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How To Run A Restaurant

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How To Run A Restaurant
knife and fork

    The restaurant business is a huge industry in the USA, growing each year because anyone with any idea about food or wine thinks they can do it. But why do 9 out of 10 restaurants fail?

    It’s a sexy idea–until you realize how hard starting a restaurant really is. Soon enough, questions will be flying like grains of sea salt. What permits do you need? What are your start-up costs? Where should you buy your produce? What corporate structure should you choose?

    Forbes.com have outlined 8 areas in the fundamentals of the restaurant biz:

    Legal Structure

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    You have five basic choices: a sole proprietorship, a partnership, a limited liability company or a corporation–either an S corporation or a C corporation. Restaurants–and most small businesses, for that matter–should choose an LLC structure.

    External Threats

    Most restaurants don’t offer much in the way of health benefits. Only 61% of employees in service industries such as restaurants are covered and most hourly paid restaurant workers don’t have access to employer-provided coverage–not exactly a draw for talented workers.

    Best Role Model

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    While there are some 660,000 independent restaurants in the U.S., each with its own menu, strategy and clientele, all have something to learn from Starbucks.

    Must-Have Technology

    Tasty fare will only get you so far without timely, accurate service. The latest generation of software-based, point-of-sale systems from Micros Systems and Radiant Systems can help you cater to even the fussiest of customers.

    Important Performance Metrics

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    Accounting profits are nice, but for budding restaurateurs, cash flow–which tracks the actual dollars moving in and out the door–is more critical. “If you don’t keep an eye on [cash flow], you realize later you’re in a hole and you can’t recover,” says Chris Yeo, owner of Straits Restaurants in San Francisco.

    Start-Up Costs

    After you snare the right permits, decide whether to start from scratch or fix up an existing eatery. Depending on how fancy your new place is, a blank-slate approach will set you back $100,000 to $300,000 for stuff like industrial cooking and ventilation equipment, refrigerators, freezers, tables, bar stools, shelving and counters with stations for cutting, heating and cooling.

    Permits

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    Depending on the location of the business, you will have to file articles of incorporation or organization. (Approval is quick.) Once established, you’ll be able to secure a Federal Tax Identification Number, which registers your business with the federal government so Uncle Sam can take his cut.

    Sourcing Supply

    Finding food and liquor suppliers is easy; sizing them up is trickier. Price is important, of course, but so are quality and safety.

    If you’re still interested, read on.

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    The Fundamentals Of Running A Restaurant – [Forbes]

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    Craig Childs

    Craig is an editor and web developer who writes about happiness and motivation at Lifehack

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