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Restaurant Launch Guide: How You Make Your Dream a Reality

October 2008

by Margie Walker

There comes a point in your career when you face a crossroads: Do I continue down this path or do I risk everything and pursue my dream of owning my own place? Patrick McNamara of Noble Fare in Savannah came to that place in this career, and he decided to go for it. “My culinary clock was ticking,” McNamara explained. “I was 39, and they say if you haven’t done it by 40, you’re not going to. So I was feeling that it was now or never.” McNamara has worked in the restaurant industry since he was 14, starting out as a dishwasher. “All I ever wanted to be was a chef,” McNamara said. “I’d worked with many talented chefs in my career and I knew it was time for me to blend all the things I’d learned and do my own thing.” With the help of his wife, Jennifer, and his extended family, McNamara bought a building and set out to make his dream a reality.

As a chef or a general manager, you might harbor a similar dream of launching your own concept. Perhaps you have it all mentally sketched out, down to the color of the walls. Or maybe you just have a general idea of what you want. Either way, here are some steps you need to take to begin your entrepreneurial journey.

RESTAURANT LAUNCH CHECKLIST

You will first need to secure an ally to help you understand and map out the contractual parts of your business. A good lawyer will help you with:

  • licensing
  • operating agreements
  • lease negotiations
  • business plan development

A commercial broker can help with:

  • site selection
  • lease negotiations

A bad lease agreement is the No. 1 mistake of new operators. You need to have a favorable lease so you can be successful for the next 30+ years. Scott Serpas, owner of Serpas True Food, suggests being very aggressive when negotiating a lease. “There is no real set lease contract. You have to push and prod and give a little when you negotiate your contract. Know what you need beforehand, especially around the cost of upfitting. Once you sign the lease, you no longer have any leverage and it’s on you.”

Next, you need to have your financing secure. Locate private investors or fi nd a banker that believes in you. Work with an accountant to develop the necessary documents and knowledge you will need going forward:

  • develop pro forma financial projections
  • secure financing
  • understand tax liabilities/opportunities

You have your business incorporated, your location selected and financing secure.

Next, you need two people to make your concept a reality. An architect and general contractor will:

  • design estimates to bring your conceptual ideas to paper, and
  • provide construction cost, scheduling and estimates of furniture and fixture cost.

Steve Minton recently opened JaMan Caribbean Café in Statesboro, GA. Minton advised that the most difficult part of the construction process is “delays caused by subcontractors. Every delay by subcontractors is money lost due to pushing back the opening timeline.” Minton opened one restaurant with a contractor that did all his own work and the job was completed in six weeks. The same restaurant in a different location with a contractor that relied heavily on subcontractors took six months.

Before you can start any work, insurance must be finalized. As stated previously, be sure you have an experienced insurance agent and adequate coverage. One well known Atlanta restaurant is in a protracted lawsuit that has cost them nearly $300,000 in legal fees. This could have been avoided if they had had a solid agent and proper coverage. You will need the following:

  • builders risk
  • general liability
  • workmen’s compensation
  • liquor liability
  • property and casualty
  • employment practices
  • health

The state of Georgia’s permit laws are challenging. An expeditor and/or lawyer can help you navigate the system.

  • Hire expeditors to navigate the licensing process.
  • Line up inspectors: fire, health, electrical, building and others.

Pulling the inspectors in early in the project and working closely with them will help your process go much smoother. Minton says that he “gets inspectors involved before any nail is pulled or struck.” By involving them all throughout the process, Minton saves time and money by avoiding  “tear-outs” and “re-do” requests.

FURNITURE, FIXTURES & EQUIPMENT

Hopefully by now you are seeing some progress with your build-out. You now need to make decisions regarding:

  • kitchen equipment
  • furniture
  • fixtures
  • technology partners (phone, music, point of sale, credit card, website, etc.)
  • finalizing graphics for signage and logos
  • utility providers (water, gas, electric, waste removal, grease removal, etc.)
  • uniforms
  • determining outside vendors (food, alcohol, landscaping, valet parking, cleaning, linen rental, pest control, etc.)

LAST STEPS:  TALENT, TESTING AND MARKETING

To open smoothly, employees must be hired and trained. This is also a good time to solidify the menu and concept with the executive chef.

  • Hire employees.
  • Set training plans.
  • Refine concept/menu tastings.

Don’t overlook the importance of bringing in an expert to help you with the following:

  • marketing/promotions
  • public relations
  • advertising

Test, test and re-test everything. If you’ve made it this far, you’ve learned that operating a restaurant is all about multitasking. In any given day, you may be the plumber, bartender, human re sources, server and chief bottle washer. The good news is, with the proper systems in place you can realize your dream of having a successful, fun operation. The best thing about owning a restaurant is you are never bored. Every day is a new adventure! The Georgia Restaurant Association (GRA) is a great place to net work for all the individuals listed above. Their mission is to provide operators with the right resources for success. In fact, there is a number of GRA partner members (food purveyors, utility providers, CPAs, lawyers, etc.) with significant restaurant experience that will be happy to help you in your journey.

For additional resources and a more detailed opening checklist, please consult www.FoodServiceResource.com. â– 

Top Five Expensive Opening Mistakes

  1. Starting out under-capitalized. Have 18-24 months of working capital set aside.
  2. Not having enough experience in the type of restaurant you want to open. Have at least two years of similar operations experience. If you’re new to the restaurant industry, find a high-volume restaurant and wash dishes there for 30- 60 days. Being a restaurant owner isn’t always as glamorous as you might think.
  3. Not checking with county codes to see if your new kitchen design is in compliance, or assuming a building that was previously used as a restaurant is up to current code.
  4. Assuming that the equipment in a restaurant you are taking over will be sufficient for your new concept. After all, aren’t all fryers the same?
  5. Thinking that these mistakes are hypothetical!

 Top Four Success Tips

Success Tip #1 When working with architects, make sure you ask about their experience with restaurants. If they are inexperienced, supply them with a list of typical interior resources such as storage rooms, pantry and plans for running lines for drink stations. Serpas worked with an architect that did not have restaurant experience, but his contractor had many years of restaurant experience, so as a team, they made sure all the bases were covered.

Success Tip #2 Do a yearly review of all your fixed costs, such as insurance and utilities. For example, did you know that liability insurance premiums have recently decreased? Don’t assume that your providers will contact you with possible ways to decrease your bills. Minton found out that he could lower his general liability in urance by 30% just by closing at midnight instead of 1 a.m.

Success Tip #3 Make sure your location has safe, well-lit parking. All things being equal, people will go down the road rather than fight traffic getting in and out of your restaurant. McNamara said parking was a No. 1 priority when choosing his building. Parking is a premium in Savannah, so the fact that a new 600-car garage had just been built across from the building he was looking at made it his top choice

Success Tip #4 Did you know that you have to actually have your certificate of occupancy before the city of Atlanta will consider finalizing your liquor permit? Don’t be stuck unable to serve alcohol upon opening.



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