Starting, Owning and Marketing A Restaurant Blog|Starting and Owning a Restaurant - Construction, Planning, Marketing, Opening and Managing a New Restaurant

As you get within a few weeks of opening a restaurant, you must choose your primary food supplier carefully. Price and service are the key elements. One is important as the other. For instance, a supplier that has the lowest prices may not get deliveries consistently on time. Having the product when you need it is a customer service issue that is more important than price.

One of the other critical comparisons when it comes to price is to use the top 20%, by dollar volume, of your purchases. You may be buying ten cases per week of potato chips. That may seem like a lot. However, those two flats of fresh strawberries per day cost a lot more. The minimum invoice for deliveries is another factor that can go into your decision.

Most of the major suppliers like Sysco, US Foodservice, PFG, GFS and many more have services such as:

• Menu development help.
• Product samples.
• Chef assisted recipes.
• Various reports on your ordering habits.
• Regular food shows to highlight new items and product variation options.

If you run a restaurant that has an extremely high volume of a particular item, you may be able to negotiate a contract price through the processor or manufacturer’s representative. Another possibility is to buy a large quantity of an item and have the wholesaler store it until you are ready for weekly delivery.

Your relationship with the food supplier is critical to your growth and operations. They can keep you up to date with trends, new ideas and an insight to what is working for other suppliers.

As good as the large major food wholesalers are, my experience has been that their produce is generally sub-par. In most markets there are companies that specialize in fresh fruits, vegetables and herbs that extend beyond what the large companies supply. When you are looking for that purple fingerling potato or that true Japanese wasabi, you will have to find a specialist. The small companies rotate their inventory faster and have quick access to unique items. Many are buying from local producers native to your area of operation. Make sure produce suppliers deliver in refrigerated trucks, have basic products that allow you to order things like mayonnaise, eggs and dairy items along with fresh produce.

Other suppliers may include fresh seafood companies, paper companies, specialty meats, bakeries and others. Remember two things - you can use them as a source of information and stay a step ahead of your competition by keeping reliable lines of communication open. However, you are still the customer. Your needs flow directly to customer service issues. Service is essential to the relationship.

Sometimes while building a new restaurant, we tend to get ahead of ourselves and make mistakes without thinking about details. Below are a few I made in the past or almost made:

• Ordering outdoor tables with no umbrella holes in sunny areas.
• Tile that was not rough enough to prevent slips and falls.
• Buying equipment to fit under counters that was higher than the counters.
• Ordering doors that were 1/2 inch bigger than the opening.
• Mixing paints, stains and finishes that are not compatible. Causes immediate peeling.
• Forgetting there are two different “standard” counter heights. Order high chairs that are the wrong heights.

The point here for the entrepreneurs starting their new restaurant is to pay attention to details, small print and exact dimensions. Small mistakes can cost a lot of dollars to correct. For instance, the mixing of finishes may cost many hours refinishing surfaces. The half inch on kitchen doors could require rebuiding the framework to install the doors. Decorative restaurant tile may look nice, but one slippery floor could cost thousands in hospital bills.

The new plans as revised have been filed. The contractor is “99.9%” sure we have covered all of the issues raised during  the county’s plan review. We anticipate the final OK on the plans within a couple of days.

The restaurant start up process continually evolves. Sometimes from necessity and many times for economic reasons. We have made these changes for the reasons given:

• Decided to tile the entire place with ceramic tile. Early plans included part carpet. Made the change because we can get the tile done within a few days while waiting for the plans to save several days.
• Moved the “slop sink” for mops and other things into the kitchen to save a few hundred dollars running piping through the grease trap.
• Changed the location of the dishwasher into a corner machine to accommodate the slop sink above.
• Purchased nearly new equipment at equipment suppliers. A three compartment sink, 6 foot prep refrigerator, 4 foot under counter freezer and 36? 6 burner stove and 30 chairs. The total savings on these items is about $3500 as compared to new equipment. The used restaurant equipment will carry a minimum 30 day full warranty from reputable restaurant equipment suppliers. They have even agreed to store the equipment until we need delivery after construction. We also placed bids on other items held on consignment from other closed restaurants.

We continue to revise our potential menu and test recipes and products from suppliers.

After spending the last few days trying to figure out the county’s interpretation of the referenced building codes in their 44 changes they wanted on the building plans, we narrowed the problems down to three. The rest we made changes, corrections and additions we think will satisfy an over zealous plan reviewer.

Two of the three problem areas deal with plumbing issues. We need clarification on those. The third is a matter of interpretation dealing with the double swing kitchen doors we had drawn in as 48″. The county says we need 30 inches on each side for a total opening of 60 inches. The code does not appear to say that.

The architect met with the plan reviewer. We must meet again with the plumbing contractor to solve the plumbing issue and accept the reviewer’s interpretation of the door issue to prevent further delays. The plans need re-submitted in a day or two to get final approval.

In the interim we are finding ways to cut time when we get into full construction. The electrician continues to do a few things that deal with existing wiring and we have decided to tile the floors now to avoid delays.

Existing walls are being sanded and smoothed for coating, we found all shelving for the walk-in cooler/freezer, found potential outdoor furniture for seating at a much lower rate and have begun accumulating smallwares when seen in restaurant supply ware houses at reduced prices.

The other restaurants are not being ignored. Sales are holding up well under the economic citcumstances and restaurant food prices seemed to have leveled off. In fact, some items like dairy and egg products have come back down from their highs in July. Keeping watch on pricing impacts the new restaurant from the perspective of pricing and final determination of menu items.

One of the goals in starting this blog for restaurant entrepreneurs, was to write about the thoughts, emotions and self examination it takes to get from an ugly hole taking up space in this world, to a full service restaurant. While this is the fourth time I have been through this, the environment is much different.

Starting, building and opening a restaurant is difficult enough without the pressures of spiraling food costs, an economy that is on the brink of recession, record closures of chain restaurants and independents. Intertwined with all of this is the consumer who is rapidly changing their dining habits, food choices and spending habits to conform to the pressures on their pocketbook. All the normal self second-guessing is magnified. You question your decisions, motives and direction at length. You know these emotions are normal, but it doesn’t remove the fears that creep from the far corners of your mind.

When problems, delays, cost overruns and unneeded surprises are littering the path like hurdles on a track, you have to take control. If you cannot make decisions, you are in trouble. It’s like having a dozen back seat drivers who want to give you directions, but don’t have the responsibility to safely get you to your destination!

When doubts surface, go back to your plan. If it was solid in the beginning, nothing should deter you from getting the restaurant open as quick as possible within your budget. Your marketing plan must be built with the same care and attention as a blueprint that directs the construction. Take control of the contractors, suppliers, craftsmen and components of your operation. Keep focused. Move forward. Put on the face of a person who is under control and knows what, where and how they are going to do in each situation.

Oh yes, when you are only sleeping about four or five hours a night, you know things are normal!

After over three weeks, we received the plans and permit application back from the county. While the contractor made light of the fact that there were 44 items that needed corrected, changed, added or omitted, I was not happy. The process will cause another ten days to correct. Many of the items listed by the county should have been caught before the plan submission to the building department. The contractor and architect should have known about some of the requirements we failed to include.

Among the 44 items are the normal few that are silly requisites such as:

• copy of state license application for restaurant permit. This can be a “Catch 22″, since the state wants a copy of your plans, which of course will change with the county’s requirements.
• One of the requests was for information about the demolition process. Of course, the demo is done and they already approved and inspected the demolition and, therefor, have the information. No one looked.
• Correction of an incorrect parcel number (not address), that the county had given to us in the first place. It was wrong. This will necessitate the filing of a new “Notice of Commencement”. This is a formal document sent to the owner through registered mail, that a states work is about to commence on the owner’s property and is subject to mechanic’s liens. It will take two or three days to cancel the old NOC and file a new one.
• They want information about the use of the second story, which is leased by another tenant for storage. This also is in their records with the fireproofing detail. This is bureaucratic nonsense. You must give each department a road map to look at other parts of the plan in their hands!
• One interesting new requirement is a statement of how we intend to serve handicapped people at the small four person counter. We must give them a statement just saying the handicapped can get service at a nearby table that is the same as being at the counter. Unbelievable!

While the time delays and frustrations mount up, it is also time to re-think our time frames and reduce the potential for delays in other areas. We must step up the planning process and may even have to overlap some sub-contractors that you generally avoid. For instance, plumbers and electricians don’t like working simultaneously. Tile and flooring people want to have the premises to themselves so they don’t have to work in sections. We will need to co-ordinate the various craftsmen to gain back some of our days.

Here is a list of ways to reduce construction days;

• Overlap scheduling various trades that must work in co-ordinated different areas of the facility. Be aware you will do this above their objection.
• Build some components offsite such as counters, shelving, decorative trim, special doors and cabinets.
• Get a list of all remaining components of the space and make certain that all have been ordered and the supplier will bring in and hold until the last minute for delivery.
• Buy and store obvious kitchen items you will need to operate. There will not be time for back-orders, shipping delays or out of stock items from any supplier.
• Test and re-test all new recipes in another kitchen with similar cooking circumstances.
• Carefully think out work flow issues, even though your kitchen is not in operation.
• Contact each contractor and sub-contractor to make sure they understand timing is going to be a priority. Call the general contractor daily (or more) to make certain your job is in the forefront of their mind and they are meeting scheduling.

You also need to refer back to the risk taking steps of scabbing in work without permits and determine the reward in time saved is worth it to get your restaurant open on time.

We finally heard from the county on the permit application. They have requested several “minor” changes to the plans. The architect is making the changes to re-submit the drawings. Maybe we can have a final permit to begin construction in 5 to 7 days.

During this waiting period, we continue to tweak our menu, test product samples and work on training and documents that will be used in the restaurant. During this process we came upon an article that offers some advice on the layout and design of a restaurant menu. Click here for the full article from Restaurants and Institutions Magazine.

In earlier posts we have covered costs to start a new restaurant. Of course, they vary based on the number of seats, type of cuisine, location, menu and other factors.

In this case, I have updated the estimated costs for this particular restaurant according to what I know so far. Keep in mind that we are in the construction stages and there will be updates as we go along. The numbers you will see in the estimates are based on quotes and actual payments made or items purchased as of this date.

One of the most significant costs will be the finishing and decorating costs which will be filled in as the actual numbers are calculated. Visit the site in a couple of weeks for another update. Remember, this is a 70 seat inside and 25 seat outside breakfast and lunch restaurant. Dinner could easily be added, but that is not our concept.

Now that invoices for services, materials and equipment are beginning to roll in, there is an important step to remember when paying contractors. It is a notarized form called a “lien waiver“.

The format may vary from state to state, but the effect is the same. The form is protection from liens for owners/tenants of commercial space who pay a contractor for work and when there is a dispute, the contractor has a right to file a contractors/mechanics lien on the property. The name and type of lien may also vary in different states, but the protection is as follows:

• For the owner or lessee the signed lien waiver makes certain a contractor doesn’t claim they have not been paid for work performed.
• For the contactor, of course, the protection is the right to file the lien if he is not paid.
• Most construction lien laws allows the contractor to file the lien that becomes effective the date he started the work. This is what makes them dangerous. You could have the contractor start the work in January with an agreement that he would be paid upon completion of the work. If you have a dispute, even if you have paid the contractor 90% of his fees, he can file a lien that is effective the date he started. Six months later when there is a dispute, the contractor files a lien that is superior to all other liens going back to the original date in January, six months earlier. Lien waivers eliminate this probability.

The effect of a lien waiver is to confirm the contractor has been paid for all work through the date of the payment. This precludes him from going back to the start date of the project and eliminates trying to invoice for work completed and paid for.

On any construction work, demand a lien waiver every time you pay a contractor.