How real is the movie ‘Chef’?
Thankfully, I finally got around to watching the movie ‘Chef‘ starring Jon Favreau. The movie is about an executive chef at a high end restaurant in Los Angeles that goes verbal fist-to-cuffs with the restaurant owner and a food critic, quits his job and opens a Cuban food truck. Throughout the movie, the chef is faced with challenges with son, ex-wife, and his business but in the end reclaims his love for cooking, his family, and life in general (I highly recommend it). What I find particularly interesting about the movie is the relationship between the restaurant owner and the chef. The restaurant owner is obviously concerned about making all of his customers happy and profits while the chef wants the freedom to be creative with his dishes which may not appeal to the masses. This brings to mind the question of how do you balance menu creativity with customer satisfaction and profit?
Finding the balance
I’m not a chef nor have I owned a restaurant. However, I am finance professional, restaurant broker, and a self proclaimed ‘foodie’ (I hate to use that term but it gets the point across) so I asked some of my clients this question. The answer from almost everyone hovers around this basic concept – understand how many people want your product and build your restaurant business around that. Simple, right? Wrong.
How many people want your product?
Realistically, how many people want your product? Just because you love it doesn’t mean you can sell it. So, before you go and open a 5,000 square foot restaurant test out the market with a pop-up food stand or maybe a food truck like in the movie. This will give you a sense of the market, how many people want your product, and the price they are willing to pay. Not to say that if you went all out on your first try you won’t succeed but testing the waters on smaller scale can help you to minimize your risk.
Building your business model
Ok, so you have done your testing and have a good sense of the market. Now you can estimate the types of volumes your restaurant can do on a given night, what capacity you will need – 50 seats, 250 seats, etc. What does your annual revenue look like? What type of staffing model can you afford? You are a chef/owner with a niche concept that appeals to a smaller demographic so perhaps you go smaller. You might want to keep the menu to one page of items which helps to control waste and food costs. On the flip side – you find out that everybody and their brother and sister wants what you are selling so you can go a little bigger because your revenue potential is higher.