Restaurant Start-Up

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Bar Design 101

Bar Design 101

By Doug Radkey – 07/26/2018

There is truly a science to the design and layout of a winning bar. Outside of implementing a timeless interior, a bar needs to consider many factors including but not limited to; efficiency, hyper-local competition, and overall guest experiences – within its design elements.

Completing a bars ‘concept plan’ should be one of the first steps any aspiring bar owner should take. A concept plan will outline vision, value, mission, and culture statements plus its initial architectural, entertainment, and menu development characteristics (wishlist).

Once you’ve defined your concept, you can begin adding more heart and soul to the design and overall guest experience strategies; the back-bone to a memorable bar. Every component of the bars interior design, entertainment plan, and menu development process should enhance the guests’ overall senses (also known as emotions).

Here are items you can work on for your vision, prior to delivering a presentation to any designer, consultant, and/or architect.

Energizing the Space

Consider ways to not only maximize the space, but energize the space. What experiences can you deliver? Use this time to consider adding space for sound engineering, live music and/or DJ’s, interactive games, mix of televisions, and the right mix of socializing and networking opportunities.

Social Space

In today’s market-space, it is imperative that all newly designed bars (and restaurants) take into account social media, guest photos, and guest videos. Keeping the energized space in mind, how can you add space with the right lighting for taking group photos (with your branding in the background) in addition to taking videos and photos of cocktails and/or food.

Bar-Back

The next focus needs to be on bar efficiency. Consider the size of establishment, guest capacity, and your point-of-sale requirements. Then add multiple bartender stations while choosing the correct equipment, bottle display, overhead glass racks (less breakage), and under-bar space plus the number of speed rails, ice stations, garnish stations, cutting boards, and sinks within a one pivot movement for each bartender. This will then determine the size of ‘bar’ required, which will assist in developing your budget (and beverage menu).

Kitchen Space

A winning bar will also have a memorable food program. Offering premium food and focused, high-quality beer, wine, & spirits is a recipe for maximum revenue potential in today’s market space. Ensure there is space for grills, flat-tops, deep fryers, burners, and a convection oven (or combi-oven) plus space for prep areas, freezers, and refrigeration to provide a quick (and profitable) food program.

Seating and Lighting

This will entirely depend on the chosen concept. Your choice of lighting and seating will determine length of stay, the amount of money a guest will spend, and how they will interact with guests in their party plus other guests at your bar. Every seat and light fixture must have a purpose. This is just as important as laying out the actual back-bar itself and should be discussed with designers, architects, and consultants.

Branding

Consistency through all design elements (interior, exterior, menus, website, social media, and other marketing collateral) is the final consideration piece. Look for ways to incorporate subtle additions of logo colors and branding throughout the venue. Where ever the guests will take the most pictures and videos, make sure there is a way that people will know they’re at your bar!

There are numerous other variables and details required, but starting with this will make you look like a pro when you meet with a designer by having a concept plan completed and a true vision of how you want your bar to be laid out. A professional designer should be able to then take your vision, tweak it to professional standards, and implement it into drawings that will ensure it meets local codes and your overall budget!

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Perfect Pitch to Investors

How to Deliver the Perfect Pitch to Investors

Originally Posted on Typsy – By Doug Radkey 07/13/2018

Sometimes, in order to reach our dreams, we need a little help. Starting (or growing) a scalable and sustainable restaurant or hospitality business is not cheap. Many aspiring restaurateurs need a business partner or investment group to help reach their financial targets.

Here’s what we know: The average start-up restaurant, (in US dollars) can range from $295,000 to $660,000+ depending on a variety of factors, including of course the size of establishment, whether it’s a ‘from-scratch’ project, and the choice of overall concept.

No matter how you look at it, that’s a lot of money.

So how can you get financial help? You can’t just walk up to someone and ask for $100,000 for example. You need to get out in both the financial and hospitality community and network to build up both solid and referable business relationships. You then need to prepare yourself and your concept for investors.

But how do you do that successfully for your hospitality business? Here’s how: 

Be Prepared 

Let’s hope you’ve completed a feasibility study, concept development plan, and business plan (hint: if you haven’t – get started, you won’t get far without these plans). Once those plans are finalized and tweaked, you want to begin preparing yourself for investors by ‘working backwards’ from your completed business plan.

Investors receive numerous proposals per month or year. They may not have the time to read through all of your plans, initially. You want to narrow it down to 10-12 impactful slides followed by 1-2 pages of your ‘executive summary’, and then a 60 second elevator-type pitch.

When crafting a proposal to investors, the return on their investment will always be their first and most critical concern, so keep that in mind. 

Perfect Your Pitch Decks 

Combining your three plans (feasibility + concept + business), what are the most important and impactful pieces of information that an investor would look for?

This is a great opportunity, within 10-12 slides, to include:

  • Your overall market size
  • Gaps in the market
  • Competitive advantages
  • Start-up costs
  • Architectural notes
  • Menu development
  • Key performance indicators 
  • Other financial highlights

Refine Your Executive Summary 

Now, take your pitch decks and narrow that key information down to 1-2 pages of the most important and impactful information. If you can’t capture their interest in your executive summary, you need to keep re-drafting it until it screams ‘WOW’.

Often times, this is the first document they will want to read, before getting into pitch decks or even your business plan. 

Know Your Elevator Pitch 

Sixty seconds. How can you grab the attention of an investor in one minute or less? Show your passion through the pitch while answering the three most critical questions the investor will want to hear, even before they ask you.

This is where you want to hit them with:

  • How they will make their money back
  • What problem or market gap you are filling
  • What your overall business concept is

Be Strategic

Investors want to know where their money is going, how it is going to be used, and how they’re going to get it back. Being strategic also means to expect the unexpected, and be prepared for it. You also want to identify your strengths, opportunities, and challenges. 

If you’ve completed your plans correctly, you should know your numbers. Be prepared to answer key financial questions (for example KPI’s) – which should all be backed
up with both facts and strategic (SMART) objectives.

Show them your benchmarks for:

  • Revenue per customer throughout different times of the day 
  • Break-even strategies
  • Detailed labor reports, inc. revenue per labor hour
  • Detailed food and beverage costs
  • Marketing and advertising budgets
  • Revenue per square foot
  • Revenue per available seat

Know Your Limits

Don’t be surprised that investors will have an interest in your business, (after all it is their money and reputation that’s on the line) so be prepared to answer some challenging questions: 

  1. Are you willing to negotiate any control of the restaurant to investors?
  2. When will the restaurant begin to turn a profit? What are the monthly cash-flow projections?
  3. What are the projected profits of the restaurant over the next 1-3 years; and is it realistic?
  4. What is your role in the project and who will be surrounding you for support?
  5. What are the chances the restaurant concept will fail? What is the exit strategy

Before you pitch your heart out, have a long, hard, think about these and know where you stand. It’s better that you know your boundaries rather than step into a deal that you’re not happy with. 

Leave an Impression

Lastly, be confident and memorable – show your passion, your level of experience, as well as your true understanding of your business concept. Utilize additional resources such as photos, drawings, videos, market research, testimonials, and even food or beverage samples to help enhance your presentation.

If you’re turned away by an investor (or bank), don’t let it get you down. Learn from the experience, make any adjustments from their feedback, and try again.

Asking for money isn’t easy – but being prepared, strategic, and memorable – will help you get closer to winning that next investor pitch.  

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Ready to Open a Second Location

5 Signs You’re Ready to Open a Second Location

Originally Posted on Typsy by Doug Radkey – 04/24/2018

Opening a second restaurant location is not as easy as many people may think. Just because “you’ve been there – done that” once doesn’t mean it’s going to be any easier the second time around. In fact, many restaurateurs find it more difficult than the first one.

A common first challenge is that many restaurants, even the most successful restaurants, are simply not ready or properly positioned for this type of expansion. There are numerous circumstances that need to be executed on first, many of which are often overlooked.

To take a restaurant from one location to two or three takes a variety of planning methods, in-depth market research, and the proper execution of a variety of systems. Sound familiar?

Let’s have a look at the indicators so you can ready yourself for growth and expansion!

1. You’re Mentally & Physically Prepared

By now you should know if you have the willingness to sacrifice in addition to the required systemized thinking, social skills, creativity, stress management, and passion to lead a restaurant to success. But that’s just one restaurant, now you’re considering multiplying all of that by two (or more).

Are you ready?

We know restaurant owners more often than not, wear too many hats, leading to upwards of 60 to 80+ hours of work per week. You have to truly ask yourself if you’re in the right mindset and have structured your personal life to endure this type of growth. This is where surrounding yourself with the right professionals (supporting cast) and/or considering a business partnership might be ideal for some – to reduce both risk and potential burnout with the opening of a second unit.

2. Your Previous Restaurant Isn’t Dependent on You 

How critical is your presence to the operations and day-to-day success of the restaurant? If it is highly dependent on you; what would happen if your time was shared at a secondary location? What often happens is an independent owner will spend more time at the new location, leaving the first location vulnerable.

That’s why it’s important to take the time to consider the right management team for multiple locations to ensure there is no collapse of the first location and a strong start for the second location.

This includes additional chefs, managers, and supervisors in addition to start-up specialists like consultants, designers, engineers, and architects that will save you time, money, and energy during this growth stage.

3. You Have Strong Systems and Processes in Place

Arguably one of the most important aspects in terms of growth is ensuring that each restaurant (current and the potential new one) has consistent systems in place. Duplication of the same winning formula is the key to early success.

Developing daily routines, service sequences, training programs, communication methods, hiring practices, and customer experience strategies to name a few – is absolutely critical.

It takes effort, honesty, training, reviews, and accountability by the entire team to ensure these basic systems work and are implemented on a daily basis. If you feel there is a gap in any of these systems, it needs to be addressed immediately before any second location is considered.

4. You’re Financially Ready 

Is the current restaurant highly profitable and maintaining the most important key performance indicators? Could there be any further financial improvement at the current location? Could it help financially carry the second location if needed for a period of time? If so – for how long and by how much?

Again, just because one restaurant is profitable, doesn’t mean the second unit will have immediate profitability. It takes a deep dive into the books to make a verifiable business decision to expand. Work with trusted and experienced accountants to fully understand the financial health of the current location and the viability of a second.

5. Your Restaurant is a Good Market Fit

Conducting a feasibility study for the second location is just as important as completing one for the first location.

Consider these factors: Where are you planning on developing this second location? How close will it be to the first location? Is the market large and strong enough to support a second location of the same brand? What has made the first location so successful? Will you need to scale or adjust the concept?

There are numerous market related questions that need to be addressed.

Outside of the company structure, choice of concept, financial viability, and overall market – growing restaurants need to consider supplier consistency and overall marketing plans for numerous outlets.


There are many positives to growing into multiple locations, but it should only be done when the time is truly right and when it is done for the right reasons. It’s important to not forget the fundamentals of restaurant operations; where consistency, the quality of food and beverage, customer service, and overall guest experience is paramount at each location.

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Lowering Your Risk Before Opening a New Restaurant

Lowering Your Risk Before Opening a New Restaurant

Originally Posted on Typsy by Doug Radkey – 01/16/2018

Early recognition of risk is crucial for the success of any business, and arguably more so for restaurants. To ensure proper positioning and ongoing success, it’s vital for a restaurateur to understand the variety of operational, financial, legal, systematic, and people-related risks to not only opening a restaurant, but operating one too.

Identifying risks from the very early stages will position a restaurant  to be disciplined and prepared for when things may ‘go wrong’ down the road. Identifying risks will also help streamline a restaurants’ processes while improving communication and implementing a variety of systematic control methods, something every restaurant needs for long-term success.

The opposite of risk, is opportunity, and that’s why  focusing on with these seven tips will help you avoid pitfalls before opening your restaurant.

1. Assess Yourself First

First and foremost, the hospitality industry is not for everyone. It’s not what it’s made out to be on television and across some social media feeds. This industry is cut-throat; plain and simple. Take the time to look in the mirror and ask yourself about the required character traits.

You then want to ask yourself, and also write down detailed responses to:

  • Why you want to open a restaurant or bar
  • Why you think many restaurants fail within 18 months
  • What the difference is between success and survival
  • Explaining expectations of profit versus the lifestyle you want to live
  • Explaining how important growth is to you, both personally and in business.

Do you feel you have what it takes? This industry requires sacrifice, systemized thinking, social skills, creativity, stress management, and a lot of passion. The first opportunity in risk management – starts with you.

2. Plan Thoroughly

One word that cannot be stressed enough during the start-up phase is of course, planning. Sometimes, however, even with a high level of planning in place, things can unfortunately go sideways — and they can happen fast.

This is where having a strategic combination of feasibility studies, concept development plans, and business plans will be beneficial and provide you with an opportunity to set the tone early, for the upcoming project. 

These plans will analyze and reduce the risk for many potential, common, and ‘unforeseen’ events during both start-up and operational stages.

3. Form a Strategic Team

You’re determined, positive, confident, adaptable, and crave learning experiences. Being an a restaurateur combines an enormous amount of passion and vision for creating food, drink, and experiences – and a drive to be undeterred by a high level of unprecedented risks.

But you shouldn’t go about it alone. Work with a team of supporters; including mentors, consultants, accountants, lawyers, designers, engineers, and chef/bar focused experts.

They will help minimize start-up and operational risks by creating efficient systems that will undoubtedly streamline your restaurant and both its start-up and ongoing processes. You will also be given the opportunity to learn a lot from these professionals in their respective fields which will assist you both short-term and long-term.

4. Do a Financial Check-Up

One of the many headaches aspiring restaurateurs face is the simple fact of running out of money before the restaurant even opens – a common, but detrimental risk.

A thorough set of plans reviewed by consultants, accountants, and designers – will prepare a restaurant  for potentially hidden costs by measuring realistic financial scenarios. Ideally, there should be at least three months worth of operating capital set aside for opening day.

Aspiring restaurateurs should also analyze the potential for leasing equipment and other assets while comparing interest rates and exit strategies for each potential financial program they may apply to.

Restaurant owners should also ensure they have a credit check report and a statement of personal net worth, and to clear any outstanding debt with past creditors prior to starting a restaurant. Most importantly, set aside savings (ideally 6-12 months worth) for yourself and your family in case the restaurant is off to a slower start than originally predicted.

5. Complete All Business Paperwork

Make sure you receive the full list of permits that your local municipality requires for starting a restaurant or bar. Visit your city clerk office to receive the entire list, in writing, plus their associated fees and timeline for approval. Overlooking one or more of the required permits or licenses can result in a delayed opening and course, further additional costs.

These may include business registration forms, business licensing, building permits, zoning adjustments, occupancy certificates, ventilation, electrical and plumbing permits, outdoor signage permits, health and safety inspection certificates, liquor licenses, and others. Each municipality, province/state, and federal government will be different, so ensure you receive the correct information for your specific location.

A restaurant also needs to measure a variety of liability factors. Disaster can strike at any moment, therefore an aspiring restaurateur should ‘hire’ an insurance broker, to source the best general liability insurance, property insurance, off-premise insurance, liquor liability insurance, and workers compensation insurance to reduce risk, costs, and any personal liability.

6. Assess Your Restaurant’s Location

Choosing a location is an exciting component of starting a restaurant, but it comes with its own variety of risks. New restaurateurs often find out after a lease is signed that their property may not be fully compatible for a restaurant and will need further upgrades to meet standards for energy and ventilation, plus any revised building and/or health codes (to name a few).

This is where working with a commercial realtor, property inspector, engineer, and commercial lawyer will reduce any potential shortcomings while looking for specific leasehold concessions and exit clauses that will reduce your own risk, down the road, if the restaurant is unsuccessful.

7. Prepare Your Restaurant’s Operational Setup

When it comes to restaurants, bars, and cafes etc; the producers, manufacturers, delivery drivers, owners, managers, and servers ultimately share the responsibility to create a safe and enjoyable dining experience.

Transparency, traceability, and accountability in terms of food and  beverage, must be a top concern when deciding on vendors to ensure all product entering your restaurant are not only safe for your customers, but for your community.

Knowing and understanding your concept will also assist in kitchen, bar, and storage requirements – reducing the risk for spoilage, theft, and accidents.

There is so much that goes into operational setup, but focusing on the above plus proper HR programs, staff training programs, allergen disclosures, secured networks, and overall venue related security, will create a safer environment for both your employees and customers; reducing a long list of risks and potential lawsuits.

Life happens, things go wrong, but being prepared is what will make you stand out from the others. It takes planning, effort, and an experienced support team to overcome the impact of an unfortunate event when opening your restaurant.

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What to Look for in a Restaurant Business Partner

What to Look for in a Restaurant Business Partner

Originally Posted on Typsy by Doug Radkey – 11/01/2017

If you’ve worked as a leader in the restaurant industry, then you know what it’s like. You know that leaders have to be willing to make sacrifices and acquire the systemized thinking, social skills, creativity, stress management, and passion that it takes to be successful.

Becoming a restaurateur combines an enormous amount of passion and vision. You have to create food, drink, and overall experiences with a drive that is undeterred by the high number of unprecedented risks. You must be determined, positive, confident, adaptable, and crave learning experiences.

And even if you do have all of those qualities, it can often be too much for one person to endure. This is when considering a partnership might be ideal for some.

It’s not uncommon for restaurants to be started or initially operated by a partnership, and you will be hard pressed to find a well-known restaurant brand that didn’t start as a partnership before becoming a larger corporation.

However, partnerships aren’t easy. They come with their own set of challenges, both at the start-up phase and during the operational stage.

There must be a common vision, mission, and commitment, and a high level of communication, creativity, and expertise between partners. Effective partners will also play off each other’s strengths and weaknesses to succeed in this cutthroat industry.

Here are a few elements to consider when determining if a restaurant partnership is right for you. This is what you should be looking for in a business partner today.

1. Have a Three-Step Plan 

Before engaging in serious partnership discussions or agreements, it is crucial to complete a feasibility study, concept development plan, and business plan. Is the idea of a partnership even feasible? Can your restaurant concept withstand not only the market, but also two or more owners? Is there enough of a profit margin for all partners to live a healthy lifestyle? What are the short and long-term goals? 

Many questions need to be answered before you make any decisions, and these plans will lay the foundation needed to move forward.

2. Conduct a SWOT Analysis

There should be a competitive SWOT analysis within the business plan, but it is also ideal to complete a thorough SWOT analysis (strengths, weaknesses, opportunities and threats) on both a personal and partnership level. 

What strengths and weaknesses do you each possess, what opportunities exist if you decide to partner, and what threats will present themselves if you formulate a partnership? 

For full effectiveness, have all potential partner(s) complete the same and analyze all of the responses.

3. Create Statements

To ensure potential partners are on the same page, it is imperative that you all have a similar vision, mission, value, and culture statements. Complete an exercise, similar to the SWOT analysis, in which each individual writes a statement addressing those four categories. These answers should then be compared against one another.

A partnership will inevitably run into hard challenges if visions and goals are not equally aligned. If you cannot cohesively agree on these statements at this stage, don’t move on to the next step.

4. Review the Laws

It’s absolutely critical to review your national and local business laws, regulations, taxes, and how they may relate to structured partnerships, liability, and asset management. Many countries, states, provinces and local municipalities have different information on their registered requirements.

Study this information and review it with both an accountant and a lawyer, so you can determine which partnership structure is best for your unique situation.

5. Draft an Agreement

Restaurants, bars, and other hospitality related businesses are really no different to traditional businesses. There needs to be a comprehensive and clear partnership agreement in place, even if it is a friend or family member as the potential partner.

The agreement must clearly state the financial structure of the partnership (investment, return and profit share) in addition to property management involvement, labor involvement, and overall activeness within the business.

Will both partners be active in the day-to-day operations, or will one act as a ‘silent partner’? Often, one partner looks after the back-of-house while another looks after the front-of-house, or is one partner just there to assist in finances while the other operates the business? Every minor detail must be documented, reviewed by a lawyer, and signed for liability and accountability purposes.

At the end of the day, successful partnerships rely on setting realistic (S.M.A.R.T) goals, open communication, frequent meetings, defined roles, and sound business structure. Only partner with other individuals who are willing to be open, honest, and respectful, and share the same values that you do.

You will need a balance of planning, trust and talent to be compatible. There will undoubtedly be stressful situations throughout the start-up phase, operational phase, and overall partnership that will reveal who you have really partnered with.

By executing these steps, you should be able to limit any surprises. The same goes for partnerships as it does for business in general; if you fail to plan, then you plan to fail.

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Often Overlooked Benefits of Restaurant Lighting

Often Overlooked Benefits of Restaurant Lighting

Originally Posted on FoodableTV by Doug Radkey – 10/19/2017

There are so many critical elements that go into the design of a restaurant, so much so that it can easily become overwhelming. It’s a moment during the start-up or renovation period, where specifics that play a large impact on customer experience, can simply be overlooked. One of the key elements that are often overlooked — is the importance of restaurant lighting.

To create positive emotions and to deliver on your promise for memorable customer experiences, a concept must think through its initial design while utilizing processes, maximizing communication, and creating surprises through a multitude of ‘touch points.’ Arguably one of the most important touch points in the overall design — is again that of restaurant lighting.

Lighting within a restaurant (or bar), affects many elements within both operations and guest experience, including food and drink presentation, atmosphere, and length of stay. Lights come in many creative materials, shapes, sizes, and brightness; therefore the largest challenge is finding the right balance for each location and concept.

When planning a restaurant space, one has to consider the ‘job’ of each light source. Is it meant to highlight wall features, to enhance a back-bar, to highlight walkways, washrooms, and exits, or is it to create the right mood over a table? Or perhaps it is for security, liability, and theft prevention?

When considering the job of each light source, it’s imperative to remember to keep customers and operations top of mind first and not the architecture itself.

Here are other ways that restaurant lighting can have a large impact on revenue, profit, and customer satisfaction by again, considering the ‘job’ of each source.

Sense of Security

Ensure that the restaurant and bar space is well lit (this is both inside and outside the venue). Strategic placement and brightness of lights will undoubtedly reduce theft opportunities, reduce damage to property, reduce injury and liability, and keep both employees and customers safe (especially at night).

Differentiated Space

Different lighting sources within a venue can assist in creating multiple spaces. Similar to guest positioning, lights can assist in highlighting the multiple “levels of comfort” that guests will connect with and want to be seated near, allowing the restaurant to maximize each individual seating area, effectively managing customer satisfaction and revenue opportunities.

Seat Optimization  

Lighting has another effect on Restaurant Revenue Management, as well. If a restaurant wants customers in and out quickly (QSR model), they should consider brighter lights paired with fast paced music, as it often makes guests feel hurried. A balance between warm and bright lights is ideal for casual restaurants where dimmed (softer) lights is therefore more ideal for restaurants that are looking for longer guest duration.

Kitchen & Bar Performance

Don’t forget about a restaurants team and the productive areas within the restaurant space. Ensure the correct light placement and correct choice of bulbs is decided upon for inside the kitchen and bar production area. Consider where food and beverage preparation and final presentation will be completed for a final quality check before being delivered to the guest.

Food & Beverage Presentation

Increase restaurant and bar profits with the correct back-lighting, up-lighting, and track lighting along liquor, beer, and wine displays. Take it up a notch and differentiate positioning of premium product with a different set of lights. Furthermore, food and drink can look unappealing if placed under the wrong lighting element— therefore bars and full service restaurants should use dimmers to control brightness (softness of light) and to ensure there are no shadows along the plate or glass while at a table.

Energy Conservation

When deciding on lights, consider the upfront cost and the ongoing energy cost and look for long-term operational savings, adding profits to a restaurants bottom line. Restaurants use a lot of lights so dimmers (or control systems) for example, are great for a variety of concepts to reduce costs and create more efficient layouts.

Curb Appeal

A restaurant cannot forget about its exterior lighting. Outside of the obvious security reasons, a well designed exterior with strategic lighting can in fact, invite people inside versus them choosing a neighboring restaurant. Lighting along entranceways, signage, landscape, and the up-lighting of architectural highlights, is most ideal. Lastly, outdoor lighting for a restaurants patio needs to be creatively decided upon and equally not overlooked to create not only the right outdoor atmosphere, but curb appeal, as well.

Poor restaurant lighting can lead to a cold and clinical feeling or a dark and unsafe feeling among guests. Lighting can also have a psychological effect on guests, as their minds may play tricks on them when it comes to flavors and scents for both food and drink. 

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Restaurant Seating Strategies

Restaurant Seating Strategies

Originally Posted on FoodableTV by Doug Radkey 10/09/2017

There are many tactical elements to operating a restaurant business and Restaurant Revenue Management (RRM) is one of them.

RRM can be defined simply as selling the right seat, to the right customer, at the right price, and for the right duration of time.

As property and overall restaurant operating costs continue to increase, so does the desire to maximize seating and guest turnover. This goes for either a full service or quick service restaurant environment. There is, however, a science to restaurant seating strategies— the essence of RRM.

First and foremost, restaurateurs need to understand their intended guest experience and their ideal customer profile — including guest behaviours — to maximize their seating potential.  

With the right seating strategy, a restaurateur will position themselves to increase guest spending, increase turned tables, and contribute to a more positive guest experience. Consequently, this will greatly affect the operator’s revenue and profit potential.

An award winning seating strategy will include the following planning steps and thought processes.

Here are six factors to think about:

1. Room Size

The general rule of thumb for a restaurant is to allocate 60 to 70 percent of real estate to the dining area with the remaining percentage allocated for kitchen, storage, and washrooms etc. Ideally, a restaurant wants to keep approximately 20 to 25 square feet per seat, to offer the most comfort and flexibility for guests and the most adequate flow for staff including traffic aisles, server stations, and beverage bars/counters.

For example, a 5,000 square foot property will provide approximately 3,250 square feet (65 percent) for the dining and/or service area, resulting in an average of 144 optimal seats (22.5 square feet per seat).

2. Table Size

As with the above room size, there is a general rule of thumb for table size as well. Ideally, guests should be given a minimum of 300 square inches of space (per guest). For example, a 24 inch by 30 inch table will offer 720 total square inches of space or 360 total square inches per guest for up to two guests, often enough space for traditional plating, utensils, and glassware.

Table size can fluctuate based on concept, menu, plating style, and service sequence. Make the tables too small, and guests will feel uncomfortable and leave more quickly. Make the tables too large, and your property will lose valuable real estate. In this case, size does matter!

3. Table Optimization

A profitable interior design combines a variety of table sizes to meet the demand of different sized parties in addition to maximizing Sales Per Minute (SPM), an essential key performance indicator of Restaurant Revenue Management. For a restaurant to be successful, it needs to live in the moment by maximizing every day, every hour, and every seat.

Optimizing table sizes and their positioning, will improve traffic flow and turnover while reducing noise and accidents within the restaurant. Utilize point-of-sale reports to understand typical party sizes, average duration of stay, and dollars spent to ensure the restaurant is not wasting any seats or opportunities.

4. Guest Positioning

Depending on the concept, we know guests either sit themselves or wait to be seated. If one were to sit back and watch how guests were to seat themselves in a full service restaurant, a high percentage of guests would rather choose to sit near a window, featured wall (near fireplaces or wine racks, for example), or a partition wall. This is because these elements create a level of comfort.

When planning a floor layout, it is important to keep this in mind and create multiple “levels of comfort” that guests will connect with and want to be seated near, allowing the restaurant to maximize the space and not have undesirable seating areas that lead to quick visits and less spending.

5. Seating Styles

Without getting into specific details on chair styles (that’s another article), there are three key seating arrangements that are known to either keep guests in their seats and/or keep them spending more money.

Banquette tables (a bench along a wall with an opposite chair), often reduces sales per minute because it keeps guests sitting longer (which can be a great thing). This results, however, in a requirement for the restaurant to up-sell coffees, desserts, and/or other profitable items throughout the meal. This is a critical communication point to all service staff.

Booths on the other hand, are the number one option for guests and users of these booths are known to spend more in both time and dollars, as they feel highly comfortable and often feel a higher sense of privacy. Unfortunately, most restaurants cannot offer a space consisting 100 percent of booths, nor is it ideal for single diners. The right table and seating mix is required, but more booths than others, is a more desirable approach.

Traditional tables, those with two or more seats, often lead to quicker visits, unless strategically positioned near levels of comfort and appropriately spaced apart — offering a more intimate experience and ultimately leading to longer stays. It is essential this setting is truly mixed for seating of two and four (or more) to maximize potential and to reduce the risk of a single diner, for example, sitting at a table for four.

6. Guest Duration

By now, we understand that the longer a guest stays, the more they need to spend to maximize the seat and space. As a restaurateur who knows their concept and ideal customer profile, one must decide whether to focus on longer stays and higher revenues per table or to focus on volume of guests (resulting in volume food and beverage production).

What is needed to not only breakeven, but be profitable long term while having a highly productive, but not overrun kitchen and bar?

Every concept and every location will be slightly different, but once you know the average meal length, one can determine many other aspects of the restaurant such as the full potential for each day of the week which will then correlate to improving other financial management components including optimal staff schedules and food and beverage preparation.  

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How to Develop a Restaurant Menu – For Real

How to Develop a Restaurant Menu – For Real

Originally Posted on Typsy by Doug Radkey 08/31/2017

It doesn’t matter if you’re developing your very first restaurant menu or you’re planning to re-invent your current one – you need to have a strategy in place with both the food and beverages on offer. 

If you’ve done a concept development plan, you’re already on the right path. Your restaurant menu is there to give meaning to the overall guest experience while also delivering emotions and brand personality.

These are the fundamentals of a restaurant’s concept.

To develop a memorable food and beverage menu, however, you must have a thorough understanding of your target customers. You should also undertake an advanced hyper-local analysis (competitive analysis) and aim to understand your local economic factors.

If you’re just starting out, developing a menu concept will assist both you and your architect in designing a kitchen and bar layout that is going to deliver effective productivity, storage, and preparation.

Here are a few tips to help you get started.

1. Develop Your Menu Concept

First and foremost, you should ask yourself what you want your restaurant to be known for. The best ‘what’ in your area? From here, you can begin to develop a flavor profile with supporting elements such as colors and textures that will deliver that promise.

The goal is to keep it simple and memorable. Try to keep your menu under 24 items for optimal productivity, and to minimize confusion and anxiety among your guests (and staff).

Remember, guests prefer to make a decision within 120 seconds.

Take this time to list out your desired menu and if it’s too large, begin to narrow it down.

2. Develop a List of Core Ingredients

Developing a menu and/or new and specific dishes and drinks can take a lot of trial and error. It’s important to understand your concept and target market while working with flavors that will make customers go ‘wow’!

Put together a list of the core ingredients that will deliver that wow factor within your desired menu. You’ll also want to consider how you can repurpose raw ingredients as much as possible to reduce food costs and potential waste.

Consider this; how can the kitchen & bar collaborate to maximize the yield on ingredients?

When considering ingredients, try using as much product from around you as possible – for example, produce that is in season, food artisans from your area, or meats from a local farm/butcher. Take this time to list out all the main ingredients you will require.

3. Investigate Your Supply Chain 

Now that you know your concept and its core ingredients, where can you find them?

You want to reduce your risk (and often costs) by eliminating as many third parties as possible within the supply chain. When planning your menu(s), list out a limited number of targeted suppliers, including data on their company history, any past product recalls, their storage facilities, delivery logistics, and ethical working environment.

Build a list of two to three local butchers, seafood suppliers, dry goods, craft breweries, local wineries, and produce suppliers (etc.) needed for your concept.

4. Cost Out Your Menu Items

Using a recipe management program or simply inputting available data into a spreadsheet will allow you to begin analyzing your menu concept, its portions, and each associated item with its core list of ingredients.

Based on the concept, noted ingredients, and each supplier’s cost, can the menu items be priced accordingly for your target customers and local economy? Is there enough room for profit based on your location’s needs? Is there enough balance in the pricing? What is the goal for average revenue per customer?

This is where having a business plan in place will assist in understanding appropriate key performance indicators (KPIs) required to be a successful restaurant.

5. Visualize Plating and Glassware

Now that you have the concept and initial costs figured out, you can move along to the next step. Many aspiring restaurateurs forget about this one. It’s time to consider how your guests will eat and drink your menu offerings.

How will it look on the plate or in the glass? How will the colors contrast with one another? Is the dish or drink ‘Instagram’-worthy? Which elements should go on a fork or spoon together?

If it’s available for take-out, how will the menu item perform after being in a container for 10+ minutes on the drive home?

It’s ideal to plate it three different ways, test it, take photos, and also test its longevity if it is going to be available for take-out.

Again, trial and error makes perfect.

6. Run a Test Kitchen

This is arguably the most exciting aspect – testing the flavors! Do the menu items meet and exceed your expectations? Give each item a few different tweaks and decide which is best. Get others involved in the process and don’t be afraid to use a soft opening to gather further feedback.

You may want to take photos and put them on social media to see which ones gather the most engagement from a visual standpoint.

At the end of the day, the key to a profitable and memorable menu is to keep it small and focused with signature items that you want to be known for – while differentiating your concept from local competition and offering a balance in pricing.

This is the recipe for success!

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What is the Cost of Opening a Restaurant

What is the Cost of Opening a Restaurant?

Originally Posted on Typsy – By Doug Radkey 06/28/2017

Starting a restaurant is not a cheap endeavour. There are a variety of cost factors to consider when developing a restaurant concept and it is imperative that an aspiring restaurateur measures the cost difference between purchasing an existing restaurant, taking over a vacant restaurant space, starting a restaurant from scratch, or buying into a franchise model.

The riskiest scenario, which will require additional planning and, in all likelihood, additional funding, involves starting a restaurant from scratch.

Using this start-up model as an example, we can break down the different cost categories that many will overlook.

The average start-up restaurant, in US dollars, can range from $295,000 to $660,000+ depending on a variety of factors, including of course size of establishment. In terms of square feet, the total project can range from $150 to $200+ USD per square foot, depending on the scale of design and chosen materials.

The largest cost factor is going to be the construction and renovation period, which can range from 35 to 65% of the total start-up costs.

These are key budget scenarios to consider when one is trying to decide on a location and size of an establishment. A restaurateur will want to keep 24 to 28% of the space for kitchen production and allow for approximately (and ideally) 15 to 25 square feet, per seat.

This again all depends on choice of concept. It is difficult to pin-point precise costs for you as every concept is different, but we can outline the variety of cost categories to consider for your start-up budgets.

Leasehold Assets

Construction and design
In addition to the above notes, a restaurateur will want to keep in mind engineering costs, interior designer costs, millwork costs, artist renderings, and permit costs.

Restaurant furniture
Consider the style of tables, table stands, and chairs that one would need for the restaurant, based on concept and size. This can range from $300 to $700+ per set of table and chairs.

Kitchen & bar equipment and supplies
When developing a concept, it’s important to understand the menu that will be developed to assist in estimating kitchen & bar size constraints and the type of equipment needed. Kitchen and bar equipment can range from $50,000 to $125,000+ USD depending on the size of space. Consider in this budget shelving, storage, and small wares in addition to any required exhaust hood systems.

Plates, glassware, and takeout containers
Based on the size of the restaurant and project sales and turnover, how many plates, drinking glasses, and takeout containers will one need to get started? Consider each type of glass (wine, beer, juice, martini etc.) in addition to soup bowls, salad bowls, desserts and so on.

Food and beverage supply
The cost of purchasing food and beverage for opening is often overlooked. Though some suppliers will offer payment terms, it is best to budget for the first shipment(s) in addition to food & beverage for training.

Rent & Operating Costs

Security deposit
As a new entrepreneur without any kind of track record, a property manager will likely require a security deposit that will be returned after the first twelve months of business. This can range from $5,000 to $10,000 USD.

Lease payments
During renovations, a property manager will often settle on a negotiation for ‘free rent’ during that period, usually 2-3 months. However, it is ideal to budget 1 to 2 months of lease payments in the case of any unexpected delays.

Utility payments
It is wise to budget for 3 to 6 months of utility costs and keep in mind that many utility companies (water, energy, and gas), will want a deposit from new customers.

Capital cash flow
Many restaurants open with no money left in the bank. This can become a critical situation. It is best practice to budget at least 1-3 months or more worth of wages and lease payments to be on the safe side, and to have money in the bank for emergency and simple cash-flow purposes.

Marketing & Advertising Costs

Web design and social media

Unless one plans to do in-house, a professional marketing agency may be hired to design a website, set-up social media channels, and get the restaurant listed on all of the crucial review sites.

Logo design
This could be provided by the same agency as above. It is always suggested to have a professional design the logo and branding package. In this category, also consider the cost of trademarks.

Outdoor and indoor signage
This cost can vary greatly, depending on the style of sign needed for the property and the layout of the logo. One must not forget about interior signage and branding as well.

Menu printing
There must be a budget for menu covers and printing. Again, this cost can vary, depending on number of seats, style of menus, and if there are printed takeout menus to be distributed.

Other mediums
Set aside a budget for any video production, radio commercials, print advertising, and other partnerships that may be needed to generate opening day buzz!

Grand Opening Costs

Staff uniforms
Once a restaurateur has an idea of the staff plan, a uniform budget can be allocated for chefs, cooks, bartenders, servers, and managers. To save some costs, it’s ideal to have employees provide their own pants.

Staff training
A start-up restaurant will want to set aside two to three weeks of training and orientation. It is best practice to set up a mock training schedule during the planning stage to develop this budget.

Soft opening
Often you will have a one week practice period so your staff can run through real-life scenarios with a select group of guests. A budget should be set aside for food and beverage costs, as a soft opening is often offered for free to guests.

Grand opening
Consider a budget for a grand opening event that will attract the attention of local dignitaries, media, food bloggers, and the immediate community.

Administrative Costs

Business licenses
Though minimal and needed, research your local and regional licenses and their associated costs, including traditional business/corporation licenses, liquor/beer licenses, and music licenses.

Ordering and payment solutions
A point of sale (POS) system is vital for customer service, inventory, communication, and other reports. Set aside a budget for a program and set of hardware that is suitable for the style of concept.

Insurance/legal fees
Construction insurance and operating insurance should be purchased prior to opening, for the renovation and training period. You should also allocate part of your budget to a business lawyer who can read through lease agreements.

Accountant 
It is ideal to have an accountant during the start-up phase, to track and organize expenses and to guide a restaurateur in the right direction, financially. This individual will also assist in setting up payroll and HR files for all start-up employees.

Hidden costs
As with any type of project, there are always hidden costs that are not accounted for. It is best practice to set aside a budget, similar to that of the operating capital, to ensure there are some funds available in case of emergency.

All of this may become very overwhelming for a start-up venture. With a proper feasibility study, concept development plan, and business plan – in addition to a restaurateur surrounding themselves with the right team of consultants, engineers, designers, and contractors – a start-up project can in fact stay within budget.

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Developing a Profitable Restaurant Concept Plan

Developing a Profitable Restaurant Concept Plan

Originally Posted on Resto Biz – By Doug Radkey 06/14/2017

No question, every restaurant or food and beverage related establishment starts with a vision. A dream for most that must be met with the right research, planning, and overall mind-set. Similar to the true definition of branding, one’s market will, and must, also define the concept. To be successful, you must be open to building a venue the market both wants and needs.

A common theme through the first phase of starting a restaurant (or any business) is research, research, research! Whether you’re an experienced restaurateur or new to the scene, if you are looking to start a new restaurant, the question you’re likely asking is, ‘where does one start?’

A feasibility study, concept development plan, and a strategic business plan are the three key steps in developing a scalable, profitable, memorable, consistent and sustainable restaurant. These plans should be composed simultaneously and reviewed by industry experts prior to securing any leases or further investments.

This article, the framework for a restaurant concept development plan, will not only deliver on vision and purpose, but assist in determining realistic start-up costs. A restaurant concept development plan should (at the very least) follow these essential headings, after a thoroughly completed feasibility study.

Restaurant Concept Summary

This first section is about giving the start-up restaurant character. Summarize the dream, the proposed name, and the main descriptions for the concept on one page. From there, take the time to carefully craft a value, vision, mission and culture statement, which will build the foundations for your brand.

The concept summary should also highlight any proposed operational configurations and hours of operation in addition to management and staff requirements, plus uniform design and wage structure, which should flow from your previously written culture statement.

Architectural Design

The overall restaurant experience is summarized into four basic areas: food (30 per cent), service (25 per cent), environment (24 per cent) and cost (21 per cent). It’s imperative to ensure that the ambiance and environment match that of the menu to drive a memorable concept.

Every piece of real estate is unique in its own way; a 1,000 square foot location will have different needs than a 1,000 square foot location two blocks away, so it is difficult to be 100 per cent accurate, but this section will surely define any future budget restraints.

With the right research techniques, one will be able to determine the space allocation (number of seats, take-out counter size, washroom requirements, and kitchen/bar production space) needed to meet financial objectives in the feasibility study.

From there, define the interior characteristics your location would need and list out your wants versus needs for the interior design. Taking research to another level in this section will properly estimate the costs for your desired floor styles, wall finishes, lighting, tables, chairs, and so on.

Take this time to also list out the top three to five interior designers, engineers, architects and contractors that you would like to contact and have bid on your project.

By the end of this section, you should also be able to determine if you’re in a financial position to purchase/remodel a restaurant, build a new restaurant, or retrofit an existing restaurant space.

Bar & Kitchen Production

Much like the architectural design, it’s imperative to plan out your kitchen and bar space. A helpful tip to remember is the average kitchen equates to approximately 20 to 28 per cent of the overall space. To plan a kitchen and bar properly, you must also have a solid idea of the proposed menu and estimated number of seats or daily orders.

Take this time to determine the key pieces of equipment required to execute the menu in addition to understanding their specs (electrical/gas/water usage, and overall size), plus estimated costs for each piece of equipment.

Based on the above, will your establishment need an exhaust hood system? What is the estimated ‘BTUs’ that will be used for accumulated gas equipment? What is the estimated number of ‘amps’ required for accumulated electrical supply? Lastly, what technology-related equipment will you require to execute on the customer service side (POS and digital boards for example)?

Once all of this information is collected, list out the top equipment suppliers in your area that you would like to bid on your project for when the time comes.

Menu Design Attributes

Understanding the core menu items early on will allow a start-up to plan the kitchen and also determine estimated food and beverage price points. You don’t need to have the entire menu completed, but a solid idea that flows with the remainder of your concept is required.

Based on the menu, what plating, take-out containers, and glassware styles will be required? Based on seats and projected orders, how much of each will be needed at start-up? Take this time to source possible suppliers and their estimated costs.

Knowing your core menu will also position you early on to determine key food and beverage suppliers and begin mapping out possible supply chain solutions in addition to any challenges you may face to meet the demands of your concept.

When a concept development plan is complete, it will assist in completing the strategic business plan by preparing you for capital requirements, budget limitations, construction related options, space planning, lease requirements, and overall day-to-day operations.

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