Season's Greetings 2012

The holidays are upon us! With so many events and activities on your plate it is understandable if news and information regarding the restaurant and foodservice industries may not be at the forefront of your minds.  But here at Ideal Software as the old year draws to a close, we understand that now is the perfect time to start planning how you will revitalize your business for 2013.

As most of you are well aware, 2012 has been a truly significant year on many levels.  From political upheavals in the US and around the globe to violent events on national levels as well as natural disasters of all kinds, it seems that every time we turn around there is something else that is occupying our time and attention and causing a strain on our budgets.  In no area has this negativity been more evident than in the downturn of the economy.

From individually owned businesses to corporate conglomerates it is difficult to find any size business that has not been negatively impacted by the fluctuations and dips in the market.  It is also hard to find any type of business that has not felt the squeeze.  From the fitness industries to retail and from manufacturing to foodservice, everyone has to make difficult decisions in order to keep their heads above water.

While there are plenty of arguments as to the cause of the fluctuations as well as who is to blame, one thing everyone can agree on is that it is time to tighten our belts. No industry has been hit harder than the restaurant and foodservice industries, for when people start feeling the pinch of lessened financial income, luxuries like meals out and prepared foods tend to be some of the first things cut from their budgets.

It is with this in mind that we at Ideal Software would like to thank you for continuing to support us in our efforts to bring you the very best news, information and trends in the foodservice and restaurant industries in 2012.  We also look forward to continuing to provide you with ongoing support throughout the New Year and into the foreseeable future.

At Ideal Software we understand that you need every weapon in your arsenal in order to battle the insidious creeping of the negative economy.  It is our goal to provide you with the tools and information you need in order to get every ounce of value out of your business.

From controlling your inventory, to ensuring accurate ordering to monitoring individual and overall cost of sale and much more, Ideal Software has what you need to get the job done and to get it done right.  With the tips and techniques we provide you’ll get all the very latest news and information in the restaurant and foodservice industries; information that will enable you to increase your profits in the New Year without having to skimp on things like customer service or quality of goods or services.

So from all of us at Ideal Software, we wish you happy holidays and a safe and joyful holiday season.

Warm Regards,

Ian Said, Owner, IdealSoftware.co.za

December 2012 Issue of Ideal Software's Niche Notes, our FoodService industry newsletter.

IdealSoftwareNicheNotesDecember2012

Opening a Restaurant? Why Location is Important.

Location. Location. Location. It’s a cliche for a reason. Before you fold the napkins or add a dash of anything, you need to settle on a location. This should never be an afterthought. You can have the best food in the world and still be hungry for customers if you are not in the right location. Location is really the key to the success of your restaurant. Even if you have the “perfect” spot in mind, don’t get too attached until you do a little research first.

Here are four factors to consider on finding the correct location for your restaurant.

1) Population

Are there enough people in your area to have a regular customer base? You don’t want to rely on Census Bureau data alone. You want to check factors such as neighborhood demographics and population projections. If, for example, there is a heavily Italian population in your desired location, you’re not likely to have much success with a Japanese restaurant. One way to determine if a location is right for your restaurant is to do a site study. A less expensive alternative is to do a little research on your own. If you contact the local municipality where you want to locate your restaurant, they can provide population projections and other useful info.

2) Accessibility

Building a restaurant by a busy highway is also a cliche for a reason: it works! You may have the right demographics and population requirements, but it doesn’t matter if customers can’t easily get to your restaurant. Even if there are plenty of ways to get to your restaurant, you’re not in the clear just yet. Look at details such as current traffic patterns and projected traffic patterns to determine if congestion will be a major barrier to customers trying to make it to your restaurant.

3) Parking

So, the population in your desired location is just fine for your expected customer base and there are no major barriers to keep customers from getting to your restaurant. The next step is to look at your parking situation. Ideally, it would be best to have your own parking lot for customers. If this is not possible, you’ll want to check on the availability of public parking. Dig a little and find out how busy your desired location is at different time of the day. While crowds are great for business, non-stop crowds may not be so great for parking – especially if people are just parking by your restaurant because it’s convenient.

4) Visibility

Visibility also plays a role when it comes to location. This is why it is more expensive to locate a restaurant right in the heart of the downtown shopping district. It is great to have a cool website with a link to a Google map showing exactly where you are located, but don’t underestimate the impact of walk-in business. More customers than you might think make last minute dining decisions based on what restaurants they happen to see when walking or driving while they are hungry.

In Conclusion:

Location can make the difference between a successful restaurant and a good idea that never really got off the ground. It is all about finding the right ingredients – the right combination of a desirable location, key demographics, and available parking – when cooking up a recipe for a successful restaurant.

What has been your experience when starting your own restaurant? Leave a comment below.

For more info on Ideal Software’s Inventory Management system for controlling food cost IdealStockControl

How Much Does it Cost to Start a Restaurant?

Venturing into the wonderful world of food is an exciting journey. Not only will you be testing out new recipes and pleasing the palates of many, but you’ll also create the perfect ambiance to accompany main courses, side dishes and the like.

Now, before actually opening your restaurant, you need to figure out a budget. Questions regarding the amount you have saved, how much you’re willing to spend and what amount you want left over will factor into this decision.

What exactly is the cost of starting a restaurant though?

The Figures:

Well, according to Forbes Magazine article entitled “How To Run A Restaurant: start-Up Costs” by Maureen Farrell, the amount will likely vary from $100,000 to $300,000. A large gap clearly exists between these numbers, and you want a better sense of toward which side your budget should lean. You’ll need to consider the following factors when estimating a more firm number.

Size of the Restaurant:

How big or small the restaurant shall be is a huge factor when determining the cost. A little beach side eatery with a few plastic tables and umbrellas will cost a good deal less than a formal restaurant with seating for hundreds of people as well as a space for large wedding receptions and other celebrations. Places that are more middle of the road will, of course, fall in between the two extreme price ranges.

Types of Materials:

Speaking of plastic chairs, the materials with which furniture are being constructed is another major component of the budget. All wood tables and chairs as well as an authentic fireplace will place your restaurant toward the higher end of the estimates. Additionally, building the exterior of the restaurant comes into play. On the lower side of the budget, you would be able to have folding chairs or plastic chairs and perhaps a counter or window where people order food and then take it back to their seats.

Restaurant Essentials:

Of course, you’ll also need commercial size stoves and ovens. If you serve some sort of specialty, such as brick oven pizza, you will need to factor in the cost of that equipment as well. In order to successfully open up the restaurant, you’ll also have to hire staff and decide what their salaries or hourly rates would be. These numbers are not included with the aforementioned start-up costs, so paying employees will be an additional expense. The type of food you’re serving will certainly change the price too. Buying burgers and fries is a lot less expensive than purchasing prime rib, fresh vegetables and all of the finest spices.

Permits:

You also must consider permits when you are starting up a restaurant as you certainly cannot open up a restaurant out of anywhere. Check with the local town and with the state to find out what you need to do to open up the restaurant. Furthermore, if you want to serve alcohol at the establishment, securing a liquor license is a necessity.

Starting a restaurant is an exciting endeavor that will hopefully provide you with many profits. Before you can start reaping the benefits though, you’ll need to be fairly generous with your bank account to start building up the business in the best way possible.

Estimates for Opening a Restaurant in South Africa:

160 Seater Middle to Upper Service Restaurant Out of the Box Cost:

Kitchen equipment R475 000.00
Refrigeration R275 000.00
Storage R75 000.00
Dining area (tables, chairs) R250 000.00
Sound and sight R75 000.00
Kitchen smalls R65 000.00
Dining room equipment R80 000.00
Signage R95 000.00
Shop fitting R525 000.00

Sub total R 1 915 000.00

This excludes vat as well as wet works. These numbers are based on current prices but can vary according to the type of quality products used. Franchise groups work on a per square meter charge of between R9 000.00 and R14 000.00 per square meter.

What has been your experience when starting your own restaurant? Leave a comment below.

For more info on Ideal Software’s Inventory Management system for controlling food cost IdealStockControl