Recipe Costing Blog - Beyond the Kitchen

Owning a restaurant has it’s advantages and disadvantages

Advantages of Owning a Restaurant

People got to eat – For years upon years, people have been hardwired to grab something to eat when they are hungry. This is a major advantage for any startup restaurant. The only thing you need to consider is the future of your product, and will there be a demand for it in your local geographical area. That’s really it in my opinion. People have to eat and here in the U.S. and around the world is something we all enjoy to do. It’s not like opening a haberdashery. Food is universal, and our very basic senses can lead us there. We’re lucky to live in a country where you can try cuisine from all over the world without having to travel to those parts of the world. When people see a restaurant they know there will be food, but now you have to get them into the door and we’ll discuss marketing later on in this guide.

Top ten restaurant mistakes that are detrimental to your success

Don’t Make These Mistakes Opening A Restaurant

Business Plan – We offer a free business plan at our website. It’s a real working business plan specifically built for the operation of a restaurant. Use it as a guide and always work with a professional when your build your business plans. Don’t fall into the trap of not taking the time and effort to write a business plan. At a minimum, it will give you an idea of your concept, financial projections, and start-up cost. After writing your business plan, make sure to review it monthly because things will change and you should update your business plan regularly. If you decide to open a second restaurant, your first business plan is like a journal you can revisit to better prepare yourself for your next build out.

Letter of intent sample for your restaurant

Communicate Each Point Clearly

Let’s take a look at a sample letter of intent from one of my deals, so we can understand what’s in it. It’s important to educate yourself and knowing the details of your LOI will help you to weed out the attorney’s that may not know the basic terms we use in the restaurant industry. This was a deal I had to walk away from because the numbers were ridiculous and the rent was about $12k a month. We’ll talk more about budgets and what are good numbers later on. I’ve also listed other terms that I’ve seen in the past that may not be in this LOI.

Restaurant business plan free word document

Download Our Free Business Plan

Part of your due diligence is to also write a business plan. A perfectly good business plan will allow you to see your business’ pros and cons on paper. It will walk you through the process of operating your business and what it takes to be successful. Without a business plan it’s like walking in the dark feeling your way through to get from point A to point B. Can you imagine the bumps and bruises? If you’re not willing to do the work for a business plan, then don’t waste your time or money. At a minimum you will need to do the research. If you’re not a good writer, then there are people out there that will write your business plan; however, you must know your business. This way you’ll understand the details the writer puts into your business plan. I like to use elance for outsourcing work.

How to work with your restaurant architect

Designing Your Restaurant Take Patience and Time

Like all aspects of this business it’s important that you know your design and layout well. You know what you want and are looking for and it’s up to your architect to capture that design. For me it has always been important to sketch my own plans. You can sketch them with pencil and paper or design it using excel or Visio. Visio is a cool tool I used during my software development days when I had to create flow charts. It had a cool feature for designing offices and I used it to design my restaurants. My designs are not proportionate and my architectural skills are novice at best; nevertheless, it gave my architect the idea on how I wanted my restaurant to be designed.

5 things you must know before hiring a restaurant architect

Ask Your Architect These 5 Questions

TIP: Before your architect works on his plans, make sure to get a copy of the plans for the location you will be doing the build out. If it’s a shopping center, you will need the following:

1. Get all zoning information from the landlord prior to finalizing a lease!!!
2. The plans for the entire shopping center
3. The plans for your specific location
4. The number of the mall or shopping center architect
5. All plans need to be on a CD Rom in .pdf format or AutoCAD

8 questions to ask your restaurant lawyer about real estate

Experienced Real Estate Attorney Will Save You Thousands

A good real estate attorney that’s been in the game for a long time will also be able to broker your deal. Make sure when interviewing your restaurant real estate attorney you ask them the following questions:

1. How long have you been working as a restaurant real estate attorney?
2. Can you also help negotiate and broker my deal?
3. What clients have you represented in the restaurant industry?
4. Do you have any connections with strip malls and indoor malls?
5. What are your fees?
6. How much do I have to have in escrow?
7. Will you review and negotiate my LOI (Letter of Intent)?
8. Does your fee also include legally reviewing and assisting me in executing my lease?

My experience applying for an SBA restaurant business loan

Restaurant Business Loan Process

I’ve written and co-written many business plans not just for myself, but for other restaurant owners. We all planned on submitting these business plans to our banks and SBA. No matter how well our plans were written, we always got the same response, “NO”. The worst part is that the “No” took over 3-6 months, keeping our project at a standstill.