Sep 24, 2017

Opening restaurants is food for entrepreneurs’ souls

Opening new restaurants is an exciting undertaking. From the first glint of an idea to the eventual launch, the journey is packed with risks and opportunities.

It starts with the concept and the team. What sort of cuisine will this restaurant serve? What will the menu look like? Are there signature dishes? How will it be distinctive? What drinks will be offered? What will a meal cost? Why will people come? What about the decor? And the environment you want to generate? And who will cook the food and serve it? Who are the key partners in this grand enterprise? How will administration be handled?

A business plan should be prepared, outlining why the restaurant will succeed, who its customers will be, and why they will come back again and again. How will you market this wonderful new establishment?

Who will be the suppliers? You need to estimate the staffing required and the cost of ingredients, assess pricing carefully and calculate the likely patterns of trade during the day, the week and the seasons.

How much space is needed to execute this plan? What equipment does the kitchen need? How many seats are required — and what table turn — to deliver success?

Then comes a location. You find an empty shop or an existing restaurant, or perhaps a new development, either via an agent or directly from a landlord. Next you carry out an analysis of the area, gauging the competition, judging the local market and probable demand. Meanwhile, you consider the structure of the building — the architecture, the design, the planning — and the possible cost of the project. Then negotiations over a lease begin — the length, the rent, and any possible incentive or premium.

Later a budget is produced, and then a thorough appraisal of the economics of the venture, including a timetable. All the costs are compiled — the construction bill, the fees, the equipment, the various services. And finally an assessment is made of the trading potential.

From this calculation you derive a final investment figure and a projected return. Only if this makes financial sense can you proceed to commit to a 10, 15 or 20-year lease, to planning and licensing applications, to a contract with a builder and specialist suppliers.

Once all the legalities have been completed and permissions received, then comes the three-week, or ten-week, or six-month building project. You hope the scheme comes in on time and on budget — but, sadly, unexpected problems frequently arise and so delays and extra costs are incurred.

Eventually the day dawns when the work is finished, and out of a vacant shell arises a fabulous new venue.

The furniture arrives, the crockery and cutlery. The chefs test out the kitchen. Last comes the opening: the first patrons are welcomed, the room is suddenly humming with people, and the premises buzz with the chatter of happy guests, while immaculate waiters ferry delicious plates of food to the tables.

This summer I have been involved with opening about 10 new restaurants, bars and cafes all over the country. Some have been instant hits, others have started more slowly. It may be that not all will work: no matter how many such outlets you have opened — and I have been involved in more than 500 during the past 25 years — you get some sites wrong. Perhaps it is the manager, or the intensity of competition, or that you simply misjudged local demand.

Currently, conditions in the restaurant and pub sector are not easy: climbing labour costs, the rates revaluation, rising rents, fierce competition, ingredient inflation, full employment, cautious consumers. It is easily the toughest economic climate for a decade or more. Yet it remains a huge industry, worth perhaps £75bn a year, with 125,000 licensed premises — and the financial rewards for a strong offering can still be attractive.

Amazingly, this September in London will see a record number of 75 restaurant openings — a testament to the confidence and optimism of Britain’s restaurateurs.

And, when it goes well, there is nothing I like more than helping to create a new restaurant and provide hospitality for guests. After all, sharing a meal with friends and family is one of the great joys of life; for many, their happiest moments are celebrating such occasions. Going out to restaurants, bars and cafes has become a dominant part of our culture — more perhaps even than entertainment such as music or film.

Furnishing good food and drink, stimulating great conversation, affording a convivial atmosphere — while also making a living. What could be better?