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How to Succeed as a Top Chef

9/24/2010

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Tom Colicchio talks about what to avoid if you want to succeed as a restaurant owner.

Restaurant owner Tom Colicchio has won almost every major culinary prize out there—including the James Beard award for best chef in 2010. In other words, the man knows a little something about running a successful enterprise or two. But he’s also seen how restaurant owners can make painful mistakes before they even get their establishment up and running. Colicchio spoke to NEWSWEEK’s Jessica Ramirez about what new restaurateurs must avoid if the want to do well in this business. His advice:

DON’T THINK GOOD DINNER HOST EQUALS GOOD RESTAURANT OWNER
You need to know that just because you’re good at some aspect of cooking doesn’t mean you can run a place. For example, some people with no restaurant experience have dinner parties at home and think maybe it’s a cool thing to do for a living. That’s not quite how it works because the expectation is different. If the air conditioner breaks at 8 p.m. and everybody’s screaming at you that your restaurant’s too hot, that’s not fun. Your friends at home at your dinner party won’t yell at you.

DON’T ASSUME THE BUSINESS END IF YOU DON’T KNOW IT
You can be a great chef, but if you can’t control costs you don’t stay in business. Get the right people—like lawyers—to look over business contracts. I actually have attorneys that do it for me, partly because I’m a lousy negotiator. The other option is look for a partner who can bring those [business skills] to the table, someone who can negotiate that contract on your behalf, someone who’s not going to run the restaurant day in and day out, but who you can turn to for business advice. That’s what I did. I have a backer—his name is Robert Scott, who, before retiring, was the president of Morgan Stanley. I would always rely on him for business advice. So if you take on a partner, don’t just look for someone who’s going to give you money. You want someone who you can also go to for advice.

DON’T LEAVE LAWS AND REGULATIONS TO SOMEONE ELSE
In this age, HR is so important. I’m not saying you should have an HR director at a small restaurant, but a lot of people are getting sued these days. So you really need to understand local labor laws because you don’t have to be doing something maliciously to get sued. For instance, there’s [a New York regulation that refers to what’s] called “spread of hours.” Let’s just say an employee works a split shift. So this waiter comes in and he worked three hours for the lunch service, and he takes off for three hours, and comes back and works dinner for six hours. If the spread of hours, including the break, is more than 10 hours, you have to pay [one hour of additional pay for each hour in excess of 10 hours]. So a lot of these laws are bizarre, but not knowing them can hurt you.

DON’T TRY TO BE EVERYTHING TO EVERYONE
Try to figure out what you want to be and stick to that. You can’t be everything to everybody. You have to figure out your price point and figure out how to deliver quality and value at that price point. Then every decision you make is in support of that concept and that price point.

DON’T SPEND WHEN YOU DON’T HAVE TO Designwise—and I learned this the hard way—you can probably spend a lot less than you think you can or than you think you need to. Once you’re presented with a design from an architect, try to take money out of it. If you don’t, then you end up spending way too much for things that really, at the end of the day, won’t make much of a difference to your bottom line.


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