AND RUNNING

A RESTAURANT
IN NOVA SCOTIA
AND RUNNING
A RESTAURANT
IN NOVA SCOTIA
Project Management:
The Economic Planning Group

Content:
Jane Wright, Katelyn Bourgoin, Chef Wayne McKay,

Copyright © 2018 by the Restaurant Association of Nova Scotia.

All rights reserved. No part of this publication may be republished without the prior written
consent of the Restaurant Association of Nova Scotia. Reproduction for the purposes of training
and teaching (including multiple copies for classroom or workplace use), is not an infringement of
copyright.

Disclaimer
The content of this Guide does not constitute legal or other professional advice or an opinion of any kind. The
user is advised to seek specific legal advice or other professional advice. While the information contained in
this manual is believed to be accurate as of the winter of 2018, it is not so warranted. The reader should note
that federal, provincial and municipal laws and regulations change frequently and it is recommended that
you check with the appropriate authorities, including representatives of the Restaurant Association of Nova
Scotia, Nova Scotia Department of Environment, Department of Agriculture, Nova Scotia Alcohol and Gaming
Division, Tourism Nova Scotia, Access Nova Scotia and your local municipal government to obtain up-to-date
information on laws that may affect starting and running a restaurant in Nova Scotia.

The information and analysis contained herein is intended to be general and represents the research of the
authors and should in no way be construed as being definitive or as being official or unofficial policy of any
government body. Any reliance on the Guide shall be at the reader’s own risk.

Cover Photo: Barrington Steakhouse & Oyster Bar

Phototographer: Reilly Mooring
FOREWORD

We hope this guide will give you a good overview of what

it takes to open a restaurant and, most importantly, keep it open.

Restaurants can be risky and stressful businesses. And the road to opening can be a very bumpy
one. But if you decide you really want to move forward, we want you to succeed. We hope some of
the tips and advice we’ve put together will help you get to where you want to go, or at least give
you a sense of where it is you need to go. If you are already in the business and are looking for some
insight, we hope you will find new ideas to help you improve your restaurant.

You can never stop working on your restaurant. You can’t think for a minute that this is all about
‘opening.’ The real work — staying ‘top of mind’ among new and regular customers — never ends.
And change is essential to your survival and success. In this business, you really are only as good as
your last meal.

The guide was prepared for the Restaurant Association of Nova Scotia (RANS) with the support
Tourism Nova Scotia in 2014, with minor updates in 2018. It draws from a document originally
prepared in the late 1990s with substantive new material added, particularly on running a restaurant.
The project was coordinated by the Economic Planning Group. Content was prepared by Jane
Wright (owner of the former jane’s on the common) and Katelyn Bourgoin (RedRiot | Brand
Strategist) with input from Chef Wayne McKay (Menu Tools) and Kerra AuCoin Mansfield.

Thank you to Nova Scotia restaurateurs Jennie Dobbs (Morris East), Roland Glauser (Charlotte Lane
Café), Chris Smith (Jamieson’s Irish House & Grill) and Joe Mcguinness (Durty Nellys Irish Pub) for
their invaluable comments which helped fine-tune the content. The ‘Helpful Tips’ scattered through
the manual are based on their experience in the restaurant business.

Thanks also to the other restaurateurs who contributed the quotations found throughout.
THE RESTAURANT BUSINESS –
BY THE NUMBERS
• There are 1,565 food service and drinking establishments in Nova Scotia in 2018; some 900 are
restaurants.

• Sales at food service and drinking establishments in Nova Scotia total some $1.6 billion annually.

• The pre-tax profit on average for restaurants is 5%. If you are doing everything right, you will
need to have $100 in sales to take $5 to the bank.

• The cost of sales (that is food and beverage that you purchase so as to prepare items to serve) is
35% - 40% of revenues. Salaries, wages and benefits are a similar amount.

• 20% of the menu items in a restaurant generate 80% of the revenues.

• You need a minimum of 12 sq. ft. per seat for the service (seating) area in a full-service restaurant.

• The failure rate of restaurants is high. Some sources say 60% of independent restaurants fail in
the first three years; others report that restaurants have the second highest failure rate of any
small business in North America.

• The capital investment required for a restaurant is significant. Establishing a 60-80 seat
restaurant could cost over $500,000, including working capital.

• It can take many months for a restaurant to become profitable. A US survey of over 400
restaurants reported an average of 18 months to reach profitability.
KNOW ABOUT STARTING AND
RUNNING A RESTAURANT
1. Go into the restaurant business with your eyes wide open. It will require hard work, long hours
and passion. You will need to thrive on chaos and have a thick skin.

2 It is very difficult to make money running a restaurant. Pre-tax profits average only 5% and the
business failure rate is high.

3. To run a successful restaurant, you must be a leader, move with a sense of urgency and be a great
communicator. You must have the right personality for this business.

4. Don’t go into the restaurant business without some previous experience in the field, and some
related formal education.

5. The restaurant business is very competitive and the marketplace is fickle. It takes time to
develop a customer base and build relationships with them.

6. Your staff is critical to the success of the business. You need to find and train good staff, mold
them into a team that can deliver on your vision and keep them.

7. Restaurants are in the entertainment business. You are delivering an emotional experience
to your customers – along with quality food and strong memories. If you can do this, they will
return.

8. You must have a strong vision and concept for your restaurant – what you are going to deliver,
how you will deliver it and to whom. Everything – your menu, design, staffing, training, branding
and marketing will all be driven by your vision.

9. Getting financing for your restaurant will be difficult. Banks are very cautious. There are
numerous other options that you will have to research. You will need money not only to open but
also to cover costs while you build the business.

10. Opening a new restaurant can be a rush. But, the repetitive, day-to-day running of a restaurant
can easily become a grind.
USE THIS GUIDE
This Guide contains valuable information, insights and tips to help you understand the restaurant
business, get your restaurant business started and operate it. It does not provide a comprehensive,
detailed look at all aspects of running a restaurant, but there is a good overview of all facets of the
business (other than the cooking!).

If you are thinking about starting a restaurant, focus first on Chapters 1 through 9 which will
help you:

• Decide what type of restaurant you want

• Decide where to locate it
• Prepare your business plan
• Plan the menu
• Design your restaurant and kitchen
• Do the feasibility analysis
• Look at financing options
• Understand the rules and regulations

And, be sure to read through the rest of the chapters since these address all aspects of running a
restaurant.

If you are already in the business, focus on Chapters 10 through 13 which address:

• Staffing
• Operations
• The Customer
• Marketing
TABLE OF CONTENTS

CHAPTER 1: Reality Bites . . . . . . . . . . . . . . . . . . 1 CHAPTER 7: The Design and Build. . . . . . . . 57

1.1 The Sobering Truth . . . . . . . . . . . . . . . . . . . 2 7.1 Your Design. . . . . . . . . . . . . . . . . . . . . . . . . 59
1.2 Ask Yourself: Is This Industry for Me? . 4 7.2 The Contractor . . . . . . . . . . . . . . . . . . . . . . 62
1.3 Helpful Resources . . . . . . . . . . . . . . . . . . . 4 7.3 The Kitchen Design . . . . . . . . . . . . . . . . . 62
7.4 Kitchen Equipment . . . . . . . . . . . . . . . . . 65
CHAPTER 2: Nova Scotia’s Restaurant Sector . . 7 7.5 Helpful Resources. . . . . . . . . . . . . . . . . . . 67
2.1: The Numbers. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Tourism Markets for Restaurants . . . . . 9 CHAPTER 8: The Math and The Money. . . . 69
2.3 Some Restaurant Industry Norms. . . . 11 8.1 Feasibility Analysis . . . . . . . . . . . . . . . . . . 70
2.4 Trends and Issues in the 8.2 Startup Costs . . . . . . . . . . . . . . . . . . . . . . . 70
Restaurant Industry. . . . . . . . . . . . . . . . . . 13 8.3 Financial Projections. . . . . . . . . . . . . . . . 72
2.5 Helpful Resources. . . . . . . . . . . . . . . . . . . . 15 8.4 Options for Financing . . . . . . . . . . . . . . . 78
8.5 Helpful Resources . . . . . . . . . . . . . . . . . . . 81
CHAPTER 3: Chart Your Course. . . . . . . . . . . . 17
3.1 The Business Plan. . . . . . . . . . . . . . . . . . . . 19 CHAPTER 9: The Rules and Regulations . . 83
3.2 Business Structure. . . . . . . . . . . . . . . . . . 24 9.1 Registry of Joint Stocks . . . . . . . . . . . . . 87
3.3 Helpful Resources. . . . . . . . . . . . . . . . . . . 27 9.2 Canada Revenue Agency . . . . . . . . . . . 87
9.3 Municipal Building and Zoning
CHAPTER 4: The Concept. . . . . . . . . . . . . . . . 29 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
4.1 Where to Start: The Type and Style. . 30 9.4 Food Safety – Nova Scotia
4.2 Franchise Restaurants . . . . . . . . . . . . . . 32 Department of Agriculture. . . . . . . . . . 88
4.3 Individual Restaurants . . . . . . . . . . . . . . 32 9.5 The Liquor Licence . . . . . . . . . . . . . . . . . . 89
4.4 Helpful Resources . . . . . . . . . . . . . . . . . . 33 9.6 The Fire Marshal. . . . . . . . . . . . . . . . . . . . . . 91
9.7 Department of Transportation
CHAPTER 5: The Location . . . . . . . . . . . . . . . . 35 and Infrastructure Renewal. . . . . . . . . . 91
5.1 Where? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 9.8 Department of the Environment. . . . . 91
5.2 Leasing or Buying?. . . . . . . . . . . . . . . . . . 36 9.9 Department of Labour and
5.3 Before You Sign a Lease. . . . . . . . . . . . . 37 Advanced Education . . . . . . . . . . . . . . . 92
5.4 Before You Buy. . . . . . . . . . . . . . . . . . . . . . 38 9.10 Occupational Health and Safety . . . 92
5.5 Where to Get Help Finding a 9.11 SOCAN and Re:Sound. . . . . . . . . . . . . . . 93
Location. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.12 Helpful Resources. . . . . . . . . . . . . . . . . . . 93

CHAPTER 6: The Menu . . . . . . . . . . . . . . . . . . . 41

6.1 Planning and Designing a Menu . . . . 43
6.2 Purchasing, Receiving and Inventory. . 47
6.3 Costing and Pricing . . . . . . . . . . . . . . . . . 50
6.4 Managing the Menu. . . . . . . . . . . . . . . . . 53
6.5 Wine and Beverage Menus. . . . . . . . . . 54
6.6 Helpful Resources. . . . . . . . . . . . . . . . . . . 54
 A GUIDE TO STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

CHAPTER 10: Staffing . . . . . . . . . . . . . . . . . . . 95 CHAPTER 12: The Customer. . . . . . . . . . . . . . 121

10.1 The Leader . . . . . . . . . . . . . . . . . . . . . . . . . . 96 12.1 Understanding Who Your
10.2 Staff Requirements and Job Customer Is . . . . . . . . . . . . . . . . . . . . . . . . . 122
Descriptions . . . . . . . . . . . . . . . . . . . . . . . . 97 12.2 Customer Service . . . . . . . . . . . . . . . . . . . 123
10.3 Hiring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 12.3 Hospitality vs Service. . . . . . . . . . . . . . . . 125
10.4 Staff Training. . . . . . . . . . . . . . . . . . . . . . . . 99 12.4 When Things Go Wrong. . . . . . . . . . . . . 127
10.5 Managing. . . . . . . . . . . . . . . . . . . . . . . . . . 102 12.5 How to Handle Complaints. . . . . . . . . 128
10.6 Staff Retention. . . . . . . . . . . . . . . . . . . . . 103 12.6 What to do if a Customer Says
10.7 When it Doesn’t Work Out . . . . . . . . . 104 Your Food Made Them Sick . . . . . . . . 128
10.8 Helpful Resources. . . . . . . . . . . . . . . . . . 105 12.7 Managing Accessibility
Regulations and Standards. . . . . . . . . 130
CHAPTER 11: Operations . . . . . . . . . . . . . . . . 107 12.8 Consistency/Standardization. . . . . . . . 131
11.1 Point of Sale (POS) . . . . . . . . . . . . . . . . . 108 12.9 Helpful Resources. . . . . . . . . . . . . . . . . . . 131
11.2 Collecting Payment. . . . . . . . . . . . . . . . 109
11.3 Gratuities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 CHAPTER 13: Marketing . . . . . . . . . . . . . . . . . 133
11.4 Waste Management. . . . . . . . . . . . . . . . . 111 13.1 Glossary of Key Terms . . . . . . . . . . . . . . . 135
11.5 Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 13.2 Brand Positioning. . . . . . . . . . . . . . . . . . . 136
11.6 Cleanliness … is Next to Godliness . . . 112 13.3 Traditional vs New Media. . . . . . . . . . . . 137
11.7 Maintenance. . . . . . . . . . . . . . . . . . . . . . . . 113 13.4 Marketing Plan. . . . . . . . . . . . . . . . . . . . . . 139
11.8 Linens/Laundry . . . . . . . . . . . . . . . . . . . . . 114 13.5 The Opening. . . . . . . . . . . . . . . . . . . . . . . 143
11.9 Safety and First Aid. . . . . . . . . . . . . . . . . . 114 13.6 Digital & Online Marketing. . . . . . . . . 144
11.10 Minimizing your Environmental 13.7 Handling Online Criticism. . . . . . . . . . 148
Footprint. . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 13.8 Associations. . . . . . . . . . . . . . . . . . . . . . . . 149
11.11 Bookkeeping. . . . . . . . . . . . . . . . . . . . . . . . 116 13.9 Measuring Results. . . . . . . . . . . . . . . . . . 150
11.12 Payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 13.10 Helpful Resources. . . . . . . . . . . . . . . . . . 150
11.13 Forms and Manuals. . . . . . . . . . . . . . . . . 117
11.14 Records Management. . . . . . . . . . . . . . . 117 APPENDIX I:
11.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Some Additional Restaurant Industry
11.16 Helpful Resources. . . . . . . . . . . . . . . . . . . 119 Operating Data . . . . . . . . . . . . . . . . . . . . . . . . . 153
Domaine de Grande Pré
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

REALITY BITES
So, you want to get into the restaurant business? Maybe you’ve been
dreaming about this for a long time, or maybe it is something that
you’ve just begun to romanticize about. Success in the restaurant
business is the dream of many and the achievement of few.

Be sure you go into this venture with your

eyes wide open. Many people think that the KEY TAKEAWAYS
restaurant business will be easy. But, in fact,
a restaurant can be the most difficult type
of business to operate. It is both a service
business and a manufacturing business,
with all the problems of both. The restaurant • The restaurant business can be a
business is highly sensitive to a number of
lot of work for little pay.
different things including location, menu,
food quality, customer service, and changing
trends. • To be successful you need to have
passion and be willing to embrace
It may be a difficult business, but when it a new lifestyle.
works, there is probably no greater satisfaction.
It can be a wonderful business, fun to operate, • It takes leadership, skill and
and financially rewarding. Because people
determination to manage the
need to eat every day, there is a continuous
and renewing market of customers. many facets of the restaurant
Opportunities in the industry continue to business.
grow.
• You need training and/or
CHAPTER MODULES experience in the restaurant
and hospitality industry, and in
1.1 The Sobering Truth about the Business business, before starting your
1.2 Ask Yourself: Is This Industry For Me? own restaurant.
1.3 Helpful Resources

1
THE SOBERING TRUTH
If anyone sees the restaurant business
as a goldmine, they should look
carefully at the numbers before
jumping in.

Yes, there are a few restaurateurs who have

struck gold with their first venture. But keep
in mind that pre-tax profit is on average, in all
sectors, just 5%. In other words, if you are doing
everything right, you will need to have $100 in
sales to take $5 to the bank.

This can be a very risky way to make a living.

Hard Work and Long Hours

Da Maurizio

Running a restaurant is also a very hard way to

make a living. The work is physically demanding
and the hours are long.
Something really does break every day, and it
will be your job to fix it. As a restaurant owner,
Ask yourself: how much do I like weekends?
you must be able to keep your cool under
Saturdays and Sundays can be the busiest days
pressure and thrive despite the chaos.
of the week for a restaurateur. You will always be
working weekends, with a few days off here and
there.
How Thick is Your Skin?
Choosing the restaurant business means
A restaurant is a very public business. Today, a
choosing a new lifestyle.
disgruntled customer is likely to go online and
report to the world about what he didn’t enjoy
about his meal or service at the restaurant.
Do You Thrive in Chaos?
Everyone you know is going to tell you how to
How do you handle chaotic situations, like when
run your business, what you should have on the
someone doesn’t show up for their shift, the
menu, and what you should charge. You’ll need
dishwasher breaks, or an irate customer finds
to learn how to listen and to accept all kinds of
a hair in his meal? If you can’t answer these
free advice with grace and dignity. You’ll also
questions now, we strongly recommend you
need to recognize when someone is telling you
get some experience in the restaurant business
something you really need to hear. You can’t be
before you open your own restaurant.
defensive.

2
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Are You Truly Passionate? Restaurants and service stations share a

common reason for their high failure rate: too
This isn’t just another business. You have to many good mechanics become service station
like people and enjoy schmoozing with them. owners and too many good cooks become
Without passion, your odds of becoming restaurant operators. To be successful in the
successful are low. restaurant business it is not enough to be a great
cook; you also need to have good management
But passion alone is not enough. You need skills.
to have the experience, the personality, the
knowledge and the skills. Managing employees is challenging. You will
need leadership and communication skills, and
Take a serious look at your motivations for you will need to understand the labour code.
wanting to open a restaurant. Your objective, as Some employees will take advantage of you,
with any business, is to make a profit. others will be incredibly loyal. Knowing how to
deal with both is a job requirement for restaurant
Don’t open a restaurant for the perks. Many owners/operators.
people want to own a restaurant to have a place
to hang out with friends and get free drinks. And, you need to be able to finance the
If you are truly passionate about providing the restaurant – not just the initial capital investment
public with an incredible dining experience, but sufficient operating capital to cover you for
make a commitment to always serve alcohol the period of time it takes the business to be able
responsibly, and with your business objectives in to carry all its costs and generate a profit.
mind.

If you haven’t ever worked in a restaurant, do Opening a New Restaurant

so first before jumping in the deep end on your Can Be a Rush!
own. Or if it has been a long time, get your
feet wet again. Try to find an opportunity to But after opening day, the greatest challenge
interview or better yet, shadow, an experienced facing all restaurateurs is keeping it open.
restaurateur in another restaurant. To remain open and be profitable, you must
manage all facets of your restaurant with
precision. The repetitive, day-to-day ‘grind’
It Takes a Lot to Succeed of running of a restaurant quickly follows the
exciting ‘fireworks’ of opening.
The failure rate in restaurants is high. Some
sources say that up to 60% of independent
restaurants fail within the first three years.1
Others report that restaurants have the second
highest failure rate of any business in North
America, closely following services stations which
are number one.

1
http://www.smallfoodbiz.com/2013/04/02/restaurants-top-the-list-of-the-most-tried-failed-small-businesses-infographic/ 3
 HELPFUL RESOURCES
ASK YOURSELF:
Reading/Watching List:
IS THIS INDUSTRY
FOR ME? Kitchen Confidential by Anthony Bourdain
http://www.amazon.ca/Kitchen-Confidential-
It’s critical that you know the restaurant Anthony-ourdain/dp/1408845040/ref=sr_1_
business. But you also need to know 1?s=books&ie=UTF8&qid=1397250229&sr=1-
yourself and what you are good at. Before 1&keywords=Kitchen+Confidential
you go any further, ask yourself the
following questions… and answer honestly. Alice Waters and Chez Panisse by Thomas
McNamee
Do I really know what kind of business http://www.amazon.ca/Alice-Waters-Panisse-
I am getting into? Thomas-McNamee/dp/0143113089/ref=sr_1_1?s=b
Do I have any experience in the ooks&ie=UTF8&qid=1397250250&sr=1-1&keywords
industry? =Alice+Waters+and+Chez+Panisse

Am I okay working 60-80 hours a week? Life on the Line: A Chef’s Story of Chasing
Am I ready to make this lifestyle choice? Greatness, Facing Death, and Redefining the
Way We Eat
Can I handle opinions and feedback by Grant Achatz and Nick Kokonas
without getting defensive? http://www.amazon.ca/Life-Line-Chasing-
Do I have the leadership and Greatness-Redefining/dp/1592406971/ref=sr_
management skills to run a ship like 1_1?s=books&ie=UTF8&qid=1400866694&sr=1-
this? 1&keywords=life+on+the+line

Can I manage employees – both the

The Art of the Restaurateur by Nicholas Lander
good ones and the not-so-good ones?
http://www.amazon.ca/Art-Restaurateur-
Am I flexible? Will I be willing to change Nicholas Lander/dp/0714864692/ref=sr_1_1?s=boo
my concept or menu if it doesn’t fit the ks&ie=UTF8&qid=1397250208&sr=1-1&keywords=T
market? he+Art+of+the+Restaurateur
Do I have the personality, strength and
Why Restaurants Fail by H. G. Parsa, John T. Self,
support of my family to run a restaurant
David Njite, and Tiffany King
Am I well-organized? http://www.econ.ucsb.edu/~tedb/Courses/
Ec1F07/restaurantsfail.pdf
Can I function well in a fast-paced
environment where everything is
urgent?
Can I get the financing needed?

4
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Spinning Plates DVD with Grant Achatz Restaurants Canada

http://www.amazon.ca/Spinning-Plates-Grant- (formerly the Canadian Restaurant and
Achatz/dp/B00HED9FVQ/ref=sr_1_2/179- Foodservices Association or CRFA)
1062659-6021615?ie=UTF8&qid=1405184271&sr=8- http://www.restaurantscanada.org
2&keywords=spinning+dvds Restaurants Canada has more than 30,000
members across the country. Its roles include
Jiro Dreams of Sushi DVD advocacy, research, member savings and
http://www.magpictures.com/jirodreamsofsushi/ industry events. CRFA members represent
every sector of the foodservice industry,
including restaurants, bars, cafeterias, coffee
Associations: shops, and contract and social caterers.

Restaurant Association of Nova Scotia

(RANS) http://www.dinens.ca Other
The largest restaurant association in Nova (Note: these are US-based; some are for
Scotia supporting food service businesses. members only)
RANS provides members with cost-saving
programs such as preferred rates on credit Restaurant Owner
card fees, business & personal insurance, group (includes sample restaurant business plans)
benefit plans, discounts for employees, etched http://www.restaurantowner.com/public/main.
glassware, equipment financing, and design cfm
services. Other support includes educational
materials, start-up support, a free listing in our Running Restaurants
restaurant guide book, a free posting on our http://www.runningrestaurants.com/
DineNS.ca website, and free access to Savour
Food & Wine Show. RANS is currently planning The Restaurant Doctor
to launch a Benefit Incentive Card (BIC) for http://www.restaurantdoctor.com/
restaurant employees which will provide them
with benefits such as discounts at stores around
the province.

5
6
Agricola Street Brasserie
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

NOVA SCOTIA’S
RESTAURANT SECTOR
Learning about the restaurant industry and its financial performance,
and about restaurants in Nova Scotia is a good place to start your
research when you are thinking about opening a restaurant.

CHAPTER MODULES TESTIMONIAL

2.1
2.2
The Numbers
Tourism Markets for Restaurants
“ THIS GUIDE IS
INDISPENSABLE TO THE
2.3 Some Restaurant Industry Norms FIRST-TIME RESTAURATEUR
2.4 Trends and Issues in the Restaurant Industry STRUGGLING WITH
2.5 Helpful Resources THE IMPENETRABLE
BUREAUCRACY AND LESS
GLAMOUROUS ASPECTS
KEY TAKEAWAYS OF THE BUILD-OUT AND
SMOOTH OPERATION OF A
SUCCESSFUL RESTAURANT.
QUESTIONS OF GARBAGE
• The food and beverage sector is REMOVAL, READING
an important part of Nova Scotia’s YOUR LEASE PROPERLY,
economy. INVENTORY, AND COSTING
• Visitors to Nova Scotia can be a ARE ALL ADDRESSED
valuable market for food & beverage
CONCISELY AND DO WELL
operations.
TO OPEN YOUR EYES TO
• Industry operating norms indicate
EVERYTHING RUNNING A
that the average operating profit for
all food services & drinking places is RESTAURANT ENTAILS. ”
5%; 4% for full service restaurants and
Joe Gurba,
5% for limited service eating places. The Watch That Ends The Night, Dartmouth

7
THE NUMBERS Sales by Type of Establishment
Food services and drinking places include
Annual sales at Nova Scotia’s 1565 (some 920 4 types of operations based on Statistics
are restaurants) food service and drinking places Canada definitions:
are some $1.6 billion2 (2016) and represent 4%
of the province’s GDP. Some 7% of the • Full-service restaurants
province’s workforce or 32,000 people are • Limited-service eating places
directly employed in the restaurant industry.
According to RANS, 65% of the provinces
• Special food services (food service contractors,
caterers, mobile food services)
restaurants are independently owned.
• Drinking places

Table 1 provides data on Nova Scotia sales for

each of these sectors for 2014 and 2015.

TABLE 1
Food Establishment Sales in Nova Scotia ($ millions; % of total)
Type of Establishment 2015 2016 % Change
Full Service Restaurants $564.7 $617.9 +9.4%
Limited Service Restaurants $728.6 $784.6 +7.7%
Drinking Places $64.9 $67.4 +3.8%
Special Food Services $121.6 $119.6 -1.6%
Total $1,479.9 $1,589.5 +7.4%
Source: Statistics Canada, CANSIM Table 355-0006; Unadjusted

Sales by Month Spending on Restaurants by

Nova Scotians
According to Statistics Canada data,
food establishment sales are fairly evenly Nova Scotians spent, on average, nearly
distributed across the year, with July, August $2,100 per person on food purchased from
and September being peak months. restaurants in 2016. This represents over 25%
of their total expenditures on food.3

Trends in Annual Sales Percentages of Nova Scotia Food Service

Establishments Sales by Month, 2016
Annual food establishment sales in
Nova Scotia increased by45% between 10%

2003 and 2016, from $1.087 billion to 8%

$1.59 billion. 6%

4%

2%

0%
JAN FEV MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
8 2
Statistics Canada, CANSIM Table 355-0006, Monthly Survey of Food Services
and Drinking Places 3 Source: Statistics Canada, CANSIM table 203-0028
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

TOURISM MARKETS Visitors from outside Nova Scotia spent an

average of $238 per party (on average a party
FOR RESTAURANTS is 2.1 people) in 2010 on food and beverage
in restaurants/hotels/bars, with this amount
Visitors to Nova Scotia and Nova Scotians varying by purpose of trip and origin as
travelling around the province are important illustrated in Table 2.
markets for restaurants. In the past few years,
Nova Scotia has seen strong growth in visitation
to the province and growing interest from these
markets in Nova Scotia’s local cuisine. TABLE 2
Average Spending on Food & Beverage
Tourism Nova Scotia’s strategic goal is to at Restaurants/Hotels/Bars
collaborate with industry stakeholders to reach Non-Resident Visitors, Per Party, 2010
$4 billion in tourism revenues by 2024. The All Visitors $238
strategy has four pillars including attracting Pleasure Visitors $312
more first time visitors and investing in markets
Business Visitors $227
of highest return – those that will spend the
most money in the province, both of which are Visiting Friends & Relatives Visitors $191
strong positive indicators for the restaurant Visitors from the United States $340
sector. Visitors from Ontario $291
Visitors from Overseas $402
In 2017, there were some 2.4 million visitors from
outside Nova Scotia, an increase of 9% over 2016.
This follows an increase in 2016 of 8% over 2015
In rural areas of Nova Scotia, and smaller urban
visitation levels.
centres, tourists from both inside and outside
the province can be critically important markets
In 2013, total tourism revenues in Nova Scotia
to restaurants.
were $2.3 billion. Note that this includes
spending by Nova Scotians travelling around
the province. (Overnight trips or same day trips
Growth Market Segments for
greater than 40 km one way are considered
Nova Scotia Tourism and
tourism). Preliminary data from Tourism Nova
Implications for Restaurants
Scotia reports that revenues reached $2.7 billion
in 2017.
As tourism in Nova Scotia continues to grow,
the province can expect to see more visitors
Detailed data on spending by type is
from international markets including the
available from 2010 and indicated that 18% of
United States, Europe and Asia, particularly
expenditures was at restaurants. Assuming
Chinese visitors. It will be important for the
that this percentage stayed consistent in 2013,
food and beverage sector to be aware of the
travellers (resident and non-resident) spent an
varying expectations and preferences for food
estimated $414 million on food and beverage at
and beverage service and restaurants of these
restaurants/hotels/bars.
growth market segments.

9
A 2016 presentation at the TIANS conference
provides some data on the Chinese market
and suggestions for the industry to “be China
Ready”. It can be found at https://tourismns.
ca/sites/default/files/2016_tians_be_china_
ready.pdf . In addition to food and beverage
preferences, the industry needs to be aware
of payment preferences for this market – the
Chinese market overwhelmingly uses UnionPay
Debit/Credit cards and acceptance of these
cards will need to be set up on POS systems.

Tourism Nova Scotia began using EQ as its

lead market segmentation tool in 2015. EQ
has helped identify who is most drawn to
Nova Scotia’s unique landscapes, cultures and
experiences, and to tailor marketing approaches
to appeal to these potential visitors. The three
EQ types that offer the best fit with what Nova
Scotia has to offer as a tourism destination are:

• Authentic Experiencers
• Cultural Explorers
• Free Spirits

Each segment has varying interests. In terms of

food service, all are interested in restaurants that
offer local foods and in farmer’s markets and
local food producers. The Free Spirit segment
is also particularly interested in fine dining/
gourmet experiences. An example of how
culinary experiences in Nova Scotia are being
tailored to these segments is the “Dining on the
Ocean Floor” experience at Burntcoat Head Park
Eilliot’s Dining Room, White Point Beach Resort
http://flyingaproncookery.com/dining-on-the-
ocean-floor/

10
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

SOME RESTAURANT Tables 3 and 4 provide some operating cost

norms from Statistics Canada for food and
INDUSTRY NORMS beverage establishments in Nova Scotia. Table
3 provides a summary of operating expenses
Norms, or averages, for the operating as a percentage of revenue, indicating that
performance of restaurants can be very useful operating profit is, on average for all food service
when preparing your business plan (Chapter and drinking places, 5.2%.
3) and in reviewing your own business’
performance. The main sources of this type
of information are Statistics Canada and
Restaurants Canada surveys. (See Helpful
Resources at the end of this chapter).

Grounded Coffee Bar

11
TABLE 3
Nova Scotia Food Services & Drinking Places, Operating Expenses as Percent of Revenue, 2015

All Food Service Full Service Limited Service

& Drinking Places Restaurants Eating Places
Total Operating Expenses (incl. wages & salaries) 94.8% 95% 95%
Wages & Salaries 30% 30.8% 27.5%
Operating Profit 5.2% 4.9% 4.9%
Source: Statistics Canada; CANSIM Table 355-0008, Food services and drinking places, industry expenditures

TABLE 4
Nova Scotia Food Services & Drinking Places, Operating Expense Breakdown
Note: Percent of Total Operating Expenses, 2015

All Food Service Full Service Limited Service

& Drinking Places Restaurants Eating Places
Salaries, Wages & Benefits 31.8% 32.4% 29.0%
Cost of Goods Sold 37.7% 36.6% 39.9%
Rental & Leasing 7.3% 6.4% 8.8%
Repairs & Maintenance 2.3% 2.9% 1.9%
Advertising, Marketing, Promotions,
Meals & Entertainment 3.9% 2.4% 3.0%
Utilities & Communications 3.5% 4.3% 2.8%
Royalties, Franchise Fees & Memberships 1.9% 1.5% 2.4%
Amortization & Depreciation 2.7% 2.8% Incl. with Other
All Other Operating Expenses 8.9% 10.7% 12.2%
Total Operating Expenses 100% 100% 100%
Source: Statistics Canada; CANSIM Table 355-0009, Food services and drinking places, industry expenditure.
Note: Total operating expenses exclude write-offs, capital losses, extraordinary losses, interest on borrowing,
and other non-recurring items.

Remember, these are provincial averages and of seats and for urban and rural locations are
include data from well-established restaurants. provided in Appendix 1. Appendix I also provides
You can’t necessarily expect the same findings from a US survey of restaurants about
performance in the early years, or in urban and sales-investment results, cost estimates and
rural locations. Additional norms by number space requirements.

12
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

TRENDS AND ISSUES

IN THE RESTAURANT TOP 10 TRENDS IN MENU
ITEMS & COOKING
INDUSTRY METHODS
Blogs, e-Zines, magazines, associations, (2017, Restaurants Canada Chef Survey)
networking – all are great sources of information
on what is happening in the restaurant industry 1. Craft Beer/Microbrews
locally and nationally. As this guide is updated 2. Food smoking
(Winter 2018), here are some trends: 3. Charcuterie/house-cured meat
4. Sous Vide
• Food Service & Hospitality4 identifies the
following top food trends for 2018: 5. Locally sourced food
- “Beyond Bacon and Eggs” – increased 6. Gluten Free
interest in non-traditional breakfast 7. Sustainable Seafood
offerings 8. Ethnic Condiments
- “Dissolving Dayparts” – Consumers want
9. Pickling
access to all types of food at all times of
the day; this is most apparent with the 10. Asian Twists on Condiments
popularity of all-day breakfast menu items.
- Continuing popularity of vegetable-
focused offerings - Root to stem eating of plants
- Dessert is becoming a menu attraction - Cannabis cuisine
in its own right, with more complex and
experimental flavours • The local food movement continues amidst
- More focus on waste reduction by concern for nutrition, food safety and a desire
operators, driven by consumer concern to eat healthier.
about sustainable practices
- Continued focus on local cuisine and • Beer is still the beverage of choice for
sourcing produce from local farms Canadians, and Nova Scotians but the
- Increasing demand for ethnic condiments market share of wine is growing. In Nova
and spicy flavours Scotia, agency sales of alcohol in 2015/16
- Importance of made-from-scratch items were6:
- Use of activated charcoal - Beer 278.7 million (45.8% of total)
- Indigenous inspired cuisine - Ciders, Coolers & Other Refreshment
Beverages $30.2 million (5% of total)
• The Huffington Post5 reports the top food - Wine $135.9 million (22.3% of total)
trends of 2018 will be: - Spirits $163.2 million (26.8% of total)
- Veganism and plant-based eating
- Avocado • In restaurants, the latest trend is ‘fast casual
- Instagrammable foods – food that looks dining’ – customized made-to-order food
great in pictures with fresh ingredients and in a more upscale
- Protein alternatives such as fake meats environment than traditional fast food
operations.

http://www.foodserviceandhospitality.com/top-10-food-trends-for-2018/ 5 http://www.huffingtonpost.ca/2018/01/09/food-trends- 13
4

2018_a_23327293/ 6 http://www.statcan.gc.ca/daily-quotidien/140410/t140410a002-eng.htm
• The US-based Restaurant Business and Issues Impacting the
Technomic (a major US foodservice research Restaurant Industry
company) has released a list of trends that
may significantly impact the restaurant sector Running a restaurant can be challenging. Some
in 2018. Although US-based, their insights of the big issues impacting the industry today
are still valuable. The seven trends they have include:
highlighted are7:
- Asian Island Cuisine – culinary influences • Increasing food costs, particularly for full-
from other islands such as Filipino food, service restaurants – this is leading to
Indonesia, Malaysia including street-food increased menu prices.
styles common in Asian markets.
- Lower-intensity, gut-friendly menus such as • Increasing other costs:
those incorporating probiotics, prebiotics - Energy
and anti-inflammatories. - Water
- Off-Premise Dining – concepts that - Property taxes
accommodate delivery and take out as well - Labour – not just wages but associated costs
as delivery-only concepts. With increased – EI, CPP, insurance, etc.
competition from ‘grab and go’ sections of
grocery stores, restaurants are evolving to • Finding skilled labour, particularly Chefs and
better address these demands. other kitchen workers – and this is going to
- Increased use of data to provide a become even more challenging:
more detailed level of service including - 4500 is the projected shortfall in skilled
personalized menu suggestions and labour in the Food & Beverage Services
marketing. Industry & Accommodation Foodservices
- A return to more emphasis on baby by 2025 in Nova Scotia
boomers - both in terms of re-engineering
menu to appeal to them and also as • Competition for the consumer’s discretionary
workers. dollar, although dining out is important to
- A tight labour market means restaurants Canadians:
are having to do more to attract workers - 40% of Canadians rank going to a restaurant
such as more training, educational as their preferred activity with friends
opportunities and personalized - Canadians make 17 million visits to a
advancement programs. restaurant each day – that’s an average of
- Dealing with the impact of regulations and almost ½ a visit per day per person! Or 176
increasing wage rates. visits per year per Canadian.

32% OF TABLE SERVICE RESTAURANTS ACROSS CANADA

REPORTED A SHORTAGE OF SKILLED LABOUR
Restaurants Canada survey, Quarter 4, 2013

14 7
http://www.restaurantbusinessonline.com/consumer-trends/7-trends-will-shape-restaurants-2018#page=0
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES
Reading/Watching List:

Statistics Canada Food Service Industry Statistics

http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3550006&pattern=restaurants+n
ova+scotia&tabMode=dataTable&srchLan=-1&p1=1&p2=-1#F4

Industry Canada Small Business Profiles

http://www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home

Restaurant Association of Nova Scotia

http://www.dinens.ca/

Restaurants Canada
https://www.restaurantscanada.org/en/

Technomics
https://www.technomic.com

Global Ready – China – A Travel Alberta Program

https://industry.travelalberta.com/resources/industry-development/global-ready-china

Be China Ready – A presentation at the TIANS Annual Conference, 2016

https://tourismns.ca/sites/default/files/2016_tians_be_china_ready.pdf .

15
16
Bistro Le Coq
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

CHART YOUR COURSE

Opening a restaurant means taking on many tasks simultaneously.
If you aren’t great at multi-tasking, make sure you have someone to
help you in areas where you are weak. It’s a pressure business, and
the pressure is not likely to diminish. Are you up for this challenge?

Clearly there are some things that you will

need to do first, or before you can move on to
CHAPTER MODULES
something else. Keep in mind, however, that
for most of the journey to opening you will be
3.1 The Business Plan
working on a whole bunch of different tasks at
3.2 Business Structure
once to ensure everything comes together for
3.3 Helpful Resources
your scheduled opening.

So, forget creating a typical ‘to-do list’ and

consider instead the idea of a ‘to-do wheel’. As
you can see in the graphic, it can be helpful to
begin the planning process by laying out the
project areas of opening a restaurant.

Your vision and concept are the foundation

of every aspect of planning for and running
a restaurant. The concept must be clear and
fit your target markets; it defines what your
restaurant is. It is at the centre of the wheel.

In the remaining chapters you will find details

on how to approach each of these areas
of restaurant ownership. It’s important to
remember that many of them apply not only to
planning the opening of a restaurant, but also
to the day-to-day operations.

Grounded Coffee Bar

17
 The
Business
Plan The
Marketing (CHAPT 3)
Location
(CHAPT 13)
(CHAPT 5)

The The
Customer Menu
(CHAPT 12)
THE VISION (CHAPT 6)

AND
CONCEPT
The
Operations Design
(CHAPT 11) (CHAPTER 4) and Build
(CHAPT 7)

The
Staffing Math and
(CHAPT 10) The The Money
Rules & (CHAPT 8)
Regulations
(CHAPT 9)

KEY TAKEAWAYS

• Have a clear vision and concept: Your vision for the restaurant is an overriding piece of
the plan. It is the driving force behind your location, menu, pricing and design.

• A business plan will make or break you: It doesn’t have to be long but make sure you
have enough information yourself regarding the viability of the business, and to spark the
interest of potential investors and satisfy your financial backers.

• Get help when you need it: There are lots of organizations out there that can lend a hand
when it comes to business planning. It can be difficult — don’t be shy when it comes to
asking for help. Analyze yourself carefully – not everyone is good at everything.

• Don’t start from scratch: Look for pre-existing business plans and forms from which you
can glean insight. Use these resources to save time and frustration.

• Decide on a business structure: Choose the one that works best for you. You may not
have the time or resources to go it alone, but business relationships can be tricky. Explore
your options before making a final decision. Get agreements in writing.

18
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE BUSINESS PLAN examine all of the shortcomings and potential

pitfalls of your business.

The very first step you should take, and It needs to be concise and yet contain enough
for some the hardest one, is to create information for the reader to judge the potential
a document called ‘business plan.’ profitability of your business. There is no
recommended length for a good business plan,
You can start with a scrap of paper if it
but if you are hoping potential funders will read
feels right. The most important thing it, you should keep it as brief and succinct as
is to get what is in your head down on possible.
paper. Many a business plan has had a
There are thousands of books, articles and
start on a restaurant napkin.
websites on how to write a business plan. Here
is a general overview of the key components of a
You might find it helpful to get a small (or
strong business plan.
large) binder with tabs. Or start a folder on your
computer. This way you can stay organized and
EXECUTIVE SUMMARY:
keep your plan and your research together for
This should be a brief summary of the business
easy reference as it evolves.
plan components. It should highlight your
concept and why it will be successful. It should
If writing is something you fear or struggle with,
tell the reader how much it is going to cost and
just begin to jot down some notes about your
where you intend to find the money. Don’t get
business. Open a WORD document and call it
bogged down in the details here. In fact, you
‘Business Plan.’ The structure outlined below
should write this section last.
will help you organize your thoughts. Then you
can begin to flesh out the content.
LEGAL STRUCTURE: (SEE CHAPTER 3)
Provide a history of or a plan for your business
You won’t necessarily finish your business plan
structure.
right away. As you begin to research and work
through the many things you have to do, you
Outline the legal structure: the form of your
will refine the plan. Successful entrepreneurs
business, be it partnership or incorporation, etc.
work on their business plan long after their
Include the date it was created and the names
business opens. In fact, you should update your
of the principals involved. The capitalization
business plan regularly.
plan (i.e., who owns how much, etc.) should be
described here. You can find more information
on the various types of legal structures in
How to Write Your Business Plan section 3.2 of this chapter.
A business plan is the roadmap for the future of
BUSINESS CONCEPT: (SEE CHAPTER 4)
your business.
You need to find the words to paint a picture of
what a visit to your restaurant will feel like. You
It is basically a formal written presentation of
need to describe why your concept will appeal
your restaurant vision or concept. It maps out
to diners and who those diners will be. This
where you are headed and requires you to
piece is critical. Your concept and vision need to

19
be clearly understood and easy to communicate THE MANAGEMENT TEAM:
to consumers and employees. And, the concept Who is going to run the place? To be successful,
drives most other aspects of establishing and a restaurant needs sound management.
running a restaurant – the location, menu, Demonstrate that you and your team have what
design, pricing, staffing requirements, etc. it takes: the experience, skill, education, and/or
discipline to make this work.
Articulate everything you can:
Provide the background and experience of the
• The service style (i.e., fine dining, casual, owners and the key management. You can
quick service) insert actual resumes here or include them as
appendices at the end of the plan.
• The size and seating capacity
• A brief description of the decor and
Outline other key principals of your team: your
furnishing
professional advisors such as lawyer, accountant,
• Proposed operating hours designer, contractor, etc. Make sure you have all
• Details of the atmosphere and ambience, the the bases covered.
lighting and music
• The menu: description and price BUSINESS ANALYSIS (SEE CHAPTER 8):
Some entrepreneurs seem to have an uncanny
THE LOCATION: (SEE CHAPTER 5) ability to visualize a concept that will appeal to
If you have not chosen a definitive site or the public and the passion and experience to
address, just list the area where you intend turn that dream into a reality.
to open your restaurant. This section can
be updated, if needed, after a site has been A more cautious approach is usually
selected. If you intend to lease or purchase your recommended: balance your passion with some
location, provide the details here. Include the in-depth market and feasibility research - a
amount of floor space and the rent or purchase reality check of sorts. You want to examine your
price. proposed restaurant in relation to the existing
marketplace. You also need to clearly identify
SAMPLE MENU: (SEE CHAPTER 6) what will make your restaurant different than
A well-written and designed menu can help sell the others out there.
your concept. At the very least, you will need to
write out some examples of the food you will be Before you proceed with your business plan, you
selling. need to carefully research the viability of your
plan in terms of competition and demand. The
DESIGN LAYOUTS: (SEE CHAPTER 7) following discussion provides some pointers on
If you have drawings or floor plans (professional what you need to do and how to go about it.
or otherwise) include them here. Even a hand-
sketch can be helpful in creating an image of
your concept.

20 Restaurants Canada is a membership-based organization. Some of their publications can be purchased by non-members; others are only
8

available to members.
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

INDUSTRY OVERVIEW Information about your target area can

Review the dining and consumer trends in the be obtained from your municipal/regional
restaurant business in Nova Scotia and Canada. economic development agency, the province or
business improvement associations. Statistics
Statistics Canada provides data on sales at food Canada also has data by census tract which
service and drinking places by province and may be useful. Tourism Nova Scotia has data on
occasional reports on trends in sales of food and tourism markets.
beverage. RANS also has data on Nova Scotia’s
restaurant industry. You should know the history of the economic
development in the area. And, you need to
Restaurants Canada publishes an annual report know everything you can about future planned
called Food Service Facts8. It includes a full developments. Investigate construction taking
market review and forecast. You can find out if place and planned; follow the local paper and
commercial foodservice sales are expected to business news.
grow over the next four years. You can see in
which province growth is strongest. You can find LOCATION ANALYSIS
a breakdown of the average check per person Perhaps the only detail you can provide about
by restaurant type (i.e.; quick-service, full-service, location right now is just a general area or the
retail). While some of these are national statistics, city or town. Perhaps you have an address and
they can still be useful. Appendix I provides an agreement of purchase and sale or lease. If
findings from a US survey of restaurants about you do, include them in your plan.
sales-investment results, cost estimates and
space requirements.

Depending on your concept, you may want to HELPFUL TIPS

review data about population growth, tourism
activity, ethnicity demographics, labour and
economic conditions.

Do your research on food trends and consumer RESEARCHING THE COMPETITION

expectations to support your concept. For When researching your
example, while french fries are still a top- selling competition, look at:
menu item, more and more consumers are
looking for healthier food choices and there is • Restaurant concept
data to support this.
• Target markets
TARGET MARKETS • Menu and prices
Who is your preferred target market? Who will • Hours of operation
your concept most appeal to? Describe your ideal
target customer. Who are they and how old are • Quality of food and service
they? What do they do for a living? Where do • Level of business at different periods of
they live? Do they drive or walk or arrive by cruise
the day/week/year
ship? What price points can your target markets
tolerate? (Your location may well have an impact • Strengths and weaknesses
on this issue).
21
Regardless of whether you have a street FINANCIALS:
number already, you still want to describe the Itemize your start-up costs (a capital budget)
market conditions that exist in the location or and prepare a detailed projection of your
general area. Include demographic information revenues and expenses (a projected income
and information about your target market. statement). Knowing the number of seats you
will have is critical to this analysis. You need to
A real estate broker might be helpful here demonstrate the potential profitability of your
as they tend have a lot of insight about restaurant. You need to show how much money
neighbourhoods. They often have access to you will need to get your restaurant open and
information and data that is not freely available how the business will generate enough revenue
to the public. to ensure you can repay your debt.

Make sure the locations you have in mind are Templates for all of these statements can be
a good match with your target market. Is your found on-line; or from some of the resources
market residents of the neighbourhood? Or are listed at the end of this section and in Chapter 8.
you looking for a business clientele to fill your
seats? Are you counting on tourists finding you?
Selecting the right location for the markets you
are targeting is critical.

HELPFUL TIPS
COMPETITIVE ANALYSIS
How much of the potential market can you
expect to get? While you might by now have a
pretty good sense of the appeals of your DOING THE NUMBERS
When doing your financial analysis:
product concept, you have to take a hard look at
the competition.
• Be realistic, not optimistic. Base your
analysis on sound research. Don’t guess!
You need to try out the competition and
research their reputations. You want to learn • Add a contingency of 20% - 30% to
about their strengths and weaknesses and try whatever you think your capital budget is.
to get an idea of how much business they might
• Don’t forget to add Working Capital to your
be doing.
capital budget – this is the money to cover
your operations for the time it takes the
Describe the local competition that exists for
business to cover it costs. And, that might
your restaurant. List and describe the other
be a while.
restaurants in your area or beyond that are most
similar to your concept. If you feel you have • Analyze your revenue and expenses several
a competitive advantage over these, list your times, using different assumptions for sales
unique aspects. You want to be certain that you and costs. Make sure you understand the
will be able to offer something different and worst case scenario.
have a competitive edge in the area for your • Remember, the number of seats is the
type of restaurant. critical factor in driving revenues.

22
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Photographer: Reilly Mooring

Barrington Steakhouse & Oyster Bar

OPERATIONS PLAN: (SEE CHAPTERS 10 & 11) You will need to establish a solid brand
Include a description of how your restaurant positioning – knowing who you are, what you
will operate on a day-to-day basis. If you are do and why people should care. You will need
a franchisee, you will likely have a detailed to carefully select the best media, traditional or
operating manual to follow already. Otherwise, new, that will reach your target markets.
you will need to create one.
Getting it right will likely take some trial and
Key operations to describe can include: error. Marketing is one of those areas where, if
staffing, training, customer service, you don’t have a lot of expertise, bring in some
suppliers, management controls (i.e., Point expert help. Plan to invest about 3% of your
of Sale systems), cash controls, accounting, revenues back into marketing.
bookkeeping, inventory control, payroll, staffing
and training plan. There are many places you can go for help
with business planning and we’ve listed some
MARKETING STRATEGY: (SEE CHAPTER 13) suggestions at the end of the chapter. Don’t
You will need to include an outline of your hesitate to ask another restaurateur if they
marketing strategy for before and after you would be willing to share their start-up plan.
open the doors. While a few restaurants open
their doors to instant success, you can’t rely on
this and need a plan to proactively grow your
business.

23
BUSINESS STRUCTURE
Like any business, you will need to decide on the legal structure of your company,
be it a partnership, a sole proprietorship or an incorporated company.

Sole Proprietorship

If you are in this project on your own, a sole proprietorship is the simplest and cheapest business
structure. It involves one owner, and that owner and the business are one entity. It means you own the
restaurant and its assets personally, and are responsible for the business liabilities. There is no legal form
to a sole proprietorship, although you still have to register the business. The income of the business is the
personal income of the owner. The expenses are also the liability of the owner.

Table 5 summarizes the advantages and disadvantages of each type of legal structure.

TABLE 5
Advantages and Disadvantages of Different Business Structures

Business Structure Advantages Disadvantages

Sole Proprietorship • Simplicity • No limitation of personal liability for

• Freedom to make your own the owner
decisions • Nobody to share the
responsibilities of running the
business
• Limited access to equity other than
what you have available or can
arrange

Partnership • Provides for more than one owner • Unlimited liability for each partner
• Relatively simple for all of the liabilities of the
business
• Many partnerships fail because
partners do not adequately
deal with issues that need to
be included in a partnership
agreement

Incorporation • Limitation of owners’ liability • More expensive and complex to

• The business can enter into establish
contracts and conduct business • For small businesses, the
in its own name, rather than the advantage of limited liability is
names of its owners usually lost since bankers and
• There can be some tax benefits other lenders will insist on personal
to the owners compared to other guarantees from owners anyway.
structures. Get the advice of a
tax accountant for your specific
situation.

24
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Photographer: Reilly Mooring

Gahan House Harbourfront

25
Partnership Incorporation

If you have one or more partners who want a say Whether you are going it alone or you have
in the running of the business, you can form a one or more partners, you should still consider
partnership. incorporating your company. Incorporating
means you create a corporate entity that owns
Like the sole proprietorship, the owners of the your restaurant. It can protect you personally
business and the business itself are one and if the business goes under, but it doesn’t
the same for legal purposes. The business has necessarily mean you won’t have responsibilities
no legal status separate from the individuals if your business fails. As a new restaurant
involved. The liabilities of the business are the owner, you will likely be required to personally
liabilities of the partners. guarantee loans, which means that you’re still
responsible if the company fails.
No two partnerships are the same, but you’ll
want to be sure you have an agreement in There are also pros and cons of tax implications
writing before you begin. Work with a law for incorporations, which you should explore
firm to put a partnership agreement in place. further with an accountant.
You will want to spell out everything: who’s
responsible for what, who’s getting what for You will likely need a lawyer to do the
their investment of money or time, how you incorporation (although some people manage
will divide profits, what happens if a partner this successfully themselves) and can expect the
dies, as well as exit options. We highly legal fees to be in the range of $1,000 to $3,000.
recommend each partner get independent The Nova Scotia Registry of Joint Stocks (contact
legal advice before signing a partnership information below) will have more information
agreement. about what is required.

A word of caution: you should be very careful If you are embarking on this on your own, check
when choosing a business partner. Many out the Canadian Legal Guide for Small Business
partnerships, like marriages, fail because the published by the Self-Counsel Press (included
partners find they can’t get along. Also, like in the Restaurants Canada start-up kit). It will
marriages, you may find, “It’s easy to get in, show you the detailed steps required to form a
it’s another matter altogether to get out.” corporation and the reporting requirements to
An agreement before you start will make maintain your company in good standing.
everything about having a partner(s) more
straightforward.

Restaurants Canada sells a start-up kit that

includes a CD produced by the Self Counsel
Press: Partnership Agreement. It includes
easy-to-use instructions on how to create a
professional and legal partnership agreement.

26
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES

Appendix 1

1. Operating norms by number of seats and for urban and rural locations in Nova Scotia.
2. Findings from a US survey of restaurants about sales-investment results, cost estimates and
space requirements.

Reading List

Start & Run a Restaurant Business by Brian Cooper, Brian Floody and Gina McNeill, Self-Counsel Press, 2nd
edition http://www.amazon.com/Start-Run-Restaurant-Business/dp/1551806320

Resources

Restaurants Canada Business Tools https://shop.restaurantscanada.org/

For more information about business plans or to get help with a business plan:
http://www.cbdc.ca/sites/default/files/business_planification_guide.pdf

http://ceed.ca/

http://www.bdc.ca/en/Pages/home.aspxhttp://www.bdc.ca/en/Pages/home.aspx

27
 Photographer: Reilly Mooring

28
Barrington Steakhouse & Oyster Bar
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE CONCEPT

The ‘concept’ is the combination of your type of restaurant, the menu,

prices, ambiance, and the style of service provided. The concept is
critical – it’s your brand and who you are.

For many potential owners, it’s the concept that

inspires them to open a restaurant in the first KEY TAKEAWAYS
place. While it is easy to say “I want to open a
restaurant where people can enjoy meals like
the ones my mom used to cook”, it is important
to get specific about what this looks like.
• Your Concept is Critical. The
Unlike the many ever-evolving aspects of restaurant concept defines your
restaurant ownership, the concept is one restaurant, your brand and what you
that should remain relatively consistent after offer consumers.
opening. Because it will ultimately influence
and guide all of your other decisions, clearly • Define your restaurant ‘type’ and
articulating a unique yet feasible concept early ‘style’. Restaurant ‘type’ refers to
on can ensure your approaches to other project whether your business will be a
areas are in line with your vision. franchise or an individual restaurant.
A restaurant’s ‘style’ is a combination
Keep in mind where you plan to open your of the speed, atmosphere and price
restaurant when developing your concept. A of service, and is either ‘quick/limited
concept that works in Halifax may not work for
service’ or ‘full service.’
the markets in Truro or Shelburne.
• Franchises versus Individual
Restaurants. Franchises leave you
CHAPTER MODULES with very little opportunity to be
creative, but are considered the closest
thing to a ‘sure thing’ in the restaurant
4.1 Where To Start: The Type and Style
Photographer: Reilly Mooring

industry. Individual restaurants provide

4.2 Franchise Restaurants a blank canvas on which to paint your
4.3 Individual Restaurants concept, but require a lot more work.
4.4 Helpful Resources
29
WHERE TO START: eating-out segment of the market. The growth
of this market segment is said to be a function
THE TYPE AND STYLE of today’s lifestyle. Food from a limited service
facility is served quickly, often ordered at a
The first thing is to determine the type counter, and eaten in a very casual manner
(sometimes simply from a napkin).
and style of the restaurant you want.
Labour costs can be lower because the skill level
of cooks can be kept to a minimum. Service
Restaurant Types And Styles
costs are minimal because the process to
turnover customers is quick and efficient.
There are two basic types of restaurant: an
individual or a chain. Both types can be owned
Food trucks are an emerging trend in the quick
by an independent operator.
service sector.
The individual restaurant is one not associated
FULL SERVICE RESTAURANTS
with a chain or franchise. You, the owner, come
The range of full service opportunities is wide:
up with a unique concept and name and
from the elegant fine dining establishment to
operate as you see fit.
a small neighbourhood diner. They are often
independently owned and operated. Labour
In the case of chain restaurants, the concept
costs are usually higher because of the level of
is predetermined by the company that owns
service and the requirements of the menu.
the franchise. While this can make opening
the business much easier, it prevents you from
OTHER
having any creative liberties in terms of the
The industry also includes caterers and drinking
design, décor and menu. You can find details on
establishments. In Nova Scotia, drinking
each type of restaurant in sections 4.2 and 4.3
establishments can be either beverage rooms
respectively.
(serving wine and beer only, not hard liquor) or
cabarets (a large scale establishment, usually
Whichever approach you decide on, there are
over 400 seats, with liquor service; purchase of
two main operational styles to choose from:
food is not necessary). The number of drinking
establishments is declining as businesses realize
QUICK/LIMITED SERVICE
that they have to serve food to survive.
This sector is largely dominated by the major
fast food chains and continues to be the largest

30
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WORDS OF ADVICE FROM THE PROS

“ The importance of the clearly defining the concept cannot be

overstated. It is from this point that every facet of the business will
originate.

The concept must be crystal clear and only then can one embark on
the next steps of the business plan.

When embarking on a journey we must know where we are going

otherwise we will not know when we have arrived at our destination.

The same is true in the hospitality/restaurant business. In business we

call this the vision. When the vision is clearly defined it provides the
entrepreneur with many benefits:
1. The ability to focus the entrepreneur’s efforts on creating or
realizing the vision.
2. The clarity to market the concept to future guests.
3. A benchmark for the focus of all employees, suppliers and
stakeholders.
4. The clarity of the vision will assist in communicating the business
plan to potential investors or financing companies.
5. The discipline to keeps costs in line and to not over spend or
underspend.
6. The basis from which the capital costs can be determined to realize
the vision.

By having a crystal clear vision of the concept we will have set in

stone the course of action which shall convert the vision to reality. ”

Joe McGuinness
Durty Nelly’s Irish Pub and Stubborn Goat Gastropub, Halifax

31
FRANCHISE INDIVIDUAL
RESTAURANTS RESTAURANTS
It has been said that buying into a Fine dining or a food truck? Or perhaps
franchise is the closest thing there is you are thinking of something in
to a ‘sure thing’ in the risky restaurant between? When you are starting from
business. There are pros and cons and if scratch, the possibilities are endless:
you decide franchising is for you, you’ll you really do have a blank canvas.
want to research everything you can
about franchises in general and the
This is your baby. You can work with your chosen
specific franchise you are after. concept in a space or location you select to fit.

Atmosphere is a key ingredient in defining

Franchising is very popular in the quick or the ‘type’ of restaurant. The same food can
fast food sector. The reasons are compelling, actually be served in a fine dining restaurant,
including reduced risk. The secret success of a casual neighbourhood bistro or a food truck.
franchises lies in the proven concept and the These days, you can find tacos being served
consistency of product and service delivered by at all of these types of restaurants. What really
all units. differentiates each style of restaurant is how
the food is served, where the food is served, and
A franchise can provide a solid base for the who serves it.
inexperienced operator. You receive a complete
package on how to do things, as well as training
and pre-opening assistance. And yes, there is
a fee for all of this: upfront and a continuing HELPFUL TIP
royalty fee paid indefinitely.

The disadvantage is that you have less flexibility

and control with few opportunities for any kind Be a Little Flexible with
of personal expression. You have to stick with Your Concept
the franchise rules. You have no discretion in
the operation of a franchise restaurant, as they While your concept should remain fairly
are based on a standardized formula of proven consistent, you need to stay somewhat
success. If you are a creative type, this model flexible:
might not be for you.
• Respond to the marketplace
Finally, the cost of services provided by the
franchiser can be high (7% - 9% of revenues) and • Listen to the customer
can eat up a significant part of your potential
operating profit. • Be prepared to ‘tweak’ your concept if the
numbers are not working

32
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

If you need inspiration, take a business trip to

another city or country. A weekend eating your HELPFUL TIP
way around New York City or Montreal can open
up a world of possibilities. Observe what seems
to work and what doesn’t. Remember though,
that it is difficult to live out someone else’s vision. Carry Your Theme through
Concepts can be very difficult to copy because all Aspects of the Restaurant
of the hundreds of intangible elements that
contribute to a restaurant’s success. Whatever theme you select, implement it
fully. Don’t go half way or cut corners, you
Even if you think you are starting this with a will regret it later.
specific vision and concept in mind, you might
want to take a minute and step back. This is the
time to think big and to think outside the box.
If you’ve already decided on the name, be sure
Don’t hesitate to get help. A restaurant consultant to verify that you can use it legally. If someone
can assist you in developing your concept. else is using the same name, or something
similar, you may have to go back to the drawing
board. Check it out with the Nova Scotia
Theme and Name Registry of Joint Stocks as quickly as you can.

A theme is a common thread, an idea, or image

that runs throughout your restaurant. It might
be based in your food (i.e., a dish or an ethnic
influence), or the ambience (i.e., decor). Your
theme and menu definitely need to match.

With luck, you’ll be living with your restaurant’s

name for a long time. Take your time. You want
the name to be memorable and to evoke, in some
way, the concept of your restaurant.

Don’t worry if a name for your restaurant doesn’t

HELPFUL RESOURCES
come to you right away. You can be well on your
way to opening a successful restaurant without Reading List
knowing the name. If you are really stuck about
the name, consider bringing together a focus Restaurants that Work: Case Studies of the Best in
group9. the Industry by Martin E. Dorf
http://www.amazon.ca/Restaurants-that-Work-
Of course, if you are using a professional Studies-Industry/dp/0823045404 .
restaurant designer or marketer, they will have
lots of ideas and feedback on name choices. Try
to keep an open mind; but make sure you are
passionate about the choice.

A focus group is is a form of qualitative research in which a group of people are asked about their perceptions, 33
9

opinions, beliefs, and attitudes towards a product, service or business. (Wikipedia)

34
Bistro le Coq
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE LOCATION
The golden rule in real estate is “location, location, location.” On the
other hand, locations can be what you make them. You must be clear
on what you can do in the space and what its capacity is for a restaurant.

CHAPTER MODULES
patient. If the space you are looking
5.1 Where?
at doesn’t meet your criteria, walk
5.2 Leasing or Buying
away. There are lots of spaces out
5.3 Before you Sign a Lease
there.
5.4 Before you Buy
5.5 Where to Get Help Finding a Location
• Understand your lease
Before you sign on the dotted line,
make sure you know what’s included
in the rent price, what common area
KEY TAKEAWAYS charges there will be, what you’re
responsible for, and what you can
and can’t do with the building. Make
sure you know the ‘down the road’
details.
• Make sure you have enough space
Figure out early on how many seats • Negotiate pricing
you can fit in the space you are See if you can strike a deal on rent
looking at. Is this enough seats for with the landlord. Many landlords
your vision to succeed? will offer free rent for a period.

• Do your Due Diligence • Talk to the experts

You may be excited about a space, Leasing agents and business
but don’t jump into anything before development centres can help you
doing your homework. Make sure choose the best locations for your
you can do what you want to. Be needs.

35
 WORDS OF ADVICE
FROM THE PROS

WHERE? “ If choosing a remote

location, your concept must
There are always a few ‘can’t lose’ be special and unique,
locations, and a few ‘can’t win’ locations, and you must be willing to
most locations fall somewhere in adapt to local customs and
between.
habits. Embracing the local
A restaurant’s success is more likely influenced people and getting involved
by the management/ownership of a restaurant in community activities is
than solely by its location. But, the right location important; accept that your
can really help!
customer will want to know
The key to deciding on a location is finding a everything about you....!!!”
spot that works for your concept, target markets
and budget and lets customers reach you. Roland Glauser
Charlotte Lane Café & Gift Shop, Shelburne

If your concept involves feeding tourists, you’ll

want to be certain your location is easily found
by those who are unfamiliar with the area.

It does seem there are always a few jinxed

locations. More often than not, this has to do
with the operating costs (the cost of the rent
and utilities to operate,) being so high that no
one could realistically make a go of it.

Number of Seats
LEASING OR BUYING?
You may not have the luxury of making
One of the first things to consider when looking
at space is: How many seats can you fit in (at 12
this choice. Purchasing a building is
sq.ft. per seat which is the guideline for liquor often too expensive for a new start
licences)? This means looking closely at space up. It is also extremely difficult to find
requirements for all the other necessities to commercial property to purchase,
meet building code and licensing requirements especially in urban areas of the province.
– washrooms, storage, wheel chair accessibility,
etc. While you may not be thinking about your exit
strategy right now, you should understand that
Your financial analysis and business plan will be if you don’t own your real estate, the odds of
driven by the number of seats. getting anything for your business if you decide
to sell are significantly reduced. However, most
restaurateurs lease their space, perhaps moving
to owned-space at a later date.

36
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

BEFORE YOU SIGN A How Much Rent is too Much?

LEASE A rule of thumb is that if you are paying more
than 5-6% of your sales revenue, you are paying
Rent is a big expense. It is a fixed cost too much. For example, if your sales are $100,000
that will be with you every day that you a month, your rent should not be more than
are in business. There are no tenancy $6,000 a month.
protections for commercial tenants like
those for residential tenants. You are on Don’t fall in love with a space! If your total
your own here. occupancy costs (rent, taxes, and common area
costs) are more than 10% of your estimated sales,
walk away.
Understand and negotiate hard for the terms
of your lease. Landlords can be unscrupulous.
Exactly what is included and not included in the Plan for Success!
rent will affect the outcome of your business
for years to come. Is heat and air conditioning When the term of your lease is up, do you have
included? What about hot water, snow removal, an option to renew? Do you have the ability to
and garbage collection? What about common sell your business and assign the lease to a new
area fees? (These may fluctuate). purchaser? Is there a process for determining or
arbitrating future rent increases? It’s good to know
Some landlords will help with start-ups, reducing future options in order to be successful today.
or waiving rent during construction. Or, you
may be able to negotiate a free rent period. If Restaurants require significant leasehold
you are making infrastructure changes to HVAC improvements: substantial plumbing, electrical
(heating, ventilation and air conditioning) and and mechanical investments. This is especially
electrical systems, try to get a significant break in true if you are taking a space that wasn’t
the rent, as you are paying to improve someone previously a restaurant. Make sure your contractor
else’s building. If you are leasing, you will likely inspects the space so you know exactly what you
have to leave everything on the premises if are getting.
and when you vacate. Make sure you research
municipal zoning requirements and what will Before you sign a lease, be certain that you can
be needed to meet building code and licensing make the renovation changes you need or want.
requirements for your restaurant, and how Make sure the municipal zoning laws will allow
much it will cost. you to operate the way you want to, in
that location.
You may find it very much worthwhile to retain
a leasing agent to help you navigate through
the process of negotiating a lease. They are Parking
professionals at this and can save you a lot of time
and heartache. Having lots of parking doesn’t guarantee you’ll
be successful, but a lack of parking can be
detrimental. Check out municipal by-laws – there
may be requirements about the number of
parking spots you must provide.
37
BEFORE YOU BUY of renovations that may be required for your
restaurant and to meet building code and
licensing requirements. As with all real estate
Do your due diligence before buying purchases, it’s ‘buyer beware’.
an existing restaurant or a property to
develop into a restaurant. As with any Keep in mind that commercial property taxes
real estate deal, it is ‘buyer beware’. can be higher than residential taxes, and
that you, as the owner of the building, will
If you are buying an existing restaurant, be clear be responsible for all costs associated with
about whether you are buying the building, the the maintenance and repair of the building.
business it may currently house, or both. Discovering you need a new roof in your first
year of business could be catastrophic.
If you are buying an existing property with the
plan to renovate it and open a restaurant where Also look into what was on the property or
there was not previously a restaurant, be certain site beforehand and make sure there are no
the municipal zoning will permit a restaurant, or environmental issues that need to be addressed.
a licensed restaurant. For example, former gas stations or dry cleaners
could have significant environmental hazards
As with purchasing your first home, purchasing and clean-up requirements.
a restaurant or the space for a future restaurant
requires much due diligence. Have it inspected The more you find out about the property
by a building inspector or engineer. Bring before the condition dates of the purchase
contractors, plumbers and electricians through close, the better.
so you can begin to get a sense of the scope

Photographer: Jessica Emin

Lot Six

38
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WHERE TO GET HELP TESTIMONIAL

FINDING A LOCATION
Walk and drive around the areas that
“ THE “HOW TO OWN AND
OPERATE A RESTAURANT”
appeal to you. Even drive around the
MANUAL WAS AN ESSENTIAL
ones you’ve already dismissed.
TOOL IN CREATING AND
Keep your ear to the ground and abreast of what DEVELOPING THE FOH
is going on in the local business community. (FRONT OF THE HOUSE)
Subscribe to www.Allnovascotia.com, a business- AND BOH (BACK OF THE
focused electronic news source that provides
daily reports about openings and closings of all
HOUSE) PLANS. I WOULD
kinds. RECOMMEND ANYONE
THINKING OF GETTING
If you need help finding the right location, INTO THIS BUSINESS TO
consult a commercial real estate broker or
GO THROUGH THE FIRST
leasing agent.
SEVERAL PAGES. IF YOU CAN
Make contact with local development agencies MAKE IT THROUGH WITH
and neighbourhood business improvement YOUR HEAD HELD HIGH, YOU
districts. These folks have a lot of intelligence
ARE READY FOR THE WORK
about what is happening in their areas in terms
of commercial property. THAT FOLLOWS. ”

Troy Arseneault, The Anchor, Halifax

39
40
The Five Fishermen
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE MENU
The menu is much more than a list of what you are selling. The menu
is how your restaurant is known and judged by customers. The menu
is both a valuable marketing opportunity and a blueprint for profit.
It takes careful planning and pricing, and it is critical to continually
monitor your costs.

Your concept will be the driving factor in

planning your menu; your menu in turn drives
CHAPTER MODULES
the design of your kitchen. There are many
questions to consider in planning your menu.
6.1 Planning and Designing a Menu
6.2 Purchasing, receiving and Inventory
The menu itself must be clean and clear and
6.3 Costing and Pricing
visually inviting. It is something every guest will
6.4 Managing the Menu
see. Where items are placed on a menu affects
6.5 Wine and Beverage Menus
sales. Make sure your descriptions are clear
6.6 Helpful Resources
and customers can understand what is being
offered.

The menu has to be priced right. Pricing menu

items properly is essential if you want to operate
a profitable restaurant business. Knowing your
true costs is the first step.

You need to understand how the kitchen works

- the purchasing, inventory control, rotating
food, storage and overall kitchen management.
If you don’t have this expertise, hire a great chef
who does. And make sure the chef has a good
track record in managing food costs; you can
have a great chef but if their food costs are 50%,
your business will be in trouble.

41
 KEY TAKEAWAYS

• Careful planning goes into developing

a menu that fits your concept
There are lots of factors to consider from
your customers to the availability of
ingredients.

• The menu is your selling tool

Menu presentation and layout play
a huge role in influencing customer
decisions. Consider investing in a
professional designer while saving costs
by printing the menu yourself.

• Recipes must be standardized

Standardizing recipes is important not
only for ensuring the taste and quality
of your meals are consistent, but also for
maintaining profit margins.

• Find the right costing/pricing

method for you
There are many approaches to
determining the price of your menu
items. Find the formula that makes
sense for your business. Your location
can also impact your pricing.
Photographer: Reilly Mooring

• Continually manage your menu

Once you’ve created your menu
and priced your items, be prepared
to do it all again! Or at least some
of it. Managing your menu means
continually looking for ways to Barrington Steakhouse & Oyster Bar
maximize profit.

42
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

PLANNING AND Keep Allergies And Food

Sensitivities In Mind
DESIGNING A MENU
Allergies and food sensitivities are at an all-time
There are always a few ‘can’t lose’ high. More and more customers want and need
locations, and a few ‘can’t win’ locations, to know exactly what they are eating. It can be
most locations fall somewhere in helpful to indicate which items are gluten-free or
between. dairy-free, vegetarian or vegan, etc.

There are a lot of questions you need to

ask yourself and a lot of criteria to take into Consult Your Staff
consideration in planning and designing a menu.
Create the menu with the involvement of the
As you’re designing your menu, ask yourself: staff: “No involvement equals no commitment”.
• How many customers will you serve each
meal? Your staff must know the menu. They should
know how each item is prepared and presented,
• What type of service are you providing? (i.e.
the ingredients, and how it tastes. Servers can
eat in or take out)
directly influence guest choices if they can speak
• What kitchen facilities and equipment do
intelligently about menu items.
you have?
• Who do you have to execute the menu?
(You will want to build the menu around the Size
talents you have and that you can replace
with confidence and speed.) Size matters when it comes to restaurant menus.
• What are the hours of service? Small is more manageable for the kitchen,
• What is the maximum number of customers management and especially the customer.
per meal period? When a large menu is presented to a customer,
• What type of menu do you want? Paper? it can be confusing because it offers too many
Blackboard? choices. Also, less is better when preparing
• How many menu choices will there be? and managing superior quality delivered with
consistency. It is better to give customers an
• Are the ingredients I need available all year?
impressive experience with fewer items than a
• Does the menu fit with the restaurant mediocre one with too broad a menu offering.
concept and cuisine? Extensive menus can also be more costly. As the
• Is the menu balanced in terms of food number of items on the menu increases, the
groups and seasonal availability of fresh kitchen expertise needed increases, the total
products? food cost increases, and the cost to construct the
restaurant increases.
Some Tips for Creating a Menu are provided in
Exhibit 1 on page 44.

43
EXHIBIT 1
TIPS FOR CREATING A MENU
GUIDING PRINCIPLES: “QUALITY,
CONSISTENCY & VALUE”
“Important – Always follow the guiding Always test the item with staff first for
principles when making each menu acceptance, taste, texture, quantity, quality
creation decision”. and value sampling, then with a cross
section of your customers.
Start with the best quality ingredients
possible “When you use quality, the cost When planning portion sizes, remember to
looks after itself when you go to price and consider the average person eats 2.5 pounds,
sell your menu offerings”. including fluids, per meal sitting. If the main
course is too large, desserts and starters
Ensure there will be a consistent supply should be smaller in size to allow room.
of ingredients at a consistent quality by
dependable suppliers. Ergonomics should be highly considered
for the length of time it takes to prepare
Sell quality and price the menu item where each dish with the distance being no more
you need to price the item to make it worth than arms reach for each ingredient to the
keeping on the menu. cooking and delivery area.

When deciding on a new ingredient in the Measurement – “If you can measure it, you
kitchen, plan a minimum of at least 3 cross can manage it” and “Measure it and it will
uses of the ingredient in your recipe / menu improve”.
planning.
Create the menu items following these steps:
Get to know what your market likes and let 1. In your mind, in concept and price using the
that be your focus to the menu choice. It above rules.
does not matter what you like – it is about 2. Document the ingredients, specifications of
what the customer likes and it’s your job to the brand, pack size and product yield along
help them get it. with the quantity of ingredients used.
3. Document the ingredients on recipe
When creating a menu item, give thought to templates, take pictures and notes…cost each
what will make each ingredient or cooking batch and plate recipe while considering
method of the item stand out above and the throw out and safety factor in the cost
beyond your competition. allowance.
4. Always go to the kitchen and confirm your
Create the menu item cooking methods theory of portion sizes and preparation
around the equipment and wares you have methods are being executed / served on the
or can afford. plate.
5. Revise recipe cards to show the reality of the
Build the menu around the talents you planned actual servings and cost.
have and that you can hire / replace with 6. Take a picture of the plate presentation and
confidence and speed. add to the Recipe Card.

Create the menu with the involvement of the Reproduced with permission from Menu Tools
staff, “No involvement, No commitment”. http://www.menutools.com

44
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Balance The layout is very important. Customers’ eyes

Balance is an important criterion when are naturally drawn to specific points on the
designing a menu. The menu should reflect the menu, so where you position menu items often
various food groups and it must be in tune with determines how much of any given item will be
the kitchen design to ensure no one station in sold. For example, when a customer first opens
the kitchen becomes overworked. Seasonal a menu, their eyes tend to focus on the upper
balance is also important, as many customers portion of the right hand page. If you place the
appreciate fresh products in season. items you want to feature there, you will increase
sales of those items.

Follow the ‘Triple Use on all Ingredients’ A little bit of up-front professional design work is
Principal a valuable investment. It may be possible to have
Don’t plan menu items such that you have a designer create a template for you that you
ingredients that are only used for one item. All of can manipulate daily or weekly or seasonally to
your ingredients should be used in at least three accommodate any changes you want to make.
menu items. This helps with the turnover of your Proof read the menu carefully. You don’t want a
ingredients, ensuring things stay fresh. customer finding a spelling error.

Changing Your Menu

From time to time, it will be necessary to
change your menu. Some items will not sell or
will no longer be profitable. Tastes will change
or new competition will require a rethink of your
offer. Be careful when changing your menu
HELPFUL TIP
that the new items you choose fit with your
concept, your kitchen’s capacity, and with the
other menu items.
Accommodating Dietary
Preferences & Allergies
Menu Presentation
It is essential that you plan for dietary
The menu is your selling tool. It must be clean preferences, such as vegetarian, gluten-free,
and clear, but also descriptive. or dairy free meals.

The descriptions you provide for each menu To save your servers time and avoid mistakes,
item should encourage your patrons to want to clearly indicate items on your menu that
order something. Remember this is your selling fit these requirements. Or, consider several
tool and you need to communicate what it is different printed menus including only the
you are selling. Use words that most people relevant items. So, you might have:
will understand and try not to confuse or make
customers feel stupid because they don’t know • A gluten free menu
the latest foodie terms. • A dairy free menu
• A vegan menu

45
 WORDS OF ADVICE
FROM THE PROS

The physical form of the menu itself needs “ For me, writing the menu is one the
most enjoyable and most challenging
careful consideration. If you need the flexibility
parts of the restaurant experience. A
to change your menu frequently, you might
guest sees a menu online, posted outside
not want laminated and professionally printed
the restaurant on a sidewalk, or in their
menus. With today’s computer capabilities, you
hands once they have sat down. In all
might find it more convenient and less costly to
three cases, the words that represent your
generate new menus yourself if this fits with your
food and experience are key to entice
concept. Or, use a blackboard.
them to enter or stay. The words whet
their appetites and fuel the excitement for
the meal that follows.
Recipes
A well written menu can be poetic, sexy,
The first step is to write out your recipes! You
and rich with meaning about the place
should have a standard recipe for every item on
you have chosen to dine. A menu can also
your menu. This is essential, not only for food
contribute to the success or failure of an
costing but also to ensure you have a consistent
experience by either allowing the food to
product every night of the week, not just the
exceed expectations or fall short of them.
nights when your best chef is working the line.
Writing a long-winded and embellished
Recipes must be standardized so that
menu does not in and of itself make for
every employee will make the dishes the
a great dining experience. In fact, it can
same way every time. You also need to
lead to disappointment when the food is
standardize ingredients, portion sizes and
less than the delivered expectation of the
plate arrangements so the customer is always
written word. Therefore, each word must
receiving the same amount and quality of food.
be chosen carefully, as it paints a clear
picture in the guest’s mind as to what will
To be able to calculate your food costs, you need
follow.
to know exactly how much each item costs.
Having a recipe that specifies this is the first
Finally, a menu is key to the branding of
step in managing your food costs. “If you can’t
the restaurant, and even the personality
measure it, you can’t manage it.”
of the chef. It identifies clearly the type
of food experience you will find inside,
Proper measurement tools, not just a standard
with even the chosen font having a huge
recipe, are essential. Easy access to conversion
impact on the guest’s perception. A
charts, scales, measuring cups and spoons,
menu is a movie trailer, with the pictures
portion cups and containers, etc. will go a long
existing in the guest’s head. It is only a
way in ensuring your standards are met.
glimpse of what is to come, but it can
make or break the success of the main
An example of a standard recipe is provided in
Exhibit 2 on page 48. feature. ”
Craig Flinn
Chives Canadian Bistro
2 Doors Down Food + Wine
Fork in the Road Productions

46
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

PURCHASING, RECEIVING also means you most likely won’t find a wholesale
price – the old laws of supply and demand.
AND INVENTORY
Talk to other chefs and restaurant operators
Understanding the purchasing, and ask them for references. Keep your options
receiving, inventory, storage and rotating open and shop around. It isn’t easy to get the
of food (FIFO) is critical to the successful best prices and service from suppliers. Whatever
management of your kitchen. If you approach you use, build a good relationship with
don’t have expertise in this, hire a chef your suppliers. Like most aspects of business, this
arrangement is often about relationships.
who does.
A sample template to enter your recipe names
and then create the necessary product list to
Purchasing determine your purchasing requirements is
provided in Exhibit 3 (page 49). It is important
With recipes in hand you will be able to prepare a
to include the brand you have decided on along
shopping list and some standard specifications for
with the details of the package size to ensure
the ingredients you need to source.
you get the right product you need. This is called
establishing your food specs or specifications.
Depending on your location in the province, you
Using food specs will allow you to shop
may not have the luxury of too many choices
competitively on an ‘apple to apple’ basis.
in terms of suppliers. The bottom line is: having
reliable sources for your ingredients directly
affects your menu.
Receiving
Many restaurants choose to use a ‘one-stop’
The goods you receive must be counted and
shopping system: that is, where one large supplier
checked on delivery to confirm you have received
provides you with just about everything you will
exactly what you ordered and what you have been
need to purchase. Many operators find this a
charged. If there are any discrepancies, they must
convenient and time-saving method, but your
be noted immediately.
menu may be limited to what they can supply.
You should also check for quality, even though this
There is an increasing trend to purchase locally
may seem time-consuming. It may be that the
from many different suppliers. While this is more
lemons on top of the case look good, but if you dig
time consuming it offers you access to some of
a little further you find a science experiment.
the highest quality, fresh and local ingredients
available.
Goods received should be put away immediately
to avoid theft and spoilage (frozen items need to
Buying locally means you may find yourself
be kept frozen). They should also be put away
running around town and visiting farmers’
FIFO (that is, first in, first out, ensuring older items
markets or calling the individual farmers
are used before newer ones). Again, this does
themselves to place your order each week (or
require a bit of effort, but it can save you in the
daily). You might be writing 10 or 20 cheques a
long run.
week at the back delivery door for COD orders.
Buying direct from local farmers and suppliers

47
Inventory managing food and beverage costs.

Another key criterion for food cost control is taking Today’s sophisticated restaurant POS software
an inventory. This can be a tedious job, but the systems often have built in systems for managing
value of your inventory needs to be accurate and and tracking inventory.
taken into consideration if you are serious about

EXHIBIT 2
SAMPLE STANDARD RECIPE
Recipe Name: Caesar Dressing
Category: Salads and Dressings
Yield *true usable quantity 1.5 litre

Quantity Ingredient
2 gr or ½ tsp Dry Mustard
150ml or 5 fl.oz Lemon Juice
5 gr or 1 tsp Table salt
5 med. each Eggs, Whole
5 ml or 1 tsp. Worcestershire sauce
2 each – cloves Garlic Cloves
1 litre or 34 fl. oz. Olive Oil
3 gr. or 1 tsp. Fresh ground Black Pepper
100 gr. or 3 oz Fresh Ground Parmesan

Method:
1. Froth the egg yolks in blender – approx 1 .5 minutes
2. Puree the garlic in the oil in a separated blender cup
3. When egg is frothed, pour in the garlic oil slowly
4. Add in the balance of the ingredients and mix well
5. Chill till ready to use

Reproduced with permission from Menu Tools

http://www.menutools.com

48
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

EXHIBIT 3
TEMPLATE TO DETERMINE YOUR
PURCHASING REQUIREMENTS

Product Pack Size Pack Price

Apples Red Delicious 1 Bag 5 kg $65.00
Bread 1 pk of 12 sl $2.09
Tortilla Shells 12x12 pc pk $46.00
Cheddar Cheese 1 pack of 1kg $14.00
Mozzarella Cheese KG $11.00
Creamers - Individual 1 pack of 160 $6.90
Eggs - Lg loose 1 case of 15 doz $33.00
Barley 1 bag 4.54 kg $27.93
Carrots - small 1 bag of 5 lb $14.50
Potatoes - large #1’s 1 bag 50 lb $24.00
Ceasar Dressing-Kraft 2 bt of 3.78 lt $38.93
Chocolate Sauce 8 bags of 1 lt $48.96
Red Bell Peppers 1 case of 5kg $28.00
Rolls-Par baked 1 case of 144 pcs $118.68
Coconut - shredded 5lb box $52.55
End cut pub steaks 1 case of 35 each $38.86
Chicken Fingers 1 case of 4kg 85 pcs $45.00
Shrimp -36-40cnt shell-on 1 pack of 1 lb $9.75
Random chicken breast 1 pack of 10 lb $44.80
Ground beef - medium 1 pack of 1 kg $5.14
Haddock pieces 1 pack of 1 lb $2.49

Enter Your Recipes Here: Enter Your Products Here:

RECIPE REQUIREMENT CHECKLIST EXAMPLE Enter Your Product Here Pack Size Pack Price
Menu Item-Plate Recipes Batch Recipes Pizza Dough Case of 48x12” 48.00
ie. 12” pizza Pizza dough Pizza sauce 6x100 oz 36.00
Pizza sauce Cheese blend KG 12.00
Cheese blend and so on...
Enter Your Top Menu Items Here Batch Recipe Here

49
Reproduced with permission from Menu Tools http://www.menutools.com
COSTING AND PRICING Here’s the logic of menu pricing: When you make
your items from scratch or homemade recipes,
you must allow for the labour cost to purchase,
Never sell anything without first store, prepare, cook and serve each menu item.
calculating an accurate food cost and
profit margin. There are a variety of Let’s begin by understanding that menu pricing
approaches that can be used to price a and food cost must be carefully balanced with
menu, some involve expensive software the labour cost. Their relationship to each other
programs and others can be as simple works like a teeter–totter: when one goes up,
as a pencil, paper and a calculator. the other goes down. The more cooking from
Pricing also depends to some extent on scratch you do, the more the food cost goes
your location – you may not be able to down yet the labour cost goes up. If you purchase
get the same price for an item in a rural ‘ready to use’ (RTU) products, your labour cost
goes down because the labour is already built
area as in an urban location. into the product and you will need less staff.
However, your uniqueness and competitive edge
An all too common technique for pricing a menu
will also go down.
is to look at what your competitors are charging
and charge a similar amount. This method
Here is the goal with a menu and its pricing:
is dangerous because you don’t know if your
you must be able to properly manage the
competitor’s costs are the same as yours. You
labour cost burden and cover the service staff
may be seriously under-pricing your menu items.
and overhead in your pricing. The goal is to sell
unique menu items that are different from the
When pricing a menu, there are many
competition and are better than can be found
considerations that must add up to ensure you
in your marketplace. Once you hook customers
are generating enough gross profit to cover all
on your food and certain menu items become
expenses and still reach a 10% or better net profit.
their favourites, you have just created the edge
The food, beverage and labour cost for front and
to move your prices upwards because the
back of house must total no more than 60%. In
restaurant is providing a quality, consistent
the industry, this is called “Prime Cost”. If you
experience for the customer.
were to set aside the allowance of 60% or sixty
cents to pay for your prime costs on each dollar
sale, then cut the budget of 60% in half, you
Menu Sales Mix
would be planning for a 30% food & beverage
cost and a 30% labour cost. If your food cost is
Reaching a targeted percentage food cost is
more like 35%, this would only leave room for a
created in the beginning by costing and pricing
25% (front and back of house) labour cost from
each menu item. Divide the cost of all that is sold
each retail dollar you sell.
by the total food sales to give a food cost sales
mix average for all sold. See the Menu Sales Mix
It’s crucial to ensure that the menu prices will
example in Table 6.
cover the labour cost needed to prepare the
menu items from scratch.
Pricing the food cost is calculated by costing all
the ingredients on a plate. It is a good practice

50
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

to add a five percent ‘safety’ for a waste factor will improve when a higher volume of lower
to each cost calculation. For example, if the food percentage cost items are sold in the menu mix,
cost per plate is $4.00, add $0.20 cents to make bringing down the overall average percentage
the food cost $4.20 to ensure there is a safety food cost mix for your menu.
factor built into the menu pricing mark-up.
The % food cost is simply the allowance that you
Each individual menu item will have a different can spend out of the selling / retail price of a
range of costs. Menu item food costs change menu item to plan for paying the food cost only
by item from as low as below 10% (e.g. Fountain of what is on the plate.
Pop) for the raw cost to as high as 50% (e.g.
lobster). The food cost average of all that is sold Table 6 provides an example of a menu mix:

TABLE 6
Sales Summary

Total Items 8
Total Items Sold 275
Total Food Cost $734.71
Total Sales Revenue $2522.39
Total Gross Profit (total sales revenue minus food cost) $1787.68
Percent Food Cost (food cost divided by sales revenue) 29.1%

51
Review the tips in Exhibit 1 to help you. Understanding how to add or back out the HST
from a selling price is illustrated below:
FORMULAS TO HELP COST AND PRICE
YOUR MENU
Formulas have been provided which can be used To Add Tax (15%) to a Selling Price
to calculate: $ Selling Price x 1.15 = Tax in Selling Price

1. Selling price For example:

2. Percentage cost $10 selling price x 1.15 = $11.50 tax in selling price
3. Food cost allowance
4. Gross profit margin (sales less direct cost of
sales and labour) Backing Out Tax (15%) from a Selling
Price
Once you have a good understanding of how the $ Selling price/1.15 = $ Before Tax Selling Price
math works, there are many food cost software
For example:
systems in the marketplace to cost and price a
$11.50 selling price/1.15 = $10 before tax selling
menu.
price

To Calculate a Selling Price Once the restaurant has been in operation for a
Food cost $––––– /Preferred % Cost = Selling Price period of time, quality and cost controls become
critical to profit and product consistency.
For example:
Typically, if a restaurant operator were to analyze
$2.50 food cost / $10 food cost = 25% selling price
their sales, the top twenty percent of menu items
sold will drive eighty percent of the revenue.
The popularity and sales mix can be established
To Calculate a Percentage Cost quickly using the Menu Mix process introduced
Food cost $––––– /$ Selling Price = Food Cost %
earlier to analyze the menu. It is a proven
For example: good business practice to have management’s
$2.50 food cost / $10 selling price = 25% food cost attention focused on the quality, consistency, and
cost controls of these top twenty percent selling
menu items.

To Calculate a Food Cost Allowance A Food Cost Check List is provided in Exhibit
% Cost x Selling Price = Food Cost $––––––
4; it is intended to be used as an audit check
For example: list for an operator/manager to use when
25% food cost x $10 selling price = $2.50 food looking at food quality and cost management
cost allowance maintenance.

To Calculate the Gross Profit

(contribution) Margin
$ Selling Price minus Food Cost $ = Gross Profit $

For example:
$10 selling price minus $2.50 food cost = $7.50
gross profit

52
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

MANAGING THE MENU

Whether you are just opening or have been in business for decades, you must continue to ‘manage
your menu’.

Continuously analyze what items are selling and what your profit margin is on these items. Consider
dropping items that are poor sellers. Can these items be re-priced? Can they be re-worked or modified
to make them more appealing or should you drop them? Keeping duds on your menu actually costs
you money.

EXHIBIT 4 - FOOD COST CHECKLIST

THE PATH MEASUREMENT TOOLS
• List the top ten most popular, highest • Provide a recipe card – ingredients &
volume, costly food products preparation method to ensure quality,
• Establish the preferred brands (product consistency & value
specifications) • Digital ounce scale and larger – 25 kg scale
• Shop on an “apple to apple basis” for the back door
• Conduct a yield test to measure ‘true cost/ • Conversion chart/weights and
best value’ of unit cost (oz, gram, ea) measurement table for common foods
• Evaluate how you receive, store and handle • Post a portion chart – top most expensive
the products products (i.e. meats & cheese)
• Confirm yield & unit cost of all batch recipe • Measuring spoons/measuring cups/
cost calculations are accurate measuring jugs
• Prepare accurate food cost calculations with • Patty papers/sandwich bags/fry containers/
cost percentage & margins of each menu portion cups
item (plate recipes) • Plastic freezer bags
• Evaluate the portion control with the recipe • Scoops/ladles/ramekins
cost card • Pie and cake markers
• ENSURE THE MEASUREMENT TOOLS & • And possibly, a common kitchen utensil
COSTS ARE ACCURATE that holds the exact portion matching the
• Ensure menu items are priced according to portion on the recipe costing card.
food cost mix goal (15% lower than budget
goal) “If you can’t measure it, you can’t manage it”
• Maximize retail price of top ten most
popular menu items
• Monitor numbers sold to consumption of
product

“If you can’t eat it, it’s not food cost”

According to menu costing expert Wayne McKay, the ‘menu mix’ area is the fun part of menu costing.
This is when all of your information comes together and you see that you have options and control.
53
WINE AND BEVERAGE and spirits from NSLC; you will need to register
with them for this. If you don’t pick up your own
MENUS orders you can arrange for delivery but there will
be a charge for this. Private stores offer products
Both non-alcoholic beverages and wine/beer/ not available through the agency stores and
liquor offer a huge boost to your bottom line and delivery is usually free; most also offer a discount.
average sales check. The mark-up on these items
can sometimes be much higher than the mark- Consider supporting our own regional wine
up the market will sustain for food items. industry. Nova Scotia is producing many award-
winning vintages. Some local wineries will
Most importantly, your wine and beverage menu provide good discounts if you buy directly from
should complement your menu and concept. them. There are also more and more craft
Wine should be selected to enhance the food breweries opening in Nova Scotia that you could
you are serving. If you aren’t knowledgeable in support.
this area, consider hiring a sommelier to help you
select wine to pair with your food offerings. Wine Having a good mix of non-alcoholic drinks is
and liquor companies (and private wine stores) important today, so don’t neglect to build these
will offer to select, design and print your wine into your menu.
lists, provided you are serving their brands.
Understanding beverage cost controls and
As with your food menu, it is important to select having strong inventory
suppliers who can guarantee product availability
and delivery. As a licensee, you can purchase
directly from the NSLC warehouse or shop at
agency stores. There is a 10% discount on wine

HELPFUL RESOURCES

https://buyersguide.restaurantscanada.org/companies/

$ or Dollars: Effects of Menu-price Formats on Restaurant Checks, Cornell Hospitality Report

https://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15048.html

54
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Cafe Chianti

55
56
Sushi Nami Royale
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE DESIGN AND BUILD

Good design pays. Your design is dictated by your vision, concept and
your menu. If you are not a designer, get some help.

Don’t underestimate the power of good design.

Good design is essential if you want to be
successful. Good design can:
WORDS OF ADVICE
3 Attract customers into your restaurant FROM THE PROS
3 Be a significant part of the customer
experience. Success in the restaurant
business is about customer experiences...not “ In building a new restaurant,
just the food you must have a clear vision of
3 Make people want to try out your restaurant the concept and identity of your
and come back
business - all your decisions will
3 Help control noise and odours
3 Make your restaurant more efficient to run flow from this. Having said that,
and more attractive to work in you also need to be flexible as the
3 Be a significant part of your brand identity
3 Help retain employees build process moves along. If you
always think about what is best for
Naturally, the design will be influenced by your
your guests, you will always make
concept, type of food, and how you serve it. At
the same time, it will be constrained by local the right decisions. ”
and provincial zoning and building regulations,
and your budget.
Stephanie Bertossi
Formerly The Bertossi Group of Restaurants
il Mercato Trattoria

CHAPTER MODULES
Ristorante a Mano
The Bicycle Thief
La Frasca Cibi & Vini

7.1 Your Design

7.2 The Contractor
7.3 The Kitchen Design
7.4 Kitchen Equipment
7.5 Helpful Resources

57
 KEY TAKEAWAYS

• Hiring professionals is an investment

Just because DIY is cheaper, doesn’t mean it is less expensive. Professional designers
know how to create an atmosphere that will keep customers coming back for more…

• … But you’re still the boss

Ensure your designer stays on track by providing them with important details (like
budget and functionality requirements) and make sure you stay involved.

• Good relationships are key

In the restaurant business, you can’t afford delays due to a broken dishwasher or bad
plumbing. You’ll need an army of subcontractors who are available at a moment’s
notice.

• Your kitchen design can make or break you

Make sure you talk to professionals to know what the requirements are versus
what is to be put on the ‘wish list’. A well-designed kitchen will also help you retain
employees.

• When it comes to equipment, you have options

New or used? Buy or lease? Propane or natural gas or electric? Explore all of these
options to determine what works best for you. Don’t think that you need the most
expensive piece of equipment to start with.

58
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

YOUR DESIGN Washrooms

The number of washrooms you will require

Start with some simple math and a isn’t always straightforward and will ultimately
review of the key regulations. How depend on the style of restaurant, your liquor
many seats do you want to/need to licence, your occupancy and dining room
have for your business plan to work? capacity as spelled out in the building code,
and the number of staff you will have working.
Use a simple software program to start
The Nova Scotia Department of Agriculture also
laying out the space to get the most has requirements that impact the number of
out of what you have available. Don’t washrooms – if your establishment is over 1,000
overbuild or take on more space than sq.ft. in area, you will need to provide separate
washrooms for staff.
you need.
The other requirement with washrooms is
providing accessible washrooms in accordance
Space Requirements
with the building code. Make sure you
understand the liquor licence requirements
There are some commonly used ratios of
when it comes to your layout and design. For
production space to revenue generating space.
example, if you want a lounge licence (so you can
It is not uncommon for designers to allow too
serve liquor without food), there are implications
little space for production. And let’s face it, as
on how the washrooms are accessed.
a restaurateur, you will want to fit in as many
revenue-generating seats as possible. Do keep
You are well advised to explore all requirements
in mind that taking away space from the product
as early as possible in the design process.
and storage areas can cause serious problems
down the road.

A common ratio is 1/4 to 1/3 for production and

Seats
storage, and 2/3 to 3/4 for dining area space. In
Seats are very important! Every seat counts in
planning for the service area, allow about 15
the restaurant business. You will want to fit in as
sq.ft. per seat. (Liquor licence rules require a
many revenue-generating seats as possible. At
minimum of 12 sq.ft. per person, unless the Fire
the same time, you’ll want to ensure that your
Marshal requires a lower capacity). There are
kitchen, through its design, can support the
other requirements that will impact your space,
number of seats.
such as number and type of washrooms (see
below).
Booths are popular with customers but
moveable tables and chairs will give you more
For example, if you are planning a 100 seat sit-
flexibility in seating.
down restaurant, you should have 1,500 sq.ft.
in the service area plus another 750 sq.ft. for
You need to think about traffic flow around
kitchen and storage. In addition, you will need
tables and chairs. There are industry standards
allowances for washrooms and mechanical
for table size and the distance between two
systems.

59
tables. Computer generated design diagrams Dishes, Glassware, And Flatware
can help you visualize your options for fitting in
tables and chairs. These objects are intimately experienced by the
customer: they put them to their lips and in their
mouths. They see and touch them and linger
Chairs over them in the long hungry moments before
their food arrives. This doesn’t mean you have to
As for the seats themselves, explore your options. spend a fortune on buying the best. It does mean
Restaurant chairs take a lot of abuse – frequent you should know that the quality and condition
use by people of all sizes and those who like to of your dishes and cutlery can leave a lasting
lean back on two legs. You will need to maintain impression.
them and replace them (so think carefully about
purchasing the last of a lot). They need to be Rarely will household china stand the level of
easy to clean. They need to be comfortable for wear and tear and abuse that comes with the
the customer, but not too comfortable if you’re business. You would be wise to consider only
banking on a high turnover! commercial products.

If matching dishes, glasses and flatware are part

Tables of your design, be careful to find a supplier who
can assure you a future supply. This isn’t just a
The surface of the tabletop needs to be easy start-up cost, your initial purchase will need to be
to clean and maintain. They will be subject to replenished because of breakage and theft while
daily repeated cleanings. With time, the surface you are in business.
material will get scratched and worn and dented
and may need to be continuously refurbished.
Of course, you won’t need to spend a fortune on Decor And Furnishings
tabletops if you plan to use tablecloths.
The combination of materials, colours, textures
Table bases are important! You will soon become and lighting in your restaurant must all work
an expert at leveling the legs of the tables to together. It is very difficult to get this all right
prevent the tables from wobbling. This can be without the help of a professional.
a major annoyance for customers. Research
your options when it comes to the feet, or floor Too much clutter in a restaurant not only confuses
levelling devices, especially if you have a tile floor the customer, it will also increase the number of
that isn’t smooth, or the dining room floor slopes. places where dirt and grease can gather.

Imagine your tabletop when a customer first Lighting can be everything in a restaurant. It
sits down. Think about the details of what it will certainly sets the mood and ambience of the
look like: will there be flowers, salt and pepper room. It can be a grave mistake to underestimate
shakers, menus, lamps or candles? You will need the importance of lighting design. Improper
to make choices about every detail – they are all placement can make customers look
part of your design. unattractive, and can draw attention to things
you might not want to.

60
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Function
HELPFUL TIP
Give a lot of thought to traffic flow. How will
customers enter and exit with ease and not
become bottlenecked in chaos?
Keep the Fire Marshal, Alcohol &
Have you watched the sun’s movements to Gaming Licensing Inspector and
determine if you will need blinds? There may the Building Inspector in the Loop
be times of the day when you need to have
something to keep direct sun from blinding As your plans proceed, keep the various
customers. inspectors up to speed. You will find that
guidelines for the number of seats and
When the front door opens in the middle of other facilities can vary between agencies,
winter will all of the customers in the restaurant and changing something can impact the
feel the gusts of cold air? Do you have sufficient requirements of another agency.
space to hang guest coats?
Make sure you get sign off on your plans from
How will your servers pick up and deliver food? each agency in writing.
During the planning and design phase you must
consider everything you can to ensure a smooth
experience.

Other Factors

Consider sound and acoustics in designing your

restaurant and selecting materials. For some
restaurants, having a lot of noise is part of the
theme and concept. For others, the opposite
is critical. Make sure that you work with your
designer and contractor to get the type of
acoustics you are looking for.

Agricola Street Brasserie

61
THE CONTRACTOR THE KITCHEN DESIGN
Whether you choose to hire a general A restaurant kitchen is not just a
contractor or to take this job on kitchen. It is a machine that should be
yourself, you will need an army of other built around the menu. And when it
‘sub trades’ to get the job done. comes to kitchen design and layout,
less space is often better.
From carpenters, electricians, plumbers,
mechanical engineers, refrigeration experts, and Restaurant equipment supply businesses have a
gas and propane installation technicians, you range of design programs and staff to help you
need a great team to get the job done right. The put a plan together for your kitchen. But first,
reality is you will require these professionals and you must have a menu. The menu will dictate
trades-people during your entire life in business. what equipment you need. The equipment will
These relationships are very important to your dictate the infrastructure you will need to be able
success in managing your business. to operate. Once these things are determined,
always have your plans reviewed by other
If you don’t have a contractor, ask for restaurateurs and chefs.
recommendations. Get quotes on the work
that needs to be done and check references. A The ‘Kitchen Planning Cheat Sheet’ in Exhibit
renovation can be costly and time-consuming. 5 provides some useful tips and hints when
It must be kept on budget and on a time-line. planning your kitchen.
Delays are, unfortunately, inevitable.

Your contractor must commit to a timetable for

completing the work. He or she can hire all of the
trades needed to finish the renovation.

Unexpected Surprises

If you are renovating an older building, keep in

mind that costs can escalate as you begin to tear
away old layers. You never really know what you
are getting in to and while sometimes you can
discover wonderful treasures that work in your
favour, in most cases, your costs will increase.

62
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

EXHIBIT 5
KITCHEN PLANNING CHEAT SHEET

3 If you don’t have a menu, you can’t begin to design the kitchen.
3 Get help from an experienced chef/operator when drafting your kitchen design.
3 Always get a second quote and experienced opinion on your plans before you spend any
money.
3 Start with a copy of the menu and a large (blotter size) graph paper to pencil in the
equipment to scale.
3 Using the square footage you require to layout the kitchen, decide what storage space
you will need to receive, store, prepare, portion, prep and cook your menu.
3 Using the copy of the menu, mark each menu item with a number on the menu and
then again write the same number on the graph paper where it will be cooked. Then,
write the same number where the item must be stored properly at an arm’s reach in
using the right piece of equipment.
3 The flow of the product starts at the back door — starting with the receiving space.
3 Every step saved is time saved and stress reduced when you need to perform on
the line. Think of wells to store oils, cooking wines, condiments while cooking under
pressure.
3 Plan the walk space between the cooking equipment edge and plating area behind the
line to be approximately a metre or 3 feet in width to provide a passing space for coming
and going in front of the line.
3 When shopping for the best equipment, look for proof of dependability, track record for
durability and most importantly, a proven service record in your area.
3 DO NOT risk buying used equipment for your 20% high volume menu items on the
menu.
3 Plan the areas so there isn’t crisscrossing on the line.
3 Think of refrigerated drawers with remote compressors to allow maximum space and
less stress on the compressor and your electricity bill.
3 Consider using induction burners (cooking on a magnetic field) to cook more efficiently
and in a cooler environment.
3 Plan resting places where you are going to place your knives in between orders.
3 Remember the importance of well-placed hand washing sinks.
3 Always think ahead about dividers and cross-contamination of food splashing.
3 Consider airflow through the kitchen. Consider planning a carbon sensor that will
change the speed of the fan when needed in smoky, busy time and will allow the baffles
to close on the exhaust when it is not hot or smoky. This can save you a lot of money.
3 Have your proposed layout previewed by the Fire Marshal, the Alcohol & Gaming
Division and the Department of Agriculture and your municipality for their approval. Get
their sign-off in writing.
3 Never start anything without a building permit.

63
Bigger Isn’t Always Better faster the service, and the happier the customers.

You might be surprised to learn that the most Plan and build your kitchen using the forecasted
profitable restaurants are often the restaurants “20/80 rule”. Dedicate the highest efficiency
with smaller kitchens — with less space comes equipment to the menu items that make up the
smarter designs. top 20% of sales. Remember, however, that the
other 80% of menu items should take roughly
The best approach to designing a kitchen the same amount of time to prepare. That way,
line is to ensure its functionality allows you to a table’s service does not become bottlenecked
service your menu with the least amount of staff because one person ordered a more time-
possible. Think of a galley kitchen, or a kitchen consuming meal.
in a metropolitan city, where extra space simply
doesn’t exist. Long customer wait-times can be a death-
sentence for both quick and full service
restaurants alike. Having said this, a full service
Service Efficiency And Speed restaurant is more likely to be forgiven for
lengthy wait times, with the exception perhaps,
The other key component to a smart kitchen is of lunchtime service when customers are
the distance from the kitchen to the dining area; crunched for time and expect restaurants to be
the shorter the distance, the hotter the food, the accommodating of this.

Sushi Nami Royale

64
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

KITCHEN EQUIPMENT Service Plans

New or used, you will want to think about
“service plans,” especially on high functioning
Getting the right equipment can make equipment like dishwashers. Your restaurant
or break you in the restaurant business. can’t be open if your dishwasher isn’t working,
Be sure to consider all your options so when it breaks, you need to get it fixed right
before making purchases. away.

Keep a list of companies/people that can service

It is important to get equipment that helps your equipment, and a list of back-ups. You
your chef to prepare and store food efficiently. can’t afford to have major equipment down for
Whatever your concept is, plan the efficiencies very long.
from the back door to the plate.

Before you spend a penny, go on tour of as Consider Leasing

many kitchens as you can to learn the pros and
cons of different approaches. Consider looking Another option for major equipment such as
at franchise type kitchens for the practical flow stoves, refrigerators, is leasing. This approach is
and general functionality. becoming more common.

A typical restaurant kitchen might contain: a In choosing between leasing or borrowing

range, griddle, fryer, hood/fan, ovens, broilers, money to purchase, the question asked most
microwave, steamer, kitchenware, tables/ frequently is what is the interest rate? The
counters and small appliances, a refrigerator difference between the lease rate and the
or walk-in, a dishware and sink area, and a interest rate you would pay on a loan is most
sprinkler system. Ultimately, your menu will typically 3 or 4 percentage points and the initial
determine what equipment you will need. reaction is to assume that the lower rate (for
purchases) would be the better choice but there
are other factors to take into consideration.
New vs. Used
The lease payment is an operating cost and
You will need to make decisions about whether is, therefore, most likely a deductible. On the
to purchase new or used equipment. The other hand, if you buy the equipment it may be
benefit of buying new is that the equipment considered a capital purchase and listed on your
will be covered by warranties and you can financial statements as an asset. And, if you
rest assured that you won’t face any major purchase, sales taxes have to be added so this
repair bills in the first year or two. Also, new increases your costs automatically by 15%. So
equipment is likely to be much more energy while the financing costs may appear high (and
efficient. make sure you read the terms in the fine print),
leasing does reduce your start-up costs and
allows you to pay monthly for a term. Leasing
companies may be willing to work with you on
the terms.

65
 Photographer: Jessica Emin
Lot Six

You should also consider whether the asset

will appreciate or depreciate. Your accountant HELPFUL TIP
is best able to look at your individual
circumstances and give you a recommendation
as to which is the cheapest and wisest choice for
your business. New vs Used Equipment
Be careful with buying used for major pieces
of equipment. If it doesn’t work, you could be
Time for an Upgrade? in big trouble. If you are smart and careful, you
can do OK with used equipment, particularly if
Efficiency Nova Scotia ( http://www.efficiencyns. it is not a critical piece of equipment.
ca/ ) offers rebate programs to upgrade kitchen
equipment to more efficient models and fuel
sources. It involves a bit of paperwork, but can
be well worth your effort.

66
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES

Reading List

Restaurants that Work: Case Studies of the Best

in the Industry by Martin E. Dorf
http://www.amazon.ca/Restaurants-that-Work-
Studies-Industry/dp/0823045404

Resources

Where to find help in Nova Scotia:

Restaurant Association of Nova Scotia (www.
dinens.ca) has an online directory of suppliers to
the restaurant industry.

67
68
Grounded Coffee Bar
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE MATH AND THE

MONEY
How can you predict if your concept will work? You need to do a feasibility
assessment before major commitments are made to establish the
business. If the math doesn’t add up, the sooner you know, the better.

CHAPTER MODULES
8.1 Feasibility Analysis
8.2 Startup Costs
8.3 Financial Projections
8.4 Options for Financing
8.5 Helpful Resources

KEY TAKEAWAYS

• Figure out if your plan makes sense

A feasibility analysis will tell you if your business has the potential to succeed.

• Figure out your costs

This may seem like common sense, but sit down and really do the math — it might
surprise you. Make sure you do the numbers using different assumptions for revenues
and costs.

• You’ll need money up front

Start-up costs can be a big chunk of change. Make sure you have enough for the capital
investment and working capital.

• There’s money out there — figure out how to get it

When it comes to financing, there are plenty of opportunities. It’s important to become
well versed in the available sources and determine which options are best for you and
your business.

69
FEASIBILITY ANALYSIS START-UP COSTS
Do the math. Your restaurant must be Regardless of what type or style of
profitable. restaurant you are planning, you will
need to get a handle on what it is going
to cost you to open.
Assess Your Situation

In order to minimize your risk, you need to be

The costs of opening a restaurant will vary with
able to answer the following questions:
location, design, lease, concept, etc. You need an
estimate of the capital investment required since
3 Can you get the volume of business you need? this will give you an idea of how much financing
3 How many customers a day will it take? you will need.
3 What is the average check or spending per
customer needed to generate the revenue Don’t forget the requirement for sufficient
required? working capital. Undercapitalization at the
3 What will you need to sell each day to break beginning or capital cost overruns can lead to a
even? business not having enough cash to pay its bills.
3 Will revenues be sufficient to cover operating Restaurant operators often underestimate how
costs? long it will take for the business to reach a level
3 Will the business make a profit — enough to of profitability adequate for carrying all its costs.
pay you a living wage, cover your debt and As a result, cash flow becomes a problem for
pay a return on investment? many new restaurants. Seasoned restaurateurs
recommend you have at least 6 months working
capital available.
Is it worth it?
Keep in mind that at this point you are trying to
What is really involved here is risk reduction assess the feasibility of starting your restaurant
and taking your business proposal past the and will need some realistic estimates of the
pure seat-of-pants, ‘gut-feel’ level. Carefully costs.
undertaking a feasibility assessment will give
you the information you need to make a better, Worksheet 1 on the next page might be helpful
more informed judgment about whether or not as you begin to itemize start-up costs. It can be
to proceed. used in determining how much financing you
will need in total. Table 7 lists typical restaurant
You must convince your banker that your idea equipment and furnishings that you will need to
makes sense; most importantly you must allow for.
convince yourself.
A note re Point of Sale (POS) Systems. They can
be expensive (a base system with 2 terminals
and a back-up can be $10,000; more extensive
systems can run to $30,000). You may want to

70
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

TABLE 7
Typical Restaurant Equipment and Furnishings

SERVICE AREA OTHER

Furniture POS (point of sale) System

• Chairs, bar stools, high chairs
• Table tops and bases, folding tables KITCHEN
• Tray stands
Cooking equipment
Dinnerware and flatware
• Range
Glassware
• Griddle
Table top accessories
• Fryer
Beverage and bar supplies, coolers
• Hoods/fans
• Ovens, broilers
STORAGE AND OTHER
• Microwave
• Dry storage • Steamer
• Cool storage • Tilting skillet/kettle
• Liquor locker • Kitchenware
• Freezer Preparation tables/counters and equipment
• Shelving and other equipment Service and holding/warming equipment
• Transportation equipment Refrigerators
• Sanitation and maintenance equipment Dishwasher
Sprinkler system
Fluorescent lighting

consider lower cost options, such as an I-PAD

system if you are planning a small, simple HELPFUL TIP
restaurant operation. More information on POS
can be found in Chapter 11.

Sample Capital Costs Things Cost More and Take Longer

Some examples of capital costs for a small (60-80 Whatever you think your capital budget will
seat), basic, hypothetical restaurant are provided be, add 30%.
in Table 8 on the following page to provide
a broad indication of the type of investment Extend your expected opening date by 3
required to open a restaurant. These are estimates months.
only and some costs can change dramatically
based on concept, size, location, etc. If you are
taking over an existing restaurant space with
equipment that can be re-used, you should be
able to save money. 71
TABLE 8
Sample Capital Costs for a Small (60-80 seat) Restaurant

ITEM AMOUNT

Design $25,000
Leasehold improvements (assumes empty space) $250,000
Furniture $10,000
Fixtures/Smallwares/Dishes $10,000
Kitchen Equipment (incl. refrigeration) $80,000
Hood/Fan/Exhaust System $35,000
Cash/POS System $10,000
Advertising/Website/Menu Design/Uniforms $10,000
Inventory $10,000
Working Capital $30,000
subtotal $470,000
Contingency (15%) $70,000

Total $540,000

FINANCIAL PROJECTIONS
When developing your financial projections, be conservative. It’s better to plan for
the worst case scenario — slow start, fewer customers, lower sales — than to make
unrealistic projections and have to deal with the aftermath.

Revenues

Begin with an estimate of your sales revenue. One way to forecast sales is to break the days down into
meal periods, forecast the seat turnover for each period to determine the number of customers or
covers. Then multiply the number of covers by the estimated average check.

72
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WORKSHEET 1
Capital Requirements Worksheet

Capital Assets (*)

Land
Building (Construction or Renovation)
Kitchen Equipment
Refrigeration & Storage
Dining Room Furnishings & Equipment
Office, POS & Systems Equipment
Roads, Parking & Landscaping
Services (hydro, gas, etc.)
Signage
Other
Subtotal (A)

Pre-Opening Soft Costs (Costs prior to revenue being earned)

Salaries
Staff Training – Wages & Costs
Pre-Opening Marketing & Public Relations
Interest during Construction/Renovations
Design and Consulting Costs
Other Professional Fees (legal, accounting, etc.)
Incorporation, Registration, Licensing, Dues
Other
Subtotal (B)
Subtotal Capital and Pre-Opening Expenses (C) (A+B)
Contingency (20% - 30%) (D)
Total Capital and Pre-Opening Expenses (E) (C+D)

Working Capital
Inventory
Prepaid Expenses
Other Current Assets
Cash Reserve/Line of Credit
Subtotal (F)

TOTAL FINANCING REQUIRED (E+F)

*Note: Some of these will not be applicable if you are leasing space.

73
Worksheet 2 can be used to calculate your
weekly revenues. If you anticipate your sales will HELPFUL TIP
fluctuate seasonally, you should do estimates for
the different periods.

Do the Numbers Over and Over

Expenses
Do your financial projections several times
using varying assumptions and ‘what if’
There are four kinds of expenses you need to
scenarios.
estimate. Your numbers can be derived from
either a detailed work-up, or you can look to With software programs like Excel, it is simple
industry norms (see Chapter 2), which can be to build a model and then change key factor
used to ball-park your expenses. Worksheet 3 such as sales per seat, cost of sales and labour
(page 76) will help you project expenses. costs.

COST OF SALES Satisfy yourself that you will be able to pay the
In a restaurant, this normally includes all of the bills even under the worst case scenario.
costs of the items used and resold to customers.
That is, the cost of the food and beverages used
in preparing the menu items you are selling.

DIRECT OPERATING EXPENSES Putting It Together:

These are also referred to as variable operating The Projected Income Statement
expenses. They include the costs that are directly
involved in providing your product and services Combine your estimates of revenues and
to the customer. They can vary with the number expenses into a summary projected income
of meals you serve. They include the cost of statement. It would look something like
labour, fuel and supplies used in preparing and Worksheet 4 (page 77):
selling your meals.

OVERHEAD EXPENSES
These are also called your fixed expenses and
don’t necessarily vary with changes in the
volume of business you are doing. These are
the supporting costs of providing service and
running your business.

74
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WORKSHEET 2
Worksheet for Projecting Restaurant Revenues

Mon Tues Wed Thurs Fri Sat Sun Total Weekly

Revenues

Breakfast
Number of Seats
Seat Turnover
Average Check
Projected Revenue

Lunch
Number of Seats
Seat Turnover
Average Check
Projected Revenue

Dinner
Number of Seats
Seat Turnover
Average Check
Projected Revenue

Total Food Revenue

Percentage of Food Revenue
for Alcoholic Beverages
Total Beverage Revenue

Total Food and Beverage

Revenue

75
WORKSHEET 3
Worksheet for Estimating Restaurant Operating Expense

Basis for Calculation Mature Year 1 Year 2 Year 3 Year 4 Year 5

Year
Cost of Sales
Food % of food sales
Beverage % of beverage sales
Total Cost of Sales
Prepare a worksheet
Direct Operating Expenses or
Wages % of total revenue
Supplies % of total revenue
Total Direct Operating Expenses

Overhead Expenses Estimate these costs

Management Salaries based on
Fringe Benefits combination of
Marketing • Industry norms
Repairs and Maintenance • Quotes and estimates
Utilities you have received
Office Supplies from suppliers
Communications • Your own analysis
Rent
Equipment Leases
Insurance
Property & Business Taxes
Bank & Credit Card Charges
Professional Services
Travel
Miscellaneous
Total Overhead Expenses

Grand Total Operating Expenses

76
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WORKSHEET 4
Summary Worksheet: Projected Income Statement

Mature Year 1 Year 2 Year 3 Year 4 Year 5

Year
REVENUE
OPERATING COSTS
Cost of Sales
Direct Operating Expenses
Overhead Expenses
Total Operating Costs

OPERATING PROFIT

77
OPTIONS FOR FINANCING success. They are hoping for a return on their
investment and will likely become ambassadors
for your business — bringing friends and
Unless you are independently wealthy, colleagues through the doors.
you are going to need to raise some
money to open the doors. You must Try to make these people investors, not
shareholders. As shareholders, they may well
also be prepared to invest a significant
expect a say in the running of the business or see
amount of your own money. your restaurant as their ‘personal’ place.

Owner’s Investment Equity Tax Credit Program

Rule number one is that you must invest The Government of Nova Scotia offers an
significantly in the business yourself. You have investment program, known as the Equity Tax
to have your own neck on the line — especially if Credit. It offers investors (who invest in eligible
you are asking others to risk their money on your Nova Scotia businesses) a one-time tax credit
restaurant. of 35% of their investment to a maximum of
$50,000 per year. This means that if you or
Do you have savings? Can you borrow against another resident of the province invests $10,000
your house with a home equity loan or line of in your business, you would receive $3500 back in
credit? If you are eligible for credit cards or a line tax credits against your Nova Scotia tax payable.
of credit, apply now! It doesn’t mean you have to Note: At the time of this update, a Nova Scotia
use them but, they will come in handy if you run Tax and Regulatory Review was underway.
out of cheaper options.
For more information visit: http://www.
Banks will expect at least 10% of the required novascotia.ca/finance/en/home/taxation/tax101/
capital to be the owner’s investment, and at personalincometax/equitytaxcredit/default.aspx
least 1/3 total equity. (You will find, however, that . Among the conditions of the tax credit, is that
banks are very very cautious when it comes to the investor must retain the share for a minimum
financing restaurants). of five years, and be a resident of Nova Scotia.

If you need to raise more than $25,000 (there are

Private Investment some costs associated with the process) this is
a very smart way to go. You might be surprised
If you need to look for more money than you how many friends, colleagues, and family might
have yourself, you can look to outside investors. want to invest in you.
While it can take some work to manage the role
and expectations of outside investors, there are
lots of benefits. Sometimes this type of financing Crowdfunding
can mean you won’t have an immediate debt
servicing cost. According to Wikipedia, crowdfunding is the
collection of finance to sustain an initiative from
Private investors are usually vested in your a large pool of backers—the ‘crowd’ — usually

78
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

made online by means of a web platform. Young entrepreneurs age 18-34 may also use
funds as a business growth loan. Additionally,
The Brooklyn Warehouse, a successful Halifax the program allows each client to access up to
restaurant, has twice used crowdfunding to $2,000 for business training and consulting. The
help finance two much needed renovations Seed Capital Program is available for businesses
to their restaurant. The story of how they located in Halifax, Dartmouth and Bedford.
successfully carried out the raised the capital
they needed is described in their blog: http:// For more information, visit: http://ceed.ca/
brooklynwarehouse.ca/theblog/2013/2/26/the-
success-of-crowdfunding
Futurpreneur Canada

Centre For Entrepreneurship And futurpreneur Canada (formerly The Canadian

Education Development (Ceed) Youth Business Foundation) partners with CEED
to offer up to $15,000 interest rate financing
The Centre for Entrepreneurship and Education for entrepreneurs age 18-39 that are starting a
Development (CEED) in Halifax administers business.
educational and financing programs to assist
entrepreneurs to develop and execute business Clients can also qualify for an additional $30,000
ideas. through the Business Development Bank of
Canada’s double matching program, and the
Whether it’s organizing your business plan, opportunity to participate in futurpreneur’s
getting access to forecasting templates or mentoring program, matching young
connecting you with a mentor, CEED has a team entrepreneurs with experienced business
of experts and the tools and resources to help. professionals.

In addition to offering training programs and For more information, visit: http://www.
one-on-one assistance with business planning, futurpreneur.ca/en/
CEED staff help facilitate start-up funding
through a loans program. You may be eligible
for a start-up loan and a number of different Community Business Development
assistance programs. Corporations (Cbdcs)

CEED’s Self-Employment Benefits Program Outside of the metro Halifax area, you should
(SEB) is a 40-week intensive program that helps look to the Atlantic Association of Community
entrepreneurs become self-employed. If you are Business Development Corporations (CBDCs),
eligible for Employment Insurance (EI) SEB can a network of autonomous, not-for-profit
provide you with income and entrepreneurial organizations that work with all levels of
support, with access to ongoing support from government and the private sector to meet the
SEB advisers. needs of small businesses.

The Seed Capital Program offers up to $20,000 CBDCs can assist by providing financial and
in low interest rate financing for business start- technical services. They offer:
ups that belong to entrepreneurs age 18 and up.

79
3 Financial assistance to a maximum They offer:
of $150,000 in the form of loans, loan 3 Financing: long-term loans for projects and
guarantees and equity financing to existing working capital
and aspiring entrepreneurs. 3 Consulting services: tailored consulting
3 Counselling & advice for small businesses. services at a price businesses can afford
3 Entrepreneurship development and training 3 Subordinate financing: hybrid debt and
for individuals and small business owners/ equity financing
managers 3 Venture capital: direct and indirect
3 Technical assistance, usually in the form of investments in high technology companies
guidance and coaching, and sometimes
advocating on behalf of clients to other For more information, visit: http://www.bdc.ca/
lending establishments or regulatory
agencies.
Banks And Credit Unions
For more information, visit: http://www.cbdc.ca/
You will soon discover that banks and other
financial institutions are extremely cautious with
Nova Scotia Small Business Loan restaurant financing. When you are starting out,
Guarantee Program do not be surprised if getting a bank loan is not
an option.
Administered by the Cooperative Council of
Nova Scotia, the province’s credit unions and Regardless of whether your bank gives you
the Province of Nova Scotia, the Nova Scotia financing, you will want to ensure that you have
Small Business Loan Guarantee Program offers a good relationship with your banker. You never
government guaranteed loans (term loans, know when you might need them!
working capital, lines of credit) of up to $500,000
to start or grow a business.

For more information, visit: http://www.

novascotia.coop/programs/small-business-loan-
guarantee-program/

BUSINESS DEVELOPMENT BANK OF

CANADA (BDC)

With over 100 business centres in Canada, the

Business Development Bank of Canada (BDC)
is a bank focussed exclusively on entrepreneurs
and providing assistance to small and medium
sized business.

80
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES
APPENDIX I

1. Operating norms by number of seats and for

urban and rural locations in Nova Scotia.
2. Findings from a US survey of restaurants about
sales-investment results, cost estimates and
space requirements.

READING LIST

Canadian Restaurant Accounting by Douglas P.

Fisher, 2nd edition (Canadian Restaurant and
Food Services Association)
https://shop.restaurantscanada.org/

Reading Financial Statements for Dummies by A.

Wilely Brand
http://www.dummies.com/how-to/content/
reading-financial-reports-for-dummies-cheat-
sheet.html

81
82
Bistro Le Coq
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE RULES AND

REGULATIONS
Business organizations lobby government to ‘reduce red-tape’ and
governments respond with ‘red tape reduction programs.’ The bottom-
line is that red tape is a fact of life when you are in business.

Keep in mind that rules and regulations can

change frequently and you should check with
CHAPTER MODULES
the appropriate authorities to obtain up-to-
date information on the laws that may affect
9.1 Registry of Joint Stocks
your business. The provincial government has
9.2 Canada Revenue Agency
been going through a process to streamline
9.3 Municipal Building and Zoning Approvals
red tape that impacts small business. One of
9.4 Food Safety: Nova Scotia Department of
Agriculture
the outcomes of this is an on-line tool to help
navigate the process of opening a restaurant
9.5 The Liquor Licence
or accommodation business in Nova Scotia.
9.6 The Fire Marshal
This tool includes a step-by-step process as
9.7 Department of Transportation and
Infrastructure Renewal
well as links to required licenses, permits and
inspections. It can be accessed through http://
9.8 Department of the Environment
www.novascotia.ca/snsmr/access/business.asp .
9.9 Department of Labour and Advanced
Education
There is no doubt that the road to opening will
9.10 Occupational Health and Safety
be much smoother if you develop a relationship
9.11 SOCAN and RE:SOUND
with the men and women who work to
9.12 Helpful Resources
administer the rules and regulations.

Exhibit 6 on the next page summarizes the

phases in renovating or building a restaurant,
and where the various regulatory agencies
need to get involved. Following Exhibit 6 is a
simplified graphic of the process for developing
a restaurant in Nova Scotia from the initial
concept through to final permits and licences.

83
 EXHIBIT 6
6 REGULATORY PHASES TO RENOVATING OR
BUILDING A RESTAURANT
Phase 1: Plan First
• Do your own Preliminary Planning – use a software program to help with a rough
layout and to make sure you can fit the number of seats you want
• Hire a Designer and Prepare Building Plans and Specifications.
• Consult with each of the following in the planning of your space:
- Your municipality (to make sure your concept fits with zoning rules)
- Department Environment (food safety and design and layout)
- Alcohol and Gaming Division (if you want to serve liquor)
- Office of the Fire Marshal (occupancy, fire exits, etc.)
- Department of Environment (water and septic requirements if you are not on
municipal services)
- Department of Transportation and Infrastructure Renewal (if on a provincial road)

Phase 2: Check Regulations

• Consult with your municipal building inspector to review bylaws regarding zoning and
land use and building requirements for plumbing, electrical codes, fire protection,
cooking surfaces, etc.
• Consult with the Department of Environment and the Alcohol and Gaming Division.

Phase 3: Seek Approvals

• Get the green light: obtain approval for construction of your business.
• You will need to submit copies of your building plans and specification to each of the
agencies listed in Phase 1 for their approvals so that you can get the necessary licences.

Phase 4: Manage the Project

• Develop, plan and schedule for the construction phase
• Schedule timelines, establish critical path deadlines, and develop a budget and
payment schedule
• Invite bids from contractors
• Launch the project
• Monitor and inspect progress as the work proceeds

Phase 5: Request Occupancy Permit

• Once construction is complete, and all inspections have been done and approved, you
will receive an Occupancy Permit.

Phase 6: Inspection and Approval

• Once the occupancy permit is issued, the Department of Environment, the Fire
Marshal, and the Alcohol and Gaming Authority will inspect your property for final
approval and licensing.

84
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

PHASES TO DEVELOPING A RESTAURANT

IN NOVA SCOTIA

PHASE 1

PHASE 2

PHASE 3

PHASE 4
Business Planning (Time Required: 3 – 12 months)

Vision and Concept

Business Plan & Feasibility Analysis
Financing
Business Name
Registration & Incorporation
Location Selection (check zoning & regulations)

Preliminary Planning (Time Required: 3 – 6 months)

Rough layout to confirm # of seats . Alcohol & Gaming
Hire Design Team . Office of Fire Marshal
Consult with: . Dep’t of Environment – Public
. Municipality – Building Inspector Drinking Water, On-Site Sewage
. Dep’t of Environment – Food Safety (if necessary)

Submit Plans, Get Approvals and Build (Time Required: 6 - 18 months)

Submit plans to all identified agencies Plan and schedule construction
Make modifications Schedule timelines, critical path and
to plans as required payment schedule
Get approvals in Invite contractor bids
writing before proceeding with Launch construction
construction Monitor and inspect progress

Inspections and Permits/Licences (Time Required: 2 – 4 months)

Get progress inspections as necessary . Occupancy Permit
Once construction is complete, get final . Liquor Licence
inspections and permits: . Others as required (e.g. Nova Scotia Power,
. Food Establishment Permit Elevator, Fuel Safety)
. Fire Safety Inspection & letter of approval

Note: Timelines are approximate and may vary; Some municipalities may 85
require other permits or licences.
 KEY TAKEAWAYS

• Start early
A big portion of the work will need to be done long before you open. Ensure that you
do your research before jumping into any commitments.

• You can’t bypass the law

Make sure you do some research and cover all your bases; just doing things may
seem easier now, but going through the proper procedures will save you a lot of
hassle in the long run.

• Many permits take time

Make sure you understand deadlines and expected timelines before you start making
commitments or permanent decisions.

• Talk to those who’ve been there

Connecting with other people in the food industry is a great way to make
connections where you need to and the perfect way to learn industry tips and tricks.

The Watch That Ends The Night

86
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

REGISTRY OF JOINT administered by the Federal government. You

will use your BN to register for HST and payroll
STOCKS numbers at http://www.cra-arc.gc.ca/tx/bsnss/
tpcs/bn-ne/menu-eng.html
The law requires all businesses operating in Nova
Scotia to register with the Registry of Joint Stock You will need to learn the HST rules. You will need
Companies. This is also where you will search to collect and set aside and remit 15% of your
and register the name of your company. You sales minus any eligible input credits (any HST
will have to pay for this service and file renewal you pay to purchase supplies or services, can be
information and registration fees every year. deducted against the HST you collect from your
sales).
The Registry of Joint Stocks will provide you with
your Business Number which will also be used in You will also need to register for a payroll number
dealings with the Canada Revenue Agency. and begin to submit monthly source deductions
(income tax, EI, CPP) deducted from your
employees.

You will need to file business income or

corporate income tax returns.

Everything you could possibly want and need

to know about taxes pertaining to Nova Scotia
CANADA REVENUE businesses can be found on Nova Scotia
Department of Finance’s website, including links
AGENCY to all of the federal taxes listed above:
http://novascotia.ca/snsmr/access/business/what-
Every business requires a business number (BN) do-i-need-to-know-about-taxes.asp
for its legal entity (a legal entity is defined as a
sole proprietor, partnership, corporation, trust
or other organization). The business number
(BN) is a common client identifier for businesses HELPFUL TIP
to simplify their dealings with government at
the federal and provincial level. Your business
number also forms the basis for your HST and
payroll numbers. HST Claims

Nova Scotia has adopted the use of the BN for Make sure you incorporate your business and
services such as licences, permits, registrations, register for your HST number before you start
and Workers’ Compensation Board insurance paying for capital costs.
and its use will be expanded. The BN is provided
to a business in Nova Scotia when it is registered You may find that you have a large HST claim
with the Registry of Joint Stock Companies. in your initial filing since you have spent a lot
on capital items, but have little or no revenue.
For more information, check out http:// Keep all invoices and receipts well-organized in
www.novascotia.ca/snsmr/access/business/ the event of an audit.
one-business-one-number.asp . The BN is 87
MUNICIPAL BUILDING FOOD SAFETY: NOVA
AND ZONING SCOTIA DEPARTMENT OF
APPROVALS AGRICULTURE
You need to be certain your chosen location is Regulations and policies governing food safety
zoned to permit the type of business you are and commercial kitchens are the responsibility of
planning. Call and speak to someone in your the Nova Scotia Department of Agriculture while
municipality’s planning department. the Department of Environment handles licences
and inspections (see 9.8)
You will need to apply for a building permit. Most
municipalities charge a fee based on the value For more information, visit: http://novascotia.ca/
of your estimated construction or renovation. agri/programs-and-services/food-protection/ .
They will require multiple copies of your plans They also have a document ‘Planning for
and your construction estimates. They will assign Food Service’ that may be helpful. http://
you a building inspector and will give you advice novascotia.ca/agri/documents/food-safety/
about what you can and cannot do. They will PlanningforFoodService.pdf
make periodic inspections through your building
process to ensure you are doing everything to These folks manage the regulations pertaining to
code. food service facilities: the Regulations Respecting
Eating Establishments. These regulations detail
Building inspectors ensure that new and requirements for restaurant design and layout,
renovated buildings meet several standards, equipment, food preparation, maintenance,
in particular the Nova Scotia Building Code sanitary facilities, and other health-related aspects
Regulations (part of the Building Code Act) and of eating establishments.
the Fire Prevention Act.
They are going to tell you what kind of walls you
The Building Code stipulates that newly must have in your kitchen. How many toilets and
constructed restaurants as well as existing sinks you require. They will insist the temperature
buildings that are being renovated be accessible of your hot water reaches a certain height during
to disabled people. Is the location barrier-free, the dishwashing cycle. They will inspect and
and accessible to those in wheelchairs? You may monitor your kitchen to ensure your refrigeration
have the option of using a portable ramp. is at the right temperature and that you are
handling and storing food safely. They will insist
you have a waste management and pest control
Local municipalities may also have regulations contract in place.
and guidelines for accessibility and for signage.
You may also need a Municipal Vendor’s Licence.

88
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

You will be required to take a Food Safety

Handling Course. And, you will be required to
THE LIQUOR LICENCE
have at least one staff person with this training on
The Nova Scotia Alcohol and Gaming Division
each shift. It is recommended that all staff take
administers the Liquor Control Act of Nova
the course. This certification has to be renewed
Scotia. They review and approve liquor licences
every five years. Information on taking this course
and monitor and enforce compliance with the
can be found at http://www.novascotia.ca/snsmr/
rules. Information can be found at http://www.
paal/agric/paal365.asp
novascotia.ca/snsmr/access/alcohol-gaming/
forms-permits.asp
Once you are in full compliance, the Department
of Environment will issue you a food permit
You will need to decide what kind of licence you
valid for one year. They will then make several
want or need and then apply for it. There are
unannounced inspections a year to monitor your
several types of liquor licences in Nova Scotia:
compliance. Always remember the results of these
inspections are available to the public and posted
on the department’s website.
BEVERAGE ROOM
For anyone who wants to operate a pub style
facility in Nova Scotia serving beer and wine only
(no hard liquor).

CABARET
For anyone who wants to provide liquor service
for a ‘large scale’ establishment in Nova Scotia
featuring high-quality live entertainment (i.e.,
“large scale” usually means capacity above 400
people.)

EATING ESTABLISHMENT
For all restaurants in Nova Scotia that want
to provide beer, wine and other liquors to
accompany meals. Under updated regulations
(January 2017), eating establishments with a
valid liquor licence are able to serve patrons two
alcoholic drinks without the need for food to be
purchased. This means that such establishments
no longer need a Lounge License as well if they
want to do this.

LOUNGE LICENCE
If you are an Eating Establishment and you also
want to provide an ‘all products’ liquor service,
Stubborn Goat Beergarden
with or without food service, you will also need a
Lounge Licence. Under this licence, food service
must be available when the eating establishment

89
is operational, but it is not necessary for a Serving Beverages
customer to buy food in order to buy liquor.
You and your staff will need to take the “It’s Good
Business: Responsible Beverage Service Program”
The Process offered through the Nova Scotia Tourism Human
Resource Council. Visit: http://www.tourismhrc.
The various licences have different requirements com/
for documentation and some will require a public
consultation or hearing. As a licensee you could be held responsible if
something happens after an intoxicated patron
Make sure your application is complete before you leaves your restaurant and you are found to have
submit it. Invest in a small binder, and begin early, over-served the customer. Make sure you have a
to collect the necessary documentation needed good understanding of the regulations and the
for your application. Among other things, you common law that define your responsibilities and
will need three letters of reference, your business liabilities as a licensee.
plan, confirmation of your financing, a police
check, your floor plans, a draft of your menu and On opening, the liquor inspector will require you
a cheque for the application fee. You will also to organize a meeting so that he can review all the
require your Occupancy Permit, Zoning Clearance, rules and regulations with all your staff.
Food Establishment Permit, and Fire Clearance
from the Office of the Fire Marshal as well as your
business plan before you can get your Liquor Patron Accountability, Safety And
Licence. Service Program (Pass)
The application form for an Eating Establishment If serving liquor is a big part of your business, you
Liquor Licence can be found here http://www. will want to know about the Patron Accountability,
novascotia.ca/snsmr/pdf/agd-application-for- Safety & Service (PASS) program aimed at
permanent-liquor-licence.pdf . promoting a safe and comfortable environment
for patrons and staff members frequenting
Consult this department early in your planning licensed establishments.
stage. They also have design and construction
requirements, and you’ll want to know what these The program was piloted in 2012 in the HRM
are from the start. area and has expanded across Nova Scotia. PASS
is a bar suspension program for participating
The length of time it takes to get a liquor licence establishments in Nova Scotia, with assistance
varies from as short as ten days to as long as a from the Restaurant Association of Nova Scotia
year. Liquor Licences are valid for three years. (RANS), Halifax Regional Police (HRP), Liquor
Enforcement Unit, and the Alcohol and Gaming
Division of Service Nova Scotia and Municipal
Relations.

90
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE FIRE MARSHAL DEPARTMENT OF THE

ENVIRONMENT
Under the provincial and federal Building The Department of Environment, under its
Codes, no one can alter, construct, renovate, Environmental Health and Food Safety Division,
or reconstruct buildings intended for public licences and inspects commercial kitchens in
occupancy until approval has been obtained Nova Scotia. You will need their seal of approval
from the Office of the Fire Marshal. For more before you can open, and they will make regular
information visit: https://novascotia.ca/dma/ inspections thereafter. Their website is https://
firesafety/OFM.asp novascotia.ca/nse/inspection-compliance-
enforcement/
It is always a good idea to contact the Office of
the Fire Marshal during the design process rather This Department is also responsible for approvals
than wait until you have completed the design regarding well water and sewage disposal
work; this way, you can make any necessary systems. If you are in a rural area you will need
changes before you begin. approvals for well water and sewage disposal
systems you wish to install. If you are in an area
where there is a central municipal water system
only the appropriate municipal regulations apply
and you do not need approvals.

If your water is supplied by a well, it will need to be

a Registered Public Drinking Water Supply before
you start serving food. Getting this registration
DEPARTMENT OF will likely require Department of Environment
TRANSPORTATION staff to inspect your well and you will need to get
your water tested and analysed. The application
AND INFRASTRUCTURE form can be found at http://www.novascotia.
RENEWAL ca/nse/resources/permits.asp#water.wells . You
will then be required to get your water tested
quarterly for bacteria, and to get a chemical
You may need approval from the Department of analysis every two years.
Transportation and Infrastructure Renewal for
the location of driveways and on-premise signage The Department of Environment also has
if you are located adjacent to a provincial road. responsibility for waste management, some of
For more information on driveway regulations which are applicable for restaurants. Regulations
visit: https://www.novascotia.ca/snsmr/paal/trans/ and guidelines can be found at http://www.
paal605.asp novascotia.ca/nse/waste/regulations.asp

This Department also regulates signage for

tourism related businesses on provincial highways
and roads. For more information on signage
regulations visit: http://novascotia.ca/tran/
highways/roadsign.asp
91
DEPARTMENT OF OCCUPATIONAL
LABOUR AND ADVANCED HEALTH AND SAFETY
EDUCATION Nova Scotia’s Occupational Health and Safety
Act is based on the idea that the primary
responsibility for occupational health and safety
Nova Scotia Labour and Advanced Education
is shared by everyone connected with that
is the provincial government department that
workplace — including employers, employees,
regulates and monitors labour standards in
contractors, owners and suppliers. This is known
the province. It is responsible for minimum
as the Internal Responsibility System (IRS).
wage and employee/employer rights. Read the
Labour Code carefully; you are going to need
Under the Act, if you employ five or more people
to remember the regulations and use them
on a regular basis, you are required to prepare a
regularly in your operation.
written occupational health and safety policy.
Unless your restaurant is unionized, the basic
If you have more than twenty employees,
terms and conditions of employment are spelled
you must establish and maintain a written
out in the Nova Scotia Labour Standards Code. It
occupational health and safety program. The
is here you will find out about statutory holidays
program must provide for:
and overtime. There are rules about calling in
staff to work when they aren’t scheduled. Notice
3 The training and supervision of employees;
periods for layoff and termination, and to what
3 The preparation of written work procedures
kind of breaks your employees are entitled are
relative to health and safety;
also provided. For more information visit:
3 The establishment of a Joint Occupational
http://novascotia.ca/lae/
Health and Safety Committee or selection of
a Health and Safety Representative, where
one is required;
3 The establishment of a hazard identification
program and accident/incident investigation
system;
3 The maintenance of records and statistics,
and;
3 The monitoring of the implementation and
effectiveness of the program.

For information, visit http://novascotia.ca/lae/

healthandsafety/. To access a copy of the act visit:
http://nslegislature.ca/legc/statutes/occph_s.htm

You will likely also be required to have Worker’s

Compensation coverage for most of your
employees. For more information, visit https://
nslegislature.ca/sites/default/files/legc/statutes/
occupational%20health%20and%20safety.pdf
92
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

SOCAN AND RE:SOUND HELPFUL RESOURCES

The Society of Composers, Authors and Music Whether you need to register your business,
Publishers of Canada (SOCAN) is a not-for-profit obtain licenses and permits or start paying taxes,
organization that represents the Canadian Service Nova Scotia offers a lot of very helpful
performing rights of millions of Canadian and information on their website: http://novascotia.ca/
international music creators and publishers. snsmr/access/business/starting-a-business.asp.
Through licences, SOCAN gives businesses that
use music the freedom to use any music they The online tool to help navigate the process of
want, legally and ethically. SOCAN licenses and opening a restaurant can be accessed through
distributes royalties to its members. For more http://www.novascotia.ca/snsmr/access/business.
information visit: http://www.socan.ca/ asp .

Re:Sound represents the performance rights of

artists and record companies. It is distinct from
SOCAN and you need a licence from RE:Sound as
well if you are playing music in public. Visit www.
resound.ca for details.

93
94
Domaine de Grande Pré
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

STAFFING
In the ultra-competitive restaurant business, you are only as good as
the people who work for you. Your leadership and management skills
will be crucial.

One of the greatest and ongoing challenges for

restaurateurs is human resources. You cannot
CHAPTER MODULES
go this alone. Employees make and break your
business. They can be the best and the worst
10.1 The Leader
part of owning a restaurant at the same time.
10.2 Staff Requirements and Job Descriptions
They will be your greatest asset (they make
10.3 Hiring
your sales and are one of the reasons customers
10.4 Staff Training
come back) and your greatest liability (your
10.5 Managing
labour costs will likely be in the 30-40 percent
10.6 Staff Retention
range, and, unfortunately, some employees
10.7 When It Doesn’t Work Out
steal.)
10.8 Helpful Resources

The number of employees you will need

depends on your concept. Clearly, a fast food
establishment or a food truck will need less
staff and fewer positions than a fine dining
HELPFUL TIP
restaurant.

Turnover is expensive. Not only does it cost you

You MUST Communicate your Vision to your
to hire and train, it can unsettle your regular
customers. Consistency of your product and Staff
service are essential ingredients for success.
It’s critical that you fully communicate the
vision for your restaurant to your staff and
There is an old expression, “A chain is only as
make sure they are working together with a
strong as its weakest link.” To maximize your
common goal to achieve this vision. Failing to
chance of success in the restaurant business
do this successfully can result in big problems
you need to choose a good team, train them the
for your restaurant business.
right way and get them to stay.

95
 KEY TAKEAWAYS

THE LEADER
• Take time to train Unless you have chosen to be an
Choose a good team and train them.
invisible or absentee owner, you will be
Remember, “A chain is only as strong as
the leader of this band. You will need
its weakest link”.
to be able to attract and retain the best
• Put it in writing staff out there.
Detailed orientation, employee and
Never forget that it takes happy employees to
operations manuals will help you make happy customers. One of the main jobs
articulate your vision and increase the of the leader in any business is to motivate and
consistency of staff performance. inspire your staff.

• Happy employees make happy You will need to be able to articulate your
concept, your vision, and your rules to a crew
customers
of young adults (you might be surprised by the
Employees perform better when they average age of a restaurant employee). Many of
enjoy their jobs. When performance them are good at what they do because they’re
and morale is high, customer naturally social.
experience improves. Not to mention,
smiles are contagious. As the leader, you must:
• Be organized
• Be focussed
• Be a great communicator
• Have sales and marketing skills
• Function with a sense of urgency at all times

WORDS OF ADVICE FROM THE PROS

“ Consistent, strong leadership in a restaurant is critical to its success.

Leaders
must move with a sense of urgency, stay focused on tasks and be consistent
with all of the employees. Setting out your expectations on Day One with
employees by providing them with a job description and restaurant policy
manual will save you a lot of time down the road. ”
Jennie Dobbs
Morris East Restaurant & Wine Bar Halifax & Bedford West

96
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

STAFF REQUIREMENTS HIRING

AND JOB DESCRIPTIONS
Choosing the right team isn’t always
Think carefully about your staff easy. Canada, and Nova Scotia in
requirements and what skills you need particular, faces labour shortages in
to find to complement your own. this industry.

If you are an outstanding chef yourself, you may If you are operating a small or independent
not need to hire a chef as a key member of your restaurant, you aren’t paying ‘hotel’ wages. It
opening team. However, if you are a front-of- can be difficult to compete with foodservice
house specialist, finding a head chef might be employers who pay the top wages. Your ability
one of your first staffing priorities (sometimes to attract good staff will be challenged not just
even before you design your menu and kitchen). by the pay rates of your competitors, but also by
your company’s reputation as an employer.
If you are not taking the lead role of manager
yourself, you may want to hire a general Halifax is a ‘tiny town’ and Nova Scotia an even
manager. In addition to the key back-of-house smaller province. Word gets around among
and front-of-house management positions, you ‘industry folk.’ If your business is known as a good
will also need front-of-house staff including place to work, you’ll have jobseekers knocking on
hosts, servers, floor supervisors, and bartenders. your door. If not, you’ll have a much smaller pool
In the back of the house, you will need cooks, of applicants to choose from.
dishwashers, cleaners, and prep cooks.

You should prepare job descriptions for all Recruiting

key positions. CareerPlanner.com offers a
wide range of job descriptions you can draw Advertise in your local media. Kijiji.ca is very
from. Visit http://www.careerplanner.com/ popular among restaurant job seekers in Nova
JobDescSearchTool.cfm Scotia. For higher-level positions, where you may
have the hope of attracting a new chef to move
to Nova Scotia for example, you could try Career
Beacon, Jump Careers, Work Global Canada or
Workopolis. There are specialized recruitment
and job posting sites for hospitality jobs like
Hospitality.ca and HCareers. The Nova Scotia
Tourism Human Resource Council operates a site
for posting tourism-oriented jobs, including the
restaurant sector.

97
HELPFUL LINKS Be prepared in the interview with a list of
questions (there are books written about this;
http://www.jumpcareers.ca and numerous restaurant industry websites
http://www.tourismtalent.com/ where you can find a list that suits you.) Make
http://www.kijiji.ca/ sure you hire the best person available for the
http://www.careerbeacon.com/ position.
https://www.workopolis.com/en/
HomePage.aspx There are also on-line companies that can assist
http://www.hozpitality.ca/ you with screening potential employees, such as
http://www.hcareers.ca/ www.hiringsmart.ca
https://www.workglobalcanada.com/

Don’t be afraid to post a sign in your window. You Know What You Are Looking For
might be surprised at who walks in the door. Ask
your existing staff for recommendations. Service might be ‘the highest calling’ but not
everyone is cut out for it. Good service comes
A good ad should be visually appealing and from the heart. It isn’t necessarily something
include the type of restaurant and the meal-style that can be learned. The famous and recently
served. An email address and or/phone number deceased Chicago restaurateur and chef, Charlie
are essential. Many chefs still like to receive Trotter believed “an individual’s attitude is the
interested candidates at the back kitchen door most important consideration” when hiring.
between certain hours. You will need to learn to recognize that attitude.
Remember that bad attitudes can spread like
You may need to seek out foreign workers wildfire!
for a temporary or more permanent solution.
Many restaurants in Nova Scotia have had You’re the owner and the boss so think carefully
success with the Federal Government’s Foreign about hiring your friends and family. Experienced
Worker Program. Guidelines for the Foreign restaurateurs say ‘don’t’. There is a good chance
Worker Program are revised regularly. For more your friendship will never be the same. Try
information visit: https://www.canada.ca/en/ to imagine yourself supervising and possibly
immigration-refugees-citizenship/services/work- reprimanding and disciplining your best friend.
canada/hire-foreign-worker.html
Try to plan ahead so you aren’t making hasty
choices to cover a shift the next day. All too
Assessing Candidates often, restaurant staff are hired quickly with little
thought because they are required immediately.
Review the resumes and applications you receive.
Schedule and hold interviews. Call references
(remember, it is a small province).

98
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

STAFF TRAINING make a scheduled shift on time? How should

they enter the workplace and where can they
hang their coats and keep their belongings
Training staff is an important part of safe? What are the rules around smoking and
your start-up and a never-ending part cell phones?
of your on-going operation.

You are the choir director and if one person Operations Manual
is singing out of tune, your symphony will be
thrown off-key and result in bad reviews from An operations manual is the song sheet we
the critics! The same is true for a restaurant mentioned. It can be an enormous task to put
and your job is to make sure that everyone is one together. A good manual is always a work in
singing from the same song sheet. Every day in progress. You may have more than one:
a restaurant is a training day.
Service Manual:
Front of house / guidelines for service / open
Orientation Package/Employee and closing checklists
Manual Kitchen Manuals:
Recipe books, order information, cleaning
An Orientation Package/Employee Manual schedules, etc.
should be prepared for new employees. This
should include a written introduction to you It is not realistic to attempt to write an
and your company, your vision and business operations manual before you open. You should
philosophy, a copy of any employment policies at least have a clear idea about how you want
and procedures manuals, a written job things done at your restaurant and be prepared
description, and any legal or payroll forms. It to communicate them verbally. Many policies
should also outline your service expectations and procedures arise from the trial and error of
as well as your legal obligations. Make this your first weeks and months of operation.
Employee Manual required reading twice a year
for all employees. You can find sample employee manuals on the
web at www.RunningRestaurants.com . The
Prepare a restaurant fact sheet for your more detailed you can be, the more successful
employees; it will do double duty as customers your training will be. Don’t be discouraged
often ask the same questions. about the amount of time it might take to put
a manual together — it will save you time and
All employees should be told what they are money in the long run.
being paid and what breaks and benefits they
are entitled to.
Hitting The Floor Running
At the same time they need to know what you
expect of them. What should they wear and Working the floor or the line in a busy restaurant
how should they request time off? Where and is much like dancing. You have to be able to
when is the work schedule posted? Who should move around with skill, grace, intention and
they call if they are sick or will otherwise not speed without stepping on anyone’s toes.

99
How your employees work together in the Human Resource Council also offers a variety of
restaurant is much like a choreographed dance. programs.
Like dancing, it means if one member of the
troupe is out of step, the whole performance For more information visit:
can be thrown off. A chef once described https://www.nscc.ca/learning_programs/
a server who couldn’t ‘get in step’ to be as programs/ProgramListing.aspx?list=alpha
dangerous as a live electrical wire bouncing out http://www.tourismhrc.com/
of control around the room.
If you want wine to play an important part in
Why not ask a potential new hire to come to your restaurant you might consider Sommelier
an ‘audition’ (a trial shift or working interview) Training. For more information visit:
before making an offer of employment? You can http://www.msvu.ca/en/home/
learn to recognize talent pretty quickly. In a few programsdepartments/undergradprograms/
hours you can judge knife skills, cleanliness, and undergraduateprograms/diplomas/
a readiness to take on a new task. tourismhospitality.aspx

Because restaurants can be busy, chaotic Wine appreciation courses are offered privately
and unforgiving, you are wise to wait until an and through the Nova Scotia Community
employee is trained and has had the benefit of College.
some one-on-one floor training before throwing
them to the wolves, so to speak. You and many of your staff will be required
to take a number of industry food and safety
Remember, your restaurant will more often courses available in the province.
than not be judged by the customer’s last visit.
You are only as good as your last meal, and if a Food Hygiene is offered and required by the
customer’s experience of food or service was Food Safety Division. A schedule of course
marred because a new employee is still learning, options is available online: http://novascotia.ca/
we can guarantee you the customer will be agri/programs-and-services/food-protection/
more forgiving if they know this up front. food-hygiene-course/

First Aid/CPR courses are available through the

Technical/Skills Training Canadian Red Cross: http://www.redcross.ca/
where-we-work/in-canada/nova-scotia
There are a variety of formal training programs
available in Nova Scotia that would benefit Workplace Hazardous Materials Information
anyone involved in the food and beverage System (WHMIS) training is available at the
sector. From university degree programs NSCC and through a number of private training
(Hospitality Management Programs at Mount agencies. It is available in the classroom or
Saint Vincent University and Cape Breton online. For more information visit: http://www.
University) to college level courses in culinary whmis.ca/nova-scotia.html
arts and tourism management through the
Nova Scotia Community College (NSCC) and The Responsible Beverage Program training for
private training programs. Nova Scotia’s Tourism servers and managers is offered through the

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Nova Scotia Tourism Human Resource Council Emerit has two training applications for smart
(NSTHRC). For a listing of what is available in phones. The apps, “Service 101” and “Build a
your area, visit http://www.tourismhrc.com/ Menu” are free samples of material found in
two of Emerit’s full online learning courses and
Through NSTHRC you can also access Emerit. demonstrate the ease of use and effectiveness
Emerit provides a wide range of training of Emerit’s Online Learning courses. They are
resources including online learning and training available for free from Google Play and iTunes.
for over 40 occupations within the tourism and
hospitality sector, custom training programs,
instructor guides and a range of other tools to
assist with staff training and management.

Eilliot’s Dining Room, White Point Beach Resort

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MANAGING The Schedule

The schedule can be more than a schedule of

Employees need to know what is who works what job and when. It can be one of
expected of them. If they are good, your most valuable and powerful management
let them do their job. But, they need tools. Who works what shift on what day and
with whom? It might sound simple, but it
to know the consequences of poor
can sometimes be a difficult puzzle to put it
performance, dereliction of duty, and together.
dishonesty. As manager, you need to
be prepared to lay down the laws and You must ensure you have strong and
experienced staff alongside new or
consistently enforce them. You also
underperforming ones. Not only are you
need to be prepared to repeat the same balancing your teams with new and
things every day. experienced members, you are also managing,
Your role as a manager is POSDC – Plan, perhaps even balancing the incomes of your
Organize, Staff, Direct and Control. You may well staff. If Friday night dinner is your busiest service
find that you need some training to help you in of the week, it means whomever works that shift
this role. will more than likely go home with the most
tips.
Not only do you have to ensure your staff all
show up on time, look presentable and be good To show respect for your employees, try to
at what they do, you need to get everyone post a staff schedule as far in advance as is
working together as a team. operationally possible. Small details like posting
the schedule more than a week in advance can
It’s very important that the dining room staff go a long way in giving employees the flexibility
(your sales people) and the kitchen staff (the to plan their own lives.
manufacturers) work together as a team, and
it’s your job to manage this team. This can be
a big job, because there can be resentments Keep Good Documentation
between the two groups. You will need to work
continuously at balancing this often delicate Keep good employee records including
relationship and maintaining good morale disciplinary forms on each employee.
within each team. There will be days when staff
don’t get along and your job of managing can Conduct staff reviews every 6 months to a year.
feel more like babysitting. And make sure you follow up to address issues
that are identified.

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

STAFF RETENTION Familiarize yourself with the taxation laws

around employee benefits. Offering a staff lunch
to employees and eating in your restaurant can
A high turnover rate is common in the be considered taxable benefits.
restaurant business. You’ll want to do
If you show respect for your employees as
everything you can to keep the best
human beings they will work hard for you. Show
staff working for you. Not only is high them the same level of kindness and caring and
turnover unsettling for customers, hospitality that you want them to share with
it costs money to hire and train staff your customers. They in turn, will respect you, as
a boss and as a human being, and want to stay
repeatedly. The higher the turnover, the
with you.
less successful your business will be.
You want your employees to feel part of
the team. They are the lifeblood of your
Pay organization – they are going to execute your
concept and live and breathe your brand. Get
It is usually more than an hourly wage that them involved. Here’s some ideas:
keeps a good employee — although money • Conduct employee opinion surveys. These
does help! Creating a good work environment can be done anonymously using on-line
is equally (if not more) important. Great tools like Survey Monkey.
employees want to be at work. They like their • Get employees to review applications.
work. They feel appreciated and valued for their • Ask employees for referrals for new staff
effort and dedication. You can rest assured that
these feelings spill over to your customers. You
can be certain the opposite is also true. A Retention Strategy
When an increase to the minimum wage is For your key / management positions, consider
mandated, think about giving all of your hourly setting up an RRSP that is matched dollar to
paid employees the same increase. dollar by the business. The retention effect
works when the employee must stay X number
If you can, pay a little more than minimum of years before they are entitled to the business’
wage. This will help you retain employees. portion of the RRSP contribution. Once you
reach the 3 to 5 year time frame, the pot is too
attractive for them to walk away because of the
Benefits size of the investment and the accumulated
interest. Plus, the employee gets money back
Offering benefits like a group medical and each year when they file their taxes.
dental plan can help, especially if you are
interested in keeping career kitchen and service
staff. After you’ve been in business for a while
you can also consider incentive plans for staff
who take responsibility for food or labour or
other supply costs.

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WHEN IT DOESN’T WORK HELPFUL TIP
OUT

You will want to follow the letter of the Be Slow to Hire, Quick to Fire
law when you need to let someone go You will find out pretty quickly if a staff person
(and you will need to let people go.) is not going to work out. Once you do, deal
Familiarize yourself with the legislation, with it immediately.
the Nova Scotia labour standards code,
It’s human nature to not let someone go when
and the common law that surrounds you should. But if you don’t, you will find that
the termination of any employee. good employees will leave, and you will be left
with a high proportion of poor employees.
Letting someone go early is always your best
option. Work hard to train new employees, but
if they just aren’t cutting it after a reasonable
period of time, learn to let go. Terminating an
employee can be relatively straightforward in
the first three months of employment. You
can kindly and gently tell someone it just isn’t
working out.

After three months, it can be more complicated.

There are proper steps you need to take,
including giving the employee verbal and
written warnings that their behaviour or
performance is unacceptable. You have to give
notice and deliver it properly.

It is always in your interest to handle employee

termination with care and dignity and to do
your best to end the relationship in a good way.
Like all ‘ex’s’, ex-employees don’t always go away
nicely. Some disgruntled employees may even
take to social media, often anonymously, to post
grievances about your restaurant.
Photographer: Reilly Mooring

Gahan House Harbourfront

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES

Reading List

A Guide to The Nova Scotia Labour Standards Code

https://novascotia.ca/lae/employmentrights/docs/LabourStandardsCodeGuide.pdf

Human Resources for Dummies by A Wiley Brand

http://www.dummies.com/how-to/content/human-resources-kit-for-dummies-cheat-sheet.html

Running a Restaurant for Dummies by A Wiley Brand

http://www.dummies.com/how-to/content/running-a-restaurant-for-dummies-cheat-sheet.html

Setting the Table: The Transforming Power of Hospitality in Business by Danny Meyer
http://www.amazon.com/Setting-Table-Transforming-Hospitality-Business/dp/0060742763

105
106
Le Caveau
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

OPERATIONS
Your restaurant needs to run like a well-oiled machine. There are a lot
of minutiae in the life of a busy restaurateur. These seemingly small
operational matters are integral components of keeping your business
running.

Operate your business as though it were

a franchise type restaurant. Seek out the KEY TAKEAWAYS
measurement systems and controls that a
franchise would use to secure their profits.

• Get organized
CHAPTER MODULES Although it’s easier said than done, the
more systems you have in place the easier
11.1 The Point of Sale/POS your day to day operations will be for you
11.2 Collecting Payment and your staff (not to mention beneficial
11.3 Gratuities for your customers).
11.4 Waste Management
11.5 Suppliers • Talk to others
11.6 Cleanliness Many experienced professionals would
11.7 Maintenance be happy to share their experiences and
11.8 Linens/Laundry advice. The food service operations can be
11.9 Safety and First Aid very tricky at first— talking to those who’ve
11.10 Minimizing your Environmental Footprint been there will be beneficial.
11.11 Bookkeeping
11.12 Payroll • Develop systems for your systems
11.13 Forms and Manuals Once things get moving, it will be
11.14 Records Management important to keep your team updated
11.15 Insurance about schedules, expectations, rules, and
11.16 Helpful Resources changes. It’s helpful to create accessible
documents to which staff can consistently
refer.

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POINT OF SALE (POS) SEE HOW IT WORKS
Ask local suppliers to do a demonstration of their
systems.
Your POS system (how you sell and
keep track of your sales) is key to your You need your POS system to tell you what is sold
survival and the ‘heartbeat’ of your during the day. The system should print a guest
check or order which is then used as a requisition
operation. The sale of POS systems
for the product to be given to the server. The
is a highly competitive business with guest checks should be carefully accounted for
literally hundreds of different products to ensure none are missing. This way you can be
and services on the market. New relatively certain that no employee is receiving
technology is constantly impacting food or liquor without recording it and collecting
the money for it. Your POS system will need to
POS systems. Learn from existing generate the sales reports needed to ‘cash out’.
restaurant operators who offers the
best value and service. Employees giving free food or drinks to friends
are committing theft. At the end of each shift,
employees balance their sales with the revenue
LOOK AROUND they have collected.
Start your research early. You will need to make
a number of decisions. Do you have options to Be sure to find out exactly what, and how
buy or rent the systems? What kind of reporting quickly, the POS supplier can provide service if
information do you want or need? POS systems something goes wrong and you have a problem.
are an important tracking and efficiency tool. It can be paralyzing for your business to have the
Revenue (sales), labour, and inventory can all be POS ‘down’. Have a contingency plan in hand for
managed by a single system. this type of problem.

Your sales can be emailed to you automatically

at the end of each day. You can keep your eye on
what’s selling the most, who is signing in late,
how many customers are coming each day and
how much they are spending on average.

If you are a small/simple operation, you may be

able to use an I-PAD based system which would
be less costly. POS systems can run from $10,000
for a simple system up to $30,000 plus.

Check out other restaurants and ask other

owners/managers about the systems they use.

Barrington Steakhouse & Gahan Patio

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

COLLECTING PAYMENT HAVE A BACK-UP PLAN

When your machine is down (because it will
go down), make sure you have a system for
In most restaurants, a large recording and/or processing credit and debit
percentage of your sales are received card payments by hand. SQUARE, which accepts
electronically through credit or debit credit cards from a smart-phone or PAD is a
good back-up plan.
cards. This is also a highly competitive
and aggressive business. The fee Troubleshooting malfunctions will require much
and cost structures are extremely of your time ‘on hold’ at the 1-800 technical help
complex, making it difficult to make center, which can be very frustrating during a
comparisons between companies. busy lunch/dinner service.

You can expect upwards of 90 percent of today’s

THERE WILL BE FEES restaurant receipts to be received electronically,
Overall, you should expect it to cost you 2%-3% either by credit or debit cards.
of each dollar you collect electronically in fees. In
addition, most providers charge a monthly fee for CASH
each terminal you require. Cash does still trickle in, and a few restaurants are
still bucking the trend and accept cash only. You
LOOK AROUND FOR DISCOUNTS will require a system to collect, count, record, and
Take advantage of pricing discounts through deposit your cash receipts.
an organization that you are a member of like
the Restaurant Association of Nova Scotia, the
Tourism Industry Association of Nova Scotia or
the Chamber of Commerce.

Your bank or credit union may have a partnership

or alliance with a particular provider and can help
streamline the set up process.

109
GRATUITIES by the employer. This means the employer is
considered to have paid these amounts to the
employee. If you add an automatic percentage tip
How will you handle gratuities in your to a client’s bill or pool tips and share them with all
restaurant? Will they be shared among employees, they are considered controlled tips.
support and kitchen staff? Will tips be
pooled? Controlled tips form part of the employee’s
total remuneration and are subject to CPP
contributions and EI premiums being deducted
Before you make a decision, you should review
at source, provided that this person is employed
Revenue Canada’s rules about how tips and
in pensionable and/or insurable employment.
gratuities are to be handled and accounted
for. How tips and gratuities are handled will
determine whether or not income from tips and
Direct Tips
gratuities form part of an employee’s pensionable
and/or insurable earnings.
Direct tips are gratuities that are paid directly
by the client to the employee and that are
This is all rather complicated. But basically it
not subject to any of the forms of control by
comes down to whether the tips are considered to
the employer as mentioned above under the
have been paid by the employer (controlled tips)
heading controlled tips. These would include
or whether they are considered to have been paid
when a client leaves money on the table and
by the client (direct tips). In the latter case, you will
the server keeps the whole amount and where
need a House Tipping Policy that defines how tips
tips are shared or pooled by the employees
are shared; this policy must be designed by the
themselves (and not by you as the employer).
employees, not by the employer.
It is also considered a direct tip when a client
includes an amount for a tip and the employer
Whatever approach you introduce, recognize that
returns the tip amount in cash to the employee.
sharing of tips with kitchen and bartending staff is
The term ‘direct tips’ denotes the principle of
important so as to reward everyone.
when the employer has no control over the tip
amount and no control over the tip distribution.
Service charges are considered to be imposed
Direct tips are considered to have been paid
by the business and are therefore considered
by the client and not the employer. In these
controlled tips; gratuities are at the discretion of
situations, the employer is merely a conduit for
the customer.
the tip from the client to the worker.

For more information visit: http://www.cra-arc.

With direct tips, the employees collectively have
gc.ca/tx/hm/xplnd/tps-eng.html . Note that
to design and agree on how the tips are shared,
in future there may be some changes in the
e.g. with kitchen staff, bartenders, etc.
regulations regarding tipping so be sure to get
up-to-date information from CRA.
Direct tips are not subject to CPP contributions
and/or EI premiums. However, an employee can
elect to make CPP contributions on tip amounts
Controlled Tips earned in the course of pensionable employment
where the tip income is found not to be subject
Controlled tips are gratuities that are controlled
to CPP contributions at source.
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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WASTE MANAGEMENT SUPPLIERS

Getting rid of restaurant waste is Good purchasing decisions affect your
complicated and expensive. It is not bottom line. As a wise person once said,
unusual for waste management to cost “you make more money buying than
in the range of $500 to $1000 a month for selling.” Loyalty is important – build a
a typical small restaurant. good relationship with your suppliers.

Purchasing is buying everything you need for

To comply with current provincial and municipal your restaurant: food, beverages, equipment,
regulations regarding waste disposal you will paper goods, tables, silverware, cleaning and
need services for: maintenance services, and everything else.

3 Garbage waste Ask other restaurants for recommendations

3 Organics (you must separate all food waste) on suppliers. Interview suppliers. Ask them for
3 Cardboard/Box board samples.
3 Container/plastic recyclables
3 Refundable recyclables
3 Paper Develop Systems For Ordering

For more information, visit https://novascotia.ca/ You don’t want to run out of stuff. It is annoying for
nse/waste/regulations.asp. There is a Guide to customers to be told that items are not available.
waste reduction in the food service industry that Keep a current phone list of your suppliers at
can be found at: http://divertns.ca/recycling/what- all times and a schedule of their delivery times.
goes-where Determine if the delivery schedule works for
you. What are the payment terms? It can be a
In addition, if you have fryers in your kitchen, you headache to write cheques at the back door if you
will need to dispose of cooking oil. B.D. Rae (www. are on COD (cash or payment due on delivery)
bdrae.ca) collects oil from restaurants across the with your suppliers and they arrive in the middle
province for free. The oil is used for bio-fuel. of your lunch rush.

Be sure to read the fine print before signing a You need systems for receiving shipments.
waste management contract. You may discover Ensure that every item on the invoice was indeed
the paper you signed when you first opened has received and it is both what you ordered and of
you locked in for a long period of time. Like cell good quality.
phone contracts, these can be very difficult to
end, even if you are receiving poor service.
Think About Buying Locally
Good waste management will also help control
pests; you will also need a pest management Consumer interest in “buying local” has grown
service contract. exponentially in the past decade and has now
become mainstream. Consumers expect local
food, wine and beer as well as foods that are
111
produced in a sustainable way. Local foods are
fresher and more flavourful, support local farmers
CLEANLINESS…. IS NEXT
and economies helping to create jobs in rural TO GODLINESS
areas. They are also healthy and environmentally
friendly in that they don’t have to travel as far. Of You cannot give enough attention to
particular importance to consumers is that they
keeping your restaurant clean. You have
know what they are buying and where it comes
from, and can find out how it is raised. Eating options: an outside cleaning company
local is particularly important to visitors. or your own staff. To do a really good job,
you will likely need both.
In Nova Scotia, the opportunities for restaurants
to ‘buy local’ are extensive and include fresh fruit
and vegetables, meats (beef, pork, chicken) and FIRST IMPRESSIONS COUNT
seafood as well as wine and beer. Purchasing only Always keep your windows clean, plain and
sustainable seafood is also important to many simple.
consumers. Some restaurants are going even
further – to ‘hyper-local’ foods – growing their own DISHES AND CUTLERY
herbs and vegetables, for example. You must continuously look and feel for
cleanliness. Don’t use dishes that are stained and
Visit your Farmer’s Markets and get to know chipped.
the farmers and other local suppliers. Choose
suppliers who are in-line with your brand identity Flatware can get bent and will need to be
and personal convictions. Select Nova Scotia (Nova continuously replenished (you’d be surprised
Scotia Department of Agriculture) has a fantastic how much flatware is inadvertently thrown out
website and publishes a directory of local farmers when plates are scraped before washing). Salt and
and purveyors of local products: http://www. pepper shakers should be cleaned frequently and
selectnovascotia.ca/ . Information on sustainable kept filled.
seafood can be found at https://ecologyaction.ca/
marine/sustainable-seafood . STAY DILIGENT
Tabletops and the walls next to tabletops need to
be clean always. Menu covers are often the dirtiest
Negotiate Pricing item in a restaurant. Just think about how many
people touch them in day. Think about this the
Don’t hesitate to ask other restaurateurs what next time you see a server carrying the menu in
they are paying for products and services. You their armpit!
might be surprised at the range of prices. Even
the price of heating fuel can be negotiated. CHECK BATHROOMS OFTEN
Bathrooms must be spotless. This is critically
You can consider joining a buying group like that important. Toilet paper and hand towel dispensers
is 100% owned by members. There are two types – need to be filled at all times. While you are at
some have a membership fee and will offer lower it, make sure the taps aren’t dripping and the
prices; others are free. handles work the flush.

RANS website can provide a list of these types of

groups.
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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

CLEANING CHECKLISTS TEST OUT YOUR FURNITURE

Cleaning won’t happen automatically. You will Never stop sitting in the chairs of your restaurant
need opening and closing duties to remind and taking a look and feel around from the
staff about what needs to be cleaned and how perspective of a customer. Run your hands over
often. Often called “side duties” for front of house and under the edges of your tables: yes, people
staff, these are essential to keep your restaurant still put gum there!
clean. A schedule for when the coffee machine
is cleaned; when the salt and pepper shakers are LIGHT BULBS
put through the dishwasher, etc. The devil is in the A burned out light bulb is a sign that no one
details. notices stuff around here; nobody cares. Lighting
is a very important element of a restaurant’s
For obvious reasons, you want to keep ambiance. Replace busted bulbs right away.
your kitchen clean as this is the first step in
maintaining food safety for your customers. KITCHEN EQUIPMENT
Issues with cleanliness are the #1 problem that Kitchen equipment can need regular
food safety inspectors find. maintenance and inspection. Grease traps under
your kitchen sinks need to be cleaned, usually by a
professional industrial cleaning company. Kitchen
exhausts and canopies need to be thoroughly
cleaned (the frequency will depend on how much
grease you are extracting with the air) on an
on-going basis, again, by an industrial cleaning
company.

Fire suppression systems over stoves and ovens

and fryers require annual inspection. Fire
extinguishers must also be inspected annually.

MAINTENANCE You may also need fire safety inspections on a

regular basis; check with your Fire Marshal or
municipality.
A new restaurant can look pretty
shiny and new. But as quickly as a few
months, wear and tear can start to
show. Customers do notice.

KEEP ON TOP OF THINGS

Small repairs done often may save you from
bigger maintenance jobs down the road. For
example, keep on top of paint chips — keep some
of your dining room paint colours in small plastic
containers and use Q-tips to apply it as needed.

113
LINENS/LAUNDRY SAFETY AND FIRST AID
If you’ve chosen linen for your tables Safety of your employees and
and napkins as part of your decor, don’t customers must be always top of mind.
forget to factor in the on-going costs of
Your restaurant should have a well-stocked
laundering these items.
professional first aid kit and emergency
procedures. Your kitchen staff will no doubt cut
and burn their hands. Your front-of-house staff
You should be able to find a few local businesses
will need band-aids for blisters on their feet. Staff
that provide a linen and laundry service. If you
should have First Aid training.
have chosen linens, keep in mind you will need to
have the space to store a week’s worth of linens,
Make sure your employees know where all
clean and dirty, as most services will only deliver
emergency exits are located. Make sure the
and pick up once a week. A linen service can also
emergency lighting is tested and batteries
provide entry floor mats, uniforms, and towels.
replaced on a regular basis.
Many restaurants operate their own laundry,
with an in-house washer and dryer. While you
maintain complete flexibility over your supply of
clean linen and this definitely has its advantages,
it also means you are now supervising your staff
doing laundry. Keeping linens clean isn’t the same
as putting your jeans in the wash! Sorting and
folding is time consuming.

Laundry fees can grow to be exorbitant. It is not

uncommon for restaurants to ‘ration’ towels for
the kitchen and bar staff. Remember that every
linen napkin that goes out to be cleaned is at your
expense. Set standards for how many napkins are
provided to guests.

Be careful to read the fine print if you are signing

a ‘linen service’ contract. You can find yourself
locked in for a 5 year term with no way to get out
except taking the company to court. It doesn’t
matter if they aren’t providing a quality service.

Barrington Steakhouse & Gahan Lounge

114
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

MINIMIZING YOUR MAKE GREEN DECISIONS

Operationally, there are many choices you can
ENVIRONMENTAL make:
FOOTPRINT
3 Don’t let taps or toilets run
3 Choose packaging materials that are
If you are building new, you can really compostable, recyclable, and re-usable.
think ahead about ways to make 3 Don’t use Styrofoam
your restaurant more energy efficient 3 Don’t bring water for customers unless they
ask. Consider how many glasses of water are
and to otherwise minimize your untouched by guests. Not only is this a waste
environmental footprint. of the water itself, think about the energy
and labour costs to wash glasses.
3 Ensure your equipment is energy efficient.
The upside is that thinking this out before you Newer models use less electricity and
begin can lower your energy and other costs fuel. Efficiency Nova Scotia offers rebate
throughout your time in business, saving you programs to help you upgrade to more
significant amounts of money over time. efficient models and fuel sources. For more
information visit: http://www.efficiencyns.ca/
LOOK INTO WASTE WATER RECOVERY product-rebates/?user=5
SYSTEMS
There is a way to save on the cost of hot water by
having the water that feeds your hot water tank
pre-warmed by the very hot water that is running
down your drain every few minutes during the
cycle of your commercial dishwasher. It may
sound complicated, but it is actually quite simple.
If you are installing new plumbing for your kitchen
– or even if you want to modify your existing set
up – ask your plumber about wastewater recovery
systems.

115
BOOKKEEPING PAYROLL
Keep on top of your bookkeeping, even Today there are more options than
before the restaurant opens. If you are ever for managing payroll. You can
managing your restaurant, you may choose to do it in-house (from start to
not want to even think about doing the finish), you can work with a local payroll
books yourself. company, or you can take advantage of
online payroll services.
A good bookkeeper is worth their weight in
gold, but they can be hard to find. Ask around
Whichever you choose, you will need to:
for recommendations. It can be helpful to find a
bookkeeper who has other restaurant accounts.
1. Have new employees fill out some
paperwork, recording their name, address,
Always try to stay ahead of the game with
date of birth, social insurance number,
maintaining your accounts. You need access to
their next of kin (or who they want you to
timely financial statements showing how your
call if they faint on the job). They will also
business is doing and will want ‘your books’ to be
need to fill out tax calculation forms so you
as up to date as possible at all times.
know how much tax to withhold from their
cheques.
Also, the Government wants their cut on time.
2. Calculate and verify hours of work and set
You will need to submit monthly CRA source
pay rates. You will also need to set the payroll
deductions (the tax and other deductions you
period (likely weekly or bi-weekly).
withhold from your employees pay) and HST
3. Whether you are using a payroll company or
(Harmonized Sales Tax) on time, every month (or
running the payroll yourself, you can choose
every quarter). If you ever fall behind, even one
to pay employees by cheque or by direct
payment, it can be difficult and often impossible
deposit. There is a cost to both methods.
to ever catch up again. If your payment is late,
hefty fines and interest will apply.

HELPFUL TIP

Manage Your HST Revenue

Manage your HST revenue carefully. It comes in with your sales revenue and it is easy to lose track of
how much you will owe on your HST remittance. You may want to consider a separate bank account
for HST revenue and transfer money in weekly.

Commit to paying your HST monthly.

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

FORMS AND MANUALS RECORDS MANAGEMENT

You will need a multitude of internal If you are carrying on a business or
forms to keep your restaurant running engaged in a commercial activity in
smoothly. You don’t need to invent Canada, you are required by law to
these from scratch. There are many keep adequate records.
resources out there where you can
obtain electronic templates and
Your records have to provide enough detail to
revise them to fit your establishment determine your tax obligations and entitlements.
and help you manage. Operations Also, your records have to be supported by original
and employee manuals will also be documents.
essential.
Record keeping is an important part of every
business. Most agencies require you to save
The following forms are commonly found to be records for a certain period of time. All of these
important for day-to-day operations: rules apply to the restaurant business.

3 Opening and Closing Duties The specifics on what you need to save and
3 Food ordering sheets for how long can be found on the federal
3 Prep sheets government website: http://www.cra-arc.gc.ca/E/
3 Waste sheets pub/tp/ic78-10r5/ic78-10r5-10e.pdf
3 Inventory Sheets
3 New Employee Information Sheet
3 Cash Out Slip
3 Daily Cash Balance Spreadsheet
3 Staff Schedules
3 Forms to record breakage and waste

As a starting point, check out Restaurant Canada’s

start up guide for a CD of forms.

As noted in Chapter 10, you will need an

Operations Manual, perhaps more than one such
as a Service Manual and a Kitchen Manual as well
as an Employee Manual or Orientation Package.
Work on these and keep them up-to-date; they
can be a valuable sales feature when/if you sell the
business.

Grand Pré

117
INSURANCE damage arising from your operations. You will also
want product liability in case of food poisoning.

Insurance will be an important Equipment and stock coverage may be necessary

to protect your inventory (a loss of power and
element of your business. All restaurant
refrigeration can be very costly).
operators should carry insurance
regardless of the size of your business. In addition, you may want to consider business
The cost of insurance will depend on protection insurance or loss of income protection.
the level of coverage you need. Such insurance would protect your business from
a loss of revenue, if, for example, your restaurant
has to close for a few months following a fire.
If you have purchased your property, you will be
required to have property and fire protection Crime coverage will protect you from losses
insurance. This type of insurance will be required caused by employee infidelity or theft. Robbery
by your bank or lender to secure a mortgage on and Holdup protection will cover you in the event
the property. of a robbery.

If you are leasing, you will want to find out what Shop around for the best coverage and the
insurance the landlord covers on the premises best price. Consider using an independent
and then design insurance coverage for insurance broker, and ask other operators for
everything else. recommendations. Don’t be afraid to ask for
better rates when you are renewing.
You will want liability insurance to cover claims
made against you for bodily injury or property

Photographer: Reilly Mooring

Grand Banker

118
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

HELPFUL RESOURCES

Reading List

The E-Myth Revisited by Michael Gerber

http://www.amazon.ca/The-E-Myth-Revisited-Small-Businesses/dp/0887307280

Running a Restaurant for Dummies by A Wiley Brand

http://www.dummies.com/how-to/content/running-a-restaurant-for-dummies-cheat-sheet.html

Restaurant Basics: Why Guests Don’t Come Back...and What You Can Do About It by Bill Marvin
http://www.amazon.ca/Restaurant-Basics-Guests-Dont-About/dp/0471551740/ref=sr_1_fkmr0_1?s=books&i
e=UTF8&qid=1397312045&sr=1-1-fkmr0&keywords=Restaurant+Basics+Revisited+bill+marvin

Canadian Restaurant Accounting (2nd Edition) by Douglas Fisher, FHG International Inc.
https://shop.restaurantscanada.org/

Sorting it Out: A Guide to Waste Reduction, Recycling and Composting in the Food Service Industry
http://divertns.ca/assets/files/Guides/rrfb-sorting_it_out_for_food_service.pdf

119
BUSINESS PHILOSOPHY
TOMASSO’S ITALIAN GRILL, TRENTON, ONTARIO

Our customers have appetites, therefore our menu must be appetizing.

Our customers have choices, therefore we strive to be their first choice.
Our customers demand quality, therefore, our recipes must be authentic.
Our customers seek more than food, therefore our service must be more than exceptional.
Our customers have memories, therefore we must be more than memorable – famously.
Because of our customers, we exist!

120
Grounded Coffee
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

THE CUSTOMER
The customer isn’t always right, but they are always the customer!

Steve Jobs knew what makes a business work.

He showed the world that the customer-user KEY TAKEAWAYS
experience trumps everything. He understood
how to make a customer loyal. Unless your
business model is all about serving ice cream
on hot days where a cruise ship is scheduled to • Put yourself in their shoes
dock, you won’t survive long by serving one- The customer experience trumps
time-only customers. everything. Every detail of your restaurant
needs to be considered from the
To be successful in the restaurant business you customer’s perspective.
need to attract a loyal following of customers
who continue to grace your door again and • Make them feel at home
again, and to bring their family and friends. You Good customer service is important; but
also have to continuously attract new customers if you want to create a rave-worthy dining
to try you out for the first time. experience you must also demonstrate
genuine hospitality.

• Make criticism constructive

CHAPTER MODULES The customer isn’t always right, but they
are always the customer: Learn to accept
12.1 Understanding Who Your Customer Is complaints and do everything you can to
12.2 Customer Service recover when something goes wrong.
12.3 Hospitality vs Service
12.4 When Things Go Wrong
12.5 How to Handle Complaints
12.6 What to do if a Customer Says Your Food
Made Them Sick
12.7 Managing Accessibility Regulations and
Standards
12.8 Consistency/Standardization
12.9 Helpful Resources

121
UNDERSTANDING WHO If you’ve advertised yourself as having the best
fish and chips in town, you’d better be serving
YOUR CUSTOMER IS fantastic fish and chips. A customer isn’t going to
expect you to take a reservation and serve their
You need to talk to your customers. You fish and chips on china and white linen. In fact,
they’ll be happy if they are served on newspaper
need to find out who they are. Listen
as long as the fish and chips are good.
to them. They will tell you what you
need to do to keep them coming back. The bottom line is: customers who are not happy,
Find out why they choose you instead whose expectations you have failed to meet, will
of going to the hundreds of other not come back.

restaurants.

To create value for your customers, you need to

understand who they are and what they want. HELPFUL TIP
You need to understand what it is they are
expecting from you. Without this knowledge, you
don’t really have a hope of learning to manage
their expectations. Keep Records on Your Customers

Consider what your regular customers like to Keep records on your regular customers
order or where they like to sit when they visit. Do – what they like and dislike, any allergies,
your best to deliver the product and service they dates for special occasions, etc. Having this
want: cater to them. Of course you can’t go about type of information (and using it) can really
changing everything just because someone impress customers and help you build strong
wants it or thinks it is a good idea, but you can relationships with them.
make changes that make sense for your business
and concept.

Expectations: Meet and Exceed

Regardless of the type, style or size of the

restaurant you are operating, you can be
sure that every customer arrives with a set of
expectations. Whether they are ordering a
hot dog from a chip wagon or sitting down
to an anniversary dinner in a fine dining
restaurant, you will need to meet or exceed their
expectations in order for them to return.

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

CUSTOMER SERVICE
You need to consider every detail WORDS OF ADVICE
about how it feels to be a customer FROM THE PROS
in your restaurant. Everything you
do, every system and rule, needs to “ When taking phone
be considered from the customer reservations, remember that this
experience. is in fact a part of the customer’s
dining experience. How they are
Telephone made to feel on the phone directly
impacts their expectations of
Customer service begins with how you pick up
your phone. If you can’t answer it, what does your the restaurant. If you are taking
customer hear on your voice mail message? Do a reservation, consider that you
you provide some basic information, like address
and hours you can visit for lunch or dinner, and
are already beginning to serve
what to do if they want a reservation? that customer and use this as
You must return calls in a timely way. Remember, an opportunity to start their
nothing compares to getting a live friendly voice
on the phone and having your inquiry satisfied experience off on the right foot.
immediately.
Be accurate and prompt, repeat
Reservations the details to confirm them with
the customer and take note of
Should you take them or not take them? Some
restaurants find success with a bit of both. That any special circumstances they
is, taking reservations for part of the restaurant happen to mention (allergies,
and leaving the remainder of seats for walk in
celebrations, whether it’s their
customers. There are definite pros and cons to
both. It is possible the ‘style’ of your restaurant first time in, etc.). Remembering
will determine your policies about reservations. these things often go a long way. ”
Let’s face it. Some customers really like to have
a reservation and will outright refuse to go to Tanya King
daMaurizio Fine Dining
your restaurant if they think they might have to Halifax
wait for a table. They have a point. They want and
need a guarantee that they can arrive with their
party and be seated, immediately.

123
As an operator, it is very helpful to know or have they enter the restaurant. Nothing could be
a good sense of how many customers will come so simple, yet so complicated. Why is it that so
through your doors that night. If you have a full many restaurants fail to get this right? A lot goes
house booked with reservations, you have some on in a customer’s head in these few seconds
certainty of the number of covers you will need or minutes when they walk through the door.
to service. It gives you a chance to schedule staff Whether you’re there to greet them, or leave
and prep accordingly. them standing alone and not knowing where to
stand will leave a lasting impression.
But you will also have to deal with the ‘no-shows’.
It can be devastating to your bottom-line to The same is true when guests are leaving. After
turn away customers on the phone and at the dropping $100 or more in your restaurant, most
door because ‘all of your reservations are taken’. customers appreciate being thanked. Someone
You are left with people who are disappointed should say ‘good day’ or ‘goodnight’ to every
and often angry because you’ve turned them customer who leaves. Not only is this common
away (they won’t really understand why you are courtesy it is also an opportunity to ‘touch’ the
saying NO to them when your dining room is half customer one last time. It is your chance to be
empty). You are also left with a big hole in your certain they are leaving satisfied or better still,
bottom-line. ‘wowed’.

You can definitely ‘turn more tables’ with a no- LABELS

reservation policy. As well, your restaurant can Try to avoid using labels when greeting
be accessible to more people. You can attract customers. This may seem like a small, incidental
customers making last minute decisions about thing, but some people hate labels. We all use
going out to eat. Because you don’t always know them. But not everyone agrees with labels we
if a customer who has a reservation is coming for might give them. Why risk offending someone?
a quick bite before a show and is in and out in 45 Knowingly or unknowingly, you will offend
minutes; or if they will take two hours over dinner someone. By labels, we mean “Hi guys” or “Good
celebrating an anniversary. evening ladies” or “Hello dear”. Why take a
chance when it is so easy to simply say: “Good
Administering reservations can be a full time job. Evening, Welcome to Sylvester’s”.
There are a host of electronic reservation systems
out there you can explore. There are usually costs
involved. You may find it cheaper than employing The Room Temperature
a full-time reservationist, but most customers still
like to make a human connection right away and Inadequate room temperature can ruin an
be assured their reservation is secured. otherwise perfect dining experience. You must
learn to have control over the air quality and
temperature of your dining room to ensure
guests are comfortable.
Greeting The Customer (And Saying
Goodbye) Recognizing and pro-actively responding to
what your guests are telling you, especially with
Never underestimate the importance of quickly their body language. Many customers don’t like
and warmly welcoming a customer when to complain but are pleasantly surprised when
they see you make adjustments to the fans
124
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

or thermostat because you noticed they were

shivering. This is anticipating what a guest wants.
HOSPITALITY VS.
SERVICE
Service
If you’re aiming to run an exceptional
There are a million rules for service. There are restaurant (or any other type of
manuals of ‘formal service’ and books and articles customer service business) you must
about the art of service. understand the difference between
service and hospitality. If you want
There really is no right or wrong; only convention.
You need to set the rules of service in your to create ‘raves’ among your guests,
restaurant and you need to train your staff to you need to excel at both. You need
consistently apply them. to create ‘legendary hospitality
experiences’.
The New York Times has published a list of the
100 Things a Restaurant Staffer Should Never Do.
Do yourself a favour and read the list. Have your
Demonstrating true hospitality is much more
staff read it as part of their orientation.
than carrying a plate a certain way or serving
from the right and taking from the left.
100 Things Restaurant Staffers Should Never Do
(Part 1)
Service is the technical delivery of a product. As
http://boss.blogs.nytimes.com/2009/10/29/one-
a guest, you expect service: that someone will
hundred-things-restaurant-staffers-should-
take your order and bring you your food and then
never-do-part-one/?_php=true&_type=blogs&_
your bill and your change. Service is mechanical,
r=0
but hospitality is personal.
100 Things Restaurant Staffers Should Never Do
(Part 2)
Hospitality is about how guests feel about what
http://boss.blogs.nytimes.com/2009/11/05/one-
you did and how you did it. It is the sum of all of
hundred-things-restaurant-staffers-should-
the thoughtful, caring, gracious things a server
never-do-part-2/
does to make a customer feel that she or he is
on their side. The server or host who is warm,
As the authors note, not even a hundred
friendly and demonstrates a real willingness to
suggestions can cover all the bases. There are so
help you is extending hospitality, not just service.
many details that go into good customer service.
Famed New York restaurateur Danny Meyer put
The details are definitely the devil you will need
it this way:
to face every day you are in business.
“Hospitality is the foundation of my business
philosophy. Virtually nothing else is as important
as how one is made to feel in any business
transaction. Hospitality exists when you believe
the other person is on your side. The converse
is just as true. Hospitality is present when

125
something happens FOR you. It is absent when
something happens TO you. Those two simple
prepositions – for and to – express it all...
In the end, what’s most meaningful is creating
positive, uplifting outcomes for human
experiences and human relationships. Business,
like life, is all about how you make people feel. It’s
that simple, and it’s that hard.”

Danny Meyer, Setting the Table

A Note To Parents...

Children can be challenging for a restaurateur.

Of course, they can be charming and behave HELPFUL TIP
themselves. But they can also cause problems in
your dining room.

If young children and toddlers are walking

or running about the dining room, they can Catering to Children
endanger your staff, other customers, and
• Have a kid’s menu
themselves.
• Offer the option of smaller portions of
regular menu items for children
Strollers of today are another challenge. Some
• Provide crayons and colouring books, toys,
parents insist on bringing their strollers right
etc. to keep children occupied
inside with them. You may not have room to park
• Reward good behaviour – buy a child a
them tableside, and when they do, the strollers
drink
are blocking off access to other tables.

If your restaurant is likely to get children on a

regular basis, cater to them (see the box for some
suggestions). Children can have an impact on
the decision about where to eat and might well
be your future customers!

You might feel tempted to adopt a ‘no children’

rule. But be careful. While such a restaurant
might be popular with some diners, it has the
potential to stir up bad feelings and create huge
public relations disasters.

126
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

WHEN THINGS GO Encourage Feedback

WRONG To be successful in the restaurant business, you
actually want customers to complain and tell
The restaurant business is very you when something isn’t right. How else will
unforgiving. Very few people will ever you know that something about your restaurant
needs your attention?
give a restaurant a second chance once
things have gone wrong. Worse still, If the dining room is too drafty for guest
you can’t count on a customer telling comfort or the music too loud, you need to
you when they are unhappy. make adjustments. If the cut of meat you are
purchasing is too tough or has too much fat and
gristle, find a different one or take it off the menu
Research shows that most customers will not until it is rectified and perfected. And thank the
complain, they simply won’t return. Customers customer who brought it to your attention.
vote with their feet.
According to Bill Marvin, a typical business hears
from only 4% of its’ dissatisfied guests. One in 25
You cannot afford to have customers leave your will actually tell you when things are not right.
restaurant dissatisfied with the service they The other 96% just quietly go away and 91% will
received: they will not return and, in addition, never come back.
they will tell their friends not to go to your
restaurant. You’ve not only lost their future As a restaurateur you may have days when you
business, they can make matters worse. feel like everyone is complaining. And there are
chronic complainers out there, who are in a bad
You should know if there is a problem BEFORE mood even before they arrive. Nothing you do or
the customer leaves the restaurant. The serve them is going to win them over.
restaurant business is unique in that, as long as
you know, you have a chance to fix the problem Frankly, with a product as intimate as food and
before customers leave. service, you are never going to make all of the
people happy all of the time. Take this to heart
These days, customers are less and less likely to and learn to sort through the feedback you
tell you about a problem, they are more likely receive. Use comment cards, ask for emails, and
to tell all of their friends on social media. Worse, above all, make sure you follow up.
they will write a bad review on Trip Advisor or
another restaurant review site.

127
HOW TO HANDLE WHAT TO DO IF A
COMPLAINTS CUSTOMER SAYS YOUR
FOOD MADE THEM SICK
You need to be able to keep all of
these complaints and feedback in There will come a day in the life of all
perspective and recognize when there restaurateurs when a customer will call
have been failures in your product and or write to say they got food poisoning
service. You need to know how to take at your restaurant or that your food
responsibility for the failure and take made them sick.
steps to remedy the problem.

You need to establish a protocol about how

If a customer is voicing their complaint on the to handle these very serious situations. Treat
floor of the restaurant in the middle of service, these customers with the utmost urgency and
keep calm. It can be so easy to get defensive. sensitivity. Do not ignore them. Don’t argue
Listen to what the customer is saying, and what with them or tell them they are mistaken or it
they aren’t saying. is impossible that they got sick from your food.
Instead, tell them you will immediately investigate
Always try to maintain the perspective that further with your staff.
getting customers to voice their complaints is an
opportunity to fix the problem (and increase your Ask them for as many details as you can: when
profits.) It is a gift. they were in, what they ate, who served them. Ask
to call them back with your findings. Make sure
Don’t ignore them. If a customer writes to you, you do call them back.
you should always reply. It is always a good
idea to not respond immediately. If it isn’t an Find out if there have been any other complaints.
urgent matter, sleep on it before you write back. Check your answering machine. Locate the
Remember that most customers just want to be customer’s sales check. Hopefully your POS
heard and have their experience validated. You system can tell you how many other guests were
need to respond positively and not defensively to served the same meal. Talk to your kitchen staff
all complaints. and chef. When was the meal prepared and
prepped, how and where was it stored?
There is never a successful outcome if you get
into an argument with a customer. If you need Because you are familiar with the causes and
help with responding to customer complaints, sources of food poisoning and food borne illness,
read: Cashing in on Complaints by Bill Marvin: you now have some information to further assess
http://www.amazon.com/Cashing-In-Complaints- the customer’s allegations.
Turning-Disappointed/dp/0965626210
When you call them back, reiterate how sorry you
Sample responses and templates can be found are that this has happened to them. Never admit
online, like the one on the next page. liability. Be careful about the questions you ask
and answer. Calmly and non-judgmentally, share
128
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

with them results of your investigation. Tell them Don’t be afraid to contact your food inspector.
that if they feel your food made them sick then They know how to objectively investigate
you have an obligation to contact the government complaints and know what sorts of foods, food
food safety specialist. Ask the customer if it would handling techniques and cooking/cooling
be okay if the food inspector followed up with methods result in food that is bad. If your food
them directly. At this point the customer may ask is not the source of the customer’s illness, they
you not to follow up and concede that perhaps are in the best position to communicate this to a
something else they ate that day or the day before customer.
made them sick.
Ensure that everyone on your staff knows that
Whatever the outcome, be sure to keep their calls to the restaurant about food-related illnesses
contact information on file and ask them to be in are to go ‘straight to the top’ (or whomever you
touch should anything else arise. designate) and are not to be handled by just any
staff member.

Customer Response
Letter Template
From Comment Card
or Letter – Major Comp
[ON RESTAURANT LE laint
TTERHEAD]
[DATE]
[Name]
[Address]
[City, State ZIP]

Dear [ ],
I want to sincerely ap
ologize for the unple
[DATE]. Your commen asant incident you ha
ts were most troublin d at our restaurant on
bringing this to my att g but I want to uneq
ention. Without your uivocally thank you for
feedback I might ne
ver have known of it.
It is our highest priori
ty to provide our guest
in this instance we ce s with an exceptional
rtainly failed to do thi dining experience an
and we have already s. What you experienc d
taken steps to ensure ed is totally unacceptable
again. that this does not ha
ppen in our restauran
t
While I cannot chan
ge the past, I would
that we can show yo like to invite you back
u that we really can as my personal guest
do a much better job so
Please come back to tha n what you experienc
enjoy a complimentar ed.
I have enclosed my sig y meal for two, all foo
ned business card for d and beverages inc
you to present to your lud ed.
server.
Once again, please ac
cept our sincere apolo
for letting us know ab gy for this unfortunate
out it. incident and thank yo
u
Best regards,
[Name of Owner / Ma
nager Name], [Title]
cc: [Owner / Compan
y President / Managin
g Partner]

129
MANAGING
ACCESSIBILITY WORDS OF ADVICE
REGULATIONS AND FROM THE PROS
STANDARDS
Nova Scotia does not yet have an act regarding
“ “The consistency of good food
accessibility; however the Liberal government and service is of the utmost
(elected in 2013) made a promise in the election importance. Remember that often,
to pass ‘Accessibility Such an act, if it follows
the first thing to arrive at a table
others in place in Canada, is likely to introduce
customer service standards and training is a drink. Make certain you are as
requirements among other things. There are consistent in beverage service as
already regulations within the Building Code
with other service components.
that govern some of the physical requirements
around accessibility. And, some municipalities The client who is unsure whether
may have their own regulations, so you should their drink will be as good (as
check local rules.
strong, as fast, as full, as sweet, as
Regardless of the regulations, you should train cold, as visually appealing etc.) will
your staff on providing service to customers
be unlikely to order another. Your
with disabilities. The Nova Scotia Tourism
Human Resource Council offers a self-directed, customer suffers and so does your
‘Customers with Disabilities’ online program
which can be found through this website: http://
bottom line. . ”
www.tourismhrc.com
Tanya King
daMaurizio Fine Dining
Halifax

HELPFUL TIP

Medical Service Dogs

Make sure your staff knows, and it is in your

employee manual, that you are required to
allow medical service dogs into restaurants.
Train your staff to check with the nearby
tables to make sure there are no allergies, and
change seating arrangements if necessary.

130
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

CONSISTENCY/
STANDARDIZATION HELPFUL RESOURCES:

Repeat business is one of the most Reading List

important factors in a successful
Lessons in Service from Charlie Trotter
restaurant and consistency of product by Edmund Lawler
and service is often what brings them http://www.amazon.com/Lessons-Service-
back. Charlie-Trotter-Edmund/dp/1580083153/ref=sr_1_1
?s=books&ie=UTF8&qid=1397313926&sr=1-1&keywo
rds=Lessons+in+Service+from+Charlie+Trotter
It would be hard to disagree that McDonald’s
is perhaps the most successful food service The E-Myth Revisited by Michael Gerber
company in history. They have standardized their http://www.amazon.ca/The-E-Myth-Revisited-
product and service to the point where you can Small-Businesses/dp/0887307280
go into any McDonald’s, whether in Yarmouth
or London, England, and know before you order
exactly what you will receive. You can also be
certain the washrooms are clean.

It is well worth your while to read Michael

Gerber’s The E-Myth Revisited early in your
career. You’ll come to a greater understanding of
how important consistency and standardization
are.

Your kitchen staff should have clear portioning

and plating rules so dishes always look and taste
the same. Your customers should know that they
will always receive an excellent product and/
or service whenever they enter your restaurant.
They should also receive the same wine pour
every time.

131
 132
Gahan House Harbourfront
Photographer: Reilly Mooring
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

MARKETING
Marketing gives life to your restaurant. It’s everything the customer
sees, touches, tastes, hears and smells. And while most restaurateurs
know that marketing is important, many don’t have a firm grasp on
what it is or how to use it effectively.

When people think about marketing, they often

think about traditional advertising like radio HELPFUL TIP
spots or TV commercials. But traditional media
is only one piece of the marketing puzzle. In fact,
every “touch point” you have with your guest —
from when they first hear about your restaurant
Marketing
to the moment they walk out the door after
their first visit — is a marketing opportunity.
• Many restaurateurs don’t know much
about marketing. As such, this is a good
Marketing can take many different forms. And
area to spend a bit of money and bring
the tactics that work well for one restaurant
in some outside expertise – to help you
may not be right for another — getting it
develop a plan and then manage it. At a
right often takes a little trial and error. Yet all
minimum, get a professional marketing
marketing efforts share one common goal: to
group to review what you are doing and
communicate a message that evokes a desired
make suggestions.
action.

• Marketing your restaurant never stops.

You must get your brand out there,
CHAPTER MODULES and keep it top-of-mind and relevant
to potential customers to get their
13.1 Glossary of Key Terms business.
13.2 Brand Positioning
13.3 Traditional vs New Media
13.4 Marketing Plan
13.5 The Opening
Photographer: Reilly Mooring

13.6 Digital and Online Marketing

13.7 Handling Online Criticism
13.8 Associations
13.9 Measuring Results
13.10 Helpful Resources 133
 KEY TAKEAWAYS

• Everything is marketing
Restaurants live and die by word-of-mouth. It’s all about the two Rs: repeats and
referrals. If you wow customers with topnotch service, great food and a terrific
experience, they will happily sing your praises. But if you consistently fail to deliver,
eventually no amount of marketing will save you.

• Brand Positioning Comes First

Behind every successful restaurant is a solid brand positioning. Knowing ‘who’
you are, ‘what’ you do, and ‘why’ people should care is key to creating an effective
marketing plan.

• Know When To Bring in the Pros

A little DIY is ok, but don’t overdo it. Know your strengths; and, when possible, enlist
qualified experts for the best results (e.g. Marketing/PR Strategists, Designers,
Interiors Decorators, Copywriters, Photographers, etc.)

• It’s About the Message. Not the Media.

It’s easy to get overwhelmed by the various media platforms available today. But
whether you’re “Tweeting,” “Blogging” or “Sharing,” it’s the content that counts.

• You Get What You Put In

Industry experts suggest that the average restaurant should invest 3% of revenues
back into marketing. Investing in marketing pays… if you’re smart about it.

• Measure Your Impact

When brainstorming marketing ideas, it’s crucial to think about how you’ll measure
your results. If you don’t measure it, how will you know if it worked?

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GLOSSARY OF KEY share interesting content that your followers

will share with their own social networks. Social
TERMS media marketing is great for restaurants because
it appears as an unbiased endorsement coming
TRADITIONAL MEDIA from a trusted third-party source, as opposed to
Traditional media refers to early mass media a paid advertisement from the business itself.
and often includes: TV, radio, cinema, music,
and print (e.g. newspaper, magazines, books, GUERRILLA MARKETING
brochures, signage, tent cards, etc.) One of the The goal of guerrilla marketing is to generate
hallmarks of traditional media is that it is a one- buzz using clever, unexpected tactics. Guerrilla
way communication, and often doesn’t allow for marketing is seen as a cost-effective alternative
immediate engagement. Traditional media are to traditional advertising—which is great for
often very expensive. cash-strapped restaurants. Typically, guerrilla
marketing campaigns are unexpected and
NEW MEDIA unconventional, and often interactive.
Digital communications are known as new
media. New media includes popular social media EXPERIENTIAL MARKETING
platforms like Facebook and Twitter, but also Every time a guest interacts with your brand, it’s
includes lesser-considered channels like e-zines a marketing opportunity. Experiential marketing
(digital magazines), text messages, blogging, takes the concept of customer service one step
and web advertising. Many restaurants prefer further, looking to build deliberate marketing
new media marketing because it is often less messages into commonly mundane experiences.
expensive than traditional advertising. New From a unique greeting to a chalk wall in a
media is typically a two-sided communication, bathroom stall, there are lots of ways operators
making it easy to engage followers and measure can use experiential tactics to promote their
your impact. brand.

PUBLIC RELATIONS (PUBLICITY, PR) PROMOTIONS

Public relations (or ‘PR’) is all about your Promotions can take many shapes and sizes.
restaurant’s image. When it works, PR is basically From specialty pricing like ‘Happy Hour’ menus
free advertising, and can generate great word-of- or lunch specials to incentives like coupons or
mouth. The goal of PR is to get media exposure, online contests, strategic promotions are a great
which is especially powerful because it is seen way for restaurateurs to get people in seats.
as unbiased. Developing a solid PR strategy
is essential to the success of any restaurant. HELPFUL LINKS
Getting involved in your community, particularly About.Com: Marketing Terms & Definitions
if you are in a small community, is a big part of http://marketing.about.com/od/
PR. marketingglossary/a/marketingterms.htm

SOCIAL MEDIA MARKETING

Social media marketing aims to increase
awareness and boost sales through the use of
social media platforms. The goal is to create/

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BRAND POSITIONING Questions to Ask When Positioning Your
Brand:

Brand is that remarkable, almost indefinable

• Who are our target customers?
element that makes good restaurants great.
• What do they look like? (i.e., demographics,
It makes the champagne bubblier, the meat
interests/habits, psychographics, etc.)
smokier and the laughter louder. It is your
• What differentiates my restaurant from the
product and how your customers experience it.
competition?
• Why would a customer choose our
“If you’re planning to open a restaurant,
restaurant over another option?
developing your Brand Positioning Strategy
• If the restaurant was a person, what
should be one of your first steps. It’s much easier
adjectives would I use to describe it? (e.g.
to build a strong brand from day one than to
friendly, relaxed, sexy, high energy, elegant,
reposition your brand when times get tough.” –
simple, boisterous, hip, etc.)
Katelyn Bourgoin, RedRiot Branding
• At our core, what does our restaurant stand
for?

What is Brand? HELPFUL LINKS

“Start With Why” TedTalk by Simon Senik
Your brand is more than just a logo or the sign
https://www.youtube.com/watch?v=sioZd3AxmnE
hanging outside your door. It’s your restaurant’s
promise to customers, employees and the
“How To Get Your Ideas to Spread” TedTalk by
community. In short, it’s everything.
Seth Godin
https://www.youtube.com/watch?v=xBIVlM435Zg

Positioning Your Brand

People often get a brand positioning statement

confused with a tagline or slogan. But once you
know the difference, it becomes pretty clear. EXAMPLE
Quite simply, positioning is the place you hold POSITIONING
in the public’s mind relative to the competition
(i.e. the healthier choice, the fast option, the
STATEMENTS
locally focused choice, etc.). It’s about the unique
benefit your business delivers that sets you apart.
7up: the ‘Uncola”
Taking an active, strategic role in positioning
your brand is an ongoing effort for both new and Chipotle: Food with Integrity
experienced operators.

Starbucks: Everyday Indulgence

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TRADITIONAL VS NEW TABLE 9

Examples of New Media and Traditional Media
MEDIA
New Media

Many restaurateurs have embraced • Websites

new media as a key part of their • Social Networks (i.e. Facebook, Instagram,
marketing strategy. And while new Twitter, Pinterest, Yelp, Google+, LinkedIn,
etc.)
media can be great for restaurants
• Blogging
because it encourages engagement • Web Radio (“podcasts”)
and digital word-of-mouth, traditional • Email Advertising
media has its merits too. • Web Advertising
• Satellite Radio
As you can see on Table 9, there are many • Text Messaging
platforms to consider when developing your • Video (“vlogging”)
marketing plan. And choosing the right tools can • e-Classifieds (i.e. www.kijiji.ca , CraigsList,
be overwhelming. To simplify the process, ask etc.)
yourself the following questions: • e-Zines (i.e. digital magazines)

• Who are my target customers?

• What influences their buying decisions? Traditional Media
• Where do they generally look for
information? (i.e., Do they love reading the • TV
morning paper or do they get most of their • Radio
news from online sources? Are they die-hard • Newspapers
foodies that spend their evenings reading • Direct Mail
Yelp reviews and attending culinary events? • Signage (e.g. billboards, posters, decals, etc.)
Or are they busy families who are always on • Yellow Pages
the go — passing lots of billboards along the • Telemarketing
way?) • Product Placement
• What media platforms are they most active • In-store Promotion
on? • Promotional Literature (e.g., brochures,
• What are their interests and what kind of newsletters, tourism guides, etc.)
messaging will engage them?

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New Media vs. Old Media

Trying to decide what form of media is right

for promoting your restaurant? Answering the
above questions will help, but there is more to
consider…

TABLE 10
Comparison of New Media and Traditional Media

NEW MEDIA TRADITIONAL MEDIA

Format “Pull” Format: viewers/listeners “Push” Format: messaging is

can choose to interact or share pushed out to viewers/listeners

Time Required Often requires considerable time Paid advertising is typically easier to
and ongoing management to be execute, but requires ample
effective — without putting the strategy to be effective
time in, you won’t see the results

Reach
Varies: Reach depends on the Controlled circulation: effectiveness
quality of the campaign/content depends on quality of campaign/
content

Targeting Can typically be hyper-targeted Often more difficult to target

Cost Of Use Less expensive than many Commonly more expensive than
traditional media tactics, but new media
typically requires more time

Measurement Easy to measure impact and reach More difficult to measure impact
and reach

Communication Style Interactive, two-way Unidirectional, one-way

communication communication

Longevity Usually disseminates rapidly Typically more permanent or

tangible

Driving Factor Creating relationships over time Getting guaranteed exposure to

to drive sales drive sales

Flexibility Flexible format, easy to change Fixed format

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MARKETING PLAN purchases. It’s important that both new and

existing operators prioritize their marketing
efforts; and developing a good marketing plan is
an essential first step.
When starting your business, a
marketing plan is crucial to the The marketing plan is usually prepared in
planning process — without marketing, conjunction with your initial financial planning
and budgeting, however it should be updated
you will have no customers.
regularly as your business grows and your
customer base evolves.
But when budgets are tight, marketing can
As illustrated in the graphic below, marketing
sometimes get neglected in favour of other
incorporates most aspects of your business.

The Marketing Model

• Experiences & Facilities

Product • Packages & Programming
• Human Resources and Quality Customer Services

• Prices for various market segments and products

Price at various times of the year
• To cover costs and generate profit

• How customers buy your product, e.g., on line, on

Place the phone, through a reservation system, through
the travel trade

• The tools used to take your product to market and

Promotion generate sales, e.g., online marketing, social media, travel
guides, advertising, direct mail and email

139
Developing a Marketing Plan • Description of execution of each tactic (who is
responsible? how will they do it?)
Your marketing plan should contain several • Timeline (when will each tactic be executed?)
sections, as described below:
When developing your marketing strategy, here
BUSINESS ASSESSMENT are some channels of communication to consider:
This is an assessment of your situation and should
include many of the same elements as your • Website
business plan: • Social media channels (Facebook, Twitter,
Foursquare, Yelp, Instagram, etc.)
• A summary of market research and analysis • Email campaign
• An analysis of the competition • Print advertising (newspapers, magazines)
• An assessment of market trends • Radio/Television advertising
• A description of your geographical location • Outdoor signage
and physical site • Flyers/Direct mail campaigns
• A description of your target markets • Guides & directories (travel, food, business)
• An overall marketing budget • Promotional material (rack cards, brochures,
tent cards, swag)
MARKETING OBJECTIVES • Events
With the assessment completed, develop a clear • Guerrilla marketing
set of objectives including the following:
MARKETING BUDGET
• Sales volume (number of customers, average Take the time to research the approximate cost of
checks, etc.) each tactic and to source companies that provide
• Brand awareness / positioning (see above) the services required (i.e. such as copywriting,
• Total revenues design, printing, advertising, etc.) Things to
• Profit consider when creating your marketing budget:

MARKETING STRATEGY • Strategy development (hiring a marketing/PR

This is your overall approach to achieving your agency)
marketing objectives. It should outline in detail • Copywriting
who you will target and how you will reach them. • Photography
It should include: • Graphic design
• Web design
• Positioning Statement (what is your concept? • Traditional printing (brochures, tent cards, etc.)
who is it for? how is it different?) • Other printing (signage, t-shirts, etc.)
• Description of your target market segments • Traditional advertising (newspapers,
(basic demographics such as age, gender, magazines, radio, TV)
income level) • Distribution costs (postage, delivery, etc.)
• List of tactics that will be used to reach each
market segment (i.e. e-newsletters, coupons,
give-away contests, etc.)

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One Page Marketing Plan What’s most important is that you think
strategically and develop tactics and campaigns
If you’re like many restaurant operators, the that are easy to execute and easy to measure.
thought of developing an in-depth marketing
plan is a little frightening. The key is not to
overcomplicate it. Your plan can range from very
comprehensive to a quick one page strategy, like
the sample in Table 11.

TABLE 11
One Page Marketing Plan Example

CATEGORY STRATEGY

My reason for existence: To provide pet owners within the city of

Springfield a safe and fun place for their pets.

What sets my business apart from the rest: An indoor pet park and play-land

My ideal customer is: 1. Springfield professionals working in the 10 mile radius

2.
3.

What’s most important to my ideal 1. That their pets are safe

customer when they are buying 2. Pets can have fun in any weather
what I’m selling: 3. Exercise

What I want to accomplish this year: • Lease a building

• Recruit customers

The top 3 things that are going 1. Direct mail in nearby developments
to get me there: 2. Drop-offs in office parks
3. Open house events

How much will each program 1. Mail – 60%

contribute to my revenue/profitability: 2. Drop offs – 15%
3. Open House – 25%

What will trigger my ideal customer • Being stuck at work and pet needs to be let out
to think of me:

Programs I am running to reach my goal 1. Radio advertising

2.
3.

How much money will I need to get it done? 1. $50,000

2.

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Nine Marketing Tips For website, and inside your restaurant, keeping
Restaurants in mind federal privacy and anti-spam
legislation. For more information visit: http://
Now that you have your marketing plan, fightspam.gc.ca
there are a few things to keep in mind when
executing it. Here is a brief overview of good 6. LEVERAGE SOCIAL MEDIA
marketing practices, many of which are Social media allows you to connect with your
described in more detail later in this section. customers 365 days as year, promote your
brand, and encourage customers to share
1. STAY CURRENT their stories. That’s priceless.
Keep informed about new trends or useful
tools that can help you enhance your 7. GIVE PEOPLE A REASON TO PAY
restaurant’s marketing plan. Reassess your ATTENTION
marketing strategy on a regular basis to Promotions and incentives will encourage
determine if you need to change directions. people to follow you on social media
channels and visit your restaurant.
2. LEARN ABOUT SEO/SEM
More than 70% of all web searches are for 8. RUN CONTESTS
local businesses. Help prospective new This is a great way to reward loyal customers,
customers find you online by learning more grow your online following base, and bring in
about Search Engine Optimization (SEO) and new customers.
Search Engine Marketing (SEM).
9. BUILD LOYALTY
3. PUT YOUR WEBSITE TO WORK FOR YOU Develop a loyalty program that supports your
Your website can be a powerful tool when broader business goals (i.e. Growing liquor
used effectively. Great websites are easy sales, boosting lunch business, selling more
to find (SEO), easy to use (functionality), high profit items, encouraging repeats, etc.)
and encourage strategic engagement Promote your loyalty program offline and
(conversions). online.

4. ENGAGE FOOD BLOGGERS HELPFUL LINKS

Many local food bloggers are happy to review A One Page Marketing Plan Anyone Can Use by
restaurants in return for a free meal. The Small Business Trends
outside link will help with rankings, and the http://smallbiztrends.com/2008/06/one-page-
review (if it’s a positive one) will help your marketing-plan.html
reputation.
Restaurant Marketing: Be The “Only” by Aaron
5. GROW YOUR EMAIL LIST Allen
When done well, email marketing is super http://aaronallen.com/blog/restaurant-marketing/
powerful. But remember the golden rule be-the-only/
of content marketing: Less Sell. More Tell.
Start growing your email list by promoting 5 SEO Tips for Restaurants by Restaurant Engine
signups through social media, on your http://restaurantengine.com/restaurant-seo-tips/

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THE OPENING kinks, it’s time to jumpstart your marketing

efforts.

As the old expression goes, “you don’t 4. HOST A PRESS PARTY

Hosting a press party gives journalists and
get a second chance in the restaurant
online influencers a chance to try your
business.” Think carefully about how restaurant first-hand. Press parties are
you are going to ‘open’ your restaurant. geared toward local and regional media, and
And when. are effective publicity tools when done right.

Many new restaurant owners are so excited

to launch that they overlook key elements —
resulting in lacklustre experiences for early
guests. The following tips will help ensure your
opening is a success. HELPFUL TIP

4 Opening Tips

1. BE VERY CAUTIOUS ABOUT ADVERTISING Opening Your Restaurant

YOUR ‘OPENING DAY’
Seasoned restaurateurs recommend:
There are so many factors out of your control
that can delay a planned opening. It’s better
to err on the side of caution than generate a • Expect to open 2- 3 months later than
lot of buzz around your launch and then not you originally planned.
deliver.
• DO NOT advertise your opening day.
2. HOST A DRY-RUN FOR YOUR FRIENDS AND The last thing your new staff needs is
FAMILY crowds of people on the first day!
A dry-run gives your team a chance to learn
the dance steps without tripping — and your • Have a 1 – 2 month ‘soft’ opening
loved ones will be much more forgiving than period with limited advertising.
the average guest.

3. OPT FOR A SOFT-LAUNCH FIRST

Every seasoned operator knows that the first
few weeks after launching a new restaurant
can be hectic. Your team is still learning
the ropes and mistakes are quite common.
A “soft-launch” means that the restaurant
is open for business, but isn’t actively
advertising it. Once you’ve worked out the

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DIGITAL & ONLINE Your Website
MARKETING Your website can be a powerful tool when used
properly. A well-engineered restaurant website
should:
The digital age has dramatically changed how
many small businesses approach marketing — • Stay true to your brand — both in design and
and restaurants are no exception. writing style.
• Be “Mobile-friendly” or “Responsive” (i.e.
Anyone and everyone today can have a website automatically responds to provide optimal
and connect with the world. The Internet has viewing experience on any device —
empowered consumers to a degree never seen cellphones, tablet, desktops, etc.).
before. The consumer is shaping, even controlling, • Prominently highlight key contact information
the marketplace. and hours of operation on every page (i.e.
phone number, address, directions, link to
Selling has given way to helping people buy. Google Maps, etc.).
Marketing has shifted to a role of responding to • Include an up-to-date menu that is easy to
customers’ expectations more than ever before. read on any device.
Social networks are becoming a vital marketing • Encourage engagement (i.e. collect customer
tool, an entirely different medium connecting feedback, promote e-news signups or social
businesses with customers. media engagement, etc.).
• Be optimized for search engines (SEO);
In this environment, it’s important to remember meaning it ranks high in search engine results.
the following in regards to your promotional Blogging is a great way to connect with your
activities: customers and improve your search ranking.

• Resist the temptation to ‘sell’ your business. A good website will cost you $5,000 - $7,000, and
Instead, seduce consumers into considering up to $15,000 or more. Look at websites for other
buying it. restaurants so you have some idea of what you
• Helping consumers buy is more effective than want before you start working with a designer.
pushing your agenda. Make sure you keep your own website up-to-date
• Promote the experience (the benefits to the and also the information in your listings on other
customer), not just the facilities and services. websites. To be able do this, make sure to keep
• Focus on wants, not needs. records of the websites on which your restaurant
• Service the top 20% of your available markets information is listed.
— your most responsive and loyal customers —
they give you 80% of your net return.
• Manage all points of contact with these best Social Media10
customers.
• Stress value, not price. Social Media is the new kid on the block when
• Use social networks to reinforce your credibility it comes to advertising and marketing. With
and get your message out. its low cost and high engagement rates, social
media can be a valuable tool for restaurants. To
many it may seem fairly straightforward. Before

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you jump in feet first, it’s important to do your email, menu items, website as well any specific
research and develop a full strategy which can information you wish your customers to know.
include a combination of social media, print, radio, Assure that your cover photo and profile pictures
billboards and influencer marketing depending are easily recognisable and are up to date.
on factors such as budget, demographics and
target market. 2. Think target market. Not platforms.
There are A LOT of social media platforms and
Social media marketing is a broad topic and is new features seem to appear daily. Each platform
changing on a regular basis. Keeping up with best has a slightly different audience; knowing who
practices as technology evolves is HARD! your target market is and where they “hang out”
is KEY to being successful. Don’t worry about
perfecting all the social media feeds or having
a presence on all of them. Pick 2-3 platforms
where your ideal customers are and create quality
HELPFUL TIP content on a regular basis.

3. It is time consuming.
Social media is about building relationships
Social Media & Your Restaurant and creating consistent engagement. And that
takes time! Much more time than most people
• Regularly review postings about anticipate. Don’t expect overnight success; but,
your restaurant on social media sites if you put the time in and plan for success, the
such as Instagram, Yelp, Trip Advisor, investment will pay off. Assure that you are
Urbanspoon, Google, etc. (A Google checking all of your feeds on a daily basis and if
Alert with your restaurant’s name can possible more than once a day. Having too many
help). hands in the bucket (aka access to your feeds) in
this case isn’t good practice. Having 1-2 people
• Listen to what people are saying; in charge of your social media is best to keep a
respond if appropriate and address consistent voice and to assure you are sticking
issues as required. See the discussion to your strategy. If you do not have someone in
later in this chapter (13.7). house to dedicate to your social media feeds
and strategies consider hiring a consultant or
freelancer on an hourly or monthly basis.
Below are some useful tips to get you started.
4. Content is king.
To earn a loyal following, you must create and
10 Tips For Social Media share great content — content that will engage
your target market. It doesn’t necessarily have
1. Get back to basics. to be original but it needs to deliver value. The
The first step to being found online is to assure general rule of thumb when it comes to social
that all of your accounts are properly set up. media is that 80% of your content should be
Assure that all of the sections on your accounts educational, informative and engaging while the
have been filled out. For example: Address of the other 20% should be sales related. Great examples
restaurant, hours of operation, phone number/ for restaurants would be: Daily specials, unique

This content provided by By Kerra AuCoin Mansfield,KA Social Media Consulting

10
145
http://www.kasocialmedia.ca/
menu items, if you source local ingredients and restaurant industry this is SO IMPORTANT as you
staff tips or favourite menu items. want the pictures to leave your customers and
potential customers with an urgency to visit ASAP.
5. Engage more than you sell.
Social media can be an awesome promotional In order to capture these drool worthy pictures
tool, but if you only use it to sell, you’re missing the and videos having a good camera or phone is
point. As previously mentioned, when it comes recommended. It doesn’t need to be cost a lot but
to social media it’s best to engage always and sell a good camera/phone along with editing apps will
sometimes. Your followers want to hear your story go a long way! Some popular editing apps are: PS
and get to know the owners, the staff as well as Express, Spark Video, Snapseed and Ripl.
the stories behind your menu and why the items
are unique. 8. Contests
Contests are becoming more and more popular
6. Keep it consistent. on social media especially in the restaurant
Consistency is KEY when it comes to social media. industry. Contests such as giving away a free
If you choose to share your daily specials then you burger, a $25 gift card or one of your most popular
need to assure that you are posting it DAILY! Your meals are some suggestions for restaurants. This
fans and followers have become accustomed to is a great way to thank your loyal followers as well
this and if you simply do it randomly it won’t result as to gain new followers/ customers. They are fairly
in long term success. Your social media presence cheap to conduct and bring in a relevantly decent
should also be consistent with your restaurant’s ROI.
overall brand positioning, therefore make sure
you have the same cover photo, profile pictures, One recommendation for contests is to check
colour scheme, writing style and personality on all the most recent Facebook rules prior to doing a
platforms. contest. Did you know that for the last number
of years it is against Facebook Terms of Service
7. Get in front of the camera. to do a Like & Share Contest? How often do you
Live video is the new HOT item when it comes to see these contests especially when it comes to
social media. It seems like each platform now has restaurants? It’s critical to check the rules before
a form of live option such as Instagram Stories, going against them! You are growing your feeds
Snapchat, Facebook Live etc. and the popularity of on a regular basis so why risk the potential of
this is growing DAILY! Your followers want to see losing your page over a contest?
behind the scenes and want to know where your
food comes from, how it’s prepared, who your 9. Hashtags
staff is and in general WHY they should frequent Hashtags may seem a little strange to use when
your restaurant as oppose to the one down the you are used to doing your marketing old school.
street. Live video is the opportunity to bring However, when used properly they work! There
your followers in the kitchen without physically are specific hashtags used globally for the
bringing them into the kitchen. restaurant industry as well as local hashtags that
are popular such as #LoveLocal #ILoveLocalHalifax
While you’re getting in front of the camera make #Halifax. Similar to contests, always check online
sure you are also take great high-quality pictures to assure that the hashtags you are using are not
behind the camera. You have heard the saying “A currently banned as these change on a frequent
picture is worth a thousand words” and within the basis.

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

10. Think Like Your Customer • Google Adwords http://www.google.ca/intl/en/

Last but certainly not least, think like your adwords/
customer. Are you known as the neighbourhood • Facebook Ads and Promoted Posts
hangout? Create that tone and use it http://mashable.com/2013/07/08/facebook-
consistently across all of your platforms. Do promoted-posts-business/
you have a waitress/waiter that has been with • Twitter Promoted Tweets
the establishment for years and is the face of https://support.twitter.com/articles/142101-
your business? Use it in your social media. Are what-are-promoted-tweets
you known for your great food? Create your • Instagram Ads and Promoted Posts
social media postings around your chef and https://business.instagram.com/advertising
kitchen staff. The restaurant industry is such a
great industry to thrive on social media and the Like any form of paid advertising, online ads can
possibilities limitless. be pricey. Do your research before committing to
an online advertising campaign. Facebook, Twitter
Building a strong social media presence takes and Instagram offer inexpensive advertising
time, dedication and more importantly patience. options to let you test the waters.
It certainly won’t happen overnight. If you put the
time in and develop a plan while thinking of your HELPFUL LINKS
current customers first, social media can be an 10 Ways Restaurants Can Use Social Media to
immensely powerful marketing platform. Grow by Mike Gingerich https://mikegingerich.
com/10-ways-restaurants-can-use-social-media-
For information on specific platforms, check out to-grow/
the resources below:
• Mashable’s Social Media Blog Facebook for Your Restaurant by Aaron Allen
http://mashable.com/category/social-media/ http://aaronallen.com/blog/facebook-restaurant/
• Social Media Examiner
Social Media Marketing for Restaurants: 21
https://www.socialmediaexaminer.com
Tips by Wishpond http://blog.wishpond.com/
• Digital Information World
post/57638303180/social-media-marketing-for-
https://www.digitalinformationworld.com
restaurants-21-tips
• HubSpot’s Marketing Blog
http://blog.hubspot.com/marketing Google AdWord Tips for a Small Budget by
Vertical Response http://www.verticalresponse.
Online Advertising com/blog/5-google-adwords-tips-for-a-small-
budget/
Like traditional advertising, web-based
advertising can be an effective way to connect A Guide To Marketing Your Nova Scotia Tourism
with prospective customers. Online ads can Business (Chapter 4) from Tourism Nova Scotia
be hyper-targeted (directed at specific groups https://tourismns.ca/development/business-
based on your chosen pre-sets) and are easy to development/business-resources
measure, making them a popular choice for many
businesses. 10 Examples of Awesome Restaurant Social
Media Marketing https://pos.toasttab.com/blog/
POPULAR ONLINE ADVERTISING PLATFORMS examples-of-awesome-restaurant-social-media-
• Web-based Publications (i.e. local newspapers, marketing
magazines, etc.)
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HANDLING ONLINE UrbanSpoon, etc.), and most restaurants can’t
afford a full-time online community manager.
CRITICISM Setting up a Google Alert with your restaurant’s
name will ensure you’re notified when new
reviews are posted.
Sometimes unhappy diners will
complain in person, giving staff the STEP 3: READ THE REVIEW CAREFULLY
opportunity to remedy the situation on One advantage to receiving criticism online as
the spot [see section 12.5]. But today, opposed to in person is that you have time to
read each comment thoroughly. Once you have
many will submit complaints via social
done this, highlight the customer’s complaints,
media instead. Negative social media and consider how you’ll mitigate the issue in the
comments can hurt your restaurant’s future. In your response, detail the measures you’ll
reputation, so it’s important to have a take to improve.
strategy for damage control.
STEP 4: PRIVATE VS. PUBLIC APOLOGY
On many platforms, you can choose whether
to respond privately or publicly. It’s usually best
Negative comments won’t go away on their
to apologize in public, offering compensation
own, but if you handle the situation with
if needed. If you want more details on the
professionalism and grace, other customers will
complaint, request to continue the conversation
take notice — and the reviewer may even feel
in private (either by phone or email).
obliged to remove their comments.

STEP 5: BE POLITE AND ACCEPT

Below are some helpful tips and rules for handling
RESPONSIBILITY
negative social media comments.
Some reviewers can be downright harsh. Though
How To Handle Online Criticism
your first instinct may be to go on the defensive,
try to stay calm. Customers expect a thoughtful
STEP 1: MAKE IT EASY TO CONNECT
apology, and it will look bad if you refuse to accept
DIRECTLY
the blame. Remember that for every one reviewer
Some patrons complain through social media
there may be 20 more readers.
because they can’t find a restaurant’s contact
information to complain directly. To avoid this,
STEP 6: RESPOND QUICKLY
ensure your website, Facebook page, and other
Reacting quickly proves that you’re listening and
social media platforms have up-to-date, easy to
that you take customer complaints seriously.
find contact information.

STEP 2: SET UP GOOGLE ALERT

NOTIFICATIONS
Monitoring every social media platform is
time consuming (e.g. Facebook, Twitter, Yelp,

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RISKS TO IGNORING
CRITICISM

ASSOCIATIONS The comment will be viewed as accurate

by others
Social media reviews can have great
There are many associations in Nova Scotia that influence. And not responding to negative
might be useful for networking, information and reviews could imply that the comments
educational and training resources as well as are accurate and nothing is being done to
marketing. remedy the situation.

Restaurant Association of Nova Scotia It’s a missed opportunity

(RANS) Good or bad, social media comments are
http://www.dinens.ca genuine customer feedback. Negative
The largest restaurant association in Nova Scotia reviews can point to operational/staffing
supporting food service businesses. RANS issues that require your attention. Think of
provides members with cost-saving programs negative feedback as an opportunity for
such as preferred rates on credit card fees, improvement.
business & personal insurance, group benefit
plans, discounts for employees, etched glassware, It makes you look unprofessional
equipment financing, and design services. Other Ignoring negative comments makes you
support includes educational materials, start-up look unprofessional and unconcerned with
support, a free listing in our restaurant guide customer satisfaction.
book, a free posting on our DineNS.ca website,
and free access to Savour food & wine Show.
RANS is currently planning to launch a Benefit
Incentive Card (BIC) for restaurant employees
which will provide them with benefits such as
discounts at stores around the province. promotion in their publications, weekly
e-newsletters, online business directory, etc. Many
The association exists to assist and help individual communities also have local tourism associations
operators succeed and create a better legislative or municipal tourism departments that do
working environment for the food service sector. marketing.

Taste of Nova Scotia Regional Tourism Industry Associations

http://tasteofnovascotia.com/ Nova Scotia’s regional tourism industry
Connects restaurateurs, chefs, food producers, associations ( https://tourismns.ca/about-us/
processors and consumers throughout Nova industry-partners ) market their area to tourists,
Scotia, provides promotional opportunities both domestic and outside the province. They
online and in printed publications, and offers to have websites and printed guides.
members a public relations and media relations
program. Tourism industry Association of Nova
Scotia
Chambers of Commerce/Business/ (www.tians.org )
Tourism Associations Provides members with advocacy and industry
Many communities have chambers of commerce support, as well as expert advice through the
or other business associations that offers cost- Tourism 1 To 1 Mentorship Program (http://www.
saving programs, networking opportunities, tourismmentoring1to1.ca/ ).
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MEASURING RESULTS • What percentage of your business is new
versus repeat?
• How often do existing customers return?
As the old saying goes: “if you can’t • What are your busiest days of the week?
Busiest months of the year?
measure it, you can’t fix it.”
• When analyzing your results, the most
important thing to consider is customer
satisfaction. No matter how many people you
“However beautiful the strategy, you should
draw in or how high your sales are following
occasionally look at the results.” – Winston Churchill
a marketing campaign, you won’t earn
repeat business if customers aren’t satisfied.
Before you begin investing time, money,
and effort into marketing, it is important to
Besides using in-house comment cards to
have a strategy for tracking success. Without
gather feedback from customers, there are a
measuring your results, you could be throwing
number of helpful tools available for tracking
money out the window.
and responding to questions and complaints.
Equally as useful are the built-in analytic tools
Each marketing tactic you consider should
in each of these resources, which will provide
be measurable. And with today’s technology,
you with insight into trends and patterns in
it’s easier than ever to collect and analyze key
customer experience.
metrics about your business.

Here are some questions to ask yourself in order

Helpful Tools For Measuring Results:
to gauge the effectiveness of your marketing
HootSuite www.hootsuite.com
efforts:
Monitors social media channels by providing
analytic reports of reach and engagement.
• How did new customers hear about you?
(i.e. If tourists are flocking to your restaurant
ChattBack www.chattback.com
because they read about it on Yelp, you’ll
Allows you to view and reply to all customer
want to encourage more customers to write
messages and provides analytic reports of
Yelp reviews. If your awesome lunch specials
trends in your service.
have people talking, you should mention
them more on social media and could invest
Survey Monkey www.surveymonkey.com
in extra street signage.)
Allows you to create surveys or use existing
• How effective is each marketing tactic?
survey templates to gather customer feedback.
(i.e. How many coupons were redeemed?
Also provides data analysis tools to gain insight
How many people came in for Wing Night
into customer trends.
because they saw it on Facebook? How
many walk-ins came in because of your
Yelp www.yelp.ca
funny sandwich board message versus last
Allows you to create a profile with a description
week when you just wrote the specials? etc.)
and photos of your business, track the
• What are your social media engagement
performance of your page, and communicate
scores?
with customers but publicly and privately to
• Based on your comment cards and online
answer questions and address complaints.
surveys, how satisfied are your customers?

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Foursquare www.foursquare.com area. It keeps track of where users are located

Foursquare is a fantastic way to snag people and then sends them suggestions for where to
who are looking for someplace new in a specific eat in the area.

HELPFUL RESOURCES
Reading List

Restaurant Marketing for Owners and Managers, Patti J. Shock, John T. Bowen and John M. Stefanelli
http://www.amazon.com/Restaurant-Marketing-Owners-Managers-Patti/dp/0471226270

Purple Cow: Transform Your Business By Being Remarkable, Seth Godin

http://www.amazon.ca/Purple-Cow-Transform-Business-Remarkable/dp/1596597585

Associations

Restaurant Association of Nova Scotia (RANS): www.dinens.ca

Taste of Nova Scotia: www.tasteofnovascotia.com
Tourism Industry Association of Nova Scotia: www.tians.org
Regional Tourism Industry Associations: http://tourismns.ca/regional-tourism-industry-associations
Chambers of Commerce: http://business.apcc.ca/groups/grouproster/ns-chambers-of-commerce-18

Websites

Aaron Allen & Associates (Blog): http://aaronallen.com/blog

HubSpot Marketing Library http://www.hubspot.com/free-marketing-resources
Government of Canada: Anti-Spam Legislation http://fightspam.gc.ca/eic/site/030.nsf/eng/home

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Domaine de Grande Pré
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

SOME ADDITIONAL
RESTAURANT INDUSTRY
OPERATING DATA
PART 1: NOVA SCOTIA RESTAURANT
OPERATING NORMS

PART 2: STATISTICS FROM A US SURVEY OF

RESTAURANTS – START-UP COSTS, SALES AND
SPACE REQUIREMENTS

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 PART 1:
NOVA SCOTIA STATISTICS

The statistics presented here are averages for Nova Scotia as a whole; they are from Statistics Canada
sources. Note that totals may not add due to rounding.

1. Restaurant Operating Norms by Number of Seats

Revenue Mix by Number of Seats

Type of Revenue 25 seats 25-50 50-100 100-200 200 National

or less seats seats seats or more

Food 95.5% 93.2% 82.04% 71.6% 81.8% 86.5%

Beverage 2.1% 5.0% 15.49% 23.2% 14.2% 10.5%
Other revenue 3.2% 1.7% 2.48% 5.2% 3.9% 3.0%

Cost of Sales and Other Ratios by Size

Type 25 seats 25-50 50-100 100-200 200 National

or less seats seats seats or more

Food (cost of sales) 29.0% 32.2% 38.7% 30.2% 36.5% 34.0%

Beverage (cost of sales) 23.0% 34.7% 23.5% 25.3% 31.6% 27.1%
Other (cost of sales) 40.0% 14.2% 25.2% 1.1% 27.1% 24.3%
Costs/Sales 29.5% 32.0% 36.0% 28.6% 35.4% 33.0%
Gross Margin 71.3% 68.0% 64.0% 71.4% 64.6% 67.0%

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Grounded Coffee
 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Operating Costs and Operating Profit by Number of Seats

Type 25 seats 25-50 50-100 100-200 200 National

or less seats seats seats or more

Salary/Wages 28.1% 29.0% 29.3% 30.6% 29.7% 29.6%

Occupancy 8.3% 10.9% 9.3% 9.5% 7.0% 9.2%
Operating 4.5% 3.1% 4.3% 4.3% 3.1% 3.6%
Paper 4.0% 2.8% 3.5% 2.1% 2.9% 2.9%
Utilities 3.3% 3.5% 4.3% 3.8% 2.6% 3.5%
General/Admin 4.7% 1.3% 3.1% 3.7% 3.2% 2.8%
Marketing 3.5% 4.1% 3.6% 4.2% 2.9% 3.4%
Entertain. 0.2% 1.4% 2.5% 1.2% 0.8% 1.4%
Total expenses 56.6% 56.0% 60.0% 59.4% 52.2% 56.4%
Operating Profit (Gross
Margin minus Total Expenses) 14.8% 12.0% 4.0% 12.0% 12.4% 10.5%

2. Restaurant Operating Norms by rural, suburban and urban Locations

Revenue Mix by Location

Type Rural Suburban Urban National

Food 82.0% 89.1% 82.2% 86.5%

Beverage 13.2% 8.4% 14.5% 10.5%
Other revenue 4.8% 1.6% 3.3% 3.0%

Cost of Sales and Other Ratios by Location

Type Rural Suburban Urban National

Food 31.2% 34.3% 34.0% 34.0%

Beverage 29.1% 27.0% 29.1% 27.1%
Other 13.2% 22.1% 28.2% 24.3%
Costs/Sales 30.1% 33.5% 33.1% 33.0%
Gross Margin 69.9% 66.6% 66.9% 67.0%
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PART 2:
STATISTICS FROM A ‘COSTS TO OPEN A
RESTAURANT’ SURVEY OF RESTAURANTS –
START-UP COSTS, SALES/INVESTMENT RESULTS
AND SPACE REQUIREMENTS

The data in the table on the next page is reproduced with permission from RestaurantOwner.com.

“Our members are always asking, “How much does it cost to open a restaurant?”

As part of our ongoing effort to answer this question, we responded by asking each of our members to
share their unique experiences with regard to their startup costs. We received more than 700 responses
from a variety of restaurants. Of course no two restaurants are the same, and the cost per square foot to
open a restaurant varies greatly depending upon a litany of factors such as service style, decor, size, and
location. Nevertheless, we were able to uncover a number of statistics that can be useful when planning
your startup”

Source: www.RestaurantOwner.com

For more information visit www.RestaurantOwner.com

Important Note: This data is based on a survey of US restaurants in 2012. It is provided for
information only and should not be used as data for Nova Scotia restaurants. All types
of restaurants are included. Costs may include do-it-yourself projects as well as those
constructed by contractors.

Survey Results: How Much does it Cost to Open a Restaurant

Lower Median Upper Average # of

Quartile Quartile Responses

Sales-Investment Results
Annual Sales $425,000 $950,000 $1,375,000 $1,172,629 680
Sales per Sq. Ft. $170 $286 $433 $355 679
Sales per Seat $5,278 $9,106 $13,750 $10,534 673
Annual Profit - $ $12,813 $52,000 $130,000 $91,102 665
Profit % 2.5% 8.0% 12.0% 6.5% 665
Sales to Investment Ratio
(no land purchase) 1.7 to 1 2.9 to 1 5.0 to 1 2.3 to 1 489
Sales to Investment Ratio
(with land purchase) 1.1 to 1 1.8 to 1 3.6 to 1 1.7 to 1 138
Annual Return on Investment (ROI) 4.5% 17.6% 40.0% 33.5% 611
# of Months it took to become
profitable 1 6 24 18 440

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 STARTING AND RUNNING A RESTAURANT IN NOVA SCOTIA

Survey Results: How Much does it Cost to Open a Restaurant

Lower Median Upper Average # of

Quartile Quartile Responses

Cost Estimates
Total Start-up costs
(no land purchase) $125,000 $275,000 $550,000 $494,888 489
Total Start-up costs
(with land purchase) $175,000 $425,000 $925,000 $735,326 138
Start-up cost per sq.ft.
(no land purchase) $45 $95 $173 $159 488
Start-up cost per sq.ft.
(with land purchase) $64 $131 $234 $178 138
Start-up cost per seat
(no land purchase) $1,418 $3,046 $5,571 $4,244 482
Start-up cost per seat
(with land purchase) $1,808 $3,734 $7,315 $5,452 138
Cost overrun compared to budget 0% 15% 45% 33% 626
Construction Cost - $ $49,500 $140,000 $350,750 $279,807 547
Construction cost- %
of overall Start-up Costs 29% 47% 64% 47% 547
Construction Cost per sq.ft. $19 $50 $91 $72 532
Construction cost per seat $500 $1,452 $2,943 $2,126 539
Kitchen & bar equipment costs $30,000 $75,000 $150,000 $115,655 569
Kitchen & bar cost per sq.ft. $43 $88 $150 $136 564
Land & Building Cost $25,000 $125,000 $400,000 $406,657 138
Space Requirements
Total sq.ft. 2000 3200 5000 3945 723
Kitchen sq.ft. 500 900 1375 1051 722
Kitchen % of overall sq.ft. 20% 28% 38% 29% 721
Total # of Seats 62 100 170 140 716
Sq.ft. per Seat 26 31 39 34 414

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