Whenever you are waiting on a municipality to issue your building permits, time is like a money pit that you know is filling up. If you have a good relationship with your contractor, ask him about ways to short cut the building process by taking a few calculated risks now.
Calculated risks are those that you know the penalty under a worst case scenario. We decided to take a couple of these risks this week. Since we had a demolition permit, we decided to make the cuts in the concrete floor for drains, water lines and a grease trap. Technically this falls under plumbing and should not be done until the drawings are approved.
The risks? First, the county could “red tag” the job and fine us $25-$100 for work done without the proper permit. Second, our architect’s drawings may not be approved as submitted for the plumbing permit and we may have to change some aspects of the work already done.
Since every day you cannot move forward, the delay is costing you a day towards your projected opening date. In this case we are attempting a November 15th opening. Delays could cost us significantly if we miss the holiday season. The risk-reward ratio is worth the gamble. Only you and your contractor can make the decision.
In light of our decision to get a few things done while waiting on all the permits, we:
- made the floor cuts, removed the cement and ran the major plumbing for drains.
- placed our grease trap in the ground and connected it to the dish drain, floor drain(s) and three compartment sink area. Keep in mind, none of the equipment is installed. However, our plans are used to locate the general area.
- completed all the major circuits to boxes in the general area. These are called “homeruns”. From these homeruns, individual circuits will feed various equipment through out the building.
- started bringing various building components into the space such as metal framing, conduit, wiring and various small parts for construction.
This week we also sent out our projected equipment list to four equipment suppliers for quotes, both new and used. We received two of the quotes back by the end of the week. Suppliers were told we would pay for any equipment purchased now, but they must hold it for up to thirty days before delivery. This allows us to take advantage of any bargains that may come along. More on this process in another post.
I returned from my brief trip 2 days ago. While leaving I was advised that the lease was ready to sign from the landlord’s perspective. To bring the blog current as of today (a Sunday), this is what has occurred:
- The lease went to my attorney to do a final review. I explained I was going to drag my feet a little to get all the parties moving before the clock and costs start ticking. We will shoot for an August 1st signing date (almost a month beyond where we wanted to be!).
- The architect was contacted and told we need the drawing drafts as soon as possible.
- The contractor was called to schedule a meeting. He will call Monday or Tuesday.
- My son is doing a major part of the business plan and we touched base on the contents.
- The accountant has formed the LLC and has emailed the formal documents to me along with the Federal I.D. number.
Next week will be an important week to finalize many open issues including:
- Again calling the hood contractors for a quote.
- Getting the final numbers into the business plan.
- Exploring cost options with the contractor for various parts of the build-out and confirming a quick start date.
- Negotiating costs and time frames with the various contractors.
- Confirm amount necessary for lease signing (deposit and first month).
- Opening a checking account at the bank.
Caution again crosses my mind with the economic news, chain restaurant closings and financial results from the whole restaurant industry. I must commit within a couple of days. That is going to be a mental struggle that common sense has to rule after I examine the projections (again). Is the risk versus the reward there?
The evening after the meeting was spent beginning the planning process. I immediately started a cost list to get a handle on the cash required to open a breakfast/lunch operation at this location. The expenses were relatively easy to put together, since I was almost duplicating an existing concept. I knew the prices on much of the equipment from recent purchases, catalogs and online resources. I always use full retail, but knowing there may be a bargain or two with used equipment and supplier deals. Using retail makes up for any surprises that are inevitable.
The next step was to prepare a business plan from a form I had developed and used in the past. Since this was an operation I was copying, the numbers from the existing concept would be helpful. However, there would be more seats in this location and a lot more usable square footage not within the walls of the space covered by the lease (outdoor seating and rear space for walk-in and storage) if they agreed to my terms.
The biggest single cost that I would need help on is the construction costs. It was time to contact a general contractor and create an initial drawing of the space as I envisioned it. The architect would need to be familiar with local building codes and restaurant layout.
When selecting a contractor, you want to work with someone who has the background of building and/or remodeling restaurants. The regulatory issues are varied and several authorities may be involved such as the state, local and county building and health departments. After talking with several contractors I knew, I chose one who had recently completed a job nearby and had good recommendations from the owner. He was also able to recommend an architect he worked with on the previous job. We scheduled a meeting at the prospective location.
