advice needed, re:opening a cafe

Prak · Post by **Prak** » Thu Sep 01, 2011 1:25 am

So, I think I finally have an end goal for my culinary education, opening a cafe with in house bakery. I just need to get everything put together. Right now, I'm curious as to an ideal square footage, kitchen space, equipment costs (and amounts), and such. I can write the business plan and everything, but until I have some idea what things will cost....

Thinking Portland, pearl district. And so far looking at a 12-1500 sq foot model. But it occurs to me that that's basically "Dining room, counter, sink, storage" and probably no room for me to cram in an oven, let alone the several I'd probably need.

Doom · Post by **Doom** » Thu Sep 01, 2011 1:54 am

Well, having owned a restaurant and ran it pretty much into the ground, my advice probably isn't the best, but I'll put my 2 cents in.

You'll need, bare minimum, 20k in theory; in practice you'll want to have triple that, or more (I'm talking hole-in-the-wall here, standalone places will need 2 mill or more). Don't be a sucker and buy all new stuff, you can get used stuff at restaurant supply stores easily enough (and keep in mind, there's a reason there's so much supply available...). Anyone can walk in and shop, just look one up in the phonebook/whatever and go see.

When setting up, cut costs, cut costs, cut costs, cut costs, cut costs. Every penny you don't spend opening up is a penny you'll use later. Everything you buy for your restaurant, before you buy it ask, "is it breakable?"...don't buy anything that breaks easy.

When the federal thugs show up for a taste, give them a taste. When the municipal thugs show up for a taste, give them a taste. When the street thugs show up for a taste, give them a good taste--the street thugs might not be able to hurt you as badly as federal/city, but they can HELP you alot more than the "legal" thugs.

Take your time picking a location, which is damn near everything for a restaurant. Don't be afraid to pick a spot where a previous restaurant went out of business--this actually can be helpful to you as you'll benefit at least a little from the previous custom, and likely you'll have to pay less bribes when it comes to getting zoning and licensing and stuff.

I know you're looking for exact prices, and I just can't help you, costs vary wildly, and Kenner is different than Portland (my restaurant was 4600 sq ft, fwiw). Before opening up your own place, you might want to consider working in a place something like what you want, just as a busboy or the like, just to get a good long look at what really goes on.

CatharzGodfoot · Post by **CatharzGodfoot** » Thu Sep 01, 2011 1:56 am

I've got a friend in Seattle who would be your night baker.

Prak · Post by **Prak** » Thu Sep 01, 2011 2:09 am

Well, I'm currently working at a Bakery/Sandwich Shop/Cafe, and I'm pursuing an AA in Culinary Arts, already having obtained the Baking Certificate on my way. So I'm getting to know the business. I'm just looking for suggested numbers, so all the info you can give on what you spent for stuff, what you projected, what you needed, is good.

I'm looking at a small starting staff, but that will almost surely be close to 10 people at least, and I don't think I know that many foodies willing to move to Portland, so suggestions are good there, too.

Doom · Post by **Doom** » Thu Sep 01, 2011 2:27 am

Well, my numbers are bad because of the 11 years, location, and inflation--only now does it occur to me that you'd have to double or triple my numbers just for the last bit.

Looks like you're doing it right so far, working in a similar place and getting specific training. The big thing is all the legal crap you'll don't know about. 10 employees might be a problem, you definitely want to look into that (seems like there's a cutoff at 8, or there used to be). Power usage might have a cutoff or penalty for overuse, also--make sure you know before you invest in a bunch of energy-sucking ovens. Heck, you might even have water issues (not a problem in Louisiana, so far).

Ooh, big one: get incorporated, you totally need the legal protection. Do that now, incorporate as one name, then DBA as the restaurant name, and get the notices out of the way, and set up the commercial bank account. It's tedious annoying stuff, and apologies if you already knew that, but there's little useful you can do before that.

If you totally must have a number: 50k of actual money (from which you can leverage to get some loan money), and that's ballsy to the point of almost certain failure. And, of course, my numbers are basically meaningless.

Prak · Post by **Prak** » Thu Sep 01, 2011 2:35 am

Well, I'm planning on using Kickstarter to raise capital once I have business plan and prospective costs figured out, but I'll definitely need to look into the business part of it more.

How does personal credit affect the establishment of a commercial bak account?

Neeeek · Post by **Neeeek** » Thu Sep 01, 2011 3:19 am

Prak_Anima wrote:Well, I'm planning on using Kickstarter to raise capital once I have business plan and prospective costs figured out, but I'll definitely need to look into the business part of it more.

How does personal credit affect the establishment of a commercial bak account?

It doesn't, unless your personal credit is being used as a guarantor for the loan.

Like any other business, running a restaurant requires knowing how to run a business. Make sure you know how to do your books and do your cost accounting. A lot of businesses have trouble because they haven't figured out that one of their products is costing them more to make than the price they sell it for.

Maj · Post by **Maj** » Thu Sep 01, 2011 4:50 am

Get your butt to the closest Small Business Association office and ask them to help you figure out what you'll need. They're freakin' awesome - this is what they do.

RobbyPants · Post by **RobbyPants** » Thu Sep 01, 2011 12:56 pm

Doom wrote:When the federal thugs show up for a taste, give them a taste. When the municipal thugs show up for a taste, give them a taste. When the street thugs show up for a taste, give them a good taste--the street thugs might not be able to hurt you as badly as federal/city, but they can HELP you alot more than the "legal" thugs.

Take your time picking a location, which is damn near everything for a restaurant. Don't be afraid to pick a spot where a previous restaurant went out of business--this actually can be helpful to you as you'll benefit at least a little from the previous custom, and likely you'll have to pay less bribes when it comes to getting zoning and licensing and stuff.

I didn't realize bribes were such a big part in running a restaurant.

sabs · Post by **sabs** » Thu Sep 01, 2011 1:57 pm

Having had to rebuild a restaurant before, go to the restaurant supply store in the area. Find out what kind of refurbished equipment they have, and how much they charge for installation.

http://www.rosesequipment.com/
is one of the big ones in portland.
Roses Equipment, Inc.
207 S.E. Clay
Portland, OR US
97214

Figure out where the local foreclosure auctions are, see what kind of restaurants are in foreclosure, sometimes you can pick up really good equipment for cheap at the auction.

Also, are you handy with repairs? Do you have a buddy who is?
You're going to want someone who can do plumbing, and basic repair work on ovens, refrigerated walkins, etc. If you're not, you're going to want to find a contractor who won't bend you over and violate you. And yet, you're still going to need it.

As a local bakery, the only Federal Thugs you'll ever see is if you fuck up your IRS filing every quarter

Municipal thugs though... Health Inspectors are rough, and most of them are honest, but not all, and even the honest ones are hardbitten, bitter and jaded.

But mostly, ignore advice from Doom, he's an idiot.

Doom · Post by **Doom** » Thu Sep 01, 2011 2:26 pm

You basically agree with my advice...then say to ignore the advice because it's from an idiot. Fascinating.

sabs · Post by **sabs** » Thu Sep 01, 2011 2:30 pm

I did not agree that she should bribe them though.

Addendum:

I'm sure you've done this already but:
Price out your recipes. You want to know how much a scone is going to cost you, so you know how much to sell it for. Then, turn around and check out what the competition is selling their stuff for.

Figure out how much money you need a month for:
Rent, Utilities, Supplies, staff.
Best way to do the first too, is talk to a commercial realestate agent.
Supplies, do you know a restauranteur in the area who can get you in touch with the local portland suppliers? Sysco? US Foods? A Local Supplier? I knew chefs who swore by sysco, and others by us foods, and others by Julius Irving (Philadelphia local). It's all about your relationship with your salesman. And that's based on how much you order. For example, I worked at a place where we bought our oven cleaning supplies only from Julius Irving, because they had a descaler that worked magic on flat-tops.

When you get your capital together, be sure to include 1 year's worth that covers this.

What are Portland's minimum wage laws as it refers to tipped employees.
What's the going rate for a mexican dishwasher

I was in Northern California, and the rate was about 8.50 an hour.

sabs · Post by **sabs** » Thu Sep 01, 2011 3:37 pm

More thoughts:

You want a Cafe with an attached Bakery:
Cafe Menu?
Whose cooking breakfast
Whose serving it
Whose baking, and from what hours.
Do you have any contacts to be making/selling bread to local restaurants.
What revenue streams are you gonna follow.
1500 Sq ft isn't horrid. But realistically you need:
Walk In Refrigerator
Walk in Freezer (inside the refrigerator is probably easiest)
Hobart Mixer? (the big standing ones)
Dishwashing Machines (these can be fairly big)
Room to have hotel carts with doors for proofing.
And other stuff depending on:
Are you making soups?
Are you making breads, cakes, wedding cakes, donuts, bagels, muffins, scones, croissants, minifours, etc...

Sandwhiches? Salads? etc.

Neeeek · Post by **Neeeek** » Thu Sep 01, 2011 6:31 pm

Other things:

What's your business structure?
Who is doing your payroll?
What ways are you accepting payment?
How are you tracking expenses?
Are you paying yourself wages or just taking whatever is left (which has rather large tax implications)?

Josh_Kablack · Post by **Josh_Kablack** » Thu Sep 01, 2011 8:25 pm

My Advice:

1. Don't do it. Over 50% of all restaurants fail inside the first 2 years - even if you are better than those odds, you'd have to be mad to want to play a game like that.

2. If you ignore #1, then Location, Location, Location.
Do not try to establish your cafe in the premises of a similar establishment that failed. This may look tempting because you can get a bunch of used equipment cheap as part of a parcel deal, but if a similar business already failed in that location - that's pretty solid evidence that the location cannot support the type of business in question.

3. After you have location down it is Accounting, Accounting, and Marketing, Marketing.

Many small business owners get in trouble because they are not keeping a close enough eye on their books and not playing to the products which are the most profitable for them. You'll need to learn the tax implications of Sole Proprietership, Partnership, S-Corp, C-Corp and figure which works best for your business.

Many others fail to realize how much even really simple marketing tactics matter: Make sure your shopfront is highly visible and appealing; Make sure your in-store signage is clear to new customers; have packaging / deliveries / catering / employees which are all distinctly recognizable as yours and which can direct potential customers to your shop; partner with other small businesses - that can be as simple as displaying each other's fliers and coupons on your walls or as complicated as forming local business associations.

Doom · Post by **Doom** » Thu Sep 01, 2011 8:44 pm

Heh, Josh has my vote for best advice....#1 is really excellent, although extremely problematic to follow.

K · Post by K » Thu Sep 01, 2011 9:58 pm

RobbyPants wrote:
Doom wrote:When the federal thugs show up for a taste, give them a taste. When the municipal thugs show up for a taste, give them a taste. When the street thugs show up for a taste, give them a good taste--the street thugs might not be able to hurt you as badly as federal/city, but they can HELP you alot more than the "legal" thugs.

Take your time picking a location, which is damn near everything for a restaurant. Don't be afraid to pick a spot where a previous restaurant went out of business--this actually can be helpful to you as you'll benefit at least a little from the previous custom, and likely you'll have to pay less bribes when it comes to getting zoning and licensing and stuff.
I didn't realize bribes were such a big part in running a restaurant.

It's important to note where Doom is living. Louisiana is pretty famous for widespread institutional corruption.

In California, that kind of thing would be an anomaly.

Doom · Post by **Doom** » Thu Sep 01, 2011 10:08 pm

Certainly things might be different elsewhere...but I do remember during the last L.A. riots, store owners were laughed at for calling the street thugs and asking for some protection during the riots.

K · Post by K » Thu Sep 01, 2011 10:38 pm

Doom wrote:Certainly things might be different elsewhere...but I do remember during the last L.A. riots, store owners were laughed at for calling the street thugs and asking for some protection during the riots.

I think hiring thugs during a riot probably qualifies as "an anomaly."

Doom · Post by **Doom** » Thu Sep 01, 2011 11:29 pm

Sorry, I was unclear. They weren't 'hiring' them, these were the street thugs they were paying protection money to before the riots (hence the funny part, thinking the protection money was actually for, well, protection).

K · Post by K » Fri Sep 02, 2011 12:05 am

Doom wrote:Sorry, I was unclear. They weren't 'hiring' them, these were the street thugs they were paying protection money to before the riots (hence the funny part, thinking the protection money was actually for, well, protection).

I was in California during the riots and was watching the news, and I can't remember anything about this.

I also can't find any evidence that this ever happened after a pretty exhaustive search. The closest I can find is Korean American business owners banding together to prevent their businesses from being looted, but there's no evidence it was anything other than actual owners.

Sounds like an urban myth, even if the riots happened in one of the most crime-prone areas of California.

Count Arioch the 28th · Fri Sep 02, 2011 12:09 am

Doom is from Louisiana?

I always thought he was from some foreign country, judging by his poor grasp of English and weird mindset (I thought he was southeast Asian judging by how uptight he is).

Doom · Post by **Doom** » Fri Sep 02, 2011 1:48 am

Yes K, you're absolutely correct that only the owners actually did the protection. See, it turns out, the street thugs don't actually protect the stores they collect protection money from.

Hence, the store owners got laughed at when they called the folks they were paying protection money to and tried to get some protection when they needed it. I doubt there's much in the way of documention, since, (hopefully) obviously, the thugs did not actually protect the stores during the riots and, of course, if any such relationship were documented, it would be illegal. It's pretty stunning how many people can't tell the difference between "bribery" and "extortion".

I hope, finally, this clarifies things, and really we're pulling things off track.

In my opinion, street gangs exist in L.A. (and in other cities), and while you seem to wish to argue this point endlessly, what matters to the OP planning to open up a store is that it really makes sense to work with the street gangs, rather than try to fight them.

Prak · Post by **Prak** » Fri Sep 02, 2011 5:40 am

I'll be opening in Portland, the worst I'll have to deal with is hipsters and homeless drunks.

K · Post by K » Fri Sep 02, 2011 5:56 am

Doom wrote: In my opinion, street gangs exist in L.A. (and in other cities), and while you seem to wish to argue this point endlessly, what matters to the OP planning to open up a store is that it really makes sense to work with the street gangs, rather than try to fight them.

If you've decided to open a business in a location where street gangs feel free to roam and have decided to enter a relationship with criminals and commit felonies by bribing government employees, you probably don't have the judgement necessary to run a successful business.

I mean, if your business is a front to launder money or is raking in money hand over fist with some other illegal enterprise where any attention would be inconvenient, then go for it. Otherwise, running a legitimate business like a criminal enterprise is doomed to fail because you aren't making the same level of profits and are running a good risk of going to prison or getting stabbed.

I know that in some parts of the country the corruption is an epidemic, but you probably shouldn't open a business there without actual criminal contacts. Picking somewhere where you aren't going to be losing profits to bribery is probably a good idea and they are pretty common.

The Gaming Den

advice needed, re:opening a cafe

advice needed, re:opening a cafe

Re: advice needed, re:opening a cafe