying 40-pound boxes and standing for hours over blazing hot grills to the psychological pain caused by what Newman calls "toxic managers."

Newman found it ironic that these toxic managers in the seven places he worked used tactics ranging from shaming to sarcasm, because other parts of the industry are tightly dictated from the top down. "The way they make a sandwich in Biloxi is the way they make a sandwich in Boulder, even down to the number of pickles," Newman said. "They're much more reliable at operations - how you make a burger - than they are at how you make a good employee. There's a horrible inconsistency there, which leads to bad management practices, which lead to turnover, which reduces the quality of customer service and has a bottom-line impact."

So in one restaurant, Newman wrote, the store manager amused her employees by giving lap dances in her office during business hours to favored male workers. In another, the manager didn't even say hello to Newman on his first day - or second, third or fourth.

New respect

To blend in at his new workplaces, Newman said he decided to "downplay my personality and downplay my knowledge." But the few times he did make suggestions, he often found them rejected.

At one Burger King, he suggested to the franchise owner's son that broken burgers be used in chili - a routine Newman had been taught at a nearby Wendy's. But the idea was rebuffed. "He looks at me straight, and says, "We're not allowed to do that because of health code.' Right next door was the Wendy's that I did it at. So he's lying to me. He doesn't want to hear anything that I have to say because I couldn't possibly come up with a good idea."

In his book, Newman describes his co-workers, ranging from the "Survival Worker," living from paycheck to paycheck, to the "Way-Station Worker," who has dreams of a better job. In studying them, he said he learned to appreciate the people who work in fast food.

"I came out of this with a new respect for them," Newman said. "I guess that was the biggest thing I learned in this whole project - perhaps to my shame. I've always been a person who believed this is a meritocracy. If you don't get anywhere in life, it's because you didn't work hard enough. Well, I found all these people working really hard, who were really quite smart, who were looking for a break.

"Everybody thinks [of fast-food workers] as slothful, lazy, not very intelligent people," he said. When he became one of them, he said, "I found the exact opposite."

Since the book's publication, Newman has addressed executives at the headquarters of both McDonald's and Burger King, and will be the keynote speaker at a McDonald's conference in April.

Management styles

Newman said he did find some good managers at the places he worked, and he calls the best "ego architects," who "figure out what is good about a person and what needs to be shored up. The good ones were good at doing this."

To reward workers who are looked down upon by society and earn very little - his wages ranged from $5.50 to $6.50 an hour - the good managers provide praise. "When you're in a fast-food job, you need somebody to tell you you're doing something right," Newman said.

Newman calls the toxic managers "ego undertakers - they find out your weakness, what they can come at you with. My weakness was at my age, I wasn't sure I could do this job. I would get tired faster than other people."

In the book he tells a story about how after he took a very quick break one day, his manager snapped, "Jerry, what was that, about half an hour?" Newman's anger still flashes as he recalls this unfair accusation. "He knows exactly what my weak point is," Newman said.

The toxic manager "figures they can get you to do their jobs by breaking you down, by burying your ego. It's not a terrible model - even Vince Lombardi used to belittle his stars, which got the guy to say, "I'll prove it to you!' But it didn't work for me."

He said he hopes his book becomes required reading for fast-food managers, "so they will realize, "These are really people, these aren't interchangeable cogs.' "

Tuesday, March 06, 2007

Future Shock.

By Rick JohnsonTuesday, 20th February 2007

Adam Toffler wrote a book by this title about change in 1970 - Many of the principles he explained then still apply today. But… this article isn’t about change. This article is about compassion, leadership, integrity and “Mentors”.

Do you remember who your mentors were?

Do you currently have a mentor?

Is there someone in your organization that you really respect, someone you look up to, someone who’s actions and words have a real impact on how you live your life, perform your job and think about your future? If you do, whether you or they know it or not, they are mentoring you. Or, you may be mentoring them. Of course it is much more effective if it is done in the conscious state and both of you acknowledge your independent obligations to the process.Regardless, today mentoring is becoming more popular within organizations as an effective leadership tool for both the mentor and the recipient.

Impact on Lives
How much have mentors impacted your life? How are they currently helping you or how much are you currently helping others as a mentor? I remembered a former BOSS who was really nasty to me early on in my career; I clearly remember him screaming at me loudly in front of a bunch of other workers: I was just an inside sales person at the time but his words cut deeply. “You'll never get promoted to outside sales until you learn to pull your head out of your ---!”I probably did something to deserve some kind of comment but not in public. Funny, I have no idea now exactly what I did to deserve his reprimand but I can still hear his words clearly in my mind as if it were yesterday. The loudness of his voice, the tremor in the tone and the disgusting look on his face just seem to be burnt into my brain. Thank God I didn't believe him, and went on to become a top performing sales person and then sales manager after he was fired. But it still had an impact. I often shared that experience with employees of my own company as a way of challenging them to become better leaders. He was a perfect example of what a mentor isn’t.

Leadership Modeling

Of course, I also remember just as clearly those mentors in my life that have had very positive impact on my leadership model. I am often described as ---- “ a person that doesn’t pull punches but once you begin to work with him, he is dedicated to helping you succeed and become all that you can become.”That describes my personal “Servant Type” leadership model. Just last week out of the blue I received a phone call from someone I haven’t seen or heard from in over fifteen years. I was in total shock because it seems the sole reason this person called was to say thanks for the way I treated them over fifteen years ago. He actually gave me credit for being part of his success in becoming a high level executive at a multi million dollar corporation.I told my wife Tracy about the phone call and repeated every word he said to me. I felt proud. It really made me feel good and I was walking on cloud nine. Then I started feeling bad. I began to think of at least five specific mentors in my life that I should really acknowledge and give credit to. In fact there is currently one that I am modeling that really has no idea that I admire and look up to him and his business model, integrity and ethics.So, why did these thoughts make me feel bad; because four of the five mentors that have had a dramatic impact on my success and my career have since passed on from this life? The sad part is that I don’t even know if they ever realized how important they were to me. I don’t think I ever said thank you. These mentors made a big difference. I was a kid that grew up on the streets, ran in a gang, had no father figure and walked a fine line that could have led to disaster and even prison. One of those mentors was a Sergeant of mine in the Air Force, another was a fireman that volunteered at the Boy’s Club of Toledo, Ohio when I was just ten years old and the other three were at various companies I have worked for along the way.

Stop and Think

Someone very close to me (Tracy) reminded me of what I often talk about in leadership seminars about it never being too late to change, to finish college, to make a difference. So I actually picked up the phone and called that former mentor that is still alive. He is ninety two years old now and still as intelligent and impressive as he was when he was sixty and taught me about leadership.He answered the phone and was in SHOCK because he hadn’t heard or seen me in over thirty years.I asked him--- “What is the neatest thing about retirement and living into your nineties.”He replied: “I can’t really say what the neatest thing about retirement is but I can tell you that I really miss the weekends because everyday is a weekend. As far as being ninety three years old, I’d have to borrow a phrase from John Wayne and say the neatest thing about being as old as I am is the “Absolute Lack of Peer Pressure.”He was thrilled to hear from me and I was thrilled to have a conversation that lasted more than an hour.I wanted to tell this story to remind everyone that being a mentor is a primary responsibility of being a leader. So, if you are currently mentoring someone, remember, you can have a dramatic impact on their life. If you are being mentored, don’t be afraid to say Thank You every once in awhile.I also want to challenge all you executives and leaders that are successful today to think about the mentors in your past. Create some Future Shock.Pick up the phone, call them, say Thank You. Let them know they deserve at least part of the credit for your success. You’ll be very glad you did. And if you don’t, some day you will wish you had.

Rick Johnson, expert speaker, wholesale distribution’s “Leadership Strategist”, founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com. Don’t forget to check out the Lead Wolf Series that can help you put more profit into your business. www.ceostrategist.com