How to Open and Run a Successful Restaurant in 2020 | Food & Beverage & Restaurant Management Advice

Wilson: Hey Guys, today we’re going to be
sharing three simple steps in opening a successful restaurant or if you already have a restaurant
and you want to get to the next level then this video is for you. Wilson: My name is Wilson and today we’re
sharing three key simple steps, which you can follow to build and open a successful
operating restaurant. Now the keyword here is successful restaurant. We’re not going to go over how you get your
permits, how do you get your designer or the contracts, none of those detail stuff, we’re
not going to go over that. We’re going to go operating on the big framework
that when you get it you can actually take actions right away and implement, and have
results, and that’s the stuff that I’m going to be going over with you today. But if you are interested in these detailed
stuff, action-oriented strategies, tactics, make sure you hit the bell of the notification
button so you get future updates on how do you build more successful restaurants with
different tactics and whatnot. Anything food and beverage related we are
here along with you on this journey, so make sure you turn on the bell of notification
so you guys are updated. Wilson: Today we’re going to be talking about
the steps in order for you to take, so you can ensure that when you come out of the gate
you have the best chances of success in operating your restaurant. At the end of this video I’m going to be sharing
with you some templates and resources that I’ve personally used to build my ice cream
shop into an international chain. Make sure you guys stay ’til the end of the
video to receive the special gift. Wilson: I know you have an amazing recipe
that you can’t wait to share with the world. Your friends and family is raving about it,
and I also know that the restaurant around the block sucks, yet they are filled and packed
with customers every single night and you’re like, “If I only I had my recipe in there. If I only I was doing things my way I would
have a restaurant that’s filled with customers as well.” I know that you can generate and open up a
successful restaurant, a cash cow that you can take care of your family without working
a nine to five, but before we can get there, there’s a few things that we need to align
with. Wilson: First, did you know that businesses,
specifically restaurants, 80% of them fail within the first year. The number one reason why they fail is because
they fail to plan. Now I’m not telling you the stat to rain on
your parade, heck, I made this video so then I can encourage you, and support you along
this journey for your success. I’m just pointing this out so you know exactly
what you are coming against, and there’s resources and support, and a framework that you need
in order for you to be successful in your restaurant. Before you even cook your first meal there
are so many details that you need to pay attention to, anywhere from kitchen appliances, location,
menu design, permits, operation, hiring, marketing. Now I know this may seem overwhelming, and
that’s the reason why I want to keep everything super simple, so then now we can plan for
success together. Wilson: Step number one, location, location,
location. As cliché as location sounds, it is the number
one reason why restaurants are going bankrupt, because of the fact that they did not spend
the time in figuring out the location, and they did not spend the time analyzing whether
the traffic flow is in line with what they’re trying to serve. This is the determining factor for whether
you are going to be able to bring your family to Bora Bora to chill on the beach, to be
sipping on pina coladas or whether you’re going to be struggling your business, working
nine to nine trying to make ends meet. Location, location, location, this is what
is the determining factor. Wilson: You don’t need the whole country to
come visit your restaurant in order for you to be successful. You don’t need to be running TV ads and spending
tens of thousands of dollars on ads in order for you to be successful, all you need is
a group of loyal customers that come back again and again to have your products, to
enjoy your products, and to enjoy your meal. The secret is to develop this group of loyal
base of customers within your community, that means you need to choose a community that
you really enjoy serving. Spend time in the community and see if the
people that are walking around there, spending there, eating there, is on line with the people
that you would like to serve, because this is the type of loyal customers where you’re
going to be developing your restaurants, your menu, and your community around. Wilson: Spend time at your competitor’s restaurant
and see who is it that they’re serving, how are they serving, how are people responding
to that, what is the engagement like, see if you can do a better job. Is there a sense of belonging? Is there a lot of repeat customers? These are all facts that you need to figure
out before you settle down on a location. After you’ve chosen your community, the community
where you’re going to be building your restaurant, your legacy, then the next step is to choose
a location within the community that has good visibility, good foot traffic. Wilson: Now to determine whether this location
has good enough traffic all you have to do is to go to the location where you want to
set up shop or the location where you want to lease, sit there by a café next door or
any shop next door and start counting on a daily basis. Every time someone comes in start logging
in your clicker, and every hour you’re going to tally up the number of people that is walking
through the doors on your worksheet down below. You can download that template right below
in the link. Wilson: Now that you have tallied every single
hour you can have a really, really good sense of how the performance is like every single
day, when is there peak hours, when is there slow times, when is it that they have the
rush hours for within the day. This will give you a sense of how much revenue
they’re making, and whether this location is your ideal choice, and with this information
you can actually bring it back to the landlord to negotiate a much better, well-informed
contract. For example if they’re giving you a price
of $4,000 for every month, and you did the clicking, you’re like, “Wow, this place has
no walk-in traffic, really, really poor traffic,” then you can use this information to go and
negotiate a better lease, and a better contract. Wilson: Now I know there are restaurants in
the middle of nowhere yet they’re still killing it, making a lot of different businesses and
sales, but those are called destination locations. We’re going to be covering in this video the
highest chance for you to succeed is to have a lot of walk-in traffic. This is the easiest to perform, and will give
you the best chances of success. This step alone will take you weeks, if not
months to determine a good community where you want to establish your foothold, In terms
of choosing the right location within this community to the people that you want to serve,
do not be impulsive because so many people make this mistake of seeing a location that
they absolutely love, and they commit into a five, 10 year lease because they just love
the location so much, but at the end of the day the stars are not aligned. It doesn’t give them the best chance of success
and now they fail, all because of the impulsiveness. Wilson: Choose a community, choose a location
with high visibility, and this will increase your chance of success much, much higher. When you’re doing this exercise I’ve actually
provided a template that I’ve personally used when I was doing location scouting in the
link below. Download that template and use it to your
advantage. Make sure you use it. Do not just go with whatever your real estate
agent is suggesting, and really neglecting the really basic, really, really do your homework
because you’re going to be spending years in this location, and I want you to really
enjoy every single bit of the process. Wilson: Step number two, know your numbers. So many businesses fail because they don’t
know their numbers. The numbers, the profit and loss statement
is basically the lifeline of their business, it shows them exactly where are the improvements
that they can make. If you don’t pay attention to this on a regular
basis your business will definitely fail, it’s like not keeping check with your own
blood pressure, not keeping check, and not doing your regular body check, but with a
business it’s much more volatile. It’s so important for you to understand your
numbers. Wilson: I, myself had to pay a really hefty
price. A few years ago I was audited by the CRA,
which is the revenue agency’s department, and they actually gave me a fine of over $200,000
because I wasn’t keeping track of my numbers properly, and that was a very, very expensive
lesson that I had to pay. Now that’s definitely a very hefty price,
which I do not want you to pay. After that incident I went back to school. I took a weekend course to understand accounting,
and from them on I had the best practice that I can possibly, to implement into my business,
which took it from having just one location to more than six locations now internationally,
all because of the fact that I pay so much more attention to the books now. Wilson: Now for the sake of simplicity I have
generalized three big numbers, which you would want to be accountable and be aware of. Now understand these are just generalized
terms and generalized numbers that I’m throwing out there. Every single type of business and segment
has different types of ratios and numbers they should be hitting for, but I’m just giving
you something super generalized so you have a reference point, a benchmark to go off of,
and the three numbers to be aware of is your rental costs, your food costs, and your labor
costs. Wilson: The number one cost, rental costs. It’s very difficult to project how much you
should be paying for rent if you don’t know your revenue, therefore, when you have chosen
a location then go to the competitor that you think matches the concept that you have
to offer the best. Go to their restaurant and start clicking,
start observing how much are people spending on average, seeing how many people walk through
the doors and by there you can project how much revenue you can potentially make. Wilson: Now for example, you go into your
competitor’s restaurant and study their menu. You see that an average meal on entrée is
$15, plus a drink, around $20 is an average ticket price, in every given day you’re projecting
around a 100 customers going through the doors, now that means that they have a revenue of
around $2,000 on a given day. Now that’s on average, if you times that by
25 operating days in a month now that gives you $50,000. Now for rental costs you should be aiming,
and a golden rule for not paying more than 15% of your projected revenue. Now what that means is that given the fact
that you’re making $50,000 in revenue, 15% of that is $7,500, you should be aiming at
a rental cost of no more than $7,500 at that specific location. Wilson: Food costs is the second cost you
should be really well aware of. Food costs should include not just the ingredient,
but the laborer involved in creating the ingredients, the delivery charges, the takeout boxes, anything
that has direct relationship of how the food is produced should be included in the food
costs. Now for food costs you should be aiming at
no more than 30%, 30% is what you should be aiming at. 30% of revenue should be accounted for food
costs. Now with the same example of $50,000 in revenue
you should be aiming at $15,000 for food costs only, that should be your cap. If for any reason your food costs goes above
the 30% then you’ve got to learn how to manage your food costs properly. There’s spoilage you can manage. There’s loss to theft prevention you can manage. There’s delivery schedules you can manage. There is a lot of things you can manage, and
to control the costs of food to be below, if not 30%. Wilson: Now the third cost is the labor costs. This should include anywhere from your servers,
to your cashier, to your janitors, to also the manager’s pay, and the operator’s pay
as well. A lot of mistake that I see is that the owner/operator
do not put their own salary in this calculation, which in turns overinflate the profit that
they make, and that’s not a clear illustration of how healthy the business is, and that doesn’t
allow them to make the proper decisions for their business. For this labor cost you should be aiming at
no more than 30% of your revenue. Given the fact that you still make the 50K
in revenue you should be aiming for no more than $7,500 in your labor cost. Now there’s a lot of different ways that you
can pull this lever to control how much labor cost you’re giving, such as staggering shifting,
different types of employee incentives that allows them to gain a higher percentage as
they bring in more revenue but a lower base pay. Wilson: If you can run your business to attain
these golden numbers, 15% in rent, 30% in food costs, and 30% in labor, then this is
golden for you, you can bring your family to Bora Bora, enjoy with them on the beach,
and enjoy quality time with them, instead of spending time stuck in the business working
nine to nine and being burnt out. If you are hiring a manager or an operator
to help you out to manage this business then these are very good key performance indicators
to give your manager, so then they can help you manage the labor costs, and also the food
costs, which in turn would give you much more profit at the end of the day. Wilson: Now there’s a lot of ways to increase
your revenue and to decrease your costs, things such as menu design, loss to theft prevention,
staggering shifting, now all these things we’re not going to be covering in today’s
video, because today we’re going to be talking about the simple steps to build and operate
a successful restaurant. Those are saved for another video, if you
want to know more make sure you subscribe to the channel so then that way I can show
you guys more, and share a lot more knowledge with you guys, but to keep things simple the
three costs to aim for, 15%, 30%, 30%. Wilson: Now the third step to building and
running a successful restaurant is your ability to connect with your customer and your team. No, customers are not always right, but without
them you are nothing. Now on the same note, you’ve got to always,
and I cannot emphasize how important this is, always back your team up, given the fact
that they’re doing the right thing. You’ve got to take a stand in what you believe
in and your vision, and if your team is acting in accordance to these values and your mission
then you’ve got to back them up because without your team you’re nothing as well. It’s very, very, almost impossible for you
to handle everything by yourself without a team, you’re going to be burnt out. You’re not going to be able to have the freedom
and the flexibility to go travel, and to take care of your loved ones if you do not start
believing in your team, and communicating with your team. Wilson: The number one thing that a lot of
people fail to do, as I said, is to connect with your team, and also your customer. This is something that is often overlooked
because restaurant owners and owners in general always overemphasize the customers, and they
undervalue the importance of having an amazing team. If you want to build a truly amazing business,
a cash cow that you can walk away from and still have it running at full capacity then
you’ve got to trust your team, you’ve got to back up your team, you’ve got to develop
your team. The reason why restaurant owners, and a lot
of different business owners struggle with finding great help, struggle with finding
people who has common sense, and who are competent, who cares about their business, is because,
first, they fail to care about their team. They fail to prioritize their team because
it doesn’t seem as important as their customers. Wilson: Connect with your team, show them
your values, show them the vision, show them your gift, show them what you want to deliver
to your customers, show them and communicate that with your team, and develop your team. Trust me, they will reciprocate, they will
be putting their heart, and they will have much more passion in your business if you’re
able to show them the vision of where they want to go, and where you want to lead them. Explicitly tell them your values whether it
be integrity, customer service or empowerment, these are things that act as the parameter
of how they can execute on your behalf. They become your biggest ambassador, and they
become an extension of you. Connect with your customers, know what they
value, understand why they’re coming to your restaurant. Understand what experiences are they seeking
when they’re at your restaurant and provide them that specific experience. Wilson: Are you trying to create an environment
where people can come in with their friends and hang out, and fee like it’s a lively environment
or are you trying to create an environment where a romantic couple can come and impress
their other half? Or is this a family joint, where you want
to create everything that is friendly, bubbly, and welcoming for their family? You’ve got to be so specific in who you’re
catering your restaurant to, in order to attract the right crowd, the right loyal customers,
so then they can come back again, and again. Wilson: Now as a recap it is so important
in order for you to connect with your customers and your team. Do not neglect one side or over favor the
other side. It is super important for you to connect with
both sides. I’ve generalized a lot information here, as
a recap of the whole three step process to bring your business, and your restaurant to
the next level we are recapping the three simple steps. Find the location where your community and
loyal friends are hanging out. Number two, know your winning numbers. Control the different levers so then you can
control your destiny. Number three, connect. Connect with your team and your customers. By following these three simple frameworks
you will greatly increase your chance of opening up and operating a successful restaurant,
and I know this firsthand because these are the steps that I personally follow in order
for us to grow our ice cream chain into an international chain. These are things that I’m basically compiling
and ripping apart, my own business, and to see what are the foundational elements that
allowed our exponential growth. Wilson: I know it seems like a lot to do. It seems like things are everywhere, and that’s
the reason why I’ve compiled all the resources in the links below. These are templates that I personally used. These are resources that I personally used,
and I really want you to be able to have success in your business, and I really want to support
with you on your journey into opening up this restaurant, so then that way you can bring
your family and loved ones on vacation and spend quality time with them. Wilson: Download the documents below, these
are templates which you can use right away in your own business. Take action. You are going to be embarking in this amazing
journey, times are going to be tough. You’re going to want to call quits so many
times. Nights are going to be long, but I’m committed
in this journey with you because it is so worth it when you see the candid moments of
people enjoying your perfect recipe. When you see the moments and the smiles of
the people that you can take care of finally, and when your team comes to you and say, “Thank
you,” these are the moments that make this whole journey worthwhile, and like it or not,
I’m along this journey with you. I’m here to support you, so make sure you
guys take good notes. Use these different principles to help you
find success in your restaurant. Wilson: Like this video and show me some love. If you have any questions, if you have any
comments, leave it in the comment section below, and if you want me to be alongside
with you this whole crazy journey, make sure you subscribe. I’ll see you guys next week.

100 thoughts on “How to Open and Run a Successful Restaurant in 2020 | Food & Beverage & Restaurant Management Advice

  1. hey! I've only watched half of this video as of yet, but i find it really helpful thank you so much for sharing it with us:) but i just wanted to ask, dont you need a certain business related subject to get a degree in? I do no business related subjects at A level at all, so its difficult trying to figure out a way to actually go into business without them… do you have any suggestions?

  2. Thanks for the video. Destination restaurants take A LOT to set up. Starting with a high volume area is just so much easier it’s not worth pursuing anything else.

  3. Your video was very informative, I'm glad I came across this video. I will be subscribing so I can be watching more of your videos. I was looking for the templates you were talking about but could not find them

  4. Great advice to those who need or want to join the restaurant business. Keep them coming 🙌🏻

  5. i am a housewife ,i want to do a small resturant with 3-4items first in toronto(gta).what will i do first

  6. I've always wanted to invent or open a restaurant concept ever since I was a child…I consider myself a practical person with common sense. Whenever I see a restaurant, I think to myself…I can create this. Same with clothing lines, and furniture lines, and home decor. and even pet products. etc. etc.
    I'm a trader, the money and rewards are great…but it produces nothing tangible and visible. It's kind of like being a professional gambler or Poker champion…while it's nice to be able to excel greatly, it's nothing real at the end of the day.

  7. A lot of places I have worked restaurant wise, the owners never cared about the staff and made us all feel unimportant and kept raising prices on food just to get customers….also, customers could curse out a server and the manager would fire the employee on the spot…I’ve always heard” my restaurant, my rules “ this is not right

  8. Hello Wilson, thanks for the video it helps me a lot to understand what I will before open my restaurant, I will need more class from u 🙏am from Tanzania

  9. This will help me a lot! I’ll be opening a restaurant soon. Want to learn more about handling this kind of business 🙏🏻❤️

  10. Awesome I'm your 600 like!!" Thank you so much for this video, I am in the planning process for my restaurant that I plan on opening soon. And I just subscribed!!

  11. You are right in the first place i operate after a month going bankrupt because wrong place as wrong location im sorry my business partnef i hope he understand me 😔

  12. Lee, it's been a wonderful listening to you. For sometime now I have been thinking to start a small restaurant. You have given very valuable inputs which I'm going to include … Thanks once again. N wish me luck too.

  13. Im so new at this but it is a dream of mine. Everything you have said has meaning to it. Anybody that’s complaining about the video being too long obviously does not desire it as much as others.

  14. In your video seeing first time very energy..and i am run the restaurant now bussinuss is low i am really felt up so cost i am checking its passible i am refress so thank you so much..and i will succes my bussinuss….

  15. It looks like my labor costs could be roughly as much as 45%, but its because i want 10 employees, 2×6 hour shifts per day for 6 days per week. I want them well paid to cultivate a good work ethic and appreciateness. And at the end of the month, me and my partner are still getting good salaries anyway, so i don't think its that bad. Thoughts Wilson?

  16. Amazing work ❤️👍🏻.
    But I have a question which is;

    Is studying after Olevels important if u want to do a business with family?
    Like I mean spending time in business rather than on studies?


  17. Hi Wilson K Lee, thanks for this video it opened my eyes. I am about to open a Jamaican restaurant, I started out just with delivery service on a very well known platform in The Netherlands, the fact is i was serving food from a terrible location but still the costumer appeared from all over Holland to pick up the authentic Jamaican dishes. The location i have found is not in the middle of the town but in a much better area nearer to centrum, due to the fact that it is Jamaican in a land where the is not another in this case does the location really mater.

  18. I want a food truck one day soon. This was so informative. Thank you! Omg it'd be crazy if you're the owner of that zero degress ice cream business 😂

  19. A new subscriber here. I’ve been looking for this kind of channel that makes quality and valuable videos about learning how to put up a food business. Giving good insights and tips based on own experience. I’ve learned so much. Thanks and pls continue to make more videos on this topic.☺️

  20. I really love the information you shared because of that I subscribed! Any recommendations with learning the numbers, bookkeeping etc..? I appreciate in advance

  21. You are amazing Mr Lee! Thank you for your wisdom. I’m praying about opening a restaurant within three years. Lots of planning to do.

  22. I have a question which is really important for all viewers: What makes you trust-worthy? I know that as a business man the time is money so you as a business man why are making these videos?

    Thank you and I think I learned great things about this business

  23. Absent in this video: optimizing marginal costs, differential pricing, equipment necessary and whether or not to finance, ingredient sourcing, local sourcing pros and cons, wages, management practice, aesthetics, flow,draw,etc etc.

    I understand you are talking to an 8th grade audience and your primary goal with this information is self marketing, but it would be better if you added a little beef to this sandwich.

  24. This guy doesn’t know what he’s talking about lol
    “If you don’t want to work a 9-5” please you’ll be working 60-70 plus hours a week. And location? We have locations where there’s 7k population. And population where there’s 35k and in both locations they make more than 2 million dollars a year. I would love to school this kid

  25. I'm almost 10 so I dont want to open a restaurant now obviously but I wanna keep saving up my money for it when I'm older! I'm thinking of opening it when im 24.
    Is it too late?

  26. tnx for this very informative gives me insight on how to manage my foodshop.definitely i will add the bubble tea to my menu.more blessing for you.

  27. So much easy to learn and understand. I have a dream to have a restorant. I just start to learn. Hope it not to late for me. Thank you 🙏🙏🙏

  28. What if there is a spot I want that’s in the middle of a community that’s quickly expanding . It does t have much foot traffic but it will have soon

  29. Should we pay our employees weekly or bi- weekly. I have worked in fast food and that was the was 1 of thi issues as well.

  30. Hey Wilson, what was the weekend accounting course you took?Also, can you make a video on what taxes to pay for the business and how to pay yourself(owner).

  31. i dont often subscribe to a random Youtuber right away but Wilson definitely got my attention. Location is the most important factor to be successful. He got things right at the beginning. No wonder he is successful with his soft serve shop in Canada. Respect

  32. Hi Wilson wanted to have ice cream business but thinking about winter it will slow down how to improve for winter? Any ideas will be appreciated. Thank you

  33. Just get a custom-made website and order online for your restaurant before investing in a physical location. That way you can build a loyal customer base and get valuable customer reviews without incurring the heaviest cost in starting the business!

  34. Don’t want to work 9-5 when owning a restaurant? C’mon. This is a motivational speech, Not about owning your own restaurant. If you don’t want to work and you want to go on vacation, don’t open a restaurant. No one will run or care about your restaurant correctly except for you. Opening a restaurant is a passion, not an investment to make money while being an absent owner. Location location location? Correct. But if your food and service sucks the place will be empty once everyone tries it once. Go ahead take a vacation to Hawaii. Oh shit the oven isn’t working and the dishwasher broke in the middle of serving 150 people on a Friday night at 6pm? Guess we’ll just close. The bartender walked out mid shift? Send out the bussed we’ll be fine.

    If you want to open a restaurant you not only need to be an extremely good business person and be financially experienced. You need experience and must be able to work every job in the restaurant.

    Just out of curiosity, have you ever owned a restaurant ?

  35. Your model left out OPs expense (9%) & G/A( 9%) , given that, your model only makes 5-8% profit…..which is considered underperforming

  36. Thankyou for sharing your skills, thoughts, advices and business ideas. I think I need a personal business mentor as well as a business partner like you 💕 You are such a great inspiration to all (specially "me") who desired to have a successful business in the future

  37. ill probably just open a bagel shop or bakery down in hollywood, los angeles. since its full of tourists, they'll go coocoo for anything lmao

  38. Nice video.. So much encouraging.., I have gotten a restaurant shop already but looking for found to set it up.. Is it advisable to get a loan to set it up??

  39. Good video mate! help me go to that vacation
    Do the 75%include tax expenses, depreciation or any other costs in fact too?
    Thanks have a good day

  40. Thank you, as I love animals and everything and I want to be a vet when I’m older but to get some money I’m going to start a ice cream store 🙂

  41. Hello
    Can you create a video detailing how to implement catering options within a brick and mortar restaurant? I just found your videos and have subscribed. I learn so much just watching this one video! So informative, thank you for sharing your wealth of knowledge

Leave a Reply

Your email address will not be published. Required fields are marked *