Make Your Dream of Opening a Restaurant a Reality

ADVERTISEMENT

Food has always been your passion. Now you're ready to make it your career. But opening a restaurant can be a complicated affair because the food industry is not only about service but also about selling and manufacturing, says Stephen Zagor, director of the Culinary Management Program at New York City's Institute of Culinary Education. So, he asks, "How much money and aggravation are you willing to take?" If your answer is a loud "a lot," then here are some pointers from those who've whipped up winning establishments.

Determine Your Risk Level
Opening a restaurant is the most expensive way to get into the dining industry. Less expensive options include buying a franchise or purchasing an existing business. Zagor fell into the business years ago when he bought a restaurant in Texas from an owner who, it turned out, wanted to sell because of personal reasons. That became the first of many eateries the founder of Hospitality & Culinary Resources opened.
But if you're determined to build a place from the ground up, partner with someone with experience or spend some time behind a stove. Jamie Tiampo devoted two years to getting a master's in food studies at New York University, mastering cooking at the French Culinary Institute and learning about restaurant management at ICE before opening an Italian restaurant in Manhattan.

Figure Out Your Concept
If starting an establishment is your dream, then come up with a plan that spells out what your place will be. What kind of service will it offer -- full-service or casual café? What kind of diners do you want to attract? What are your hours of operation? How much do you want to make? This sounds obvious enough but actually it requires some serious sleuthing and planning.
You may want to open a casual Italian eatery, but what will make you different than the five in the neighborhood? The best way to make all these decisions is to put together the business plan yourself, says Zagor.

In some instances, the concept gets thrust on you. A sliver of a place in Manhattan's trendy West Village determined why Tiampo and his partners opened Dell'amina, which means 'soul" in Italian. Because of the space, they settled on a 45-seat Italian eatery that caters to the local residents while still providing top drawer service.

It's All About Appearances
Rent is going to be one of your biggest expenses. And it needs to be paid every month. So budget for it. Plan also for renovation costs. Bringing a space up to snuff can take a large chunk of your budget. A gut-renovation is the most expensive endeavor but your vision becomes reality.
Keep costs down by renting a space that once housed a restaurant. That way you don't have to retrofit the electrical and gas wiring so that it can handle a professional kitchen.

Be creative about décor. Instead of shelling out $250 to $350 each for chairs at a furniture store, Carlos Suarez hit the flea markets and had his design firm create a unique fabric to recover his cheap finds for Bobo, his pan-European spot in Manhattan.

In fact, don't be afraid to get your contractor and architect to help you curb expenses, recommends Suarez. "They will likely have been involved in more restaurant openings than you and will have plenty of helpful advice or contacts."

Other Costs
Besides rent, other monthly bills that need to be paid, whether you have someone walk through your doors or not, include utilities, insurance and labor. Labor takes about 30%-35% of Dell'amina's budget, but a lower service model could be only 25%. Also expect to shell out money on lawyer fees, an accountant, a public relations or marketing expert who can help you generate buzz for the opening, and perhaps even a consultant who can walk you through a town's regulatory maze.

Opening a restaurant can take well into a year, so plan, push and still be patient. "Budget a loss for the first few months," recommends Zagor. "You need a controlled opening so you're almost planning for a loss."

You will also need to plan for equipment breaking down. "A fan exhaust hood breaking down could be about $600, which could potentially eat up a week's worth of profits," says Tiampo. "General maintenance on a facility that turns over so many people every night is a lot of work. Getting the door open every day is a challenge."

So How Much Will You Need
Depending on where you're located, prices will vary. We're not talking just city to city; we're talking neighborhood to neighborhood. But experts recommend that you have about $100,000 to $500,000 in the bank in the event no one sits down to eat. This should pay for opening costs as well as give you a little breathing room to establish yourself. And most of the capital will come from friends and family.

Suarez had to mine his network of contacts because, despite his two-and-a-half years at successful restaurant operator BR Guest, he was still too much of a risk for a bank to loan him the needed capital.

 

 

Show Comments

Back to Top