Introduction
Why should you open a restaurant?
In my varied and meandering professional life, one of the most fulfilling things I have ever done has been to plan, open, and run restaurants. Each one is nicely profitable, and my capable managers limit the amount of my time required for any one location. The emotional rewards are enormous. Being a part of a committed, diligent team that works ceaselessly to please customers is rewarding. So is hearing the din and chatter of a dining room full of happy patrons and seeing mountains of plates come back scraped clean. Watching the realization of concepts that began as fanciful ideas and have grown into vibrant and thriving restaurants never fails to touch me and spark a profound sense of gratitude.
A word of caution
Of course, the restaurant game is fun only as long as your restaurant is profitable. A restaurant failure can be financially and emotionally devastating. Since I have opened and grown my restaurants, and in the same and similar neighborhoods, I have watched a handful of other restaurants open and fail within a year, or open and struggle and never quite reach a point of thriving profitability.
Why do so many new restaurants fail while others around them thrive? There is no shortage of widely differing opinions as to the causes of restaurant failure and, in this book, I offer an entire chapter on the subject.
But if I had to identify only one overarching reason for underperformance and failure of new restaurants, I would point to the pervasiveness of faulty restaurant business-related decision-making. Those new to the restaurant industry, understandably, often lack the tool chest of analytical decision-making tools; the frameworks and matrices required for them to most effectively navigate the perpetual storm of often conflicting, misleading, and missing information, and to plot a course that will lead them to making decisions that will yield the best outcomes in any situation.
What this book can do for you
With this book, I hope to remedy that. If you are contemplating opening your first restaurant, I want to arm you with the knowledge base and the logical, analytical, real-world restaurant decision-making skill set that will help you avoid disastrous financial wrong turns and that will dramatically increase your odds and speed of success. I hope this effort helps you to create a highly successful restaurant, one that delights your customers; provides meaningful jobs for your staff; and is financially, emotionally, and creatively rewarding for you.
How I became a restaurateur
In 2010, as the national real estate market ground to a standstill, I saw my two primary sources of income – brokering commercial real estate and teaching commercial real estate investment analysis nationally – evaporate. In my early 50s, with time on my hands, but only a humble amount of capital and no meaningful food industry experience, I decided to open a restaurant.
For me this was not a lifelong dream. One day I happened to walk by a down-at-the-heels, struggling drive-through taco stand a few blocks from my house and began reflecting on its business, or lack thereof. It hit me how out-of-step the business was with its context: a turn-of-the-century neighborhood that had been gentrified over the last 20 years. The restaurant was located near the gateway to downtown and its sizeable workforce, and was on the side of the street on which people headed to work travel, yet it didn’t even open until long after the morning rush hour subsided. What if someone were to give the building a cosmetic facelift to make its appearance more harmonious with the neighborhood? What if the business were rebranded, opened early every morning, and sold high-quality breakfast burritos and espresso drinks and maybe simple but thoughtful boxed lunches for customers to grab on their way to work?
I sought out the owner and expressed my interest in buying the business. No response. I tried a second time. After my third failed attempt, I decided to investigate other possible locations for my nascent restaurant concept.
I found several drive-through restaurant locations available, but none impressed me. Eventually, an odd building caught my eye. It housed not a restaurant, but a maid service. However, it did have abundant parking, and its zoning allowed a restaurant with a drive-through window.
The surrounding area, though, gave me pause. The site sat at the convergence of four separate neighborhoods, each with very different populations. To the north was a vacant and derelict shopping center; to the east, an area dominated by lower-income apartment renters; to the west, a neighborhood of well-kept, older, owner-occupied single-family homes and relatively high household incomes; and to the south, a hospital, a medical center, and an air force base with 23,000 employees. I wondered: could any one restaurant concept appeal to enough people from such diverse demographics to win over the critical mass of customers required to sustain it?
Up for a challenge, I purchased the property, hired an architect and contractor, converted the building into a restaurant with a drive-through window and small dining room, and six months later opened a counter-service breakfast and lunch café focused on made-from-scratch traditional Northern New Mexican-style cuisine. I named it Tia Betty Blue’s, which, linguistically, much like the food we serve, reflects a mash-up of local Hispanic and Anglo cultures.
The basic concept proved immediately popular, although there was abundant room for improvement. We spent the first two years making near-daily incremental changes in our menu items and processes, and fine-tuning our concept to better fit our customers. Business grew steadily, and to accommodate it we expanded our seating capacity almost every six months. Now in its fourth year, Tia Betty’s is thriving. The restaurant has received numerous local-favorite awards, has a fiercely loyal following, and is viewed by many as a neighborhood institution, a place to take out-of-town visitors, a place where patrons routinely scribble glowing notes of praise about the restaurant on paper napkins and slip them under the glass tabletops, where they become a permanent part of the ambiance.
Just waffles – a second restaurant
In the spring of 2014 I was approached by the owner of a cute, commercially zoned, 1920s-vintage house, located in a revitalized neighborhood full of trendy bars and hip eateries. The owner offered to remodel the building as necessary to convert it into a restaurant and proposed an interesting lease structure, one based almost entirely on the future restaurant’s gross monthly sales. The lease structure sounded great, but the only space available for a commercial kitchen and dishwashing sinks was the original residential kitchen, a closet-sized space of less than 70 square feet. Realizing that there was no way that standard commercial kitchen equipment would fit in this postage-stamp-sized kitchen, I wondered just what sort of equipment would fit. Waffle irons! The concept of La Wafflería – the word waffle with the Spanish suffix “ría” meaning a place that sells that thing – was born. La Wafflería offers a couple dozen imaginative sweet and savory waffle and sauce combinations as well as a “build your own” menu that allows for over 30,000 waffle combinations.
Since its opening La Wafflería has been extremely popular, with weekends marked by long lines, full seating capacity, and relentless demand. After six months we were able to commandeer an adjacent building to house our now much roomier kitchen and to add outdoor seating. La Wafflería continues to grow and has received numerous local favorite awards, has won several “best of” awards, and was recently featured in the Cooking Channel program Cheap Eats.
Housed in a nearly 100-year-old residence with a roaring fire in the fireplace, walls decorated with a curated collection of 1930s chrome Art Deco waffle irons, and vintage black and white waffle-themed-images, La Waff has become its own sort of neighborhood institution, popular with university students, young families, and senior citizens and seems to be on many people’s “I’ve got to show you this place!” list.
Tacos and ice cream – a third restaurant
In late 2015 I became fascinated with the street-style tacos of southern Mexico, particularly the vertical spit cooked al pastor style of taco, and spent a week in Mexico City visiting over 30 different taquerías. This led me to open my third restaurant, El Cotorro, In the summer of 2016. It employs a counter-service concept and features craft tacos and house-made Mexico-City-style ice cream, and is located in a former furniture store less than a block from La Wafflería. Many of the initial customers for El Cotorro have been the regulars at my other restaurants, have become fans of my type of restaurant, my brand, and were excited to try the latest installment.
Table of Contents
Introduction
Chapter 1. Now is the time: The dawning golden age of independent restaurants
Chapter 2. Why later in your life may be the best time to start a restaurant
Chapter 3. Is owning a restaurant right for you?
Chapter 4. How much money will it take?
Chapter 5. Capitalization: How are you going to fund your restaurant?
Chapter 6. Developing your restaurant concept
Chapter 7. Creating and pricing your menu
Chapter 8. Site Selection–finding the perfect location for your restaurant
Chapter 9. Will it be profitable? Modeling the financial viability of your potential restaurant
Chapter 10. Negotiating the Lease for Your Restaurant
Chapter 11. Negotiating a real estate purchase for your restaurant
Chapter 12. Making it yours: remodeling, equipping, furnishing, and preparing to open
Chapter 13. Sourcing: where will you obtain all your supplies from?
Chapter 14. Attracting, hiring, and keeping your ideal staff
Chapter 15. Orchestrating the Opening of Your Restaurant
Chapter 16. Marketing your restaurant creatively and cost-effectively
Chapter 17. Making Your Restaurant a Neighborhood Institution
Chapter 18. Iterative Improvements and Growth
Chapter 19. Managing Yourself
Chapter 20. Why Restaurants Fail–Five Perspectives
Your First Restaurant - An Essential Guide
Thinking of opening a restaurant? Read this book first. It may dramatically improve the odds of your success.
