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Restaurant Business Advice

5 Interesting Facts About the Restaurant Business

Think eating out nightly and watching episodes of Kitchen Nightmares has given you a grasp on what it's like to run a restaurant? Then think again: owning a restaurant is serious (and tough) business. While the tough landscape is nothing new, you might be surprised to learn what factors are directly related to success — and which ones aren't. At day three of the South Beach Wine and Food Festival, a number of culinary heavyweights came together to demystify the biz: New Orleans stalwart John Besh, Top Chef and Chicago favorite Stephanie Izard, Portland restaurateur Jenn Louis, and Miami mogul John Kunkel. Here are five points they hit upon that might surprise you.

Restaurateurs are, first and foremost, businessmen.
Kunkel shared one revelation: "A line out the door does not guarantee a profit." Understanding a balance sheet, on the other hand, might help. "I opened a restaurant . . . by basically pulling a Ponzi scheme on myself," he told the audience only half jokingly. The biggest amateur mistake is "not knowing all the costs that go into opening," Izard said. Or for that matter, the amount of work: "I have no other hobbies," Louis admitted. They all went by the wayside once she committed to opening her own restaurant.

Juggling more than one restaurant can be hugely complicated.
Izard, who has just opened a second spin-off restaurant, Little Goat, put this out there: "It's hard at restaurant number two, learning how to divide your head, when you can't do all the details. I don't know if I'll ever get to that point where I have more than two [restaurants]. I'm kind of a control freak." On the contrary, Besh pointed out that "to go from one to three restaurants is more difficult than to go from three to nine. You have to have managers that understand it, get it, and have the soul." To keep everything consistent across his Louisiana restaurants, Besh has implemented across-the-board rules. "You have to create a standardization of everything," he said. One way he does it is by sharing information with other similarly sized restaurant groups elsewhere in the country, like the Philadelphia-based Vetri Family or Chicago chef Paul Kahan's One Off Hospitality Group.

Local and sustainable is not always practical.
"Farm-to-table is not always possible," Kunkel admitted, explaining that there's a tightrope to walk between top-quality food and what the customer perceives to be a reasonable price point. "There is a balance between providing the absolute best product as a restaurant and . . . staying in business."

Keep reading to see two more interesting restaurant facts.

Restaurant stardom begins with a carefully plotted path.
Prospective chefs skipping culinary school should be careful. "Pick and choose your jobs wisely," chef Izard cautioned. That means being willing to work your way up from the bottom to study under a seafood restaurant or a farm-to-table icon. "Find people you want to emulate and work for them."

Service is everything.
Kunkel admitted Miami is notorious for horrible service: "It's been awful down here for years. It's frustrating for Miami." Part of the reason is because big hotels and restaurants have licensing deals with high-profile chefs, but those contracts quickly expire, and chefs back out after just a few months. His restaurant group, 50 Eggs Inc., works hard to make sure service is a priority through weeks of training. "That alone can make you successful — we are in this business to make people happy," he said.

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