Restaurants and Institutions

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earth2table: Money, Money, Money
August 24, 2006

Stu Stein

August 24, 2006
Over the past several weeks, I’ve contacted a number of restaurant-equipment supply-and-design companies to get detailed, accurate quotes on restaurant equipment. At the same time, I’ve been searching the Internet and speaking with my fellow restaurateurs to see about phone systems, security systems and POS systems. I have previous relationships with the three major equipment dealers in the regional Portland area and have helped to put in two POS systems over the last several years. This gave me the initial contacts, but the whole process still requires a ton of, shall I say, finger work.

Kelly Edwards, my architect, sometimes employs mechanical/electrical engineers but is not one himself. He usually uses the equipment dealers/designers to spec and do the detailed engineering drawings for restaurant mechanical systems so that the contractor has detailed plans for construction. What this means is that I need to either have an equipment supply-and-design firm do the engineering and the equipment purchasing, or try to get a number of deals on equipment wherever I can and pay someone else for engineering and design. So now we are in the hurry-up-and-wait mode. Once Kelly finishes the initial kitchen and mechanical design, I will shop for bids for both equipment and design services.

Of course my next phone call was to my SBA bank. In all seriousness, I am concentrating on turning all those estimates and projections in my capital budget into “real” numbers. I spoke with Serena Lee at Wells Fargo to see about revising their initial commitment. Let’s just say I would rather get a few sleepless nights at this point of the project than one month from opening. Projected dollars for equipment are changing now that we are tweaking the actual design. As you may have heard, construction costs are skyrocketing daily, if not hourly. My plan is to shoot for the ultimate in design and efficiency and then see how that translates into cold, hard cash. I will then have all the pieces I’ll need to order my priorities and make choices.

I have learned that Wells Fargo (and banks in general) and the SBA have certain percentages they are looking for in regard to their small business loans--for equipment, working capital and leasehold improvements as well as the ratio of how much equity I’m putting in compared to the total loan. When I first starting working with Serena, I made sure I understood her parameters and where there is “wiggle room.” My recent conversation was to update her on both timing and capital-budget requirements. The good news is there really is some leeway in her initial commitment. As the numbers get closer from the finalized bids, we will revisit and adjust the financing piece.

What did I tell you--it’s about relationships.

PR/Marketing

Call this the rant-and-rave portion of our little show, and please take this as constructive criticism. Those of you whose livelihoods revolve around interaction with people and customer service, please respond. Respond when you say you will, answer an e-mail or phone call, or at least make an effort to acknowledge the person initiating the contact. Yes, we are all busy and we all have our own set of priorities, but you never know when word of mouth will come back to bite you in the most embarrassing place.

That being said, I am still working on finding the most talented, creative, responsive and cost-effective public relations-and-marketing firm. I’m speaking with various firms that don’t necessarily specialize in hospitality or just restaurants. I don’t want to be just one more independent restaurant in a firm’s stable of dozen restaurants. I want someone who understands what we are trying to accomplish with our commitment to sustainability. And I want someone who will think outside of the box, be open to the moment and not be shackled with what was done before. I want someone inexpensive, or who at least likes to barter.

I‘ll keep you updated as I know more.

As long as we are intruding into my life, one sad note. We had to put one of our dogs to sleep. Shamrock was a not-too-intelligent but extremely sweet red-colored golden retriever that we rescued seven years ago from NORCAL Golden Retriever Rescue when we lived in San Francisco. Think a huge cat that liked to hoard tennis balls. Let’s just say that my 4-year-old yellow lab, Coriander, is getting more than her fair share of love lately.

And the journey continues.

Cheers!

Stu

Posted by Stu Stein on August 24, 2006 | Comments (0)