Professional store design - worth it?

[geraintf]

Hi all,

I am looking at opening a 'classy' fast food restaurant and am trying to weigh up the option of paying £200k+ for a professional store design (but then face high loan repayments) vs a not so amazing store design and then see how business goes before making the decision for fork out the dosh.

Does anyone have any experience in this?

Thanks

 

[antoine82]

I think it is worth it.

The fast food market is a very competitive market with well established actors who can offer decent food at a very good price. This is the industry where you have the most bankruptcies.

So if you enter the game, you'd better propose something nice in a nice environment, hence the necessity to be by helped by professionnals (designer and builders).

As for the figures, the ones you mentioned are quite high. It all depends on the size of your shop/restaurant but I think that £6-8k for the designer is fine. For the shop fitting, count around £1.5-2k per square meter.

 

[geraintf]

Hi Antoine,

I do agree with you, I am a subscriber to the philosophy of "if your going to do it, do it to the best of your ability".

The premises i'm looking at is around 116sqm, i'm still waiting to hear back regarding quotes but if you are correct with saying my estimates are high then getting my store professionally design might be more affordable than i first thought

 

[antoine82]

Be careful, my figuers did not include all the appliances (EPOS, coffee machines, fridges, cooking appliances...) that are also very expensive!

AS for the price per square meter, it might be cheaper for you because what costs a lot of money is all the fixed cost like electric system, plumbing, counter, appliances...

After having a shop which is 60swm or 110sqm does not make such a big difference.

Don't forget also in your business plan, the sollicitor (3-4k), the SDLT (can be expensive for a long lease) AND the deposit (if you are a new business, you can be pretty sure they will ask you for a 6 month deposit). Where are you based?

 

[FreelanceScribbler]

There's a brilliant phrase my girlfriend uses on her employer when he wants something done quickly and badly on their website

"Do you want Nettos or Marks & Spencer"

Every time her boss says "Marks & Spencer", because he knows that's what their customers want in terms of quality, presentation and service...which is why his company charges so much for their products and gets away with it.

 

[Blood Lust]

Hi all,

I am looking at opening a 'classy' fast food restaurant and am trying to weigh up the option of paying £200k+ for a professional store design (but then face high loan repayments) vs a not so amazing store design and then see how business goes before making the decision for fork out the dosh.

Does anyone have any experience in this?

Thanks

What food will you sell, who will be your target customers, will they be able to afford your prices and will they use you?

If you're targeting yuppies it would work but do you have enough of them at your location to run a business off?

If its ordinary people price, hygeine and taste are whats important. They wont spend £15 for some chicken when they can get it for £5

 

[amac]

I would say no. I'd focus on the product first i.e in your case, making the food the best it can be. Once you do this, you can use cash flow do make the dining experience equally as good.

If you think you can do both, go for it.

 

[antoine82]

Hi,

I think that what Bloodlust wrote is also very important. What kind of product do you want to sell? Is this something original you can't find somewhere else?

If it is just a "classy" burger fast food, check the competition. If you've got a macdonals 200m away from your shop, do you think that people will be ready to pay £2 or £3 more for your product?

Running a business is all about selling the good product to the good people. Make sure you've got both.

 

[sigmais]

It all depends on your budget, if you have good budget, go ahead for it since it is helping you in attracting the customer. By the way, if your budget is limited, then you need to first go for those necessary equipment or facility before spend those budget on design

 

[Daniel12]

I for one will always go for quality and ambiance and am happy to pay the premium for it, but then i am in Birmingham so the choice is endless.

I think the issue is always going to be costs, and weighing them up correctly, if you have the location, the marketing, the return custom then any investment is worth its weight in gold.

If however you think that just having a swanky design will make you a success then your wrong. I have seen, and continue to see many "up market" places come and go, because they concentrate on design and forget the basics in customer service and quality, even becoming arrogant.

Another big issue nowadays is bars and pubs, offering very good food early till late, good design and ambiance, well known, great customer service etc.

the issue you have with waiting to see how it goes first is that if it does go well, and you choose to then invest, shut down, redecorate etc. you will be reopening to what could be a different customer base. A friend of mine brought a pub in a small village, the pub was a mess, but had the custom, he redecorated, got the only Sky Sports in the village, done the place out, started doing food, and the original customers never came back (didn't like it), he was ok as he attracted the others that didn't go in previously and cornered the market there for a time, the recession wiped him out unfortunately in the end however.

Dan

 

[10032012]

Hi,

I think that what Bloodlust wrote is also very important. What kind of product do you want to sell? Is this something original you can't find somewhere else?

If it is just a "classy" burger fast food, check the competition. If you've got a macdonals 200m away from your shop, do you think that people will be ready to pay £2 or £3 more for your product?

Running a business is all about selling the good product to the good people. Make sure you've got both.

Do not be fooled by the common sense marketability proposals... not always the best.

Let me explain... if you deliver too good customer service (aka try too hard) you will lose out. How many times have you been hard done by Tesco or McDs/KFC etc ... then gone back there at the next possible opportunity?

Most McD fans (i.e. go there regularly) have been given the wrong burger, a burger where they requested no mayo etc but they gave it anyway, short changed, missing item, got food poisoning, had unwanted body fluids included/contamination, burnt food, the burger that fell on the floor, stale, cold, the worst customer service ever, etc etc. but they still go back. Even to the same one! The food is convenient... its not good.

How many times people go to Tesco, get overcharged (price on display isn't the one at till), get short changed, have to wait in huge queues for the till, have to scan their own shopping as not enough tills are open, get given fake coins, never have anyone on shop floor apart from tesco.com peeps and hardly have anything on the shelves, but still go back?

It becomes very much like an abusive relationship. People get the fast-food concept... you can't be bothered to cook and want convenience... you compromise from being abused (mildly) and risk your health.

 

[10032012]

Hi all,

I am looking at opening a 'classy' fast food restaurant and am trying to weigh up the option of paying £200k+ for a professional store design (but then face high loan repayments) vs a not so amazing store design and then see how business goes before making the decision for fork out the dosh.

Does anyone have any experience in this?

Thanks

If you don't invest from Day One - you never will.

You run a business to make a profit... if you are working on your own brand and not a franchise... its not going to be that simple to make sky high profits when building up the brand... so if you take the low-end version by cutting costs and alienate potential customers, when you do start making a profit, you are banking it!

No way are you going to save it to plough it back in to the business in a year or two time. It would also be silly to get a loan and refit at a late date, as you will get to know a snapshot of how the business is turning over, you get your downtime during the time its going through the refit and you will never make the loan repayments.

You will have your loyal customers but fast food is about convenience... if its your own brand and you don't have the marketing that the big boys do... most your customers will probably forget about the brand to make an informed decision to go there. You will then have to undertake a huge marketing exercise again at cost and you probably wont win.

Take McDs... the food hasn't really improved nor the customer service, but they upgraded their "restaurants" (I mean eating area) and image... some do look really classy (for fast food anyhow).

If you want to do it on a shoestring budget I think you need to pat yourself on the back if you make 9 months. Every member of this forum probably knows an example within 30 miles of them in the last 5 or so years, where at least one business in that industry or the wider industry including non-fast food restaurants, and cafes, tried to set up in business, bless their little cotton socks... but failed due to customer expectation standards.

I know of over 10 examples (about 14 last count) in my home town (can blame recession a bit, maybe) in the last few years. There is also one which keeps closing every 18 months relaunching under a new brand and shoestring budget refit... it alienates loyal customer base... however becomes a new venue that people want to try... I think this approach pays off during the 3-9 month period after reopening, however, starts to slope off again... not a way of running a business.

You must also see the design as an asset in its own right. IF you had say cashflow problems requiring finance such as a bridging loan or needed to sell the business before it collapses... the better standard the restaurant is... the more chance you have.

You must look at the business over 5-10 years... it will be paying dividends by that time if managed correctly. If you are thinking of 1-3 years, then its probably best not to undertake such venture IMO.

 

[geraintf]

Hi all,

thanks for all your input, some great comments.

My business is 'classy' fast food venue serving fresh pasta and sauces to shoppers & workers as a tasty alternative to sandwiches or junk food.

I'm really keen on building a strong brand for the business and want the place to look 'posh' but not too posh that i alienate potential customers with the impression of a expensive place.

To do this I wanted to get the store professionally designed but my concern is that as I will hopefully be getting funding from the bank, if I borrow the extra £200k or so this might push up my bank repayments to a level that I might not be able to realistically afford to repay atleast until the business has been established in the area.

 

[antoine82]

To be honest, if you want to borrow £200,000 from your bank to open a fast food, I wish you all the best!

Getting loans is very difficult right now particularly for such a "dangerous" industry.
If this is your first shot in the catering business I am pretty sure you'll never get that money. Or you should have pretty strong guarentees!

Anyway, let us know if you manage to secure the loan, I am quite interested by the outcome!

Good luck!

 

[Excellent Foods]

I would say yes. I just set-up my new website in the gourmet food (ExcellentFoods) and after just two days, I feel that the fat fees I paid to an art designer actually pays-off. If you are in the high end of the market, you need to differenciate yourselves

 

[Stuart Bailey]

speak to your accountant because there will be some tax reliefs which will help such as capital allowances. Further have you looked into obtaining grants or funding from public bodies?

Stuart Bailey of Thomas Guise solicitors