A New Restaurant

Asking “How much does it cost to open a restaurant?” is like asking how much to buy a house, or to buy a car. While there are some guidelines to consider, the actual answer is determined by so many different factors, there is no way to set an accurate price that covers all different situations. Each restaurant is unique, and the price tag for each restaurant will be unique.

When you begin to examine how much it costs to open a restaurant you first need to have a very clear idea of (more…)

As we head into the new year, you should think about what your brand is, or what you would like your brand to be.  If you want to be a successful restaurant in this volatile economy, you better know who you are, and be ready to let your customers know who you are.

If you think that building a brand isn’t important to building a successful restaurant business, you haven’t been paying attention to what has been going on on the restaurant world.  (more…)

With all of the talk about how bad things are, and no clear sign of when it’s all going to end, it’s easy to lose sight of a very important point: it’s still very possible to be profitable in the restaurant business.

Case in point: Buffalo Wild Wings.

When BWW released their earning for the 3rd quarter, they reported that they were in fact making a profit.  Despite the constant barage of news about how bad things are across the board.  Buffalo Wild Wings showed that it is still possible to make a profit during tough times.  Economic experts credit the companies “differentiated brand.”

What does that mean?  It means BWW does not try to be like other restaurants.  They are different, and their customers recognize that difference.  More important than recognizing the difference, they see value in that difference, and are willing to continue to spend their money there.

It proves what I have been saying; you have to dare to be different.  You cannot afford to be like your competition.  You need to be different, and you need to do waht you do better.

This doesn’t necessarily mean there cannot be any similarities, but it does mean your customers need to be able to recognize that you are different.  This can be in menu offerings, price and portion, service, or any combination of these things.

Be different, and learn to turn that difference into profits.

I just wanted to do a quick post today to talk about designing your new restaurant.  If you are not buying an existing facility, and you are designing a new establishment, hire someone who specializes in designing restaurants.  Any mistakes made during the design of your restaurant will haunt you for years to come.

While you may end up paying a bit more for a specialist, it will actually save yo money in the long run.  If I was going to have surgery on my foot, I would go see apodiatrist .  If I had electrical problems in my house, I would call an electrician.  It’s the same with designing your restaurant; hire an architect that knows how to design kitchens.

One thing you need to understand about architects is that at heart they are artists.  Many times aesthetics play as much a role in their design decisions as functionality.  What you end up with is a restaurant that looks beautiful, but traffic and work flow problems are an ongoing headache for the staff.  There are areas of congestion that slow the food coming from the kitchen to the tables, and longer routes to and from the kitchen than are necessary, resulting in the staff becoming more tired.

There are also work flow considerations in the kitchen.  You will face higher labor costs because the design does not allow for efficient food prep and production, thee is an increased risk of collisions and food waste because the flow of production doesn’t move the way it should.

Unfortunately, once the restaurant is built, it becomes a nightmare to try and correct, both in terms of cost and time.

So, make sure the person designing your facility knows how to design a restaurant.  Once the initial design is given to you, take the time to really think through work flow and traffic patterns.  If you don’t feel comfortable doing that yourself, hire a consultant to do it for you.  Make sure the design works before the first brick is laid.  It is an investment that will pay huge dividends in the long run.

The other day I wrote about not being able to please every one with your food.  Going along with that is that you can not be all things to all people.  You need to narrow your focus down.  Define who you are, then be the best you can be at that.

I need to talk about the restaurant that recently opened in my neighborhood.  I keep going back to this example for a couple of reasons.  First, I had the opportunity to work there during the opening, so I got an inside look at what took place.  I got to see what went right, what went wrong, and how many of the mistakes could have been avoided.  Second, there was a lot that went wrong during this opening, and there are a lot of lessons that can be taken away from this experience.

When the owner decided on his concept, he chose what he referred to as a Southern California restaurant concept.  The restaurant was constructed with a dividing wall down the middle, creating two separate rooms.  One side was a dining room, with white linens, mood lighting, and on Friday and Saturday evenings, a strolling musician.  On the other side of the wall was the lounge.  It had a juke box, TV’s tuned to whatever sporting event was taking place, and on the weekends, live bands performing.

The building was designed so later in the evening when the dinner crowd had cleared out, the center wall could be opened, creating one large room for the late night lounge customers.  All well and good, except the owner couldn’t seem to decide whether he was a restaurant or a bar when it came to marketing his establishment.  Much of his marketing was focused on increasing the late night business, and the restaurant part didn’t receive as much publicity.

To complicate matters even further, the people that lived near the new restaurant had grudgingly agreed to allowing the city to grant a variance for selling liquor at the restaurant.  They were concerned with potential drunks coming to their neighborhood.  They were appeased by the assurances that nice restaurants do not typically attract that type of person.  As the owner began doing more marketing for the lounge, the neighbors became more concerned.  They had agreed to the restaurant, but they were now feeling like the restaurant was just a cover to allow the owner to run a bar.

The restaurant has survived it’s initial opening trauma, but it continues to struggle.  While it’s opening was greeted with anticipation and excitement, many of the customers feel like the lounge is the main business, and the dining room is an after thought.  What had the potential to be a successful restaurant limps along trying to compete with the business on the other side of the wall.

How will it end?  Only time will tell.

Things are starting to look up in my quest for my own restaurant.  I have stumbled across a property that may be what I am looking for.

One of the things that stand between potential restaurant owners and their dream is the ability to finance the operation.  Starting a restaurant from scratch has a huge start-up cost.  Unless your personal finances are in excellent shape, it is very difficult to raise the needed capital.  Because of the high mortality rate of new restaurants many lenders have higher requirements for new restaurant than they have for other forms of business.  Without the start-up capital, your dreams are dead in the water.

One way to reduce the start-up costs is to get into a place that is set up for a restaurant.  That’s what I stumbled across last week.  The restaurant that had been there wasn’t there for very long.  People that had eaten there said the food wasn’t good, and it was in direct competition with another restaurant that anchored the plaza it was located in.  Then the couple that owned the business went through a divorce, and that was the end of the business.

The location is a little bit larger that I was initially looking for, so I need to be careful running the numbers to make sure my business model can support a higher lease rate, but it is in a good location, it’s the end unit of a small plaza and has great visibility, and it has a lot of daily traffic going past it.

Because the exhaust system and most of the equipment are already there it will reduce some of my start-up costs.  There is a bit of remodling to be done, and it’s not the most ideal kitchen design, so I will need to make sure my menu can be supported by the kitchen.

Be sure to check back for updates.  I will keep you posted as I continue to develop the restaurants concept, and as I develop my business plan.

Continuing yesterdays discussion…

Most concepts fall into two categories, although some concepts cross over between the two: Quick Service and Full Service.

Quick Service

Quick Service restaurants are typically fast food type concepts. They are typified by quick, easy to prepare meals that are also easily packed to go. You order your food at the counter, wait while your food is prepared, get your own beverage, and carry your food to your seat. You are also expected to clear away your trash at the end of your meal.

Restaurants like McDonalds, Taco Bell, Chipotles, and Panera fall into this category.

Full Service

Full Service restaurants are just what the name implies. You are seated at a table, and a server comes to take care of you while you are at the restaurant. (more…)

Once you’ve decided that you’re really going to open your restaurant, you have to come to a decision about what kind of restaurant you want to operate. That can be a very hard decision to make. You want it to be a concept that you like, but what happens if your tastes are so varied that it’s hard to meld them all into one style? How do you marry your love for burgers and dogs with your desire to offer more healthy choices. Throw in your passion for upscale entrees, and…well, you see what I mean.

Choosing a concept may be difficult, but it is an extremely important step in your business plan development. This decision is going to guide, or at least influence, most of the other decisions you make from this point forward.

For example, your decision of the restaurants concept will determine what items are on your menu, which in turn determines the type of equipment you’ll need to prepare the food. The concept will help determine table settings. (more…)