Randy Price and the Restaurant Business (02:28)
Randy Price, founder and President of Rocky Mountain Restaurant Group, is today's guest. He talks about his background and the traits needed for success in the business.
Following the Plan (02:26)
Price followed his plan to work for other companies before founding his own business.
Wringing Value From Asset (02:03)
After moving to Colorado Springs, Price bought a restaurant that was in the perfect location but had the wrong concept. He turned it into a Mexican restaurant to appeal to the youth.
Minimizing Risk (01:47)
Price minimized his risk with the Salsa Brava by buying an existing restaurant. He went in with a partner and invested $50,000 taking out a loan against is home.
Sonterra Grill (01:54)
Wanting a downtown restaurant, Price took over a high-end place that struggled in the post-9/11 downturn. He opened Sonterra Grill, an "innovative Southwest" restaurant that offers good value.
Buying Next-Door Location (02:44)
Price's bought a bakery adjacent to his restaurant. Fearing expanding the original restaurant would ruin its atmosphere, he turned the adjacent location into a Kansas City-style barbecue restaurant.
Second Salsa Brava Location (01:04)
Price opened a bigger Salsa Brava in the North End, the first location constructed from the ground up.
Piazza Italian Restaurant (01:16)
Price relocated Slayton's Barbecue next to Sonterra Grill, then turned the former Slayton's into Piazza Italian Kitchen, offering Neapolitan thin-crust pizza with locally-grown food.
Lessons of Price's Story (02:56)
Price's success resulted from passion for the business, personality skills, and willingness to invest his own capital while managing risk. He was responsive to customers.
Experience Before Entrepreneurship (01:52)
Price has a degree in restaurant management, but does not consider it mandatory for success in starting a restaurant. Previous work in the industry is more important.
Marketing firms find demographic information to help you determine location. Higher disposable income and density are desirable.
Lunch Driving Dinner Sales (01:27)
Price wants lunch to drive dinner sales, so that restaurants move their product quickly, food is fresh and staff stays motivated.
Finding Concepts (02:19)
Price thought a Mexican restaurant emphasizing chips would provide excitement the area craved. He tries to bring hot trends from L.A. and New York to Colorado Springs.
Implementing Concepts (03:23)
Price brought in owners of Mexican restaurants for a long weekend in Colorado Springs to learn design ideas. He favors open space and high energy.
Prioritizing Services (02:18)
Price engineers work flow to bring everyone to a central area and has a system prioritizing services so that the most important are done the fastest.
Menus and Cross-Utilization (03:14)
Price keeps a list of recipes on file based on his research eating at other restaurants. He employs cross-utilization of products to insure that food gets used and pursues broad appeal.
Chefs and Menus (02:16)
Price looked for chefs who could succeed with his menu. Once they were there, they had flexibility to innovate.
Getting a Loan (02:36)
Price's resume and solid business plan gave him credibility to obtain a loan. He has taken Small Business Administration loans and is working to pursue an economic stimulus loan.
Costs and Opening Date (01:52)
Price projects his costs based on his contractor's estimates and his desire to open up with money in the bank. He keeps his opening day flexible but bases his targets on contractor's estimates.
Price starts interviewing three weeks before opening. He hires enough to account for the fact that 20% won't last.
Criteria and Menu Test (02:26)
Price gives leading candidates a menu test, giving them questions and answers to memorize. He hires based on attitude and trains for skills.
Price's goal is a 15% profit margin; some do better. He worries more about customer experience than cost.
Price prepares staff the week before the grand opening. He talks about Monday through Wednesday of preparation.
Thursday night the staff rehearses; there are always disasters. Friday is the buzz-building VIP event. Price opens on a Monday because it is the slowest day of the week.
Morale and Owner's Role (02:33)
Price communicates with the general managers of each of his restaurants, and works the restaurants himself. He encourages balanced lives and closes Sundays, leading to low turnover.
Price puts on sales contests, with winning teams rewarded with nights out in Denver. Managers praise in public and reprimand in private.
Managing Money and Theoretical Food Cost (02:22)
Some restaurants don't know they're running out of money. Price runs frequent inventories, analyzes costs, monitors for theft, and measures waste based on the cost of menu items sold compared to total spending.
Keys to Success (02:45)
Owners must communicate to employees the restaurant's goals. Aspiring entrepreneurs should work in the industry and make sure it is right for them. Failure rates are high; some people start restaurants just because they enjoy eating out.
Host's Summary of Price's Points (02:17)
Experience in the industry is more important than education. Location and cuisine must match demographically. Food, atmosphere and service are all essential. Financing requires a good business plan; cash reserves are important.
Host's Summary Continues (03:14)
Open only when you are ready. Hire for attitude. Lead by example- Price busses tables. Reprimand in private. Maintain inventory control.
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