Determining a restaurant size can be a challenge for even the most seasoned consultant and I received a tremendous amount of positive feedback on my previous post, “How to Size a Restaurant Kitchen,” but as one commenter put it, “I seem to have put the cart before the horse” on this one. Obviously first you need to know “How to Determine Restaurant Size” before you can determine your kitchen size but even though we are restaurant consultants, our expertise does lie in the restaurant kitchen design aspect so I thought it only appropriate to start there and work backwards, not to mention I need to give you something to look forward too and of course to make good on my teaser; I’m happy to share my thoughts on how you first determine the size of your restaurant.
As with just about every aspect relating to restaurant development and determining the restaurant size, there are as many opinions on what approach is best as there are ways to cook an egg. Each approach has its merits and there is a lot that can be said for a sound analytical approach, but in my experience I’ve found that as valuable as a strategic development strategy is, unless you are building out a pad site from the ground up and have complete control over everything, most times the universe just doesn’t give you exactly what you are looking for based on your perfect location scenario so your business model must be able to adapt to what is spaces are available.
Case in point… Referring back to that gourmet sandwich shop in my previous post. After speaking at length with that potential client, I could easily determine that since his business concept relied mostly on take-out business with a minimal amount of dine in service, we could safely implement the concept in a space that was between 1,000 and 1,300 square feet. Any less and he would have storage challenges and taking more would obviously be more costly to rent based on his revenue projections. Again, referring back to my previous post, he found and subsequently fell in love with a space that was 2,200 square feet. Obviously this posed several questions that needed to be addressed to qualify if the space made sense beyond “but I really like it.”
I take no pleasure in bursting someone’s bubble, but unfortunately many times just turns into my job, to be the guy who sits on your shoulder and says… “Did you think of this? How will this impact your bottom line? Did you consider this?” I told the potential client that the space he likes so much isn’t totally out of the question, he just needs to know if he can pay for it. I’m sure I sound like a broken record when I say that all things go back to the business plan, but in a case like this, it very much does. If his plan states that he expects to drive enough business to pay for a space half the size, then simply doubling your projections isn’t going to be a realistic expectation to pay for this restaurant size. Just because he’s taking a bigger space doesn’t mean there is going to be any more foot traffic walking by his front door or that the parking lot is going to suddenly grow overnight; the one thing it does mean is that most of his fixed bills will double and unless he figures out a way to make his revenue do the same, he’ll be under water in no time.
It is a situation like this where the value of a restaurant consultant really comes into play… It was pretty clear at this point that he had his heart set on the place, so my job now is to see if I can help him figure out how he can pay for that location based on his budget. I noticed that as I drove in, there were a number of pharmaceutical manufacturers and corporate buildings nearby. My experience as a the corporate chef of a medically based health club management company tells me that I know these pharmaceutical reps constantly are bringing physician offices food to soften their arrival and more easily make their pitches. Corporate offices many times have lunch meetings with traveling executives and where there are corporate offices, many times there are a decent amount of day care facilities nearby to take care of the little ones while the parents are at work. Based on these observations and my experience, I suggested that if he is truly set on the larger restaurant size, then he need should shoot for a much larger and more profitable market… Specifically, catering.
Assuming he will have a quality product, I told him he should reach out and get to know the pharmaceutical reps to foster relationships so they come pick up daily lunches to take to their physician offices. Take some free samples and a ton of coupons over to the corporate offices and give them to the receptionists and secretaries (since they usually run the place anyway) to advertise your delivered catering menu that can make office meetings more convenient. Perhaps even come up with a delivered “Party Platter” menu for parties and take them to the day care centers. If the parents working in those corporate offices enjoy your food there, it isn’t a big leap that they may have you cater their kid’s parties or social events if they know you offer it.
The moral of the story here is that at the end of the day, yes, you do need to have a good idea of how big your ideal restaurant size would be (another next post teaser!) but more likely, you will need to have the flexibility in your business model to fit the space available instead of waiting to find a space that fits you. Otherwise, you could be searching for your dream for a very, very, very long time.
We’ve helped develop dozens of business plans with clients over the years, and know how daunting of a task it can be when you are starting from scratch. We always recommend using a software platform to make things easier after you’ve completed your food cost analysis, using our Free Food Cost Calculator. Palo Alto Software has several programs to help entrepreneurs develop their business, sales and marketing plans. We encourage all of our clients to use since it makes life so much easier, theirs and ours! We’ve placed some links below to their software that you can view by clicking the banner.