Thursday, December 31, 2015

An Overview of the Costs Associated with Opening a Restaurant

One of the most important steps in opening a new restaurant is creating a realistic, viable budget. The costs involved with opening a restaurant can vary wildly according to the concept, location, and several other factors. Opening a restaurant in Manhattan will prove much more expensive than finding a commercial space in suburban Indiana. Likewise, creating a classic French bistro with table service will cost more money than opening a deli.

Regardless of the location or concept, however, restaurant developers need to take into account all of the possible expenses to ensure that their business will be viable. The startup budget should also include cushion for the unexpected expenses that will undoubtedly arise.

Costs Associated with Space

Rents charged for commercial spaces vary widely across regions, cities, and even within a neighborhood. Individuals should research the general neighborhood in which they would like to open a restaurant and figure out the range of rental rates. Importantly, restaurant developers should do more than investigate the rents of nearby businesses, since that may not reflect current market rates. Hiring a professional to negotiate the lease can be a good decision as well.

The typical startup costs associated with space include the security deposit, first month’s rent, and the first month of utilities. Typically, security deposits equal the first month’s rent, but this practice can also change across geographic locations.

Restauranteurs should not neglect the cost of utilities, which routinely cost thousands of dollars. This includes phone service and Internet, as well as water, electricity, and gas. Predicting the exact costs can prove difficult, especially if the space was never previously used as a restaurant. However, local utilities providers may offer tools for estimating costs.

Some restaurant developers may choose to purchase a space or build a new structure to house their restaurant. While both can be viable options, they may also include additional local government fees and permits, so restauranteurs should be sure to consult with experts about these potential costs and regulations.

Costs Associated with Location Improvements

Even if a retail space was previously used as a restaurant, owners will still likely need to make improvements or updates to the kitchen or dining area. While some spaces have kitchens that are adequately initially, it’s important to include the cost of future updates in the budget. These building expenses can quickly mount into the hundreds of thousands of dollars.

Another major expense is tables and other furnishings. While this cost largely depends on the restaurant’s concept, it is critical that restaurant developers conduct research to ensure their estimates are realistic. Bar and kitchen equipment, as well as utensils, dishes, and other tableware, typically cost more than furniture. In fact, it is not uncommon for these items to cost double what restaurant developers pay for tables and chairs.

Costs Associated with Business Operations

Starting a new business involves buying insurance, obtaining necessary permits and licenses, and paying the professional fees associated with these expenses. Many restaurant developers hire a legal professional to ensure compliance and help file the necessary paperwork, which can add to the expenses. In addition, restaurants need point-of-sale systems and other ordering and payment technology, which can cost several tens of thousands of dollars.
bread baker restaurant operating cost

In addition, all businesses need an accounting system. Today, several cloud-based systems are available for smaller businesses, but successful restaurants can outgrow these quickly. Purchasing accounting software developed specifically for restaurants can be a wise choice, and hiring an accountant on a part-time basis can ensure more accurate bookkeeping. In all cases, it is important to investigate the possibilities before deciding on the best course of action.

Business expenses also encompass payroll for any staff brought on, as well as the benefits provided to this staff. While these expenses may not become extremely important until the restaurant begins to expand, restaurateurs should have an idea of the cost per employee and build this figure into their budget.

Costs Associated with Marketing and Advertising

Restaurants are businesses and they require a marketing and advertising budget to pull in crowds. While the Internet has made advertising cheaper in some respects, restaurants still need a budget for public relations to promote the opening. This should include the cost of purchasing attractive signage, which is important in drawing customers off the streets. A good website is also important, and it may be worthwhile to hire a professional designer to build one. The site needn’t be extensive, but it should feature an attractive design, include the menu, and provide clear information about the restaurant’s location. The startup marketing and advertising budget also involves costs associated with printing menus, fliers, and other advertisements. In addition, restauranteurs may want to create business cards.


Many restaurant developers choose to have a large opening party to boost hype for their new business. While this is a great idea in terms of generating excitement and building brand loyalty before the restaurant opens, such an event can easily cost tens of thousands of dollars, and this price tag must be factored into the budget. 

Tuesday, December 29, 2015

4 Key Tips for Effective Menu Development

cafe menu on well
Menu design is an extremely important part of restaurant development because the menu serves as one of the primary points of contact between customers and the restaurant. A poorly designed or unclear menu can discourage potential customers from visiting the restaurant, especially because many individuals will look up a restaurant’s menu online before they even decide to dine there.

For this reason, restaurateurs should view the menu as their primary marketing document. Several decisions go into designing the menu, from the ways in which dishes are organized to the font and overall branding of the document. The following tips can help restaurateurs keep the important considerations in mind when deciding upon a final design.

1. Make sure that the menu reflects the restaurant’s brand.

The menu should be a highly branded document. When your customers examine the menu, they should not only be excited to try the food, but also understand the type of experience that they will have at the restaurant. For example, restaurants that deliver the menu in an embossed leather folder send a fundamentally different message than those that choose to use heavy stock paper menus. The style of the menu should reflect the restaurant’s mission. A rustic, farm-to-table restaurant that changes its menu frequently may want to use simple, paper menus, whereas an eatery with a more timeless, prix-fixe selection may want to invest in something a bit more lasting. It’s important to remember that a paper menu does not necessarily communicate that the restaurant is cheap or low quality. A single sheet of paper offers the benefit of presenting the diner’s choices in a more manageable, less overwhelming format.

Restaurateurs should also pay attention to geographic expectations. Customers in New York City may expect a different type of menu than diners in Miami.

2. When it comes to graphics, less is typically more.

Virtually everyone has been to a diner or a chain restaurant that has a flashy menu full of graphics, photos, and a dizzying array of dishes. These sorts of menus can overwhelm diners. A clean menu with plenty of negative space is often more aesthetically pleasing, and in the end, easier to read. While restaurants can certainly include some graphics to help with branding, these pictures should not distract from the dishes, which form the core of the menu. Photos are risky; if the dish comes out looking nothing like the photo, the diner may be more likely to complain.

Of course, some restaurants want to develop a kitschy aesthetic, especially those that appeal to families and children. In these cases, a bright, fun, and eclectic menu can be engaging. For this reason, the first tip trumps this one. However, most restaurants will likely not fall in the eclectic category and should opt for more understated menus.

3. Tell a story with the menu.

Diners often develop a feeling of personal connection to a restaurant when they understand the story behind the food. While not every item on the menu needs a detailed backstory and the information should only include a short sentence, restaurateurs should feel free to do more than simply list the ingredients in a dish. For example, a farm-to-table restaurant may want to include details about the farmer who is delivering a key component of a dish. An Italian restaurant may want to share that a dish’s inspiration comes from the chef’s grandmother. These types of small insights will make diners feel like they are part of something special. The story ultimately helps develop brand loyalty, so restaurant developers should ensure that these stories align with and reinforce the restaurant’s brand.

4. Pay attention to menu trends.

Often, trendy restaurants do not generate enough income to stay in business after diners’ preferences inevitably shift. However, restaurants can nod to trends through relatively inexpensive changes, such as altering the menu. Changing the menu’s appearance can give the restaurant a new, updated feel without breaking the bank. For that reason, restaurant developers should pay attention to new trends as they arise and think critically about whether adopting them could strengthen the restaurant’s brand.


Some current menu trends include serving fanciful cocktails and elaborate nonalcoholic drinks, offering shareable dishes, and incorporating technology into the ordering experience. Also, as the farm-to-table concept becomes more popular, some more casual restaurants are experimenting with new forms of menus altogether, such as writing them on chalkboards rather than offering traditional printed menus. These trends could last months or years. A restaurant developer has a responsibility to stay current with changing customer expectations.

Thursday, December 24, 2015

The Importance of an Inviting Restaurant Entrance

cafe restaurant front door

Restaurant developers must pay a great deal of attention to the physical space that they create on behalf of their customers. If customers do not feel welcome at a restaurant, they will not want to return. Likewise, is the space is simply not functional, the level of service will suffer and the restaurant will become incapable of delivering the type of experience necessary to remain viable. While advertising efforts have largely shifted from physical advertisements to online engagement, this shift should not minimize the importance of making a good first impression on customers who enter the restaurant. A poorly designed entrance can quickly disenchant customers who previously had a good impression of the restaurant based on its online presence. On the other hand, a beautiful, welcoming entrance can pull people in off of the street and convince otherwise uninterested customers to give the restaurant a try. The entrance of a restaurant has three fundamentally key elements: the doorway, foyer, and the greeting staff.

Creating an Inviting, Appealing Doorway

A restaurant’s doorway is a fundamental form of advertising. The doorway should reflect the unique brand and character of the restaurant. Ideally, the doorway will get customers excited about entering the restaurant and intrigue passerby, potentially drawing them in to explore the rest of the space. If people can see the restaurant from their cars, restaurateurs should think of the entryway fundamentally as a billboard. Large windows can give people a glimpse of the inside space from a distance, while bright colors and unique architectural design can attract attention from people on the street. However, the entrance should align with the restaurant’s mission. A restaurant that serves simple food may want to avoid a flashy entrance in favor of a beautiful, understated doorway.

Restaurant developers should not forget the physical aspects of a doorway. If the door is so heavy that a diner must use two hands to open it, this can create the wrong psychological effect as a person enters. Along the same lines, the design elements should not be so intricate that make it challenging to figure out how to open the door. While intricate designs may seem appealing, they can make diners feel inadequate if they do not immediately know whether to push or pull, or even worse, figure out where the handle actually is. In the Northeast, developers should also consider how their entrance could change depending on the weather. If possible, restaurateurs should plan to include a temporary enclosure during the winter months in order to allow guests to warm up and collect themselves before entering. The enclosure also prevents cold gusts from disturbing guests in the foyer.

Instilling a Sense of Hospitality with the Foyer

bistro seatingWhen designing a foyer, restaurateurs should put themselves in the shoes of their guests in order to figure out what elements they may need. The primary concern should be the feeling that the foyer creates. Does the space blend seamlessly with the rest of the restaurant and make people feel welcome, or is it closed off so that they feel removed from the rest of the space? Another important consideration is where exactly hosts will stand and greet people when they enter the restaurant. The ability to look someone in the eye is an important part of hospitality. When diners enter the foyer and the host is around the corner rather than immediately present, then customers may feel that they are an intrusion.

The foyer should also fulfill hospitality needs. On the East Coast, this often means providing space for a coat check. Many restaurant developers shy away from coat checks because they take up valuable space and are only really relevant a handful of months throughout the year. However, this simple gesture can significantly enhance the feeling of hospitality experienced by a guest. Some restaurants have adopted creative solutions to this problem by creating coat checks in the basement or in other spaces out of public view, and they have runners take coats back and forth on behalf of customers.

Welcoming Customers with an Engaging Staff

The doorway and foyer are largely cosmetic aspects of a restaurant’s entrance. A business may have a beautiful, opening, and welcoming space, but it will still fail if it does not also have a friendly staff to enthusiastically greet diners. Good service ideally depends on several factors. The host should effectively manage the foyer space to ensure that everyone present has adequate space. Hosts serve as the initial liaison between the restaurant and diners, and they should strive to make the entire dining experience as comfortable and enjoyable as possible.


Front-of-house staff members, including the hosts, servers, and bartenders, should greet diners warmly while also keeping a critical eye on the space at all times. These members of the team must have several key skills, including the ability to relate to people and remain mindful of how they comport themselves, ranging from their facial expressions to their body language and tone. They must have an expansive capacity to pick up on problems and the ability to think quickly in order to solve these before they become real issues. For restaurant developers, creating a great front-of-house staff depends on hiring people with talent and providing them with critical training in order to develop the skills that are necessary to make customers feel welcome. 

Monday, December 21, 2015

3 Important Steps for Building a Restaurant’s Brand

When developing a restaurant, creating and maintaining a consistent brand is extremely important in attracting the desired clientele and building a great reputation in the community. Brand consistency has become increasingly difficult with marketing shifting largely toward social media and other online outlets. Despite these difficulties, restaurant developers need to deliver a concise and uniform brand everywhere, ranging from the restaurant itself to its Twitter account. When a restaurant is new, establishing a robust and recognizable brand may be difficult. Developing a solid, appealing brand takes time and effort. In addition, brands develop regardless of effort, so customers will create their own vision of a restaurant if not given direction. For these reasons, the brand needs to remain a central concern for all restaurant developers. The following tips can help restaurateurs get a head start on brand development when they open a new restaurant:


1. Write an inclusive mission statement for the restaurant. People may not commonly associate mission statements with restaurants. However, restaurateurs who take the time to define a vision have a better sense of what their brand should look like. Restaurants are busy, especially in their early stages, and investing time in a brand early on helps to keep seats filled for months and even years to come, so developers should prioritize the mission statement. The statement should not be completed alone. Instead, it should involve input from the whole team. When a restaurateur asks for input from other team members, it creates more alignment in the restaurant, which ultimately allows it to deliver a more consistent customer experience.

Inclusion also creates a greater sense of ownership among employees and makes them more committed to its success. While inclusion is important, a project needs a clear leader or else it will likely never be completed. If restaurant developers do not want to take on a project personally, they need to delegate the task to a trusted individual and continue to play an instrumental part in the process. Many restaurateurs hire outside firms to help refine their mission statement and translate it into a culture.

2. Create a memorable sign or logo that reflects the brand. A symbol, logo, or sign must speak to a restaurant’s brand. Customers should be able to easily recall this image and see it in alignment with the rest of their experience at the restaurant. Restaurant developers should think about how they can incorporate the establishment’s name or concept directly into their signage in order to broadcast exactly what kind of image they want to create. By looking at the signage alone, diners should be able to get an idea of what kind of cuisine the restaurant offers. In addition to the logo, restaurants can consider various slogans that could contribute to the branding of the eatery.

Signage is essential to creating the complete package. The storefront should align with the design of the menus, which should likewise reflect the style of the website. While the need to be consistent may feel overwhelming, restaurant developers should think about their ideal customer and what they are looking for in a restaurant. The branding image—everything from the choice of colors to the font—makes a statement and will attract some people, while persuading others to look elsewhere. No brand is universally attractive. However, a brand should be attractive to the restaurant’s core audience.


3. Establish a voice for the restaurant. Today, restaurants largely advertise by engaging with customers in an online setting, which means that they need to have a distinct voice. A restaurant can use its voice to communicate information on its own website, as well as through social media outlets. A restaurant’s website is particularly important since it is the first encounter with a restaurant’s brand for the majority of diners. The feelings that a person gets from looking at a restaurant’s website need to be consistent with the message that the restaurant wants to send. Sending the wrong message can quickly cause a restaurant to lose potential customers. Moreover, a restaurant’s social media presence should have the same voice as its website. Restaurants that are serious about food may seem disjointed if they use a lot of emoticons in social media. Likewise, a fun, family-focused restaurant that has very professional and polished text may come across as cold.


Restaurant developers should also consider the importance of its voice in internal communications. Too often, restaurateurs forget how large of a role employees play in perpetuating a particular brand. Through frequent and consistent international communications, these individuals gain an understanding of how a restaurant wishes to communicate and can use that information to deliver a better level of customer service. Employees should understand what type of experience a restaurant wants to sell and develop a connection to the brand. The way in which a host speaks to customers as they come in the door says a lot about a restaurant, as does the level of service and friendliness from the wait staff.

Wednesday, December 16, 2015

5 Tips for Choosing the Best Restaurant Location

Choosing a location for a restaurant is one of the most important factors in predicting its success. The decor, food, and overall theme must be consistent with the location. Since people are unlikely to travel great distances for a restaurant, convenience is also a factor. When deciding on a space to lease or purchase, restaurateurs must weigh a number of different points. When restaurant developers select the most conveniently located space, especially in cities such as New York, they will generally pay an exorbitant amount of money. This type of overinvestment could end up causing a restaurant to fail. Even celebrated chefs are branching outside of New York and opening flagship restaurants in other nearby areas. Finding the best spot is all about balance. The following tips will help restaurant developers to find the ideal space for their project:
1. Keep an open mind. People develop a picture in their head of where they would like their restaurant to be located. When this picture becomes highly specific, restaurant developers enter into dangerous territory. Restaurateurs may pass up great sites simply because they do not align with their expectations. With each option, people should carefully consider a restaurant’s potential and how it could fill the space. Sometimes, restaurant owners will seek out a spot on a main street in a popular neighborhood, so they pass up a wonderful potential location in an up-and-coming part of town. Areas can change rapidly, and restaurateurs can secure great returns when they get into a developing area early.

2. Avoid making impulsive choices. Sometimes restaurant developers will fall in love with a particular spot and think that they do not need to look any further. While that place may indeed end up being the final location, restaurateurs who continue to look can gather more knowledge about an area and, in the end, greater power to make the right choice. Impulsiveness can also lead to bad deals. Many do not realize that restaurant leases are largely up for negotiation. Beyond rent, restaurant developers can negotiate about everything from maintenance costs to snow removal. They need to make sure that they are getting a good, sustainable deal when they finally decide on a location.

3. Look out for the competition. Ideas on how to deal with the competition can vary depending on whom you ask. When looking at a location, people should certainly look at the other restaurants in the area and what they have to offer. If a proposed business does not offer anything new, it may not do well. Moreover, if a restaurant is too radically different, it may not succeed either. If a neighborhood consists mostly of fast casual restaurants, perhaps it is because the neighborhood does not want an elegant, sit-down restaurant. In addition to looking at the competition, restaurateurs should research what sorts of restaurants have failed in that neighborhood.

The predominant belief regarding competition is to set up shop as close as possible to your biggest threat. Rather than trying to create distance with one’s competition, restaurateurs should take advantage of the advertising already paid for by another restaurant. A successful rival restaurant is already drawing the intended demographic to the area. When people are visiting the rival restaurant, they may notice the new establishment and decide to give it a try. Opening a restaurant close to the competition is a gamble, but it shows that confidence is necessary to bring people into an establishment.

4. Consider working with professionals. A wide range of professionals can facilitate the search for a site. Lawyers are a great resource for negotiating a lease and ensuring that no problems arise with the landlord in the future. Real estate professionals with a deep understanding of a city, its neighborhood, and its inhabitants can help to identify options. They should have a clear understanding of the changing demographics of each neighborhood and the ways in which they may develop in the near future. This knowledge can help restaurant developers to identify an up-and-coming area where their establishment could become a primary element of a new neighborhood center. Other types of professionals can help restaurant developers to identify the costs involved and time needed for licensure, construction, and other needs. These expenses can vary dramatically between cities, as well as between neighborhoods.

5. Think about accessibility and visibility. Considerations in selecting a restaurant location such as accessibility and visibility can vary according to the city. Expectations about parking in Manhattan are different than those in Providence, or even in Atlanta. However, many customers at higher-end restaurants will fully expect valet parking, even in a population-dense locations such as Manhattan. Even with this in mind, restaurant developers should always look at public transportation options. Proximity to a Metro stop will make people much more likely to visit a restaurant, especially if they do not own a car.


In terms of visibility, restaurateurs should think about foot traffic and the potential for signage. Again, these factors may vary between urban and suburban settings. Visibility is much easier in urban settings. In suburban settings, restaurant developers should ensure that they are close enough to main thoroughfares to take advantage of free advertising through signage.

Wednesday, December 9, 2015

5 Mistakes to Avoid When Developing a Restaurant

A study conducted by Ohio State University founder that 60 percent of restaurants do not make it past their first anniversary, and only 20 percent survive more than five years. Restaurant developers need to understand the most common reasons why restaurants fail and create strategic plans for avoiding these missteps. The best restaurant developers are those who learn both from their own experience and from the failures of people who have come before them to create solid business plans and launch businesses with the potential for falling into that prestigious 20 percent that make it to five years. The following are some of the most common reasons why restaurants fail, particularly in large urban areas:

1. Relying on great food to draw in customers. Smaller restaurants often suffer from this mistake. Amazing food is an important part of every restaurant’s success, but in the end more than great recipes are required to help a restaurant last. A restaurant is a business, and great food must be complemented by a deep understanding of how to launch, market, and build an enterprise. In many ways, the business aspects can outweigh the good food. How many restaurants with amazing food close their doors every year? On the other hand, how many restaurants with mediocre food stay in business for decades? Developers should think of a restaurant as an experience. Beyond the food, the location, ambiance, and other factors play an important role in a restaurant’s success. After all, food is largely a matter of taste. What one person finds a thrilling and unique flavor combination may disappoint someone else.

Management skills are also critical. Creating a wonderful menu means little if the service is lousy or the restaurant seems mismanaged. Great managers understand how to keep their employees happy, which in turns translates into a better experience for diners, one that makes them want to come back.

2. Not knowing the current market and the neighborhood. Before opening a restaurant, developers need to undertake a great deal of research about the various neighborhoods of their target city. A restaurant that will succeed in one area of town will not necessarily thrive in another. Before leasing a spot, restaurant developers need to know that a market for the restaurant that they envision exists. Some neighborhoods prefer casual pubs, while others may want a restaurant where diners need to put on a shirt and tie. Likewise, if the neighborhood already has three established restaurants that serve farm-to-table food, a developer should either find a new idea or location.

The importance of location cannot be emphasized enough. People may travel some distance for great food, but they are more likely to settle for a good meal in their own neighborhood simply for the sake of convenience. When restaurant developers walk into an idea thinking that it will become a destination eatery, they should do the necessary research to prove that a market exists and that the restaurant will not sit empty for weeks on end after it opens.

3. Lack of familiarity with the restaurant business. Too often, people launch restaurants as their first real venture into the business world. While this approach can work, individuals must recognize the need for a mentor, someone with a great deal of experience who can show them the ropes. Even if a person has an extensive background in business, this experience does not translate to success as a restaurateur. People who want to develop restaurants need to truly understand the industry on several different levels. In addition to knowing the industry as a whole, they must have an intimate relationship with the local and microlocal scene.

Restaurant management involves an overwhelming amount of complexity. Unexpected issues related to everything from food preparation to presentation can creep up on a daily basis, and developers need to understand how to handle these situations with speed and care, or else hire someone who does. In addition to food, management also involves bookkeeping, finances, and customer service.

4. Making poor advertising choices. Every marketing and advertising choice should be made strategically. Smaller restaurants often have rather tiny marketing budgets, so making the most of this money is extremely important. Marketing has become an increasingly popular online activity, and taking advantage of social networks and viral, person-to-person advertising is both cheap and effective.

If restaurant developers can somehow figure out a way to make into the local newspapers, that can also boost awareness of the restaurant. Many newspapers write features on new, local spots to eat. On the flip side, taking out an advertisement in these papers can often be a waste of time. Newspapers generally have so many advertisements that they largely go overlooked unless the ad features a coupon or something else to draw people into the restaurant.

5. Failing to secure adequate cash flow. Restaurants can avoid cash flow problems by overestimating the capital that they need. Something always comes up, so operating on a tight budget can quickly lead to disaster. Businesses in general, - and restaurants in particular - can take years to become profitable, and if funding runs out before that time, the operation can go under despite every indication that success is on the horizon. Sometimes, restaurant developers will begin to cut corners in order to increase profits. However, this strategy often ends up alienating regular customers as quality decreases. Restaurants should also plan for the slump that comes after the excitement of a grand opening ends, since business can slow considerably after the first few months. At this point, restaurant developers need to think of creative ways to bring people back rather than how to reduce expenses.

Wednesday, December 2, 2015

6 Things You Must Do when Opening a New Restaurant

Opening a restaurant requires tenacity, expertise, endurance, and flexibility. Several factors play into the decision to open a restaurant, including the physical location, the culture of the larger area, food trends, and investment capital, just to name a few. The thought of opening a restaurant may initially seem overwhelming, especially given the large number that fail. However, if you believe you have a truly great idea, then the following tips can help you get the restaurant off the ground and on the path to success:


1. Overestimate the capital that you need to start the business.



From the very start, you should have at least six months of working capital. Although, ideally you should have more, because expenditures can quickly add up, especially while you are still building a regular customer base. During the first month or so, many people will come to check the place out, but when the novelty fades, they will quickly lose interest. Therefore, it is wise to plan for a drop in income after the initial excitement wears off.

With proper advertising and development, though, you can restore your restore your previous rate of income. You just need to have enough capital to survive the critical gap months. Your restaurant can remain viable if you plan for the future and resist blowing through all of your first-months’ profits. Remember, it takes years, not months, to achieve success.


2. Restaurants are about more than a love of food.



Of course, people must have a passion for food if they want to create a restaurant, but passion, by itself, is not enough. Restaurants are a business, therefore you must work to hone your business sense or find a partner who has solid experience. You do not need to have expertise in accounting, IT, or even management, because you can hire people for these functions. However, you do need a general sense of what it takes to turn a profit.

Chefs must focus on making innovative, attractive cuisine, but when you are a chef-owner, you also need to understand how to make money. If you are early in your career, you should find a mentor. This sort of one-on-one education is better than business school in some ways, because it is tailored to the restaurant business.


3. Pay close attention to the equipment in your restaurant.



The initial investment in a restaurant can be overwhelming because of the costs associated with quality equipment. Keep in mind, though, that the equipment you purchase will limit the creativity of chefs, so try not to skimp. If you need to bring costs down, you can always investigate used equipment. Often, you can purchase used equipment for fairly cheap from restaurants that are closing or upgrading their existing equipment

Never attempt to save money by purchasing something other than commercial-grade equipment. While it may seem like a good idea, this equipment will break quickly under the daily demands of a restaurant. Even the dishes should be designed for commercial use if you do not want to replace them after a few weeks because of the chips and cracks.


4. Don’t neglect alcohol on your menu.



Different jurisdictions have different rules governing liquor licenses. Some states require a public hearing as part of the application process, while others have a limited number of licenses, which means you could be waiting months or even years for it. Because restaurants that cannot serve alcohol don’t draw as many customers as those that do, you should apply for a liquor license as soon as possible.

Also, be sure to invest in a great bartender who knows how to curate a unique drink list and sell unusual concoctions. Excitement is infectious, thus employing someone with a flair for mixing drinks will make diners more excited about trying new things or ordering the restaurant’s take on classic cocktails.


5. Spend money to add value for guests.



When people come to your restaurant, you should make them feel special. This will make them more likely to return. If you try to cut costs on things like valets and desserts, your customers will lose that sense of enchantment.

Everything that a guest encounters directly should take financial priority. To improve your restaurant on a consistent basis, you should dedicate a certain percentage of revenue to adding value for guests. In many ways, this money will have a higher return on investment than an advertising and marketing budget. By spending money on the people who are already dining in your restaurant, you gain valuable word-of-mouth advertising, especially in today’s social media-driven society.


6. Understand the importance of the big three.



The “big three” refers to a great chef, an innovative concept, and an attractive location. These three elements are crucial to the success of a restaurant, and they should all work in unison. For example, a Southern soul food concept may sound great, but not when it is located in an area known for its love of healthy foods or executed by a chef versed in French cuisine. On the other hand, designing the restaurant as a French-inspired soul food restaurant located in a hip, up-and-coming neighborhood could prove very successful. Your chef needs to be able to execute your concept, which should appeal to the surrounding demographics. Destination restaurants are rarely successful.

Wednesday, November 25, 2015

5 of Today’s Biggest Restaurant Development Trends

Restaurateurs must walk a careful line between classic and trendy. Success depends on having the flexibility to adjust to new trends without losing touch with the heart of what makes a restaurant great. Restaurants that depend solely on the latest fad will struggle once a trend is over. However, those that remain true to a more classic aesthetic style will continually draw in crowds. Restaurant developers must therefore remain aware of culinary and operational trends and make strategic decisions about which ones to adopt.

The following are some of the biggest trends restaurant industry professionals have recently observed:

1. A move away from tipping


Source: Elana Centor / License
Although this trend may have started on the West Coast, many East Coast restaurants, particularly in Washington, D.C., and New York, have adopted this approach to compensating servers. Some restaurants now add gratuity automatically to the bill at a rate between 15 and 20 percent, dividing this surcharge between the service staff, often including the kitchen staff. Other restaurants are simply building the tip into the cost of the dish and slightly raising their prices to reflect the change.

The no-tipping movement, fueled by the raging debate over minimum wage, has emerged as a solution to keep salaries at a fair level for restaurant workers. In addition, the no-tip approach makes paying taxes much easier because restaurants and workers do not have to account for varying tip amounts.

2. Embracing sustainability and social engagement


As Americans become more concerned with sustainability, they search out restaurants that embrace composting, recycling, and local sourcing. Diners may also prefer restaurants that engage the community through volunteer hours or donations of food.

This trend has caused a sharp growth in the farm-to-table model, with more restaurants teaming with local farms to source their vegetables and meats. Some are even creating their own small farms so that they can features homegrown items.

Many restaurateurs see the sustainability trend as a natural progression of the push toward organic ingredients. Today, “organic” has become much less of a buzzword for restaurants than “local,” because the latter often implies that a product is organic in addition to being more grown and transported in a more environmentally friendly manner.

The “local” buzzword also extends to liquor. In many cities, local craft beers, wines, and spirits are gaining popularity with customers.

3. Increasing use of customer-facing technology


Restaurants in major metropolitan areas, as well as in smaller cities, up and down the East Coast are adopting technology to make the dining experience simpler and more personalized. An example of easily implemented technology is an app for smart phones that allows customers to see their place in line at a restaurant. Instead of sitting around or taking a buzzer with a limited range, diners can have freedom to explore other shops in the area while knowing exactly how close they are to being seated.

Other restaurants have adopted touchscreen devices to simplify the ordering process and maximize customization of certain dishes. At family-friendly restaurants, children can use these devices to play games while they wait for their meal. This technology is a welcomed upgrade to the standard paper and crayons.

Some restaurants allow diners to place a complete order remotely before they even arrive at the location. These diners then take their seats as the meal is served, which increases convenience for them while also creating a higher turnover rate for especially busy restaurants.

The technology trend also involves accepting smartphone-based forms of payments, such as Apple Pay.

4. Allowing for the prepayment of dinner


This trend has only recently begun to become popular. Through the prepay system, diners make a reservation for a prix fixe meal and pay at the time of reservation so that the dining experience does not involve any exchange of money. Typically, these sorts of reservations are nonrefundable, so they guarantee income for the restaurant even if the party does not show up for the meal.

This trend can be combined with both trend #1 and trend #3. As restaurants take this approach, they typically add in a set tip as part of the price of the meal, especially for larger parties. This approach completely eliminates the need for transactions during the dinner. Alternatively, restaurants can take the entire order prior to the dinner using online or mobile technology to make the experience as streamlined as possible.

5. Offering unique nonalcoholic beverages


Many Americans, especially the millennial generation, have become skeptical of traditional cola products due to the continuous barrage of reports about how unhealthy they are. Instead of offering the traditional sodas, more restaurants are making their own sodas from healthier, whole ingredients, such as fruit juices and house-made syrups. Restaurants are also offering teas, lemonades, rickeys, and other beverages with infusions of herbs, such as basil or lemongrass, or healthful ingredients like ginger. From a bartending standpoint, these nonalcoholic beverages can also serve as the base of creative cocktails.

Tuesday, November 17, 2015

6 Things You Must Do when Opening a New Restaurant

Louis Ceruzzi blog post


Opening a restaurant requires tenacity, expertise, endurance, and flexibility. Several factors play into the decision to open a restaurant, including the physical location, the culture of the larger area, food trends, and investment capital, just to name a few. The thought of opening a restaurant may initially seem overwhelming, especially given the large number that fail. However, if you believe you have a truly great idea, then the following tips can help you get the restaurant off the ground and on the path to success:


1. Overestimate the capital that you need to start the business.

From the very start, you should have at least six months of working capital. Although, ideally you should have more, because expenditures can quickly add up, especially while you are still building a regular customer base. During the first month or so, many people will come to check the place out, but when the novelty fades, they will quickly lose interest. Therefore, it is wise to plan for a drop in income after the initial excitement wears off.

With proper advertising and development, though, you can restore your restore your previous rate of income. You just need to have enough capital to survive the critical gap months. Your restaurant can remain viable if you plan for the future and resist blowing through all of your first-months’ profits. Remember, it takes years, not months, to achieve success.


via elmonas



2. Restaurants are about more than a love of food.

Of course, people must have a passion for food if they want to create a restaurant, but passion, by itself, is not enough. Restaurants are a business, therefore you must work to hone your business sense or find a partner who has solid experience. You do not need to have expertise in accounting, IT, or even management, because you can hire people for these functions. However, you do need a general sense of what it takes to turn a profit.

Chefs must focus on making innovative, attractive cuisine, but when you are a chef-owner, you also need to understand how to make money. If you are early in your career, you should find a mentor. This sort of one-on-one education is better than business school in some ways, because it is tailored to the restaurant business.


3. Pay close attention to the equipment in your restaurant.

The initial investment in a restaurant can be overwhelming because of the costs associated with quality equipment. Keep in mind, though, that the equipment you purchase will limit the creativity of chefs, so try not to skimp. If you need to bring costs down, you can always investigate used equipment. Often, you can purchase used equipment for fairly cheap from restaurants that are closing or upgrading their existing equipment

Never attempt to save money by purchasing something other than commercial-grade equipment. While it may seem like a good idea, this equipment will break quickly under the daily demands of a restaurant. Even the dishes should be designed for commercial use if you do not want to replace them after a few weeks because of the chips and cracks.



via ensalada-de-lengua-de-pajaritos


4. Don’t neglect alcohol on your menu.

Different jurisdictions have different rules governing liquor licenses. Some states require a public hearing as part of the application process, while others have a limited number of licenses, which means you could be waiting months or even years for it. Because restaurants that cannot serve alcohol don’t draw as many customers as those that do, you should apply for a liquor license as soon as possible.

Also, be sure to invest in a great bartender who knows how to curate a unique drink list and sell unusual concoctions. Excitement is infectious, thus employing someone with a flair for mixing drinks will make diners more excited about trying new things or ordering the restaurant’s take on classic cocktails.


5. Spend money to add value for guests.

When people come to your restaurant, you should make them feel special. This will make them more likely to return. If you try to cut costs on things like valets and desserts, your customers will lose that sense of enchantment.

Everything that a guest encounters directly should take financial priority. To improve your restaurant on a consistent basis, you should dedicate a certain percentage of revenue to adding value for guests. In many ways, this money will have a higher return on investment than an advertising and marketing budget. By spending money on the people who are already dining in your restaurant, you gain valuable word-of-mouth advertising, especially in today’s social media-driven society.


6. Understand the importance of the big three.

The “big three” refers to a great chef, an innovative concept, and an attractive location. These three elements are crucial to the success of a restaurant, and they should all work in unison. For example, a Southern soul food concept may sound great, but not when it is located in an area known for its love of healthy foods or executed by a chef versed in French cuisine. On the other hand, designing the restaurant as a French-inspired soul food restaurant located in a hip, up-and-coming neighborhood could prove very successful. Your chef needs to be able to execute your concept, which should appeal to the surrounding demographics. Destination restaurants are rarely successful.

Wednesday, October 7, 2015

Flexibility - A Key to Successful Restaurant Development

With its skyrocketing real estate costs, limited availability of space, highly critical patrons, and incredible competition, New York City remains one of the East Coast’s most challenging cities in which to open a restaurant. Still, virtually all major American and international chefs have flagship restaurants in some of the city’s most developed areas. Due to the high costs associated with these neighborhoods, these locations serve more as advertising vehicles than as sources of income. Only a select few chefs, like Geoffrey Zakarian, have the means to maintain prominent Midtown Manhattan restaurants while making a profit, but this option remains out of reach for most up-and-coming restaurateurs.

What, then, does it take to be a successful restaurant developer in New York? According to the experts at Bisnow’s recent Restaurant Development Summit, the answer is “flexibility.” Surviving and thriving in New York takes more than just superior skills in the kitchen. Restaurateurs and chefs must be able to think outside of the box and be prepared to cater to the quickly changing whims of the public.

The Importance of Inexpensive Change

The tastes of the public constantly change, and restaurants that refuse to acknowledge and adapt to these changes have significantly reduced chances of success. Many restaurateurs believe that change is inherently expensive, but this is not always the case. Small changes to the menu format or the styling of the restaurant can have an outsized impact on the restaurant’s atmosphere and its attractiveness to potential customers without damaging the bottom line.

The ability to change must be built into the fabric of the restaurant from the beginning. When restaurants invest heavily in a specific d├ęcor, a limited menu, or a particular way of doing things, they may alienate customers by not being able to quickly adapt to new trends. For example, if a restaurant spends incredible amounts of money installing marble floors, that money will be completely wasted when public opinion moves toward wooden floors.

Instead, restaurateurs must constantly listen to feedback from customers and adjust operations in response. Every one person who leaves feedback represents many more who have the same opinion. When restaurants embrace flexibility in design, they can easily adjust operations to please their customers.

Marketing Has Primarily Shifted from In-Person to Online

Restaurateurs in New York frequently think that they need an expensive and expansive storefront to launch a new eatery. Typically, restaurant developers look for prominent, flashy locations that will draw people in off the street. As previously discussed, this practice is more about marketing than about making a profit. To attract customers while remaining viable, restaurateurs need to take advantage of online marketing.

Social media has fundamentally changed the ways in which information is shared, and people are increasingly taking in news and reviews, especially of restaurants, digitally. Today, creating a strong following on Facebook or Twitter will generate much more business than opening a ground-level storefront in Chelsea.

One speaker at the Restaurant Development Summit posited that visible storefronts have become largely superfluous. When enough buzz builds through online channels, people will come to restaurants that are hard to find, even those not on street level. Historically, it would have been extremely difficult to drive customers to these places, but with the rise of social media, location no longer presents an obstacle. In fact, for many customers, these offbeat locations add a degree of charm to the restaurant and make them feel like they have stumbled upon a hidden gem. As they share this discovery with friends online, the restaurant becomes even more popular.

Other Important Lessons from the Summit


The Restaurant Development Summit brought two more important lessons related to flexibility to the fore. First, everything is negotiable in New York. Flexibility means working with people to make things happen even when they seem impossible. For example, restaurants with astronomical rents can often work out special deals with landlords to lower the rent in return for a certain percentage of sales. This option appeals to landlords because they have the potential of earning even more than the typical rent. It also relieves a lot of the stress experienced by the restaurateur because rent is now tied to income. Thus, when the restaurant experiences a bad month, this does not necessarily mean digging into savings, going into debt, or shutting the doors.

The second important lesson deals with the personal flexibility of the restaurateur. People get into this business because they have a passion for service and they want to deliver an amazing experience to customers. This tendency can quickly lead to micromanaging, which is neither a scalable business model nor a productive use of time and resources. Restaurateurs should hire people whom they trust to help them operate the restaurant and have the flexibility to let them do their jobs. While it may seem counterintuitive, success often depends on the ability to step back from time to time and have faith that the restaurant will continue to run effectively.

Thursday, September 3, 2015

Ceruzzi-Beaumont Partners Acquire 21 Acres for TheISOLA-San Antonio



In April 2015, Ceruzzi-Beaumont Partners secured its first property acquisition. The partnership announced that it had purchased 21 acres in San Antonio, Texas, for the construction and development of a new luxury apartment community, located near the Westover Hills neighborhood southwest of State Highway 151 and Loop 410.

Known as TheISOLA-San Antonio, the upscale property will offer accommodations for 576 residents. The property will cater to young professionals, business travelers, and families alike. Approximately half of the units will serve permanent residents, while hotel guests can stay on the remainder of the site. Apartments at TheISOLA will include studios and one- to four-bedroom units, and residents will have the option of annual or month-to-month leases.

Meanwhile, hotel guests will be able to choose from suites ranging from one to four bedrooms. Each of the pet-friendly, fully furnished units will include a washer and dryer and kitchen amenities, and guests can take advantage of complimentary weekday breakfasts and dinners and weekend brunch. TheISOLA will also provide a variety of amenities for both residential tenants and hotel guests, including a convenience store, business center, gym with pool and hot tub, restaurant, and full bar. In addition, permanent residents may sign up for a variety of ongoing hospitality offerings, including housekeeping and chef-prepared meals.                            

Thursday, August 27, 2015

Geoffrey Zakarian to Open the National in Greenwich, Connecticut

In May 2015, the New York Post reported that Geoffrey Zakarian would soon expand The National, his James Beard Award-winning cafe, to Greenwich, Connecticut. The prominent restaurateur, who has appeared on the Food Network, will open the new location in the fall at 376 Greenwich Avenue. Equipped to seat 85 guests, the restaurant will occupy property owned by Zakarian’s business partner, the New York-based real estate developer and restaurateur Louis Ceruzzi.



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The new establishment will carry on the concept of the original location, a modern American bistro on Lexington Avenue in Manhattan’s Midtown. Featuring an expansive bar and wood-burning grill, the Greenwich location will source local produce and seafood to deliver classic American fare with a European twist. In bringing The National to Greenwich, Zakarian, a former resident of the Connecticut town, seeks to realize his vision of a “bustling neighborhood cafe” that welcomes resident commuters for “a proper cocktail and a delicious meal.”                          

Tuesday, August 18, 2015

Ceruzzi Properties Mixed-Use Development to Feature 50 Luxury Condos



via 3dnewyorker

Real estate developer and restaurateur Louis Ceruzzi, the founder and president of Ceruzzi Holdings LLC, will spearhead the development of an upscale residential property at East 86th Street and Lexington Avenue in New York City. Located on the intersection’s northeast corner, the Upper East Side property comprises 147 and 151 East 86th Street.

Ceruzzi Holdings partnered with Stillman Development International to acquire the latter site in 2014 in an $88 million acquisition. Ceruzzi Holdings, Stillman and co-owner Kuafu Properties have not yet broken ground on the $340 million development, as they must complete the demolition of the site’s existing buildings before beginning their new venture. Demolition is scheduled for spring 2016, and the firms expect that construction will take place over a 30-month period.

When complete, the property will offer 51 luxury condominiums. The 230,000-square-foot building will include 30,000 square feet of retail space. Additionally, exercise facilities leased to New York Sports Club will comprise 24,000 square feet of the development’s third and fourth floors.