18 Things (Out of 892) You Better F***ing Consider If You're Opening A Brick & Mortar Restaurant
By Best Served Creative Team
Read Time: 12 min
“It’s harder, takes longer and costs more money than you think.
If you think this doesn’t apply to you, you’re already losing money...”
- Jensen Cummings
You are considering embarking on one of the most exciting and terrifying ventures anybody can undertake. You are starting your own business. Not just any business, a restaurant (really, any venture in the food and beverage world, for that matter) which is an incredibly personal journey. We celebrate you with both unwavering support and adoration, as well as tales of caution and experience. The following 18 pieces of insight for opening your new restaurant are broken into five subsections covering: Brand Messaging, Analysis & Communication, Financial Planning, Real Estate, and Content Marketing.
Take 12 minutes of your day to read this now, or you can download the pdf version for later, or better yet, do both! You can also find our 18 Things videocast episode here.
Customers and Employees Need To Care About Who You Are
Your restaurant is so much more than just what goes on the plate. Far too often we “self-commoditize” our value by making our offerings transactional, conditioning our customers to judge us exclusively on price. That’s a dangerous race to the bottom. To overcome this industry trend, to attract guests and restaurant workers it will take very strong core messaging and a deeper understanding for your audience.
1.MVA (Mission, Values, About) - This process starts with a unique and personal expression of your Mission, Core Values, and About Story that clearly demonstrates what you believe in, so that your employees and customers will believe in you and your business. Don’t phone it in on these brand story elements with a bunch of empty words that sound “on trend” and buzz worthy. This needs to be a personal journey to find, “the thing behind the thing that’s the real thing.” This isn’t some corporate double talk bullshit. This is the foundation of who you are and why you do what you do. It deserves your time, attention, and thoughtful writing.
2. Customer Archetypes - Once you know exactly who you are through your messaging, it’s time to seek an understanding of your key customers. Can you identify your top three to five customer archetypes? 80% of your sales come from them. You need to know who is buying your product, when & why they are buying it, and where, when, & how to reach your audience. Don’t assume you know anything about your potential customer; just because you imagine having great food, drink, and service somehow automatically brings meaning to their lives, it doesn’t. You have to know how you fit into their lives because you actually give a shit about them. Spend the time to learn what makes them tick and what will motivate them to buy from you.
3. Hiring Posts - It’s become quite obvious that restaurants having a job opening means exactly nothing to our restaurant workers. So, how do we take our newfound approach to core messaging and apply that to the restaurant hiring process to attract talent? We start by addressing our past failures in this process. You know the type of posts we’re talking about….“Hiring line cooks, $14/HR, HMU,” and the like. It’s simply not good enough. We have to do much better. You need to be marketing to attract restaurant employees just like you do to get customers for your restaurant. Why should they work for you? What do you believe in? Who will they be working with? Remember, the food is just the proof that you are who you say you are.
4. Menu Message - Finally, your new superpower - storytelling - gets applied to your menu. Your menu needs to say something about the unique experience that awaits anybody willing to spend a dollar of their hard-earned money with you. People are moved and compelled by great stories. Always have been, always will be. If you can’t write a 250 word “article” about each menu item, why the hell is it on your menu? You’re just hype-chasing. What does your menu say about you?
Prior Proper Planning Prevents Piss Poor Performance. It’s Obnoxious. It’s Also True.
Now that you know how to express who you are and why you do what you do, let’s talk about making a plan. As restaurant professionals, we are exceptional at being in the moment and reacting to the needs of the guest at every step of service. We are tacticians able to overcome any challenge thrown at us as we navigate a service. This ability does leave us very vulnerable, though, to getting stuck in the moment and never taking a step back to look at the big picture - to analyze, develop, and set long term plans. Here are four elements successful businesses implement everyday that most of us in restaurants have never even considered.
5. SWOT - There are so many steps to opening a restaurant. So many resources, education and knowledge required to opening a restaurant. So many processes to evaluate and manage. Before you get into the weeds you need to take some time to reflect on what it will take to accomplish your goal, of opening a restaurant. This starts with our ability to admit we have a problem, and adopt processes to address our strengths, weaknesses, opportunities, and threats (SWOT).
This is an analysis framework used to evaluate a company's competitive position and works to assess internal and external factors, as well as current and future potential. A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization, initiatives, or relative position in its industry. The organization needs to keep the analysis accurate by avoiding preconceived beliefs or gray areas and instead focusing on real-life contexts. Not an easy task when there is such deeply personal and emotional attachment to our “baby.”
6. Action Plan - You know that to get your station set, to be ready for a strong service, you have to get your prep list together to be able to dial in your Mise en Place and execute your recipes. Why don’t we do the same for the business as a whole? Ever considered a 90-Day plan, a One-Year plan, or a Three-Year plan? Most successful operations do. We must start to use that level of focus and detail. We must play to our strengths, putting the same focus we put into the success of a service or the satisfaction of our guests into the health of the business.
7. Team Intel Sharing - I don’t need to tell you how quickly the line can go down when communication falls apart. Partial tickets are hitting the window, misfires, refires, incorrect cook temps, and on and on. Only because we didn’t communicate the way we know how, the way that is required for a flawless service. We train so much, build so many systems, redundancies, checks and balances to account for this vulnerability.
We don’t do that when it comes to most other communications within our teams. This is most apparent when we are first opening our businesses. Jensen already said, “It’s harder, takes longer, and costs more money….” You guessed it; communication breakdowns are a major contributing factor. How are you managing email threads, document sharing and storage, team messaging, vendor expectations, compliance needs, etc.? You better have a very specific and actionable answer.
8. Business Inside The Business - Your restaurant will NOT open on time! Full Stop! You quit your job to go all-in on this project. Then you hit a roadblock, a change order, an “unforeseen” delay, hidden costs. Welcome to the club! Now you hire a few members of your leadership team, giving them a little side work so as not to take them on full time yet. Then you're “guaranteed” that now is the time, you’re getting the final “blah blah,” and you will be able to get open. Money is running out. You start cutting corners, yet now you imagine the finish line (which is actually just the starting line) is in sight. You ask that leadership team to put in their notice. And monkey wrench! We could list 100 scenarios, one of which will always play out. Two more months go by; the emotional roller coaster is unbearable. The money's gone and often you have to scrape together more cash from some deep dark hole.
What if for those two months, and the three months prior, you could have been building your brand and generating a little bit of revenue? That’s where finding the business within the business comes into play. Is it a commissary with which you can do pop-ups, catering, farmers markets, etc.? Is it e-commerce to sell products direct-to-consumer? Whatever it is, don’t sleep on the inevitable need for this and its ability to lay some groundwork and brand equity for your up coming brick n mortar business.
It’s Your Money. What’s Your Plan? How Restaurant Numbers Have Changed
Now that you have a plan, let’s take care of your money. Most of us got into the restaurant industry because we didn’t want the 9 to 5, the cubicle, the corporate job. We found something different and exhilarating in being able to create food, beverage, and hospitality memories for people. So any time we have to think about the “NUMBERS,” we rebel against it with every fiber of our being. And it’s trapped us in a vicious loop of never being able to invest in ourselves, our teams, and our businesses. We are always in survival mode. Below are four financial considerations that might help shift your approach.
9. Forecasting - Flat line revenue forecasting is a short path to failure. The ability to anticipate the needs of your customers, the way they will spend money, and how to motivate them to spend more cannot be overstated. It’s mission critical!! This is all guess work. There is no doubt about that. So, you better get world-class at the guessing game.
If you aren’t getting granular from the month to the week to the day to the hour, you are just sitting around hoping that the sales come in. That is a really bad business model.
You need to know the numbers! What items will be sold, at what time of day, with any add-ons/options, and most importantly, which customer archetype is buying them to accurately forecast revenue.
If you’ve never run a 100 Covers Analysis (or similar forecasting process), it’s highly recommended!
10. Menu Pricing - If you are still accounting for menu item pricing by 3.5X Cost, you are doing it wrong. Menu Pricing is a function of your audience, your market, and what they will bear for your menu items. Set your price and reverse engineer the cost. If your market and your key customers will pay $18 for your (insert target dish here), and you charge $19, you’ll lose sales opportunities and if you charge $17, you’re leaving money on the table. If you average selling 120 a week, 6,240 a year, well the math of lost revenue is easy. The reality of that math across your full menu is a hard pill to swallow.
11. Flex Budget - If you don’t have a Flex Budget that allows you to change course quickly, you won’t be able to use capital when you are running rich and tighten up when you are lean.
For example, with this approach, even with a small windfall of $248 - which is then activated towards a marketing channel you’ve identified - this action becomes net positive for the business. Don't leave that money on the sidelines when you know it will help fuel the business 4X over.
In today’s landscape, like it or not, 80% of your business is actually marketing. Great food, drink, and service is the barrier for entry, the cost of doing business - if you are spending 5% or less of revenue on marketing, 2016 called, and…
12. Investing in People - Have you started a third (or fourth) bank account? You’ll need your main ops account, one for taxes, yet another for your Restaurant Employee Investment Model. Set them and don’t touch them, not even for all the unforeseen costs that inevitably arise. Now it’s time to recognize your people as your most valuable asset - so have you funded that account based on your investment in your people?
You must have the proper model for Wages | Benefits | Culture | Education to have any chance in this business, or you’ll be churning through the high cost of turnover and never dig out of it. This is what we call Workplaces Worth Working.
Get on MIT’s Living Wage Calculator to understand your market, because paying living wages, not minimum wages is just the starting point.
Annual full-service restaurant turnover has jumped from 73% in 2019 to 105% in 2021 (worse yet 150% for limited-service restaurants). At about $6000 per employee with a base of 50 employees, that cost is $318,000 per year in hard and soft costs for turnover per year.
“Location Location Location” Doesn’t Mean What It Used To. Tips On How To Pick Your Space
So you’ve got a better foundation of owning your numbers, next it’s time to get into the right brick n mortar location. If you’re already scouting locations and haven’t completed the steps above, STOP. This is one of the major mistakes we have made time and again as an industry; get your Restaurant Opening Order Of Operations (aka RO4) process dialed; thinking that once we’ve decided we are going to start our dream restaurant, the next step is to find that perfect location. Don’t fall into that restaurant real estate trap. The location should be an extension of your concept and the above steps (and many more steps) come before you're too far gone and signing a lease. Once you are ready to find the right space, here are three things you better be thinking about.
13. Size & Scope of Space - 5,500 square foot restaurants are dead; the math just doesn't add up for spaces bigger than 2,800 square feet for most concepts. Ideally 2,200 sq ft. (with a walk-up window and easy access for carryout and delivery) is emerging as the sweet spot for a brick & mortar footprint.
Our on-demand world is not limited to streaming services. It includes how Americans acquire and consume food as well. Delivery revenue is projected to boom from the current $35 Billion to over $365 Billion by 2030.
14. Capitalization - When asked, “how much money will I need to start my concept," the answer is always the same…More money! Get all the money you can. Way more than you “need.” Go after SBA, Grants, TIA (Tenant Improvement Allowance), equity-based crowd funding, and any loans (with good terms) that you can acquire. Being under-capitalized is one of the top reasons new restaurants fold. Before you open is the time when you need to fill the coffers. Too many businesses try to shoestring it and run out of funds. When you are months away from opening or months into opening and you are down to zero, trying to scramble to get more money is a much harder proposition. Nobody wants to give you money when you didn’t plan appropriately and are desperate. And we see that scenario far too often. Rather, having the capital that you don’t end up needing, is a recipe for the health of the business, as well as your own mental and physical health.
For a new build, you need at least $250/sq ft – if not $300/sq ft for construction (not including equipment, small wares, etc.), for a second-generation space, you still need to budget $160/sq ft for build out and even a “turnkey” property (which is a bullshit term by the way, don’t get tricked by it) requires a budget of $90/sq ft. This means the bare minimum is $550K for a new build, $352K for a 2nd generation space, and $198K for a turnkey.
You haven’t even bought your china, glass, and silver, let alone opening inventory.
And after all that, you still need three months of runway funds in the bank …or be prepared to close in four months.
15. Occupancy Cost - If your occupancy cost is over 7% of revenue, be prepared to negotiate your base rent per square foot, your NNN, TIA, and a force majeure clause - EVERYTHING in your lease is negotiable, which is why you need your landlord-tenant attorney involved before you start your LOI. If you don’t, you are stepping over dollars to save pennies - and you will pay far more in the long run.
If You Build It, They Will Come Is Horrible Marketing Advice. Here Is Why
You’ve done it. You’re ready to open your brick and mortar restaurant. You’ve gotten through all the 892 steps and then some, and the fifteen steps above have guided you along the way. Remember, that getting open isn’t the finish line. It’s just the starting gate. You’re going to need to attract both customers and employees for your restaurant to cultivate the success. We call this a Whole House Marketing approach.
Like it or not, restaurant marketing has become the name of the game. With increased competition, chains ripping off creative offerings faster than ever, and social media dominating the customer attention span, things have changed and we must as well. Here are three areas of content, engagement, and customer interaction you’ll need to master in this next evolution of restaurant marketing.
16. Content - Capture over create! Focus on the story, not perfect content. Every single day that your business is open, you need to put out at least one meaningful piece of content. Not just a pic of a finished dish, with no depth, basically saying, “come buy my shit.” There is too much white noise and customers expect more.
Tik Tok - Short-form video will be more important to restaurants than photography. It’s clear Tik Tok (which surpassed Google as the most visited site on the entire internet) is the most important platform for the near future of social media marketing and engagement. Imagine if you had gone all in on Facebook in 2009 and Instagram in 2011.
What if you had grown massive audiences before those platforms became pay to play? Now you barely get the reach that was previously possible for free, and you have to run ads and boost posts to get any traction. Tik Tok is quickly evolving from “kids doing silly dances and lip syncing,” just like Facebook evolved from college kids’ dating status and Instagram evolved beyond just photographers' portfolios. Restaurant Tik Tok is no joke. Don’t miss out!
17. Engagement - Get to know these numbers: “8-2-1-8.” These are your Rules of Engagement. To stay relevant and top of mind with your audience, every month on social media you must commit to Liking 800 posts, Following 200 accounts, Commenting on 100 posts, and Tagging 8 new accounts you believe your content brings value to and you want to bring into your audience. This work will amplify your ability to reach your audience exponentially. This is one of the greatest tools your business has.
18. Website - If your website is not mobile first, you are losing customers. The overwhelming majority of restaurant searches are done on the mobile phone. We need to rethink the way we’ve historically organized our menus. No more “Z” or “F” pattern composition. Your online menu must be seamlessly integrated into a single stack for vertical scroll. Your top 5 menu items must be at the top, because no one is scrolling down to item number 14. For the love of everything, you better not have a damn pdf menu on your site!
What’s Next?
If you’ve made it this far and are willing to follow the guidance above, you have a real chance to bring your dream restaurant to life and have the type of business you want (and deserve). It’s simple; it’s not easy. Nothing that will lead to your success ever will be. You are so good at the tangible aspects of the food, beverage, and hospitality. It’s time to get really good at the things that allow you to do what you love.
We’ve been there as restaurant owners ourselves and as restaurant consultants on dozens and dozens of businesses just like yours. We’ve seen great successes and epic failures. You are about to go through an emotional roller coaster where you will doubt everything you know and believe in, even though you have extensive experience and have always trusted yourself. Because now, there is no buffer, no safety net, it’s just you, your decisions, and your money on the line.
Be sure to surround yourself with people who will challenge you, who will level you up, and who balance out your weaknesses. We hope to be on that short list. You can always get all that free content we drop every week from videocasts to podcasts to articles and more (hit all those links below) or drop us an email to let us know about your project. You can also catch 18 minutes of complimentary advice on a call with us (18 minutes to Figure out your 18 Things). We are always looking for great projects to support, and for great stories to feature on our media channels to amplify the worth and work of those who feed their community!
Now that you’ve come this far, download the pdf version to reference again later. You can also find our 18 Things videocast episode here.
Best Served Creative is a creative agency and consulting firm specializing in opening new restaurants, workplace culture, as well as Media, Messaging and Marketing. We are a crew of storytellers and change makers who exist to amplify the worth and work of those who feed their community. We strive to usher in new business models and a landscape where people at every level, in every facet can speak their truth and be heard.
