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

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

IdealSoftwareNicheNotesNovember2012

7 Low Cost Ideas to Market a Restaurant

Successful restaurateurs create consistent turnover as well as many customers that frequent their establishments on a regular basis. This provides the basis for sustained revenue that allows a restaurant to succeed and grow.Many think that a restaurant that reaches this kind of success has had to put in years of hard experience, slowly building up a large customer base. However, that assumption is not always true. A number of inexpensive marketing tactics can generate a great deal of business for a food establishment very quickly.

These include:

1) Cultivate Word of Mouth Referrals

Happy customers are the best kind of advertisement. They’re free, they talk and they refer new customers to a restaurant. So encouraging folk to talk about their good experiences is definitely a must for any successful restaurant.

2) Email Marketing

Email marketing is another free or nearly free marketing tool that allows you to communicate with a large section of your client base at once. Through email, you can effectively disseminate information about special restaurant events and seasonal menus to those who have taken the time to join your email listing. As your business grows, word of mouth will spread about your special offers through your mailing list, which may lead to a larger client base.

3) Social Media Tools

In most cases social media accounts are cost-free, allowing a restaurant to create an Internet presence quickly. However, they do take time and mental work as good social media destinations need to be regularly updated with new content to keep people reading and paying attention to a restaurant.

4) Using a Loyalty Card

Many businesses have figured out that customers love to feel like they are receiving something for free. With the usual approach of having customers make five or ten purchases to gain a free coffee / meal / voucher, restaurants can generate a huge amount of return business.

5) Up-Selling

Do you want to upgrade that combo? Up-selling is a great way to generate marginal additional revenue on the same sales. People will buy a meal, however, by offering a larger meal for a bit more in cost, customers will feel compelled to buy it to take advantage of the “deal.” The cost of the food increase tends to be nominal versus the higher price charged for the meal upgrade. This is obviously only applicable to certain types of restaurants.

6) Use Coupons

Along the same lines of feeling like something was free, customers also love to take advantage of discounts as well. Coupons offer a real, tangible savings for a customer. In most cases people tend to buy more than one meal, eating with someone else, so even with a coupon the customer will bring in extra business. This option is very debatable, as some restaurateurs believe it will attract bargain hunters only, who will stop frequenting the restaurant as soon as the special is finished. Try starting off small and monitor the response.

7) Restroom Advertising

Restroom advertising and marketing tends to create cold leads mainly because people have nothing else to do but read while sitting in the restroom. Those few seconds of idle reading can catch someone’s attention with the small cost of a flyer, paying for itself and more with the first customer purchase. Combine the ads with special events, and the sales can grow exponentially with each customer’s reading.

Restaurant marketing doesn’t have to be a large, expensive affair. Good, effective marketing and advertising can be done cheaply, with very noticeable results in a short time. Smart restaurateurs combine a number of the above tools and more, spreading their nets farther to gain more customers. That in turn creates consistent revenue and sales that keeps a restaurant growing.

Do you have an 8th idea to add? Leave a comment below.

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

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

IdealSoftwareNicheNotesOctober2012

Portion Control and Food Cost

Portion control is an essential element of food cost and quality control. It reduces food waste, ensures a consistent and quality product, expedites food preparation and service, and has a big impact on food cost.

Any extra food added to the customer’s plate is money coming out of your bottom line.

While an extra ounce of soup or a handful of cheese may seem insignificant, these amounts added up per dish over an extended period of time are costing you thousands per year in additional food cost. Excessive portions also contribute to food waste, both in terms of plates coming back half-full and over-ordering of stock; that is your profit going into the garbage every day.

The best way to get a handle on food cost is to keep an open dialogue with all of your staff, assess if and where waste is occurring, and have a mechanism in place to ensure that each portion is consistent in every dish that leaves your kitchen.

Assessment:

When you create your menu, you should also allocate portions for each menu item and price them accordingly. The general rule of thumb is that each dish on the menu should cost 30 – 40% of the selling price in order to cover expenses and make a profit. Lack of consistent portions makes it impossible to assess the true cost per item. Talk to your servers and your dishwashers. They can provide information about what is coming back to the kitchen. If certain dishes are constantly coming back half-eaten perhaps you need to rethink that particular dish and alter it or eliminate it from the menu altogether, or adjust your portion sizes.

Prevention:

A successful restaurant is a team effort, and it is important that all of your staff are on the same page and have the necessary equipment to ensure product quality.

- Provide pictures of each plated item illustrating the correct portion sizes and plating.

- Provide a chart that lists the correct portion of each item in all food preparation areas.

- Pre-portion condiments, sides, and sauces.

- Order pre-portioned stock where practical and make sure that all bulk items are portioned out and appropriately labelled and stored as soon as possible.

- Have and an adequate amount of the correct sized storage containers, ladles, and scoops for each menu item as well as a variety of measuring cups, spoons, and scales.

These measures not only help to ensure less waste, they also speed food preparation and service, especially at peak times. This makes certain that your customers get what they expect every time they dine: consistently good-looking, tasty food, in fair portions, at a reasonable price.

Love of good food and the ability to share it with others is the main reason you opened your doors in the first place; proper food portioning practices help to ensure that they stay open.

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

IdealSoftwareNicheNotesSeptember2012

Ideal Software supports #SmallBusinessFriday

How to Choose the Correct Music / Lighting / Décor for your Restaurant

Music, lighting, and decor play a vital role in setting the overall tone and feel of a restaurant. In some cases, it's attention to detail that really sets a restaurant apart from the competition and keeps customers coming back. It all comes down to the "if a tree falls in the forest" theory. If you have the best food in town, but you have poor lighting, outdated decor, and music that's reminiscent of your last trip to the dentist's office, are people really going to want to eat there? Here are some tips on choosing the right music, lighting, and decor for your restaurant:

1. Setting the Tone with the Right Music

Selecting the right music for a restaurant is a major decision. You generally have three basic choices when it comes to music in a restaurant. Some restaurants go with traditional elevator music. Sometimes the owner picks his favorite tunes and sometimes the staff is allowed to choose. All of these options can produce mixed results among your customers.

• Elevator music - This is the safest choice, but does it really match the tone of your restaurant? If you're running a sports bar and restaurant, do patrons really want to hear a watered down version of "My Heart Will Go On" while watching the big game?

• Owner-selected Tunes - Restaurants have personalities and who better knows what the personality of their restaurant is better than the owner? The only real drawback is if the music doesn't really match with the theme of the restaurant. This approach tends to work better in casual dining settings rather than "fancy" restaurants that rely more on ambiance.

• Staff-selected Tunes - If you're going to allow the staff to select the music, it's best to set some ground rules. You don't want music that's going to offend or annoy your customers. This means no profanity, heavy metal, or rap - unless this fits in with the style of your restaurant, except for the profanity. All music, regardless of what it is, should be kept at a low level in the background.

2. Finding the Right Balance with Lighting

Do your customers really need to be blinded by a bright light from above while trying to enjoy a romantic moment? Do you really need soft mood lighting to enjoy a pizza? The lighting that you need for your restaurant depends on several factors such as the time of day, the theme of your restaurant, and even the specific area of your restaurant that needs some form of lighting.

• Breakfast - Lots of light is needed to set a bright, energetic tone for the day.

• Lunch - Moderate lighting is fine since you don't really want people to linger as you're trying to turn tables over quickly.

• Dinner - Low intensity light tends to work best for most restaurants since you want people to take time to enjoy their meal and unwind. This is especially true in a fine dining restaurant.

• Fast food and family restaurants - These kind of places should be well lit to provide a comfortable, bright and fun atmosphere.

• Theme restaurants - Use fun lighting such as colored lights to match the theme of your restaurant.

3. Bringing It Together with the Right Decor

The decor of your restaurant should reflect your personality and the overall tone of the restaurant. A pizza place and other casual dining spots generally reflect the personality of the owner. More upscale restaurants generally have a simple decor so as not to detract from the food and atmosphere. Whatever your decision is for the decor, you want to be consistent. Color schemes should match and your decor should match the overall feeling you want to create when someone walks in the door.

In Conclusion:

First impressions are important, especially when it comes to the restaurant business. It can be overwhelming when trying to select the right music, lighting, and decor for your restaurant. If you're not sure where to start, contact a professional designer to get some ideas to get you started. Get a few trusted opinions and get as much advice as you can. Take time to consider factors such as the theme of your restaurant, the type of mood you want to set and how practical your lighting choices really are. You want to create an atmosphere that displays your style and sets the right tone for your customers.

This is a guest post from Ian Said, founder of idealsoftware.co.za, a software development company specializing in Inventory Control and POS reporting solutions. Follow Ian on Twitter @costofsale or email Ian info@idealsoftware.co.za.

Using Inventory Control Effectively

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

IdealSoftwareNicheNotesAugust2012

7 Tips in Determining Restaurant Menu Content and Prices

There is one question that every restaurant owner has to address when setting up their business, and that is “How do I determine my restaurant menu content and prices?” While there are a number of considerations that can help you in answering this question, you need to be aware of the fact that it is by no means a static question.

In other words, setting the cost of the items on your menu (or resetting the cost of them) is something that will need to be done multiple times over the course of your establishment’s lifespan. But where do you start? The seven tips listed below should help you in getting started.

1) Determining COST:

In order to correctly determine the prices on your menu, it is important to be able to price your menu items properly. To do this it is imperative that you understand how to determine the cost of your products. This includes everything from wholesale product costs to delivery fees (when the item first shows up in your establishment) to cooking costs as well as wages and overhead in order to determine exactly what it costs for you to be able to provide this particular dish. While it may seem like a lot of work to do for every item on your menu, you may well be surprised to find out how much you are underselling. Once you have determined the costs you can then (taking into account your competition of course) determine a profitable price point.

2) It's All About the Price Point:

When you are starting out in the restaurant business, a good rule of thumb is to take the cost of each dish (see tip #1) and then double it or triple it (In South Africa, an acceptable cost of sale for food overall should be 32- 40% and beverage 25 – 35% giving an overall cost in the 30 – 37% range- if other costs such as labour and rent are below 10% each, you will still be able to be profitable with a food cost in the 45% region). Of course you will want to take into account what your competitors are charging for the same or similar items. In fact, when it comes to things like specialty desserts and coffees it is not unusual to see a 300% markup. So don’t be afraid to add a little extra. If you track your sales you will quickly be able to determine what the public is willing to pay and can adjust your prices accordingly.

3) Understanding the Price Barrier:

There is a point above which most customers will not go. This point is called “The Price Barrier.” While you may find some individuals who will buy the item, the bulk of those who eat with you will not touch it as it is not a good deal for them. While you may be able to get away with a slightly higher price if you specialize and produce something with a little extra (a steak with all the extras for example) most of your middle income customers will stay below this barrier.

4) Knowing Where to Display your Prices on the Menu:

The art of displaying your menu prices is one that depends a great deal on your individual establishment. While having a standard dish/price column may be expedient for diners to determine whether they can afford a dish, if you’re selling upscale foods you may want to have the price listed below the description of the item to make sure your customers read about the food before dismissing it out of hand.

5) Take Demographics into Consideration:

While considering the demographics may seem like something you would expect from a corporation of chain restaurants, know this; being able to determine what the class of diners that your establishment appeals to can help you determine what you should set for prices, and even how your menu should be designed. Upscale clients tend to pay more on the whole and prefer reading about their food before they decide whether or not to order it as opposed to those for whom price is the primary concern.

6) When Food Doesn't Sell:

It’s a horrible feeling when your food isn’t selling. However, there are ways to ensure that even the worst failure of a dish brings you some sort of return. One of the best ways to do this is to make the dish a “special” by placing it in a high visibility area of your menu, having your servers bring it to the diner’s attention, and by lowering the price (or even offering 2 for 1 deals) in order to get it moving. You can even take advantage of your Twitter or Facebook page or send out special email runs to regular customers in order to advertise your special. Who knows, you might have a sleeper hit brewing that just needs a little nudge!

7) How Prices Affect Establishment Image:

Keep in mind that choosing the price for your menu is a direct reflection on your establishment. It’s true! As much as we might not like to admit it, upscale establishments almost always cost more than middle or lower class establishments. The higher the prices, the fancier your clientele is going to expect your establishment to be. Can you deliver? Do you have the ambiance and the service to back up the high menu prices? If so, then go ahead and raise your prices; however, be prepared to lower them if your clientele decides that there is a point above which they cannot go.

These seven tips are by no means the only factors to be considered as you determine the pricing of your menu. However, by following the advice listed above, you will most certainly see a change in the profitability of your establishment. In a few short months you will see positive changes that you might never have thought possible. All it takes is a little time and attention to detail.

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

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

IdealSoftwareNicheNotesJuly2012

9 Tips for Choosing the Best Catering Staff

Whether you’re looking for a staff to prepare and serve food at a family function or an exquisite wedding reception, following some tips will help you to hire the best staff for your soiree.

1. Narrowing the Options:

If you live in a highly populated area, dozens of food service providers might exist. Ask for recommendations from family members and friends. You should also check out reviews via online websites / searches to see how the company fares in the grand scheme of things.

2. Menu Options:

When you’re hosting a braai/barbecue, you probably don’t want a company that only makes heavier foods best prepared in an oven, such as turkey and mashed potatoes. On the other hand, opting for a platter of sandwiches and potato salads is not the best idea for an elegant wedding reception. Make sure the style of the company matches your needs.

3. Cleanliness:

Visit the physical location of the food service staff and assess how clean the space is kept. If it’s dirty in there, chances are your food is not going to be of the cleanest and freshest variety.

4.Dietary Restrictions:

When members of your group have certain dietary restrictions, you must make sure the cooking staff can accommodate them. For example, if certain members of your party keep Kosher, see if special Kosher meals can be prepared for them. If some individuals are allergic to shellfish, make sure that none of the food is cooked near or with any shrimp, clams, crabs and so forth.

5. Cost of the Service:

One of the biggest concerns for many people when they are hiring individuals to staff their party is the cost. You want to know what the cost of the food is going to be. Be honest about your budget. In the event that you’re unable to afford the particular company, ask if they have packages that are more suitable to your budget.

6. Value of Customer Input:

Once you begin working with a company, you want them to value your input as opposed to just taking over the process. You may have a specific sauce recipe that you’d like them to follow. Ask how much input you’re allowed to have before booking the company.

7. Size of the Staff:

You also want to make sure that the staff can handle the party. Ask how many servers and cookers will be on staff the day of the party. If you’re having a 100 person function, one server is certainly not going to be enough.

8. Tastings:

Before booking with a food service company, find out if you can do a tasting. The only way to know if the food truly pleases your palate is to try it out!

9. Go With Your Gut:

It may be cliche to say “Go with your gut.” However, gut feelings are often right. As a human being, you can often pick up on people being dishonest or trying to swindle you. When you’re preparing for a party, you need to feel comfortable with all of the vendors, so choose a company about which you have a good feeling.

The food service staff is just one of the elements involved in planning that perfect party. Picking the best one in the area ensures that this area of the event will be a big hit that people talk about for years.

For more info on Ideal Software’s Inventory Management system follow the link IdealStockControl

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