Been reading everything i can, but still full of questions!

Been stalking the forums for awhile now, but still full of questions and would love some help!

About Me:
Ok guys so ive been reading everything I can on these forums for awhile now, including just about every post on the FAQ list. I am in the process of opening a pizza restaurant. We will be a small dine-in/carry out restaurant with a fairly limited menu that will consist mainly of gourmet pizzas, creative salads with dressings made in-house, and a great wine selection with a trendy/upscale atmosphere. I am currently working on the business plan, but have made good progress. I personally have management experience, but limited restaurant experience (no pizzeria experience), so I am also in the process of finding a job at a pizza restaurant to start learning the ins and outs for the next few months. I have lots of questions below, and figured it would be better to just place them all in one post rather than flooding the forums.

My Location:
As far as my location goes, this is where I start to have a few questions. The location in particular that is secured is in a stripmall in an upscale area (strip malls are very common here). While I would have preferred a more high traffic location (directly off of the major road/highway but not visable actuallyfrom the road), I do have no rent expense as my partner owns the mall. The downside for me is that it is just white wall and will need a full build out (minus bathrooms which are already in place). Squarefootage is about 1700-1800 square feet, which doesn’t include the space for the walk in cooler(will be installed off the back). I would LOVE to be able to seat around 60, but I know that might be pushing it depending on what the actual kitchen size comes out to be.

Current Equipment Needed List:
Double Deck Oven
Mixer
Walk-in Fridge
Refrigerated Pizza Prep Table
Refrigerated Salad Prep Table
Smallwares( still need to make a breakdown)
Ice Maker
POS System
Phone System
Glassware
Tables
Chairs
Booths
3 piece sink
Dishwasher?
Storage Shelving
Soda Fountain
3-4 Keg Kegerator
Wine Cooler/Fridge
Safe
Computer
Security System

Other Start up Costs:
Architect
Menus/Flyers
Opening Advertisement
Food Supplies
Training Pay
Uniforms
Insurance
Buildout/Pluming/Electrical
HVAC
Permits
Wine Inventory

Questions:

  1. Does anyone have a rough estimate on what the potential buildout costs to bring it up to code for a restaurant of this size? Only thing that is already there is bathrooms and gas line.
  2. As with everyone, money is always tight. From your experiences, what are the best places to cut costs and which places should costs not be cut? (I am currently planning on trying to get all equipment I can used, are there any pieces you would advise against going used?)
  3. One thing ive been trying to find for reference purposes later so I don’t forget anything is an actual list of smallwares. Does anyone have anything similar from when they opened?
  4. Any suggestions for the best way to go about designing the restaurant layout? And does seating 60 as a rough number sound reasonable?
  5. I have been trying to compile a COMPLETE equipment needed list followed by other opening expenses so I can be more prepared for the budgeting of these items. Are there any major things you guys see missing?
  6. I am still compiling my numbers on what I think it will cost to start and then going to figure out if it will work with my ideal budget, but would love to hear what you guys think it would cost to start my planned venture.

I know I’ve asked a lot, but I REALLY DO appreciate any and all advice you guys can give!

I’ll start you off here order this catalog http://www.centralrestaurant.com/ I am not advocating to buy anything from it or not to buy anything from them, but they have a lot of items that will give you a benchmark on what they cost new.
also on your list you don’t have signs.

Where are you building this? Do you have a theme in mind?

I agree that you should get a feel for what equipment costs new, I had a lot of good experiences with C Kitchens when I was in the bar business several years ago. Then figure out what you want new and what you want used and start browsing craigslist regularly so you have an idea what used items are selling for.

The fact that you have your rent under control (very under control) is great, but rent can easily be overshadowed by other expenses like payroll, inventory, bank fees, marketing, credit card fees…just to name a few. With that said…your rent situation is admired by all.

Location is just about everything…there are plenty of mediocre restaurants that thrive due their visibility and/or ease of access. For those of us that have rent…I’ve heard that paying 10% more in rent for a better location can increase one’s sales by 50%. Pretty easy math.

Fortunately you have restrooms already…that can be a minimum of $6000 per restroom to build.

Does you location have a grease trap? Most communities have adopted the international plumbing code which requires a minimum 500 gallon grease trap for business that use cooking oil or animal fats. Installation of a grease trap can exceed $15,000.

Same as above for vent hoods…plan on $2000 per linear foot (ie…10ft hood including installation will run you about $20,000.)

And don’t forget floor drains…these too are expensive to install due to need to cut concrete floor.

You did mention HVAC…plan for 1ton of AC per 200sq ft of space.

Sorry for such a long post…

seaplus

Hi,
I opened a year ago, delivery-take out-dine in, 2000 square feet in a strip mall. I will give you some quick numbers and can get more specific if you like. My landlord did the build out with 2 bathrooms and he spent $130,000. I installed the hood and equipment. Hood was around $14000 for a 12 ft hood. Building dept. gave me a hassle and made me oversize it, which I am now glad they did. I have bakers pride deck oven y600 and a smaller wolf oven. Bought the hood from an ebay store that I highly recommend and had it installed by my hvac guys. I started with about $150000 and after the build out and 6 months operation had spent it all. We are good now, but I can’t stress to you how fast the money goes. If you don’t have pizza making experience, get it. As the “manager” you need to know how to make your product better than anyone you hire. I have been most surprised by how hard it is to teach people to throw dough and load the pizza in the oven properly. It is not an entry level cooking job. Since you list a deck oven, I assume you plan to do the same style of pizza. Also, rent is such a small number compared my food cost and labor.

That is my two cents.

Estimate how much each area of the build will cost. Framing = $xx Electrical = $xx Plumbing = $xx. Go through everything a few times so you don’t miss anything. Add everything up. And then double that figure.

Re: Been reading everything i can, but still full of questio

Hey something to take into account about the restrooms. You say you have them in place…but what was the location previously? A retail clothing store might only require a single stall m or f restroom while seating for 60…based on a 30/30 split…then they add in your staff and give you a capacity of say 75-80 and now you are looking at larger 2 or 3 stall restrooms. I went through this with a restaurant venture back in 2003. The space was only about 3200 sq ft but by the time we had added two emergency exits and two very large restrooms we lost over 20% of our kitchen and about 10% of our dining area. It’s the hallways that killed us. ADA compliant but this local building inspector was crazy. I could have driven a golf cart in the hall that he wanted and the turn around area for wheelchair users. Now don’t get me wrong…I shattered my ankle in 2000 and spent 8 months in a wheelchair… so I would be the first to say make sure you build it big enough…just don’t get a last minute shock by thinking you have restrooms and then find out you really don’t have what you need. The other thing I would highly advise is build out costs vary way too much to get any numbers that will hold true for you. There are just too many variables that we do not know and you probably have not thought of yet either. You have the property… talk to a local foodservice provider that also sells equipment. Most offer layout help and will send out a rep to talk and help you plan the kitchen and dining at no cost to you. This will fill in a lot of the blanks even if you do not go with them for the equipment or build. Also bring in an electrian and plumber/hvac guy to that meeting and let them brainstorm for you. This is what they do. This is their estimate. Let them see the problems together and having them there will save you a lot in the long run. The other person to ask to attend this little meeting is the building inspector / health inspector… if you can get everyone on board it works great. Make an afternoon…start with the layout guy and ask him to give you the day if they would…and bring in the others as the day progresses. They will also appreciate that you are getting them working together so they do not step on each others toes later in the process. Good luck. - Michael

Re: Been reading everything i can, but still full of questio

Penelope and Indie, thank you for suggesting ordering the central restaurant catalog to have on hand as a benchmark, put in the request today for one.

Seaplus, thanks for the starting point for HVAC size, I didn’t even know where to begin on that. I am not sure on the grease trap so that is something that is now added to my list of things that I need to get more info on.
And I do believe the restrooms are already ADA size compliant but that is also something else that I will be double checking on as well.

Also, as I am working through my business plan at the moment, I was curious as to what kind of percentage you guys are running into for food cost and prime cost? I have been reading that 55-60% is the max you want to shoot for in this industry for prime costs but am curious as to if this is what you guys are seeing in the real world?

Once again, thank you everyone for your quick responses, and if there is ANY advice you have on any part of starting in this industry please feel free to share!

Re: Been reading everything i can, but still full of questio

I think the basic restaurant formula is that you want 30% food costs, 30% labor and 30% operating costs and (hopefully) have 10% to take home. Your operating costs will be quite a bit less than that since you don’t have any rent/mortgage.

I’ve found a bit of a sweet spot in sales where my labor is hitting 20-25% and my food costs are down around 25% because I’m just busy enough to keep everyone busy but not overworked, but they’re a seasoned staff so mistakes and waste are also minimal (along with low produce and flour costs right now).

Re: Been reading everything i can, but still full of questio

Some times free rent is not worth what you pay for it…

It will obviously cost you way more money to open in a new space versus an existing space…Just to play devil’s advocate for a minute, what if you can not make ends meet even with free rent…And you try to “unload”…Is your partner going to extend free rent to the “bargain hunter” that comes along to take the problem off your hands?..Or will you have to sell all your leasehold improvements for pennies on the dollar so the next guy can pay market rent and still be viable?..

I had a conversation with a client that is looking to add another location and he is currently offering about 40% of the asking price for some that he has found…Now most folks run him off but it appear he has a couple that are getting desperate even for a “fire sale”…Despite the free rent, you might be farther ahead if you find a “fire sale” elsewhere…

Re: Been reading everything i can, but still full of questio

I’ve purchased from Central before but will also toss Serv-U into the ring. I rarely find any of the national catalog competitors that have a better price on the items I’ve picked up from Serv-U.

Re: Been reading everything i can, but still full of questio

Something I see missing on you list is equipment for an office such as desk, office chair, fax, office printer etc.