Start-Up Chronicle
Getting a restaurant off the ground.
Hunting and gathering in Brooklyn has been swift and successful. An existing restaurant recently became available — a 45-seater with a small garden in the back, located on a bustling street in a cosmopolitan section of the borough. It is in excellent condition, though not perfect.
If a build-out goes smoothly (ho ho ho), we could open sometime in January. The key fee is $65,000, and the first two months’ rent totals $15,000. Add another two months’ security at $15,000, and we need $95,000 before stepping inside the door. In addition, our management consultant, Black Ink Business Services, insists that we set aside $75,000 for unforeseen calamities, including closing up shop if things go radically kerplooey.
We don’t want to have to raise more money in the second or third year and then have to scramble the ownership percentages. Consider this $75,000 as back-up capital, a nest egg for a rainy day, a snowy week, or a euro tsunami washing ashore on Brooklyn.
Stuff happens.
And if stuff happens to go moderately well, that same $75,000 can become working capital and support all things bright and beautiful. All told, we figure it will take $301,500 to open in early 2012. Here are some of the numbers we are looking at:
Real Estate
We are not starting with an empty canvas. Still, we need paint and spackle. The kitchen has to be scrubbed and retrofitted. Out-of-date equipment has to be upgraded or replaced. The permits are all in place, including wine and beer licenses held by the landlord, which will save much time and money.
Leasehold Improvements
Other Expenses
Even though there are tables and chairs and a bar and a bathroom, we have some work to do, some edges to smooth, refrigerators to install and then fill with food. The sound and security systems need to be tweaked. Computers and point of service communication are needed.
Equipment and Inventory
When we open, it will behoove us to let people know. The bulk of the marketing money will be spent on social media and the Web site.
Marketing and Miscellaneous
Total Projected Capital Needs (for preopening and three months): 301,500.
And here are our three-year projections for revenue and profit. They include the number of guests, average checks, labor costs, division of food and beverage for both lunch and dinner. Neither the best case nor the worst, this is somewhere in between.
Projected Revenue, Year One: Lunch
Projected Revenue, Year One: Dinner
Years 2 and 3 we expect to see revenue flatten out. Labor costs will grow, as will taxes, inflation and rent.
Three-Year Projected Overview
Employees: 21
Annual wages: $618,000
Total Projected Gross Profit for First Three Years
Bruce Buschel owns Southfork Kitchen, a restaurant in Bridgehampton, N.Y.
Article source: http://feeds.nytimes.com/click.phdo?i=1cff03231e6c55aaa08b369db9e4f4ec
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