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    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry
    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry
    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry
    Ebook353 pages4 hours

    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry

    By Mark Radford

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    About this ebook

    Foodservice is a multi-billion dollar industry...one in which most people will fail.

     

    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry offers a blunt and brutally honest perspective on the realities that soon-to-be entrepreneurs ma

    LanguageEnglish
    PublisherMark Radford
    Release dateOct 24, 2015
    ISBN9780692515297
    Restaurant Winners: Plain Talk for Bootstrappers Navigating the Foodservice Industry

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      Book preview

      Restaurant Winners - Mark Radford

      Introduction

      Everybody knows the foodservice business is difficult. Nevertheless, restaurants and caterers make an obscene amount of money. The amount of money they spend, however, is equally obscene. What’s left over goes to the owner. This book is about whether that amount is enough to make owning a foodservice business worth the life that comes with it. If you decide this world is for you, you need to assess your threshold for risk as well as how much of yourself you want to give—because this business asks for a lot.

      My wife Erin and I have been in the industry nearly twenty years and so far, we have survived without the help of banks, investors, or partners. For us, owning a foodservice business is worth it. We enjoy the perks and freedom that come with owning our own business and the dynamic nature of the restaurant industry. This book offers a look at how you, too, can start your own foodservice business—on your own terms—and survive.

      Maybe you picked up this book because you’re ready to open your first food business. Maybe you’re a veteran of the industry and want to enjoy a trip down memory lane. Whoever you are, I’m confident there’s value in these pages for you. For too many years, my wife and I have watched our peers come and go—and far more quickly than they should have. We’ve also seen experienced operators flush hundreds of thousands of dollars down the toilet in a matter of months and witnessed accomplished, intelligent people walk into the ass end of a losing situation…not once, not twice, but multiple times. And then repeat this behavior. We want to help you avoid this.

      We’ll share with you how we got in the restaurant business, what worked, what didn’t, and what we would do differently if given the chance. That being said, what worked for us may not work for you—and vice versa. Although there are some best practices in this industry, there are no hard and fast rules. There’s no right or wrong way other than making the numbers fit. I won’t bore you with complex equations and mathematical formulas, however, because the math involved is quite simple.

      The title is Restaurant Winners because we want you to win in the foodservice industry. Simply opening a business is not winning. Being in business and being profitable is winning. Being in business and breaking even is half-winning. Being in business and losing doesn’t make sense. We’ll cover as much as we can to put you in the best position possible to win while considering the most economic approach to do so.

      In this book, I stick to what I know. I tell you where, in my opinion, the bulk of the money is made and lost by newcomers. I also introduce you to a few other people in the industry so they can share their knowledge. I won’t discuss how to win in the bar business because I’ve never worked in that business and at present have no plans to do so. My focus here is on casual catering, concessions, and the quick-service concept—businesses with relatively low barriers to entry, which are the easiest to start on a small budget. The good thing is that you can apply the knowledge gained in these segments to more sophisticated ventures down the road if you so choose. Also, I’m not here to make a case for what you should serve and who you should serve it to, or to get into any stuffy, esoteric ramblings on culinary opinion. Your ideas can be as basic or complex as your imagination.

      Foodservice is the most fascinating, frustrating, and rewarding business around, and you have the right to pursue your vision of it. It’s being done every day by people just like you and me. I hope I can help answer some of your questions. Thanks for reading!

      Chapter 1

      How We Landed Here

      Bear with me for a few pages and I’ll explain what led to this book.

      It is said people choose a career in foodservice for one of three reasons: new beginnings, second chances, or last resorts. For me—the first time, anyway—it was a new beginning. I worked in corporate America for almost 10 years, and that was enough to realize I’d be happier and do better financially by pursuing the goal of working for myself.

      Ever since high school, I had known that at some point in my life, I wanted to own my own business. I had no idea I’d be cooking, though. I wasn’t called to be a chef. I didn’t begin my career washing dishes in restaurants at age 12. I’m not professionally trained in the culinary arts. In truth, growing up in my hometown, Indianapolis, during the 1970s and 1980s, there weren’t many culinary standouts to inspire much of anyone into the cooking profession. It was, and still is, a meat-and-potatoes type of town (although that’s changing). Back in those days, people mainly cooked at home. Meals were of the traditional, comfort-food variety. Sunday dinner was a big thing, with hearty selections of fried chicken, meatloaf, roasts, and anything barbequed, grilled, or baked.

      Backyard gardens were as commonplace in my Indiana neighborhood as basketball hoops. We also had a number of pear and crab apple trees, with a few mulberry and cherry trees mixed in. Plus, we had easy access to wholesale meat shops, where you could buy a half cow or hog, whole chickens, slab bacon, and anything else you can imagine.

      New Orleans

      I didn’t develop a hard-core appreciation for food until I left for college in New Orleans. There, I saw the zeal with which people in the South regard food. Northerners settled into our dorm rooms with mini fridges stuffed with bologna and cheese sandwiches or Mom’s chocolate chip cookies. Meanwhile, the Southern kids brought hot plates, skillets, utensils, and seasonings. Walking through the hallways on any given weekend, you’d smell the spiciest, aromatic concoctions these resourceful college students could devise. Almost every week in the spring, fraternities and sororities held impromptu crawfish and crab boils in the park. Even the school cafeteria had decent food and kept local traditions: red beans and rice on Mondays, fish and spaghetti on Fridays, grits at breakfast seven days a week. Things were even better off campus. As I explored my new city, I tasted boudin, turtle, and various étouffées, gumbos, and bisques. This sparked in me a serious interest in good food and learning how to cook it.

      New York City

      After college I went back home and spent a couple uneventful years working in insurance when an opportunity arrived. I landed a job in medical sales with a company I’ll call Megapharm. My territory was Brooklyn, New York—not today’s kinder, gentrified borough, but the gritty, rough and tough early ’90s Brooklyn. I really looked forward to working in a city I’d grown up hearing so much about. Although the job was in Brooklyn, I lived in Manhattan, renting an apartment from an aunt who owned a brownstone in Harlem. For the next three years, I made the daily trip into my territory via the FDR. After working in Brooklyn all day, I drove back to the city and enjoyed all that came with living in Manhattan. It was a wonderful time.

      The food culture in New York City is nothing short of amazing. It would take a person years to eat at all the places worth trying. I ate at Senegalese restaurants and Jewish delis, Trinidadian roti shops, Korean barbeque places, American soul food joints, Jamaican vegetarian spots, Italian trattorias—you name it, I ate it. Sometimes I explored these places on my own. Many times it was courtesy of my expense account with Megapharm. You see, being successful in medical sales means gaining the undivided attention of decision makers. With medical professionals, this is no small task. They are busy people. Often, the best—and sometimes the only—way to get their undivided attention is over a meal. So Megapharm spent mind-blowing amounts of money on these outings. In most cases, we hit high-end restaurants in Brooklyn, Queens, or Manhattan. Expensive bottles of wine, single-malt scotches, and champagne flowed together to accompany fabulous gourmet meals—with Megapharm footing the bill. These were regular outings, often several times a week. The point of the whole affair was relationship building, with the hope that when it came time for the doctor to put pen to pad, it would my products they remembered and prescribed. For me, it opened up a world I’d never been exposed to with respect to food and drink and how much of the world’s business is done at the dinner table.

      Back Home Again

      It was on a trip home in August for my 10th high-school reunion that I realized my days in New York were numbered. I’m an only child. My parents divorced when I was six, and I was raised by my mother and grandfather. Sadly, my mother struggled for years with serious depression. At the time of my visit, she had her hands full with my grandfather, who was 90 years old and had the age-related health issues you’d expect. When I got into town and looked around, I knew what time it was. The house was in terrible shape. The grass was up to my knees. My mother, as was her M.O., never maintained her car, so it constantly broke down. Things were going downhill fast. Although I had a great job in my dream city, the writing was on the wall. In my book, family is first, so I decided that when I got back from my trip, I’d request a transfer to Indianapolis. And miraculously, by Thanksgiving, I was back home.

      My grandfather passed away exactly one year and one month after my return. Things were somewhat of a mess back home financially, so I spent the next several years bailing my mother out of one situation after the next. At the same time, I was also dealing with my own divorce. I quickly found myself stuck in a funk between that, missing my grandfather, and worrying about my mother. And to be honest, my career was going nowhere. Although I had been with Megapharm for going on eight years, I essentially started over with the transfer back home. And being on my fourth manager certainly didn’t help with any advancement opportunities. I was ready to move on but had no idea what to do next. The one bright spot was meeting my new girlfriend, Erin.

      Ready for a Change

      My job with Megapharm in Indy was more or less the same as in New York, but with one significant twist. When working in New York, gaining access to doctors meant taking them out to a nice dinner. In Indy, the best way gain access to these professionals was to bring in lunch for their whole office—sometimes 30 or more people! One day, after finishing another routine sales presentation at a physician’s office, I was alone in the break room, putting away my sales materials. I took a long look at the lunch I had brought in from a local caterer—the gummy lasagna, the picked-over iceberg salad, and what was left of the chocolate chip cookies. I also took notice of a bagel and cream cheese breakfast another rep had brought in that morning. Next to it was a basket of wet naps, presumably from a barbeque lunch earlier that week, as well as a bunch of those little packets of parmesan cheese and red pepper flakes you get with pizza deliveries.

      How much food had been brought into this office in the last few days? Up until then, I’d never really paid attention. Then I looked at the receipt from my caterer. The meal I’d brought in cost $300. I quickly did the math. I was spending between $2,000 and $3,000 per month on breakfasts and lunches—and there were five other Megapharm reps in my territory alone doing the exact same thing. And we weren’t the only ones. In addition to Megapharm, there were 10 or 15 other pharmaceutical companies with reps in our territory—all using caterers every day of the week.

      I’ll be damned, I thought.

      Right then and there, I had my answer as to what my next move was: a catering business. Hell, I could make box lunches, chicken Caesar salads, and tuna salad wraps! And having more or less lived as a caterer by day and a restaurant host by night, I felt I knew what good service looked like. Plus, after eating, drinking, and generally hanging out in hundreds of restaurants for the last seven or eight years, I’d put my palate up against any food critic.

      I thought about it some more: I spent $300 on one office that day. If I catered only three lunches per week, I’d pull in $900. What if I catered three per day—or more? The more I thought about it, the more it made sense. I got mad at myself for not putting two and two together years earlier.

      Up until then, I had zero experience cooking for pay. Nor did I have entrepreneurial experience (except for cutting grass as a teenager). But it was decided. I was going to open a catering business.

      Starting Small

      I started small. Rather than abruptly leaving Megapharm’s safety net, I catered on the side. I figured I’d try my hand at it for a few months to see how it went. That way, if it wasn’t for me, at least I’d still have a job.

      I didn’t go it alone. With Erin’s help, I set about getting everything together from an administrative standpoint—filing paperwork with the state, obtaining a business checking account, and so on. (More on that later.) I was ready to start making money, but needed two things to get started: customers and a place to make the food.

      Getting customers wasn’t hard. Some friends in medical sales were kind enough to let me test run on scheduled lunches with their offices. Plus, Erin—who was also a pharmaceutical rep—gave me everything on her calendar. No one at Megapharm knew what I was I was doing and I wasn’t stupid enough to cater my own lunches with Megapharm’s money, which would’ve meant automatic termination. My only risk of discovery was running into another Megapharm rep while dropping off lunch somewhere.

      In terms of the food, everything was simple and familiar: deli sandwiches, chips, slaw or potato salad, fruit and cheese trays, and a few easy pasta dishes, along with some entrée salads. Beverages were two-liter bottles of soda sent with bagged ice. Usually, I brought brownies or cookies for dessert. Plates, cups, napkins, and plastic ware were included, and everything was disposable, so the jobs were always a one way, drop-off-and-leave scenario.

      I didn’t reinvent the wheel. I just followed the model of the successful caterers I’d been using all those years. There was no need to overthink what had already worked for dozens of businesses. The goal in our case was just to make everything look and taste a little better. Why not have fresh-cut fruit in an attractive black bowl, with some thinly sliced limes and mint leaves for a garnish? How about using multi-colored and flavored wraps instead of plain white ones for a nice punch of color? This was what we were going for.

      Still, it wasn’t easy. After about a month of stumbling and bumbling, being late with deliveries, and begging for second chances, I quickly grasped that a key challenge pertained to space. When cooking for large groups, there simply isn’t enough room in a regular, residential refrigerator. Immediately, I purchased a used reach-in commercial cooler. (The challenge after that was how to move it into the kitchen of the duplex I lived in.)

      Another key challenge was time. There is never enough time in the kitchen. Worse, what seems like an easy lasagna and salad lunch for 20 people can quickly turn into a nightmare if your timing is off in the slightest. I learned the hard way to allow for cook times, packaging, and travel.

      Eventually, I felt more relaxed and comfortable, and by the second month, things started to get easier and to fire on all cylinders. I listened to feedback from Erin and my customers and got better at being organized, managing portions, and getting out the door.

      After just eight weeks, I had managed about $7,000 in sales, working a few hours a day, two or three days a week. Even buying everything retail, there was a damn good profit. Plus, I’d landed a weekend concession job that had netted another $2,800.

      After that, my mind was made up. I was leaving Megapharm and pursuing foodservice full time. The numbers were too good to keep working a corporate job.

      It wasn’t just the money that was attractive. It was the feeling that I could do something for myself—something I enjoyed. And of course, it was a new beginning. I desperately needed a reset and realized if I didn’t make a move now, I probably never would. Erin came on board as a partner of sorts. She would help me get the new business up and running, but the initial financial investment would be all on me.

      NOTE

      There was one problem with my operation in its earliest incarnation: Technically, it was illegal. Simply put, if you’re preparing and selling food to the public, the county health department requires you to have a license. This license is granted only after you pass an inspection of the commercial kitchen or commissary where everything is made. (There are exceptions for certain homemade foods. If you think your operation might qualify, consult with your local authorities to find out more.) Because I was preparing food in my home, I was in violation of this rule. I don’t suggest you do this, however. These days, there are commercial kitchens you can lease on a per-use basis. Some churches also lease their kitchens out for commissary use. Had this option been available to me at the time, I would have taken it, and I advise you to do the same.

      Giving Notice

      In June of that year I sent an e-mail to my manager, announcing my resignation effective immediately. We followed that up with a pleasant phone conversation. He asked me what I was planning to do. I told him a positive step toward some personal goals. All that was left was for me to return my drug samples, turn in the company vehicle, and tie up a few loose ends. After a week, it was over. I’d done it. I’d quit. Two weeks later, I reflected on what I’d done. In my haste to leave, I hadn’t considered how many unresolved financial issues I had. I quit without paying off credit cards and other debt, including student loans. Plus, there was the mortgage on the duplex I’d bought a few years earlier—a fixer-upper near downtown. Part of that was offset by a tenant, but it still needed major repairs, including new HVAC, windows, and a roof.

      The good news was I had a healthy 401k. When I quit, there was roughly $70,000, split between Megapharm stock and some aggressive mutual funds. The bad news was I’d take a hit when I withdrew from it. Still, I took comfort in the fact it was there if I needed it. Shortly after resigning, the Megapharm stock (and the market in general) had a nice run, and my nest egg grew to $90,000. (Sadly, I would see all of it evaporate in about a year.)

      Finding a Kitchen

      They say God looks out for fools and babies. That proved true for me when, about three months later, we found a commercial kitchen to lease. (I stopped catering from home once I quit Megapharm. No need to risk getting into trouble downtown. But I languished at home paying bills with no income until we found it!)

      The space was located near the corner of two busy streets in an historic neighborhood just north of downtown. Tiny—maybe 900 square feet—it was in the basement of a three-story walkup that once housed a popular local sandwich shop. The landlords rented it to us for $500 a month on a year-to-year basis. Erin didn’t like it so much, but that didn’t matter. She still had regular-paying a job. I was thrilled. I thought it was a great location, and only 10 minutes from my house to boot. We signed the lease and went about setting up shop.

      The kitchen area comprised about a third of the space, separated from the dining room by a short hallway with small restrooms—about the size you’d find in an airplane—on either side. The remainder of the area was then divided into three even smaller spaces. The largest of these had room for a desk, a convection oven, an ice machine, and the reach-in cooler I brought from my house. The room next to it contained a five-foot-long sandwich prep table, miniature freezer, two-bay sink, and small stainless steel prep table. In the back room was a narrow galley-like

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