It Takes a Village to Start a Restaurant and Run it
You may feel like you’re alone sometimes, but every restaurant operator needs a business team.
What does it take to start a successful restaurant? Passion, hard work and a vision, sure—but a team of advisors and contractors is what can keep it going for more than a few months.
A panel, sponsored by investment crowdfunding advisor MNstarter and attorney Stephen Cohen, took a close look at what prospective restaurateurs need to consider. The first thing to do, of course, is create a business plan.
“If you have no business plan you have no business,” said Cohen.
To help with a plan and everything else requires a team; not to hone the recipes but to help bring the brilliant risotto dish or new take on hasenpfeffer to life. It’s costly, but going it alone is impractical because of the sheer amount of work and varying skillsets required to open a restaurant.
For instance, it takes hiring someone like Mark Robinow, who is a financial analyst and consultant in the hospitality industry and longtime restaurant CFO who is all about margins. He wants the plan to have 25 percent margins before rent, all the pre-opening costs in line and sales projections and how to get there.
“The first thing you start with is sales, everything you do must support sales,” said Robinow, adding that restaurateurs often forget how critical advertising is.
His best advice: Check your ego at the door and don’t try to keep everything on your plate.
“Don't go into your business without enough money, I hear all sorts of people say, ‘I want to own all of this,’” said Robinow. “I would much rather own a small part of something that is very successful than all of something that goes under.”
Being successful also takes someone like Sara Martin, a real estate broker at Welsh Companies. A broker will help ensure exclusive territory from developers so another hasenpfeffer restaurant doesn’t come in, and getting as many tenant improvement (TI) dollars from the landlord as possible. A local expert can also help avoid those dreaded cursed retail black holes.
“What I'm trying to do is get the landlord to invest in your company, and if you can’t sell them on it, I can't get them to put in TI dollars,” said Martin.
And it pays to have a broker on the restaurant’s side who will fight things like sewer and water charges, otherwise you’ll be fighting for the landlord.
“Anyone who has ever opened a restaurant is shocked by these charges,” said Martin. “This is a massive cost. If I'm on the landlord side, you’re paying for it, if I'm on your side, they're paying for it.”
To polish it all and bring it together, a designer is key. Someone like Adam Meyer at Studio M Architects can bring the vision to life, deal with contractors and ensure that everything is going well. But don’t wait.
“I’ve had people come to me and say I start paying rent tomorrow, we got to build a restaurant,” said Meyer. “You're a year late.”
Of course the final part of that core team is a good lawyer. Someone like Cohen can help with forming the LLC, creating employment documents and helping an entrepreneur through all the legalese that goes into starting a business.
“Whatever you do, make sure you get good advice and think about these issues,” said Cohen. “Make sure you have the right people involved and make sure they're involved early in the process.”
That’s the core team. Of course, a PR firm, market research, food suppliers, influencers, the chamber of commerce and others will all likely come into play. But without legal, real estate, design and financial help, good luck!