How to Develop a Winning Concept
Category : Hints, Tips and Tricks
Chris Tripoli & Peter Merwin
Whether you are opening a one-of-a-kind restaurant or trying to grow your existing restaurant into a multi-unit chain, there are winning principles that can help shape your restaurant and improve its chances of succeeding. A well-defined concept stands a much better chance of long term success than some vague notion one might have about making one's first million selling burgers and beer to their neighbors. Nevertheless, the geneses of restaurants start in many ways, which may account for their great variety. Some start with having a space. Some start with a box of family recipes. Some start because someone thinks it would be nice to own a great place to hang out with their friends. Some of these succeed, and some fail. To start, it is wise to first set specific goals and decide on the ways you will measure your restaurants success. Polling many successful operators we have determined four distinctive characteristics that constitute a winning concept;
1. Longevity - The art of being able to maintain success over time while adjusting to meet the changing demands and buying habits of the customer. To open a restaurant successfully and become profitable is one thing, but to maintain that success over a long period of time is "winning."
2. Consistency - To not simply open a restaurant, but to truly develop a winning concept requires implementing systems and procedures to ensure consistency of your operation. A well-executed Wednesday dinner shift means little to Thursday's lunch guests. Winning concept operators know that restaurants are a zero sum game. Each day must be as successful as the one before. Each plate must be presented the same way and staff must be well trained, continually supported and supervised. That is why they live by the creedo, "Anything worth doing, is worth doing right - again and again!"
3. Market Appeal - All restaurants want to be busy but winning concepts seem to have a broad appeal and well developed "points of difference" that enable them to dominate their market niche. To be the first place the customer thinks of going when choosing to dine out is the goal of the winning concept.
4. Expandability - When Johnny Carrabba and Damion Mandola opened their second casual Italian restaurant it was successful because of the broad customer appeal, consistency of their quality and service, and operating systems and management procedures established in their first unit. Little did they know that they were setting the foundation for what has become a fast growing chain with units from coast to coast. Barry Katz thought that the families 26 year old deli-casual theme restaurant in Austin, Texas had growth potential. After developing the systems and procedures required to maintain consistency he opened their second successful 24-hour restaurant in the Montrose area of Houston, Texas. Most winning concepts grow.
A winning concept, regardless of where it starts, usually produces, somewhere in its development phase, a well-conceived business plan. This is not just a good first step if you are trying to beat the odds in succeeding, it can be quite useful for securing a lease, and extremely important when going to a bank or investors to obtain funding.
Restaurant business plans provide more than the required cost estimates and annual financial projections. They tell a story of concept development, individuality, commitment to service, proper management principles and most importantly - How this concept will "win" among the competition within a crowded market segment of the restaurant industry.
There are numerous variables to consider when planning a restaurant; some of them strictly operational, some strictly design, and some a mixture of the two. Winning concepts are different from the beginning and the difference is in the details. To develop a winning concept is to answer a lot of questions - What segment of the market will I be in? How will I create noticeable points of difference? Will it be in the display kitchen? Entertainment? To-go delivery or curb-side pick up program? Private banquet facilities or a combination of the above?
It used to be that good food, good service and a clean facility done consistently were sufficient for success. But to "win" you must realize that it takes a total guest experience to succeed in today's competitive market place. The food you serve and how it is presented are certainly important, but how well the overall concept is communicated to the guest will determine the extent of its success. Lets assume you have your concept and menu developed. Then lets assume you have answered the next fundamental question, "How many patrons will I need to serve, how often, and at what price to meet the overhead and make a profit?" Winning concept creators will consider a few more questions, such as;
What size should my restaurant be?
That depends to some extent on how you answered the fundamental question mentioned above. For the sake of discussion, a restaurant can be understood in two parts; the front-house component and the back-house component, which we will call the engine. The back-house areas include, the cook-line, the food preparation areas, refrigerated any dry storage areas, office and the dishwashing area. The front-house functions are typically dining areas (interior and exterior), bar area, waiting area, to-go area, restrooms, and private dining areas. The speed of product delivery; the size of the engine, a casual or formal atmosphere, and numbers of patrons you want to accommodate will all factor in to the amount of space you need for your restaurant. The goal is trying to maximize the number of patrons one can serve, out of the smallest most efficient back-house possible.
Will it have a bar?
Not all restaurants that serve alcohol have a bar. You have to decide what is right for you. Are you primarily a bar or a restaurant? What percentage of your sales do you anticipate will come from alcoholic beverages? Will a noisy bar crowd effect the way you do business? Will there be smoking areas designated? What impact will smoking have on the proximity of the bar to the dining areas?
How much parking will be required?
Different governing jurisdictions require certain minimums. These are usually expressed as numbers of cars per 1000sf of restaurant/bar space. Depending on your municipality they can either require more or less than you want to provide. Parking availability is important to most patrons. While an ordinance may require 8 or ten spaces per 1000sf, your concept may require as many as 20 spaces per 1000sf in order to accommodate enough of your clientele adequately.
Where should my restaurant be located?
Where space and utilities are affordable, and patrons are plentiful. Typically these two things tend to be mutually exclusive. You'll have to strike a balance. Good concepts in the wrong places usually fail. To determine the right location requires knowing the target audience you intend to attract. Understanding who the frequent customer is and what their shopping habits are will help identify trade areas with the sustaining characteristics and demographics you require.
How much will it cost to build my restaurant?
A good way to begin this is to find out what average construction costs are costing per square foot in your area and multiply that by the number of square feet in your project. Then add in all your FFE (furnishings, fixtures, and equipment) on top of that. If you intend to use design and building professionals, make sure that they specialize in restaurants and add their costs in as well. Design professionals may bill in any number of ways; a percentage of construction cost, a fixed fee, hourly, etc. Building a capital budget is normally completed in 3 steps (1) the initial guestimate with pre-bid costs, (2) updated when bids for construction, equipment, etc. are available, and (3) maintained and revised as approved expenditures are paid. Winning restaurant operators know that the best way to succeed at opening is to have had an accurate budget that included contingencies and working capital. Things may happen during development that can increase cost and delay the opening timetable. Without a contingency available you may be financially defeated before your concept opens. After opening - capital expenditures do not end.
Are you planning to put money back into your concept to keep it fresh?
Some beginning operators might forget that it's the dining public that ultimately decides who succeeds. Paying attention to the public's needs and expectations stands to benefit you. Serve them well and they will reward you. The closer you listen to your customers the smarter you become. Planning to provide annual guest intercepts or focus groups is an ideal way to learn how you may keep your concept winning. Staff meetings to review ways to continually improve the operations efficiency and mystery shoppers engaged to check the keys elements of quality, service and cleanliness are tools to consider as well. Winning concepts have operators who reinvest in their business. Seasoned operators plan for remodeling every three to five years. Since this is such a competitive market, they make sure to evolve their menu seasonally, update marketing strategies annually and continually improve on service execution.
Do you have an expandable concept?
Perhaps you've had a grand success. Ask yourself, what does your concept look like? And what should it look like as you move forward? Don't make the mistake of one success spoiling the next. Understand why you succeeded.
Certain winning concepts are immediately identifiable to us, even if we have not been there before. More often than not, this is the case because of a well-defined and precisely executed effort to consistently provide a successful "experience." Some chain establishments fit into this category. They become recognizable by both their food type, specific design requirements, and style of service. Countless hours of time and energy have been spent in developing and maintaining their brand. These concepts have been so closely studied and scrutinized that a unit on one coast is virtually identical to another 3,000 miles away. For winning concepts, consistency in design, menu and execution of daily operations makes for a successful guest experience and that is what creates customer loyalty. A satisfied guest is meaningless to a winning concept because it's the loyal guest who frequents your restaurant, tells others about it, and forms the basis for your growth. Creating and maintaining customer loyalty becomes the daily mission of every winning concept and requires personal contact from a sincere manager and well-trained staff.
We have all eaten at a local one of a kind restaurant that had the right combination of great food, good prices, warm atmosphere, and disciplined service. We want them to remain unspoiled and unchanged. They defy categorization, and may be site specific. They are idiosyncratic and they are quiet successful. The Pink Adobe in Santa Fe, New Mexico where serving a topping made from green chilies and mushrooms over steak has become a signature item is one such winning concept. Stagecoach Station in Miles City, Montana has become the leading restaurant in that market area and the Candlestick Inn in Branson, Missouri has enjoyed over 30 years of award winning fine dining. Its consistent quality and loyal following of locals and visitors who enjoy the unsurpassed view from this mountain top establishment make it an unquestionable winning concept. Interestingly, the myth and lore of established chains often trace their roots to such a concept. In them lies the essential kernel of the winning concept. Be cautious and know that expanding a concept stands a chance of diluting the authenticity of both the original and the copy. It takes a discerning entrepreneur to abstract those underlying principals that translate from unit to unit without diminishment in order to create a winning concept that is expandable.
So what is it that separates the success from the failure? How can you correctly expand? One important consideration is to maintain your trade dress. An operator planning to expand his concept should know what trade dress is - and what theirs is. Trade dress - constitutes the collective materials that impact the look and feel of a proprietary concept. It is one's brand in built form. If you currently operate a successful restaurant you may do well to carefully examine what you've done right. Those things that establish the look and feel may translate forward into the next successful venture as trade dress. Common elements of trade dress are signage, finishes, furnishings, seating and lighting.
A FAST OR SLOW MESSAGE
Every built environment communicates a message to its occupants, oftentimes, subliminally. Fast food concepts may use hard, durable, and relatively inexpensive finishes. The reason for this is low cost and low maintenance, which is an important way of controlling cost. Bright lights, bright colors, small tables and high noise levels (due to the hard surfaces) translate to getting the customer in and out quickly. By contrast, slow food is usually served with lower light levels in quieter, more comfortable settings, with larger tables achieved by using softer surfaces, such as, carpeting, tablecloths, padded furniture, or drapes. However, in solving one problem you stand to gain another; in this case, higher initial construction cost and higher maintenance costs. Ultimately maintenance and durability of a space translates into the how much you have to charge for a meal. Clientele expect higher levels of finish as the cost of their meal increases. Can you imagine sitting in a fast food restaurant drinking a $50 bottle of wine? Atmosphere is important to all winning concepts! As the "hip-ness" factor of an establishment increases they may well choose a concrete floor, but they'll probably be spicing things up with fine art, fancy lighting, and a polished and well-groomed staff. One successful operator told us he once hired supermodels to hang out at his bar to establish his concept as a see-and-be-seen scene.
A CLEAN AND NOISY BOX
Cost, durability and atmosphere are all considerations when choosing materials, but don't forget noise. Stained concrete might be inexpensive, but it is also a highly reflective surface and perpetuates noise. Tile, terrazzo, and stone while more costly than concrete, and equally noisy, can help create visual interest on the floor. Carpeting can range considerably in price and requires greater care, but really helps cut down noise. Carpet tiles are becoming increasingly more available, which helps if you need to replace a particularly badly stained or worn area. Using combination's of these may be appropriate, as long as you make sure the transitions are well thought out. Differences in material thickness can create tripping hazards or unraveling carpet edges. Each has a different design and operating value.
Walls offer some noise reduction capacity. Hard surfaces such as glass reflect sound, but drapes absorb it. Wall coverings absorb some sound and non-parallel walls help break up the waves. One of the ways unwanted noise can most effectively be reduced is in the ceiling. Ceiling tiles with high sound absorption capabilities exist and work even better than carpet. Used together they can be very effective.
Tables, chairs and booths are a large part of what goes into a restaurant space. Some fast food and fast casual concepts may work well with inexpensive plastic chairs for the entire space. While others must have custom tables and chairs costing $100's and up a piece. Whatever you need, keep in mind there are going to be a lot of them. Getting the right mix of deuces, four tops, and up is important for a successful space plan. It doesn't do you much good to base your proforma on a 100-seat concept with 25 four-tops; if your business is all couples camping. You need to be able to seat the tables and the chairs. They should be comfortable, durable, easy to maintain, and easy to procure.
LIGHT AND COLOR
Lighting is one of the most important elements available to control spatial perception. Getting the right amount where it's needed can make a huge impact on how one experiences a space. Imagine a darkened stage with a spotlight. Without the spotlight nothing is seen. In design, it is useful to think of light in terms of general illumination, spotlighting, and sparkle. General illumination creates ambiance. Some winning concepts use spotting highlights to feature and create drama. (You can a pin-spot a bowl of salsa so tightly that it's the only thing lit on the table - very dramatic.)
While lighting design can become very involved and complex it is worthwhile to keep in mind that a scheme that enhances your concept should also aim at being easy to maintain. If you've got a dozen or more lamping conditions (which is not that unusual) it can be quite a chore keeping track of all the spare bulbs, where to get them, where to store them, how to replace them. Try to strike a balance between effect and ease of use. Schemes that go overboard with different lamping might be too hard and costly to maintain.
Color is the twin sister of light. Color can add clarity or ambiguity to space. Warm colors advance, and cool colors recede. Unless you are gifted in its use and manipulation, it is best to leave color in the hands of professionals. Color can be tricky. It can take on all sorts of characteristics once it leaves the can. Color is affected markedly by light and other color. It is highly situational. A red wall can turn an adjacent white wall pink with its reflected light. In the hands of a professional it can be a powerful tool; in the hands of a dilettante a disaster. As all materials have natural color, it is often a better idea to let color express itself through those materials. Winning concepts create a successful bond with their customer base by paying attention to all of these little things. Your guests respond with all their senses - what they see, hear, feel and taste determines what they will say.
Trade dress represents the entire look and feel of the dining experience. It is that which is proprietary and repeatable. It is a way of doing business. It is the food, the menu, the presentation style, noise levels, comfort levels, the lighting, and the style of service.
It's a PEOPLE BUSINESS AFTER ALL
To win at this game you must fully understand the rules and know to excel within them. All winning concept operators we spoke with agree that rule No. 1 is "select, train, and retain key people." Winning concepts work on the formula of "People + Product = Profit" and without those 3 key ingredients your concept may become a recipe doomed to failure. We learned that for concepts to sustain and successfully grow they must employ a people management program that is committed to continual improvement.
This program includes on going training, workshops by purveyors to assist with product knowledge and service tips. Engaging the staff in pre-shift discussions regarding their steps of service, menu descriptions, and other operating issues help them to maintain their focus and improve service. Providing a work environment that encourages staff to grow, become cross-trained into other positions, and assist management allows them to win at what they are doing. Developing a winning concept requires a team effort and involvement from all staff members.
By investing the time and dollars into selecting the right team members, involving them further in the daily operations, and provide them on going product and service training - operators have increased staff retention and maintained proper labor cost. Putting the right team members in the right positions and providing them with involved motivated management forms the very foundation of a winning restaurant concept.
There are four key elements that go into developing a winning concept - concept, menu, consistency of operations and design (trade dress), and like pieces of a puzzle they all have a way of fitting together in order to provide a unique guest experience. For any restaurant to become a winning concept in the eyes of its customers it must endure the two greatest challenges facing every business, time and change, while maintaining consistency on the very elements of product quality, service, and design that engaged your guests in the first place. Although this is no easy task, it is what makes winning that much more gratifying.