Ron's Tip Jar/Insights - Published by Ron Santibanez   

February 6, 2013


In This Issue:

Tips and Things - Be Proactive When It Comes To Cost Control

Seek Results.....Not Activities


Restaurant Start Up -  The Process



 Tips and Things

Be Proactive When It Comes To Cost Control

Cost controls are primarily proactive measures established to keep costs in line with standards and allow the operation to maximize its profits. The sooner cost inefficiencies are discovered, the sooner financial damage can be corrected. Consequently, you have to watch the little things like portion control, purchase prices, inventory levels, cash controls, employee schedules, linen costs, utilities, and supplies expenses. If you can catch the cost leaks when they are small, you can reduce potential losses before they become serious.

If you do not have a reporting system to detect the variances that you cannot see with your eyes….or a way of measuring the long-term effects of those you can see…..costs may drift way out of line before you are able to do anything about them. If you are moved to respond only in a reactive manner, you are not in control of your operation.


Thought For The Day

"Your Biggest Expense Is The Money You Don't Make"

Seek Results.....Not Activities

I am often asked by my clients to provide training services. As if somehow the process of “training” will magically make all of their operational problems disappear. My response is always the same, “what is your objective?”  By focusing on the output (results) rather than the input (tasks) you can eliminate steps (work) that has no bearing on the success of your restaurant. Going through the motions of a training program does not guarantee results. It only guarantees you going through a “training process” that may not be needed. I have always believed that one should never do more work than is absolutely necessary to get the desired result.  Besides, isn't' it all about results?

The problem with providing an employee with a “job description” is that the job description focuses on tasks, not outcomes. It is conceivable that an employee can complete each task listed on the “job description” and still not provide you (the owner) with the desired result. Think about it….your restaurants profitability and reputation is predicated on the results your employees achieve. Activities (tasks) mean nothing if they do not deliver the desired result.

By defining results rather than tasks you allow your employees to interpret their jobs in the way that works for them. The result will be increased productivity, enhanced guest service, improved moral, and more sales and profits for you.     




Wealth flows from innovation, not from optimization......not by perfecting the known, but by imperfectly seizing the unknown. That attitude is necessary because this is the age of the never-satisfied customer. While your standards may be high and you may achieve consistency, you may also become ordinary in the eyes of the consumer. Setting and maintaining standards has to be more than just meeting or exceeding benchmarks; you need to surprise and wow your customer.  


Restaurant Start Up - The Process 

  The process of opening your own restaurant can be a daunting task. I have always told my clients that the process of opening a restaurant is just that.....a process. In the next few issue of "Ron's Tip Jar" I will explain some of the necessary steps you must take to open a Successful Restaurant and how the plan to open a restaurant comes together.

Decision to Open a Restaurant

The decision to open a restaurant is a relatively simple first step that may have been your dream for years, or the opportunity may have just presented itself and you want to seize the moment. For whatever reason, you want to develop a restaurant.

Your decision to take action initiates several other activities. You review and expand your notes on concepts, markets, menu, design, operating style, and restaurant details in general. At this time, you begin to share your ideas with trusted friends and potential partners. The energy and excitement grows. You plan a meeting to establish a plan of action.  

The Exploratory Meeting

The exploratory meeting focuses on how you are going to pursue the venture. You discuss concepts, operating style, menus, design, and other aspects of the proposed restaurant. Brainstorming is rampant. The enthusiasm and collection of ideas and activities must be organized and controlled. The development process must be managed.


Researching ideas and how other operators perform becomes a top priority. Perhaps you schedule trips to investigate successful or similar restaurants. Unfortunately, the idea of doing research is regarded as a luxury to many. A budget is established for it, and when funds become tight, it is deleted. Researching ideas and techniques must remain a high priority. The most obvious reason is that you may learn something. Secondly, you may also see how not to do things.

Research is a key element in the development process. Don't skimp on it.

Financing Plan

The financing of your project is a key component. Financing your restaurants development does not usually occur until you have:

  • A solid business plan
  • A termination plan
  • Legal documents for investors/partners
  • A legal business structure/entity
  • Procedures for managing the funds
  • Supporting budgets/documents for equipment needs

It is evident why the development process becomes complex. If funding cannot be completed before other activities are finished, and still other activities cannot begin until financing is in place, your development time schedule begins to expand and individual responsibilities increase.

Operational Plan 

The second critical document of your planning process is also comprised of several components. But you cannot start on this plan until you have completed at least the first draft of your business plan. Keep in mind that as you refine the business plan, changes may occur that will dramatically affect your operations plan.

The draft of the operational plan initiates five key activities:

  • The job descriptions of key management people
  • Staffing needs
  • Preopening plan
  • Design program
  • Menu development

Design Program

The design program is the third critical document in your planning process. The operational requirements established in the operational plan will dictate the physical components of the restaurant. Without a clear understanding of how you plan to operate and function and what spaces and amenities you require, the design team cannot design an effective space in which you can operate.

Construction Process

The construction process includes the activities from the bid/budget process through the completion of all contractual/administrative activities. Toward the end of construction, many earlier, unrelated activities start to interact. Owner-provided items such as phone systems, artwork, signage, furniture, and specialty finishes must be installed and coordinated with the general contractor. Scheduled inspections by building officials take precedence over all preopening operational activities. Coordination is critical.

Preopening Plan

The preopening plan, essentially a management activity, is considered a part of the development process because most of the activities begin very early in the development of your restaurant. As the restaurant constructions draws to completion, several activities move into the facility and greatly affect the final weeks and days prior to final inspections and the certificate of occupancy.

Continued next week.....




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 We encourage you to contact us if there are specific subjects you would like to see addressed in "Ron's Tip Jar/Insights".

"Ron's Tip Jar/Insights" is a newsletter discussing issues that affect your restaurants profitability delivered by Ron Santibanez. You may also view past issues of "Ron's Tip Jar/Insights" by clicking here.

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