Three Restaurateurs And Their Recipes For A Successful Business

Avid fans of The Food Network know that running a restaurant is serious business with high stakes (and sometimes even higher priced-steaks). Some entrepreneurs make it big with others who don't quite hit the mark. Take Sean "Diddy" Combs for example, who officially closed, Justin, his Atlanta-based restaurant this summer, claiming the decision was made so he could focus on his other business ventures. Meanwhile, some financiers may be view this closure as an example that supports the myth that the restaurant business is both risky and non-profitable. Further fueling this sentiment is the rumour that nine-out-of-ten restaurant businesses fail within three years.

However, according to research from the Small Business Administration and the Bureau of Labor Statistics, restaurants have a 60 per cent failure rate. Arguably, this figure is high, but it's on par with the averages of a broad-spectrum of new businesses.

In April NPD Group, a leading market research company, found that winter 2012 was a strong quarter for the Canadian foodservice industry. Restaurant visits had increased by four per cent compared to the same quarter a year ago. The winter quarter also indicated the third consecutive quarter of solid performance for Canadian commercial foodservice, posting a respectable five per cent increase in sales, the strongest sales increase within the last four years.

Are you hoping to make some records of your own with your restaurant dream? We contacted some of North America's top restaurateurs to get some real, practical advice on how to make it in the restaurant business. Hopefully their words of wisdom will help you on your journey.

Max Rimaldi
Proprietor of Libretto Restaurant Group

"Restaurant businesses are not just about the hype; at the end of the month revenues must exceed expenses."
-Max Rimaldi

Max Rimaldi started the new millennium as a flat broke stockbroker, he later became a plumber to support himself and after that stint, he became a waiter.

The culmination of his life experiences, a love for simple and traditional Italian cooking plus the will to succeed are what have made Rimaldi one of Canada's most successful and respected restaurateurs.

Max's tips for restaurant business success:
• "You should have a clearly defined business plan. The business plan has to be something that is easy to grasp so that anyone who looks at it will be able to immediately understand the concept. The business plan element helps to ask you questions in order to have really great answers for that day that you finally open."

• "The business plan is a road map. You're supposed to go back to it a year after operations and every year after that and to keep on updating it. When it's in your head you may forget things, but when it's on paper you can check things off."

• "The reason for my different careers was out of a necessity to survive. And, when you are down with your back up against the wall, when you're facing hard times, that is when the true you comes out. Some of those choices I made in the past were mistakes. But what did I learn from it? It's about having not having regrets. My training as a stockbroker lent a lot of financial expertise to the restaurant business, and the fact that I don't have to call the plumber if something breaks down helps the [bottom line] of the business."

• Lessons learned from his business plan
"I was incredibly impressed by the fact that I had stuck to my guns without even going back to the business plan and reading it. However, the financials in my business plan were completely blown out of the water. I was expecting to do one seating a night, but we were doing up to five seatings a night within the first six month of being opened. I was set up to be in the kitchen and have a limited amount of waiters, but then, that went all out the window because I couldn't operate like that anymore. So my role had to change.

Ken Friedman
Co-owner of the Spotted Pig and several upcoming restaurants

"We make a living by what we get, we make a life by what we give."
-Sir Winston Churchill

Having hip-hop mogul Jay-Z as an investor is no real surprise to restaurateur Ken Friedman. After spending 25 years in the music industry, first as a concert promoter for the likes of U2 and then as manager to bands such as The Smiths and UB40, it's only logical that his music biz friends, with ample discretionary income, would support him in his foodie passions.

Unbeknownst to Friedman, his foray into the restaurant business with his little West Village "gastropub," would turn into a three Michelin star it spot.

Ken's tips for restaurant business success:
• "Find the right chef and be realistic about what you want to do."

• "You have to find the right location. I need to know that there is foot traffic on the street because I am scared of opening [a restaurant] in a neighbourhood that I don't understand."

• "Don't spend all your money on rent or on a building. Save some money and whatever amount you save should go on the plate. What matters are a good chef, a good kitchen and hiring the right front of house staff. Ultimately, create a place where you would want to go to."

Lessons learned from various restaurant openings:
"Keep it interesting, do it for the passion and do it for yourself."

Vikram Vij
Owner of Vij's and Rangoli

"There are always new peaks and challenges; to make it keep climbing until your heart bursts from the effort."
-Haitian proverb

Celebrity chef Vikram Vij and his wife, Meeru Dhalwala,
have been crowned Vancouver food royalty, having taken the New York food scene by storm and have been voted #1 restaurant in Canada by Vacay.ca. Now, Vikram Vij has upped the ante by bringing his vision and passion to a frozen food section near you.

Vikram's tips for restaurant business success:
• "You work under good people so you get sufficient training in the business and then you move on."

• "As the money came along I tried to hire the most professional people (accountant) as possible because I knew I couldn't handle all the financials myself."

• "One of my biggest issues was the fact that I wasn't doing mainstream cooking. I was ostracized but eventually I got the accolades that I was looking for. I remained focused and I still have that level of focus as I enter food manufacturing business."

Lessons learned from transitioning to packaged foods:
"The same challenges I faced 18 years ago when I opened my restaurant are the same challenges I face today now that he has entered the grocery business."