Ideal Size for of Place??

I'm thinking of a better answer, but two thoughts come to mind:

1) $2100 is expensive, especially if it's triple net with taxes and things added on top, plus shared maintainance of common areas. Something around $1600+/- would be more in line with national averages. But location is everything and I have no knowledge of your particular area.

2) "Partner problems" is a nice way of saying they weren't making money. Better have a real good understanding of why that was before you follow in their footsteps.

Okay, 3 thoughts: Hire 4 part time employees if you do this thing. You'll fire 1-2 right away, but you'll need the other two to fill in, and also do the jobs that seem like fun at first but soon start to make you go crazy. High school kids would work fine if you can get good ones. Having at least one adult that can close for you is one of the greatest blessings a restaurant owner ever gets. Find one of those if you can. But I would allow for $15 an hour for labor in all budget estimates to allow for 2 min wage helpers.

I figure that lossing money is the truth, but that is where the lower rent comes into play. They are asking 24 sq NNN, but there is no way that will work. I figure around the area, the new going is about 15 sq nnn, so that will put it around 23 sq all in.

I love the comment of hire 4, casue you will fire 2 right away.

Please keep it coming and keep me in check.

Thanks

David

I'm not a BBQ professional, but I ran quick serve restaurants for nearly 30 years. Most of these were $120,000/month or better. Average bottom line profits were 14-21%. Rents of $5k-$16k per month.
This said $2100 isn't a lot for rent, but you need the top line sales to bring it off.
Look at your fixed costs(rent, utilities, insurance...They're the same busy or not.
Next food, paper, waste, labor...(all the things you can control).
Then determine just how much you need to sell to pay for these AND have bottom line funds to bank for a rainy day.
Too many restaurants start too small to generate the sales they need to survive and prosper. It's not just controlling costs, it's generating sales and creating a business that you could sell later or even franchise.
Well, I'm yammering.
Best wishes, think a bit bigger.

Thanks for the help russ,

14-20% is higher than I anticipated for the profit margin. I understand that turn is the most important (ok, second behind quality) in the business.

What type of food and what size of place were you moving that type of volume. Cause, in a small 40 person place it is going to be tough to turn enough 10 dollar tickets to pull 4000 - 5000 a day.

Maybe I am thinking too small, but I was going venture in smaller and if it works, grow.

Capital, I am looking to set 50k aside for household items. That would leave around 75k for the build out, equipment and working cap. I think the TI's would run 10k, equipment around 20k, 10k for supplies and 35k for working cap.

Please feel free to question my assumptions, as I am everyday.

Thanks again for the help

Toys...

14-20% profit is way out of line for the operation you are talking about...keep yourself grounded at the 4-5% mark...but that can, and probably will, take years to get to...

One question you need to ask yourself is how your kitchen will be set-up and run...what will it take to create the plate you envision?...what will your menu consist of? After you create a menu, ask yourself how orders will be taken and how will that be communicated to the kitchen? If you have 10 people in line, a full dining room, several dirty tables...get were I'm going? Right there you have at least 2 more needed besides you and your wife for lunch as well as dinner rushes...

Will you be open 7 days a week? Then you have to worry about overtime or working employees 6-7 days a week, which they won't like... probably quit on you leaving you hiring and training more than you want. Will you and your wife work open to close every day? That will get old real quick...quality control will become hard to control...

Depending on a few things, you may need to hire 7-8 part-time employees....

I count 125,000 for start-up...again, this depends on what your menu consist...this in turn will allow you to know what equipment you need to make your menu happen...will you need to do construction to allow your menu to work i.e. gas lines, b-rooms, etc...

Don't arrive at an arbitrary number and think it will work...your menu and place of business will dictate what your start-up NEEDS to be, NOT WHAT YOU THINK IT SHOULD BE...

Running a restaurant is more than knowing how to cook good food (although it helps)...internal numbers make a restaurant happen or die...food cost, labor control, utilities, advertising, marketing...these are the tip of the iceberg in the business...

Start off slow in your planning. Make it be a wise and informed business venture for you. Don't jump in because you like to BBQ.

Food for thought...

SmokinBuckeye
www.kisersbbqshack.com

SmokinBurckeye,

That is exactly the info I am trying to understand. I see Russ, one post and giving numbers that seem out of line for the financial I have seen. Maybe he is right, but seems high and based on a 10 dollar ticket, I would have to turn the place 10 times to see that type of volume.

I am also looking to work in a BBQ place, (for free if necessary) to get the ropes down. Better to cost me some of my time, that 200k later.

I am wading in very slowly riht ow, heck I am not that close to the water. I want to make sure that I position myself for potential success, not certain failure.

Please keep them coming.

David

Don't ask me where this number came from, but it has proven to be an accurate ROUGH estimate number to work with. You should project $500-600 in annual sales per square foot of restaurant space. Higher rent and labor markets skew up, lower rent and labor markets skew down.

Based on that and 1300sqft, you'll need $650K-780K annual sales, or ~$55-65K per month. Based on a $10 check average, you'll need to serve 185-215 people per day, 7 days a week. If you were in Atlanta, I'd say it is possible that you could turn each seat 4-5 times a day, but with a small market like yours, it will be tough.

Bear in mind you can/would make up some of it with catering, but then you'd need more employees too.

Not un-doable, but you need to give it a lot of thought and feel real secure with your projections. In all honesty, if I were you looking down the road a year and I couldn't see with a high level of confidence doing $85-100K per month, I'd likely look for a better location.

Just something else to consider: marketing.

Do you have good resources to market your venture? Without a good/affordable method to advertise initially, and perhaps longer, you won't get the word out fast enough to survive. I'd worry about a marketing program almost before any other obstacles at this time.

Personally delivered samples to local business' starting two weeks prior to opening is a good start. You should be able to produce a BBQ sandwich for under $1, and giving out a couple of thousand well placed sandwiches could be the best ad money you'll ever spend.

Sponsoring a drive time radio show and taking the hosts samples is not a bad idea so they can talk you up on air, especially if you can do it 2-3 times the week you open. One day brisket, one day pork, one day ribs, with the host all the while saying how they could eat like this every day.

Getting a piece on local news done as a community interest story is great and free if you can find an angle. Are you a vet by any chance? "Returning vet opens BBQ restaurant" would be a sure bet for most stations. Free newspapers will run similar stories for free or run story look-a-like ads pretty cheap. If you are a true character, or can act like one, spreading the word that your smoker operates off of alien technology you stole from Area 51 might just get you on air. Just make sure people know it's tongue in cheek or they'll lock you up for 72 hours.

Ads in local church bulletins can help you target a loyal crowd, and maybe even a hungry after church eatin' crowd if your church going folks out there tolerate working on Sundays.

Targeting just Anthem with news paper inserts of your menu might be a good option since the Wiki on Anthem makes it sound like one big gated community 35 miles from Phoenix. People in such isolation might pay more attention to a new dining option.

Looking at a map, if your location is reasonably close to I-17 you'll want hwy signage for sure. And if there is anything of interest in Anthem, you could do a joint ad run with another business for print, radio, or billboard. I live about a mile off of I-40. I could jump on the hwy and come out there to help and only make about 3 turns, but it's the 2,199 miles between turns 2 and 3 that would be killer.

Traditional wisdom is that it takes several months to find a following. IMO traditional wisdom is dead wrong. Most successful restaurants turned a profit from week one. Most restaurants that took 90+ days to turn a profit didn't make it to a year. Pretty harsh, but accurate. You have to hit the ground running and then just keep going as hard as you can for as long as you can.

EDIT: Also, Russ' numbers were correct for corporate fast food. They typically run 20-24% food costs, relatively low wages, and their rents can be whacky because of different types of ownership or bulk leasing through developers. If Wendy's hits a developer in the SW and agrees to take 200 out parcels off their hands over the next 5 years, you think they get a break on rent?

Hello Todd,

I really appreciate the advice and I am taking it all down.

Yes, Anthem is a planned community 35 north of PHX, with about 10,000 homes so around 25-30k people. There is two other planned type communities one exit down, so you can pull from them too.

I have been here for the last 4 years. Over the pass couple years, I have been doing cooks for our church, for the Little League and others. And, just in the little time I have been checking out places, people at our boys school have been asking if we are going to open a place, so there is already a little buzz.

I do appreciate all of those ideas, as Marketing is key. Trying to be a media whore is good, we have several local mags and I know two of the publishers.

I did look at another place that has a better layout, it is 1635 sq with better trafic.

Keep the ideas or thoughts coming, as I need to learn from the guys that have done it.

If you want to make the trip, we have plenty of room, cold beer on tap at home and you are more than welcome.

Thanks

David

I'm very interested in how this story turned out. Todd gave out some spectacular advice/reasoning. I'm in this situation right now, trying to find balance in my plan between big enough to make revenue and small enough to keep costs very low. I found a well established cafe spot up for sale, kindaofa food court with shared dining room. It's small, but it's all kitchen (and pos), maybe 200sqft tops. Nice area with hgiher end neighbors. There are 60-65 tables and no barbecue within 3 miles in a downtown area. The current tennant is moving to a larger spot downstairs. Right now I need to do a couple of things.

- count customers walking through the door at weekday lunch rush. Location dictates that weekday lunch will be hard and fast, but everything else will be slow. I'd be interested to see if I'm wrong.

- floorplan/workflow layout to see if I can fit a smoker, a range/oven, deep fryer, and much bigger fridge than they have currently, and still work in the space. I don't want to be bumping butts or elbows trying to move in that space. There's a lot more prep involved in BBQ than coffee and sandwiches.

Once I have those two done I can be closer to running numbers.

The reason it's a big deal is it is a TOTAL switch from my previous (and standing) plan of building out a 2000sqft shell in a sidewalk mall, full conversion from retail to restaurant and all the costs that implies. I wasn't really thrilled with the $$65k in permits, inspections and fees the city wanted, so I began considering my options, but I don't want to go so small I can't afford to stay in business either.

Well, it is me again. Sorry, I have been away for a bit, but I can get people updated.

We picked the 1635 SQ ft. place (Used to be a bagel shop) and opened up Q-to-U-BBQ. The doors opened on July 1, 2010 and I am glad to say that we have been cash flow positive from day one.

I use an FEC 500 for my smoker and man I love that thing. the build out took forever to get through the couny, but went quick once the plans were approved. you would have thought I was the first guy ever to do a restaurant buildout.

We hired 9 part timers and still have the same 9 working for us. There are some good things about a recession.

We recently won the North Valley Magazine Reader's Choice Best BBQ in N. Phoenix for 2010.

As I mentioned in the prior posting that we have cooked in Anthem for many community event, so we opened the doors with no advertising and have used word of mouth for most of our marketing. I am now using a local magazine, some tape register ads will be out this and a couple other sources.

We are open Tuesday - sat from 11 am to 8:30 pm, Sunday 12:30 pm to 6:30pm and closed on Mondays.

It is a lot of work, but has been really enjoyable.

good night for now.

David

Congrats David, thanks for reporting in.

If I'm ever out that way, I'll drop in.

Russ

toys4dlr,

congrats on your place! i too own a place in lake city co. called "smoque shack bbq". i too love what i do.....keep it up bro.

jeff,