Young chefs opening a restaurant as cheaply as possible

[makemewarmer]

Hi everyone, long time reader here that very rarely posts.

I should probably tell you a little about myself before we get into this whole thing, I graduated from art school and have been cooking in fine dining restaurants in the Boston area for about two years. As a cook, my goal has always been to open a small restaurant of my own. I hope to have my own place in 3 or 4 years.

I can't imagine myself ever having a substantial amount of money or finding/wanting to deal with loans and investors (unless maybe through some other alternative avenue such as kickstarter). I am very much interested in the idea of a DIY type restaurant (think Mission Chinese Food) serving progressive american small plates (think Momofuku Ssam Bar without such a big asian slant). I'm looking to have a place that is 30 seats or less, perhaps with a bar.

I always thought the cheapest avenue would be to take over a small existing restaurant space (somewhere around 600-800 sq. ft). That way the hoods, walk in, and most likely some kitchen equipment would already be in place. Recently I've been thinking about opening a restaurant without open flame. It seems that in some cities if you don't have open flames you don't need hoods and exhaust systems. So what would you need in the way of meeting all sorts of health and fire codes?

Could I open a restaurant with electric burners or induction, an electric oven, and a home refrigerator. There is a restaurant in Canada called The Black Hoof that just uses an old 4 burner electric coil stove. Sure, I'd love a beautiful kitchen with convection ovens and ranges with french tops but who knows when that would happen.

Any advice would be greatly appreciated!

[LindaK]

A belated welcome, hope you'll post often as you figure this out.

I've no first hand experience to share, but having watched friends open/manage restaurants in the Boston area, it's almost impossible to provide a generic answer to your question. Health and safety codes are defined by the city in which the space is located, so the requirements and permits you'd need will vary from town to town. Best to contact each city government which interests you to learn details. If you know of any similar ventures, talk to the owner to find out how s/he pulled it off. It is not for the faint of heart, but you probably already know that.

[Edward J]

Location, location, location.

If the place you want to take over has no gas/open flame or hood, and is located in a building with residentail suites, or if the place you want to rent has never been a food business, don't do it. IMHO everyone will complain about odours, noisy guests, and opening hours.

You will need a minimum of 120 amps of power if you go with induction or plain electric cooking eqpt.. You also need to budget amperage for d/washing, refrigeration, (also includes foh refrig) lighting, foh stuff like espresso machines, ice machine, hot water heater, a/c and or heating, etc.

Health dept. doesn't really care much about the type of cooking equipment you have, but many insist on NSF/UL listed commercial eqpt--California insists on this. Landlord's insurance co may or may not give you grief about cooking without a vent hood or proper fire supression system (Ansul system), again, every Fire Dept. has different codes. Health will want to know how you sanitize your equipment though, and may give a household d/w the "hairy eyeball", and I doubt many health dept's still allow the "three sink method" for a'la carte places. City may demand for a grease trap (aka grease interceptor)--again, every municipaity has different codes

I guess what I'm trying to say is to check out you local municipality to see what they want for a restaurant. You will need a minimum of $50,000 start up for rent, inventory, salaries, permits and fees, and opening expenses. 99% of places that go under in the first 6 mths do so because they are under financed. Take heed! If you have transportation most of your supplies can be bought locally and on a daily or bi-weekly basis.

Oh, and make sure your clothes washer and dryer at home are in good shape......................................

[Carlovski]

Hi,

Not sure how well the concept translates in America, but in the UK there have been a number of startups where existing premises are used which would not normally be open or serving food in the evenings - Pubs and Cafes normally. One guy locally kickstarted his business that way, cooking (Very good, and more modern) Indian food in a local pub and now has a number of very succesful restaurants. Another cafe opens as a restaurant, just on weekend evenings along with the occasional specialist sri lankan night midweek.

How the finances and contracts work in such an arrangement I'm not sure - I imagine negotiating where liabilities lie in terms of health and safety could be tricky, and no idea what it would do to any insurance policies, but it could be worth a look?

[DanM]

If you don't mind an elcectic dining room, I would recommend visiting yard sales for tables, chairs, and if you are daring... dishware and silverware! You can even claim that you are being sustainable by reusing old furniture.

Dan

[Clark D]

I have done what Carlovski has spoke about. Basically there is a coffee shop in town that closed for the day at 2. In February I started running a small full service restaurant out of it 5 days a week. You can see the coffee shop here http://cynamoka.ca/. It is very similar to what you are talking about. 4 burner electric flat top, basic oven, not a lot of equipment. Obviously this comes with it's own challenges but at the same time it allowed me to have minimal starte up costs (couple thousand dollars just for insurances, liquor licenses, business licenses etc....). It originaly caused some confusion, especialy amongst tourists who think it is just a coffee shop. Since I'm in a tourist based community trip advisor has been the best way to offset that. http://www.tripadvisor.ca/Restaurant_Review-g183794-d2502055-Reviews-Cyn_At_Night-Ucluelet_Barkley_Sound_Vancouver_Island_British_Columbia.html. There are other challenges such as prep times, not having control over how the premises really look, tables etc. At the same time you also have advocates for you that are open when you are closed, giving out menus and telling a couple hundred people a day that come through the coffee shop about you!

Clark

[sculptor]

Maybe cooking sous vide and doing any searing with heat guns... it all seems like a bit of a strech.

[jsmeeker]

How about a food truck/trailer/cart?

[Karri]

Hello and welcome,

I'd just like to chime in on the electric stove, we have one in the pastry, it is a monster, one of the best stoves I have ever worked with briefly. But it came with a price tag about double that of a gas system. I don't think that a home system will stand up to the challenge of being set on full blast multiple nights of the week?

And as jsmeeker pointed above, have you thought about only venue rental and having a satellite kitchen that you rent where you do all your food prep and simply ship it over in hotboxes?

[Peter Green]

Having talked with a number of chefs in the last couple of weeks of binge eating, an interesting approach is the most capital intensive. But it can work out cheapest in the long run.

If you can swing the finances, buy a restaurant property.

This may seem insane, but it's often easier to secure a loan when there's some solid assets involved. Once you've identified the property, you can get more attention from investors, as they'll have some hard collateral to claim against. Then either populate as a purchase agreement to include the old gear, or hit up an auction house (restaurant gear is always going at auction).

Once you're up and running in this fashion, your major overhead goes away. One of the banes of the restaurant business is that landlords can get very good at calculating how much of your income they can take, and still keep you hanging on. Sort of like a vampire keeping a body alive and hanging from a hook.

Plus, if you can't make a go of it, restaurant props never go without tenants (at least not in venues with enough of a population density). End of the day you cut your losses, take a tenant, and have him make your payments.

That's my two cents worth.

P.S. - I like DanM's not on shopping at yard sales (and this goes for church sales, rummage sales, the Sally Ann, etc). Heck, look at Noma.

[oneidaone]

A friend of mine was able to raise a little over his goal of $11,000 via Indie-gogo for his smoker. His place is up and running and doing fabulously.

He purchased some other really great equipment at the supply houses and some great used items.

[makemewarmer]

Thanks for all the suggestions everyone. Some very good insight.

Some possibilities I have thought of and that have been inspired by the discussion here:

- predominately cooking proteins sous vide

- the radical idea of only serving cold/room temperature food or food with very few hot elements. Such as a restaurant specializing in charcuterie, pates, terrines, etc.

- opening a restaurant within a restaurant. There are actually two diners in my neighborhood that close at 4 PM. I could always do the bulk of the prep elsewhere and then open within the diner at 6 PM.

I have realized though that rent is not always a lot cheaper in a standard retail space than it is in an existing restaurant space. It could just make more sense to rent an old restaurant and hopefully inherit some of the equipment and a working exhaust system.

Either way, it is cool to think about alternative restaurant concepts like this.

[LindaK]

In my neighborhood, a group of chefs have launched a pop-up restaurant while they're searching for a permanent location. They're partnering with local bakeries, coffee shops, etc. that close early. It's getting them some good PR and hopefully good experience too.

Whisk

Boston Globe story

[HungryC]

Thanks for all the suggestions everyone. Some very good insight.

Some possibilities I have thought of and that have been inspired by the discussion here:

- predominately cooking proteins sous vide

Please investigate your local health department's regulations & requirements regarding sous vide. NYC requires an extremely detailed hazard analysis & critical control point plan before any food outlet can do vaccuum-sealed cooking.

[SylviaLovegren]

Don't have personal restaurant experience but a friend bought a space that had an existing restaurant, hoping to pretty much use what they had. Turned out the Health Dept rules had changed completely since the previous restaurant got certified and she had to do all new venting systems and refrigeration systems, adding a huge unexpected bulge to her budget. Check out all bureaucratic details before embarking!

[Twyst]

One of the hottest young chefs in my region got his start by opening a farm to table food trailer. His food was good, he got a good following, opened a brick and mortar, and is now gracing the pages of magazines etc. So that route is definitely an option!

http://www.foodandwine.com/best_new_chefs/bryce-gilmore

http://barleyswine.com/about/

Edited May 24, 2012 by Twyst (log)

[bigkoiguy]

I would consider opening a restaurant in an under-served city as well. There are a lot of healthy, vibrant towns and cities out there where the restaurants do well simply because they are the only thing around. People in these cities clamor for a professional, well-run restaurant -- even a decent sandwich or soup shop -- and have money burning in their pockets. In addition, real estate is dirt cheap compared to more trendy locations, often with poorly-run restaurant locations that should've done well but had awful management.

Too often chefs turn to the bigger cities, where competition and trends are fierce, when places like the Inn at Little Washington, VA, can be equally -- or exceptionally more -- lucrative.

I love going to vibrant food cities like San Diego, Phoenix, San Francisco, New York, Chicago, New Orleans, etc - but tend to notice that as a traveler that, in those cities, the really good restaurant I found two years earlier is now closed as the locals have moved to something trendier. When I go to cities like Aberdeen MD, Columbus GA, Fairbanks AK, or Waynesboro, VA -- the good restaurants stay in business and I am able to visit them time after time, usually until the owner decides its time to quit.

[Baselerd]

Food carts/trucks/trailors offer a significantly lower capital investment than a brick and mortar. A lot of these places are able to perform most prep-work at an off-site kitchen and then bring their mise-en-place along in the trailer. If your food/price point is good, you can peddle your wares at the best locations for MUCH cheaper than renting a commercial space. If you are successful, you might even be able to transition to a full-on brick and mortar place.

Several restaurants where I'm at have made that transition, including one of my favorites (Barley Swine).

[rlped]

We now have a bakery kitchen and use portable induction burners @ ($140 each) when we need to cook something. No hood needed. Costco had a set of reasonable induction ready pans. Not my Allc lad, but affordable. I like the inductions for a small setup as you can so easily reconfigure your stations. And they hot hold like a wet dream. But we are new, small and self taught, so take that into consideration.

[Rainee]

A couple comments on this -

First, it is critical to know the relevant health and building codes in your city. They differ a lot, and will have a huge impact on what you have to spend money on and what you can get away with .

I am familiar with NYC, and here it is definitely worth it to find an existing food service place that has ventilation. The hoods and HVAC cost a lot of money to build up to current codes. If it also has working equipment, great, but that is actually less expensive than you think if you are willing to go to auctions and settle for something that is ok, not top of the line. Also, if you take over an existing space, don't change anything! As long as you don't change any existing conditions in terms of mechanicals and structural, you can get away with whatever is in there. As soon as you start moving plumbing or vents around or anything like that, you have to bring the entire kitchen up to code, which could be very expensive depending on how old it is and how good a job the original owners did.

If you dont' have existing ventilation, find a way to avoid open flame. Open flame has to have proper ventilation, which again costs lots of money. It also requires special fire control systems, like ansul, which are not cheap. Non-flame heat sources allow you to bypass all this equipment and work.

Most kitchens I have seen have something wrong with them. but I have seen some of the smallest, shittiest kitchens turn out incredible food. You can usually find a way to work with what you have. If you have very limited funds, then I think you are best off finding a space with an existing kitchen, preferably one that went out of business so they don't want to charge you a lot of key money, change as little as possible, and then modify your concept to work with the resources you have.