Mrs. Architect, I have $100K, should I invest in the restaurant design or print a lot of flyers?
The Story of Mrs. Architect and Mr. Restaurant Owner
We were standing in a functioning restaurant, in the middle of a vibrant neighborhood in San Francisco. The restaurant owner has just walked us through the space and showed us the generous floor areas and all the improvements he has invested in over the last year. He pointed out the live edge wood countertop and the new light fixtures he was proud of. It looked like a nice space with good branding, but the restaurant was struggling.
“Mrs. Architect,” said the restaurant owner, “I have $100,000 to spend on my business. I could go to a print shop and pay for a lot of flyers or I could invest in the restaurant design. What should I do?”
Images above are from Pinterest boards.
I considered his question. I knew that they had moved into the space about a year ago and reused a lot of the infrastructure from the previous restaurant, which saved them a lot of money. The location was great but I could tell that half of the dining space was not laid out to maximize the use and enhance the ambiance. I also knew that the likely outcome of investing in design would be attracting more people walking by and creating more regular guests. That would lead to higher in-person dining profits.
“Well,” I said, “I don’t know much about printing flyers but I do know a lot about creating beautiful spaces. And I think that a beautiful space, optimized for the way your restaurant works, will attract more people who will want to return again and again.”
I was hired.
The owner did not want to deal with the management of this TI (tenant improvement or redesign) effort, and he delegated everything to me. I was managing his budget, finding the contractor, evaluating cost savings and overall making sure that the result would be worth the effort.
Cost Saving Decisions We Made
Doing everything possible legally without requirement of permits. Result - save time and money on approvals, save time during construction and installation because there are no inspections. The time of business being closed is critical to keep at shortest.
Finding an excellent design-build contractor. Result - save time and professional design fees. This contractor took concept drawings and turned them into reality skipping the step of producing construction documents.
Reusing a lot of existing decorative items that have been forgotten about. Result - saving on new decorations.
Being on site a lot to make decisions right there. Result - no changes needed, but design fee is higher. The higher design fee in this phase was offset by not doing construction documents.
And in the end, Mr. Restaurant owner said this:
“You are seriously the best. After the restaurant remodel, the revenue increased 14%.”
-Mr. Restaurant Owner
P.S. One may wonder, when is it worth investing in restaurant design and when is it not? After all, not all restaurants are the same.
Five Reasons to Invest in Design
Location, location, location…this real estate adage is very true when evaluating restaurant design possibilities.
The current buildout is not optimally organized to fit the maximum number of guests comfortably
The current buildout did not age well, is outdated and uninviting to your guests
The current buildout does not align with your brand
By investing in the design, you can raise the prices and increase profit margin
By staying the same, your guests will slowly stop coming in
One Big Reason not to Invest in Design
However, if your location is the problem, and there is not enough foot traffic or visibility, you may want to consider relocating to a better in-person dining location. Or, instead of relocating, you can become a delivery-only location, in which case advertisement budget of $100,000 will last you a while and spending on ambiance is not needed.
