How to start a restaurant (Part 1)

The Video Transcript

Hi, my name is Alex Richardson. I’m the chef/owner of RA Bistro located in historic downtown Lynchburg. I’ve had the incredible opportunity over the last 15, nearly 20 years, opening up restaurants and continually our rank is some of the best restaurants in central virginia that have stood the test of time, that have worked, and stood the test of time. That’s a lot to say. If you talk to accountants, if you talk to bankers or investors, even some of my partners, they’ve always said restaurants are the number 1 failing business opportunity in America. I’m not sure how true this is, I’ve never really seen the statistics, but where there’s smoke there’s fire. Being in the business as long as I have, I can see where a lot of people think that. I’m not here today to talk to you about why restaurants don’t work. I’m here to talk to you today about why they do work and how they work. Now there’s a lot of information on the internet, there’s so much stuff out there that you can get your hands on that can tell you how to do this and how to do that and preopening check lists and business plans and everything, and for me to tell you that stuff, I’ll be straight – I’m not a restaurant guru. I’m not a consultant. I don’t go around teaching people how to open up restaurants. I’m just a cook who knows who to follow recipes, do what he does, and I just don’t quit. You’ve got to remember that part when you’re doing your gig. There’s some things here I’m going to talk about today, and like I said, I’m not going to be all-encompassing. I can’t give you all the information that’s going to make you be able to go out and open up a restaurant. I’ve been doing this a long time. There’s a lot of experiential wisdom involved in this, and hopefully you’ve got some of those things. That’s why you’re here. If you don’t have any of that kind of stuff and you’re just checking this out. Start doing some homework, start figuring stuff out, and we’ll get back and get rolling on how to do this stuff. I’m going to get to the nitty gritty and tell you some of the things that have really worked for me. I’m not sure if they’ll work for you, I can only tell you what’s worked for me. I can tell you, being in this business here in Lynchburg, I’ve loved it and I’m passionate for food and a passion for people, and I enjoy it. That’s something that goes a long, long way. You’ll hear me say a lot of different things, but I’ll tell you, the people who get to do this business and they don’t “got” to do this business do much better at it, so hopefully you’re one of those people who get to do this.

So as we get to do this, we’ll open up some things. One of the first things I’d like to talk about and everyone talks about when they open up a restaurant is a business plan. You’ve got to have some kind of business plan, whether it’s a restaurant or some other thing. People think they have to do a business plan for a banker or investor or something like that. IT’s for you for how to run your business. If you don’t have that, you’re going to fall back into what you’ve always done, and what you’ve always done you have to plan that out. For a business plan, I strongly recommend doing a concept or overview. What is your concept? What is the restaurant you’re going to make? Get very detailed with that. You’ve got to think about certain things like what do you want to accomplish? Who’s going to work with you? How are you going to do it? Things like that. And have some of those financials in there. Those financials aren’t just to show the banks so you can get money to open this restaurant. Those financials are there so they’re a good budget and parameter and measure for how you’re going to run the business. Because why you’re doing this is to make money. That’s one of the hardest parts of this business, because it is a nickle and dime business. It’s a very small percentage of profit on a lot of work, but if you do it right and do it effective and you can duplicate yourself with other people doing it, it’s one of the most rewarding businesses.

With that being said, have a really good description of your concept. Have a sample menu. Define that a little. What’s your kitchen design going to look like? What’s your style of service? Those things are very important. If you don’t have some of those things, and it’s kind of out there, you’ll want to reel them back in, and that business plan or concept overview will help you do that.

The financials – I’ve stressed and talked about that. Spend a lot of time making pre-opening budgets. What kind of money are you going to spend before opening this restaurant? Then have an operation budget. What kind of money are you going to spend when you actually open the restaurant? People think, “Oh, I’ll worry about that when we get it open. All I want to do is get the doors open.” Trust me – spend some time, get this together, organize your thoughts and organize the money, get the capital ready, have a good operating budget, and have a good operating budget. You’ll be glad you did. As you get going in, people get thinking about certain things, what I recommend is making sure you get all your permits and licensing in order. Do you have your health permits? Do you have your business license? Do you have your tax ID number? These are the things people start putting together and they don’t have it all. You need these things before you can start doing some other things. Don’t put the cart before the horse. Get ready. Get those things together. They cost money, time, and effort, but put those things together. How are you going to organize your business, and a lot of that stuff is in your business plan.

When I’m talking in the restaurant and I’m teaching guys, whether it’s in the kitchen or the front or something like that, there’s two phases that I normally talk about: preparation and execution. The more time you spend in the preparation phase, the easier it is in the execution stage. That goes for cooking, serving, and everything in my business. It definitely works in how you’re opening your restaurant. In this preparation phase, spend a lot of time doing some of these things: first, the business plan. The second thing I’d start thinking about is the people. Who are your players? Who are your experts who know what they’re doing and how they’re doing it? If you are that person, then great. If not, let’s bring them in and bring them around the table and find out what your strengths and weakness are. Find out what role you’re going to play in your restaurant and what role someone else is going to play. Start identifying and pulling those in a figuring out who’s doing what and when they’re doing it. Maybe write some job descriptions. You don’t have to go crazy and have a whole manual, but you do have to have some pretty good ideas of this person’s role and my role and their responsibilities and my responsibilites. This will help you a pretty good idea because there are questions you need to ask: who does what? Who’s going to do the cooking? Who’s going to do the cleaning? Who’s opening and closing? Who’s going to go to the bank? Who’s the admin? Who’s going to do your marketing? There’s all these different roles, and of course, I know you – you’re a go-getter. You’re going to tell yourself you can do it all. You’re going to want to do it all, but I’m telling you, you won’t be able to do it all. Start identifying what your strengths and weaknesses are, and figure out exactly what you’re going to do and what role you’re going to play in the pre-opening and the opening or operating. What role do you play in that? I can do all kinds of things, but bring it back in, reel it in, and figure out exactly what you’re going to do and what someone else is going to do. Once you’ve identified who those people are – it’s okay if you don’t have their names. Identify the roles, and then you can start recruiting and hiring. After yous tart getting that in, have a good idea of how you’re going to train those people. What are some of your non-negotiables and your negotiables for your concept. When you defined your concept overview, you told yourself what you wanted. Are these people going to be trained accordingly to deliver the product that you want to be delivered? So as we start moving into that, you go from people into product.

Your menu. Do you have one? If not, do you have an idea of one? Most people are like, “I have my menu all written out!” Okay, let’s take a look at it. Is it too much or too little? Does it match your concept? Is it already in town? Is someone else doing exactly what you’re doing? And if you’re going to do it better, how are you going to execute that? There’s some questions I have about your menu, but when you’re thinking about it, just make sure it matches your concept. Don’t be all-encompassing – don’t do too much in the beginning. Give your menu room to breathe and be adaptable in the beginning. As you’re opening, you’re giving it room to build on. Is it good? Is it readable? Is it friendly not only on paper, but digitally? Is it friendly where people can access it? Have you thought about those things – how people are going to want to be able to read it quickly and make decisions. Those are things you need to think about. As you’re thinking about your menu and writing it and thinking about how it looks and all the products on it, you need to think about costing your menu out. As you go back to financials and budgets, does the menu that you just wrote match your concept, but does it also match your budget. If you don’t have it matching your financials and your budget because you want to do this, but your financials say that ,that’s a recipe for failure. We’re cooks, so we’re not going to have recipe for failure – we want a recipe for success. Let’s start that in the beginning, and part of that recipe is going to be preparation. Spend some time here in this preparation phase. When you start thinking about that – where are you going to get your food? Start thinking about purveyors and vendors. What kind of relationships do you have? Are you going to do local or a store? Stop – reel it in. Where are you going to buy the product? “My Uncle Jim makes great cheesecake.” Okay, well can Uncle Jim get that cheesecake to match your menu plan. You’ve got to have that all in there. Is Uncle Jim a licensed vendor in terms of providing your restaurant with cheesecake. Those are questions you have to ask now. You can’t wait until you’re open and people are coming in the door to figure those things out. You are going to be busy, so you don’t want to have the time to worry about those things. As you start thinking about purveyors and vendors, who’s going to get your food, liquor, beer, wine, soap, supplies, equipment…? Who’s going to install and take care of your equipment? When your refrigeration breaks, who’s going to be that person to call? Where are you going to keep that stuff? Some of that you have to think about now, and that’s very important.

As I move from product, the next thing I think about it the property – you’re location. A lot of people have a great location in mind, and they don’t worry about their menu or their concept because they’re focused on the location. You’ve gto to have a great location, but you also have to have great people and great product. So when you’re thinking about the location and you’re starting to map that out, start thinking about the demographics of that location. Does it match your concept? Are the people walking or driving by going to come and eat in your restaurant. It’s very important to think about that now. What is the foot traffic? Do you have adequate parking? Adequate space for your kitchen and your style of service and menu and food? Did you allocate enough room to put dry good? Do you have enough room for refrigerated and wet goods? These are questions you’ll want to ask yourself and allocate that out. People walk in and say “This’ll be great – this is a big room! I can put bar here, do this here…” And they get in there adn they have no place to put a mop or a broom. They have no room to put some back-up to-go supplies or napkins or that extra chair or the baby cradle or things of that nature. You’ve got to think about that and allocate some of that space now. Take some time when you’re thinking about the property. Work with the construction guy or the guy who’s remodelling or refitting. You don’t need all this stuff, but you do need a lot of things to make this work and make it successful. You’ve got to have a layout design for that construction. Spend some time with that layout. Figuring out where things are and exactly where you want it will take a lot of pressure off of you in the operation phase of this restaurant. Exactly where that frier or char grill is going to be. When the food comes out, this is where I’m putting it. This is where that light or chair or Table 5 is going to go. A lot of people scribble this stuff on paper and hope for the best, but this is a lot of time, money, and effort, so let’s make this happen right. Draw it out and make sure it works. Get the people involved that are going to actually be there – show them what you’re doing and ask them questions, so that way it works for you with that layout and design.

So some key points: Do your homework. Plan it out. The more time you spend in the preparation phase, the much easier it’s going to go.

Video Information

RA Bistro in Lynchburg, VIrginia

About Alex Richardson

Alex Richardson is the co-owner and developer of {RA} Bistro. He has developed and operated numerous award winning restaurants in the Lynchburg area that perennially rank among Central Virginia’s favorite establishments. Born in the continental US but hails from the Caribbean island of St. Thomas USVI. Alex’s culinary skills are deeply rooted in his rich French West Indian heritage and both cooking and entertaining are long standing traditions of the Richardson Family. In October 2002, at age 31, Alex left a successful career on the national stage with Outback Steakhouse and created what would become one of Lynchburg’s premiere restaurants -- The Neighbors Place.  With the Launch of Robin Alexander, an America Bistro in 2009 and Taste American Catering and Event Company in 2012 Alex has cemented his place in the Lynchburg Dining scene as a restaurateur. He has a passion for food, an eye for detail and a heart to serve. Alex feels very strongly about the use of local, organic and sustainable products and works very hard to strengthen his relationship with Virginia farmers, producers, suppliers and vendors while at the same time staying focused on keeping it simple and delicious. Alex loves the Lynchburg community and is always on the move to improve or enhance the local Lynchburg area with his continued support and leadership of local charities, groups, church, and community organizations.


Author Alex Richardson
Date Added July 13, 2016
Length 14:20
Views 107


In part one of this helpful two-part series, Alex Richardson of RA Bistro walks through what it takes to start a restaurant. 
  • Business Plan
  • Financials
  • Permits and Licenses
  • The two phases: Preparation and Execution
  • Hiring the right people and delegation
  • How to plan your menu and budgeting
  • Purveyors and vendors
  • Picking the right property
  • And more!