Trendy San Francisco restaurant flour + water has droves of foodies lining up for locally sourced and hyperlocal cuisine.

On any given night, the line of salivating customers waiting to get into flour + water, one of San Francisco's trendiest Mission District restaurants, can stretch out the door and around the corner. The queue hums with excitement and anticipation. The menu doesn't feature rare beluga caviar or bird's-nest soup; no, it's locally grown asparagus and hand-rolled strozzapretti that have everyone abuzz. And if you want in, neither having a big name—even Steve Jobs wasn't allowed to just walk in—nor a reservation may eliminate the typical two-hour wait to be seated.

Three years and several accolades since its launch, flour + water has touched on a trend that is taking the restaurant industry by storm: locally grown and produced foods. According to the National Restaurant Association, 72 percent of adults say they are more likely to visit a restaurant that offers locally produced food, while 83 percent of fine-dining restauranteurs and 71 percent of casual-dining operators report that their customers are more interested in locally sourced menu items now than they were just two years ago.

That explains why more than 50 percent of fine-dining restaurants feature locally sourced food and wine on their menus. Another market research firm, Mintel, reports that interest in where food comes from will drive the food industry this year.

When David Steele, David White, and chef Thomas McNaughton opened flour + water in May 2009, they agreed that a menu featuring only locally sourced food was imperative. That's because if the sustainable-is-chic, organic-everything, locavore movement has an epicenter, it's the San Francisco Bay Area, with its produce-friendly year-round warm climate, and culinary icons who have paved the way—including Thomas Keller and Alice Waters, who now grows gardens of organic vegetable in schoolyards.

So the flour + water trio set out to make a statement by fostering close relationships with local farmers and livestock producers, who make several shipments to the establishment each day.

"We fancy ourselves a neighborhood restaurant over and above an internationally known restaurant," says Steele.

To take it a step further, flour + water boasts hyperlocal menu items. Hyperlocal refers to produce grown on site by a commercial establishment, either for use in a menu or to be sold directly to the consumer. The restaurant has a 450-square-foot rooftop garden that provides about 5 percent of the vegetables used in its dishes, including carrots, herbs, and spinach.

Another reason to have your own rooftop garden: bees. The Italian eatery keeps a hive of bees to shine a spotlight on the importance of the insects' role in the maintenance of agriculture. The bees don't just create, ahem, buzz; they also produce honey that is used by the restaurant's chefs.

The chefs, committed to the cause, also go foraging three or four times a week around the San Francisco Bay Area, looking for wild plants to incorporate into their dishes. "It's the ultimate local, right?" says Steele. "It's a way for the chefs to stay connected to the earth, and it makes the process of putting food in front of people a more three-dimensional experience."

Steele had designs on opening a restaurant for seven years—even drafting a business plan—before the opportunity presented itself. The key was finding the right partners. Working on Wall Street for 20 years, Steele was savvy enough to realize that he needed partners that had experience in running a restaurant and cooking. He found the rest of his trifecta in White, who handles operations, and McNaughton, the executive chef.

"My theory was, you put three people together from different perspectives to have a symbiotic partnership,” he explains. That formula worked; Steele says the restaurant has been profitable from Day 1.

Steele funded 50 percent of the $600,000 needed to start up, while nine other investors provided the rest. Last year, the restaurant earned $3.2 million in revenue and 7 percent profitability.

As local and organic is solidifying its place in the mainstream and is growing as a culinary movement, so is this business. The partners opened Central Kitchen—a full-service restaurant—on May 10, and they will open Salumeria (an Italian delicatessen) at the end of the month. Both are located in the same building, only one block away from flour + water. Central Kitchen seats 49 guests, has a rooftop garden, and also houses bees. Salumeria will sell a variety of homemade products, including pastas by the pound, olive oil, and pickles.

"The new restaurant, Central Kitchen, will not just be a continuation of our philosophy of the hyperlocal, sustainable, seasonal, and neighborhood ethos, but we’re actually going even further beyond that," Steele says.

The restaurant industry will employ 12.9 million people this year, representing 10% of the total U.S. workforce, and making it one of the best industries for starting a business in this year.

Think about it: What's for dinner? Not takeout. Not fast food. And definitely not a homemade meal.

Instead, the subtle hand of the economic recovery is inspiring Americans to pull up a chair at a neighborhood sit-down restaurant. In 2009, revenue earned by full-service restaurants declined by 6.8%, reflective of consumers' having less disposable income (and therefore showing preference for fast-food restaurants or eating at home), says Nima Samadi, senior analyst at IBISWorld, a market research organization specializing in long-range forecasting of industries and business environments.

Restaurants in this segment of the industry "were the first to feel the pinch and the last to feel the recovery," Samadi says.

Although the full-service restaurant industry is ripe for growth, Samadi notes a saturated market as a big barrier to entry.

Another barrier: the significant day-to-day costs associated with running the business. According to Sageworks, a financial information company that provides industry data, the cost of sales, including inventory, direct labor, material, and other costs directly associated with the generation of revenue, will eat up nearly 41% of sales revenue.

Samadi says success can also be contingent on familiarity with the day-to-day operations. "Especially with full-service (restaurants), the failure rates are pretty high for people that start a restaurant without any prior restaurant experience, or if they don't hire someone that has the prior experience," he says. "I think expertise plays a pretty large role, and it's a pretty good indicator of success."

Need ideas for what kind of restaurant to start? Healthy eating continues to be popular, as well as offering locally sourced and locally grown foods, according to the National Restaurant Association's "What's Hot in 2012" survey. Technomic, a food-service research and consulting firm, says the biggest trend for 2012 will be meals with a twist—whether comfort food with an ethnic spin or surprising tweaks to sandwiches. So go ahead, dig in.

Industry sales-revenue has slowly recovered, growing 1.6% in 2010 and 2.8% in 2011, and it is projected to increase 4.5% this year and 5.5% in 2013. The National Restaurant Association expects the entire restaurant industry, not just full-service restaurants, in 2012 to book $632 billion in revenue and to employ 12.9 million. That would be a slight increase from 2011, and represent 10% of the U.S. work force. Plus, as the economy improves, Samadi says, restaurants should benefit from lower unemployment rates and higher levels of disposable income.

See more Business Opportunities by Industry in 2012.

The saga of Jamie Dimon at JP Morgan Chase raises questions about the value of a good reputation.

Reputation is something every leader possesses. What he does with it matters to the organization.

Case in point: Jamie Dimon, CEO of JP Morgan Chase. The reason he has so far survived the derivative trading episode that cost his company over $2.5 billion and may cost twice that, is his reputation. He is the last lion standing from the heady pre-2008 financial meltdown days. His reputation for integrity, until now, has been beyond reproach.

That reputation is taking a hit with new reporting by The Wall Street Journal that reveals that Dimon knew all about the derivative trading model but was negligent in supervising it. In fairness it was not his job to supervise the details, but the question arises: Should he have been more engaged? Hindsight is 20/20 and the answer would seem to be yes.

His reputation also is not enhanced by his sense of entitlement. Dimon stood down the shareholders and was allowed to keep his dual job as chairman and CEO. Worse, he was allowed to keep his $23 million bonus from last year. To me, that dings his reputation--but worse it affects our perception of his character.

"Character is like a tree and reputation like a shadow," wrote Abraham Lincoln. "The shadow is what we think of it; the tree is the real thing." Character is what a person is; reputation is how he seems. It is therefore perception that can be interpreted or manipulated in different ways.

That said, a leader needs to think about his reputation but it is ultimately his character that matters more. While we like to think of character as what is inside--the individual's moral compass--for a leader, character is the outward projection of those beliefs. In other words, it is one thing to stand on integrity; it is another to act upon it.

Leaders need to act on character. "The big lesson I learned: Don't get complacent despite a successful track record," Dimon told the Journal. "No one or no unit gets a free pass." One senior JP Morgan Chase executive has lost her job over the derivative trading blunder. Shareholders are suing JP Morgan and the FBI is investigating the company. But for now it looks like Dimon has escaped everything except bad press.

Escaping consequence is a failure of character. I view it as a sign of duplicity; it says the rules apply to everyone but me. One reason that employees fail to look up to those at the top is the double standard they perceive. They know that if they committed a big mistake it would cost them their careers. When the big boss stumbles not only does he keep his job, he also keeps his bonus.

Every mistake does not require retribution. Failures of judgment are human, must be treated as such, and weighed in the context of overall contribution to the welfare of the organization. But when the person at the top is not held accountable, questions arise.

"Men of integrity, by their very existence, rekindle the belief that as a people we can live above the level of moral squalor," wrote John W. Gardner, author, educator, and public servant. "We need that belief; a cynical community is a corrupt community."

So when integrity is trumped by circumstance people lose faith in their leaders.

Cynicism may prevail on Wall Street but it cannot be allowed to permeate Main Street nor any other street where men and women of character do their best to lead themselves and their organizations.

Increase your productivity. Get yourself in the zone. Tips from Pamela Slim, author of Escape from Cubicle Nation, and Scott Gerber, founder of the Young Entrepreneur Council.

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Increase your productivity. Get yourself in the zone. Tips from Pamela Slim, author of Escape from Cubicle Nation, and Scott Gerber, founder of the Young Entrepreneur Council.