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The Restaurant Business Plan – Location Matters!

Written by Scott Pollov on Monday, 07 July 2014. Posted in Writing a Business Plan

We are often asked by clients for the keys to writing a restaurant business plan that will successfully secure financing. While a business plan plays only a supporting role in a restaurateur’s quest for startup funding, the planning document must still clearly, concisely and compelling communicate the investment or lending opportunity. 

To accomplish this goal, EVERY restaurant business plan MUST have an identified location.  Whether or not you have a signed lease or purchase agreement on a space, your business plan must be written as if you have researched and selected the perfect location for your concept. 

While we do work with some startup restaurant owners that have secured a facility, many more are waiting until they have raised money from a bank, an investor or both before they “choose” where to locate their restaurant.  While this is certainly understandable, it is imperative that a location is selected even if it just for illustration purposes.

Let me give you an example.  You are starting a quick service restaurant serving hamburgers, chicken sandwiches, and Philly cheese steaks.  You have approached a leasing agent for a prime location in a downtown area, where you will be surrounded by tens of thousands of workers during the week who are looking for something quick and delicious for lunch, but come evenings and weekends the 1 and 3 mile area around the location becomes a ghost town. 

You also have your eye on a power center in the suburbs where you will be surrounded by a few major big box retailers, as well as a movie theater and a number of restaurants. Due to the heavy residential nature of the area, your lunch business will not be great, but evenings and weekends you will be slammed as individuals, families and groups of friends look for a place to “grab a bite”.

Which location scenario you select will have a dramatic impact on almost every aspect of your business plan.  While your core product offerings – burgers and sandwiches - will be consistent, nearly everything else may be slightly or greatly different. 

For instance, how large a space and how many seats will you need to meet customer demand? What are the demographics of the individuals within a 1, 3 and 5 mile radius, as well as those of non-residents such as workers, tourists, students, etc.?  How will your average ticket price (food and beverage) differ between a lunch-centric crowd and one where most customers visit you for dinner? How will you promote and market your restaurant to your target customer? What are your hours of operation?  How will you staff your restaurant to ensure you have proper personnel at all times?

This is just some of the information in a restaurant business plan that will differ based upon your choice of a location. 

So, what should you do if you don’t have a location selected yet?  Do some basic research and pick something.  Even if you end up not securing that particular spot, you will have written a business plan that demonstrates how you think and gives your reader a plausible scenario by which to judge you, your team, your concept, your potential, etc.

Once you have secured funding, or at least gotten much closer to the financing finish line, you will be able to reexamine your location options, select a final space, and then make any necessary changes in your plan to reflect this new reality.  In fact, you may even be able to work with your lender or investor to help you due the final set of due diligence, review your lease or purchase agreement, secure a contractor to complete your TI work, etc. 

So, don’t panic if you are starting a restaurant and have yet to find that perfect or final location.  As business plan writers who work with restaurateurs on a regular basis, we know it would be great to have a signed lease agreement on your dream space. However, this is not always feasible so pick something that would make sense if it happened and then continue to make changes to your plan as the situation changes.

Good Luck!

5 Tools to Help you Startup Your Business Remotely

Written by Cristian Rennella on Tuesday, 24 June 2014. Posted in Technology and Innovation

Six years ago we made the decision that each of the founders of our start-up would work from their house or apartment so as not to commit ourselves to the fixed expense that an office rental represents.

To be honest, everything started as a purely economic aspect. However, even today, that we have the financial possibility of renting an excellent workplace, we still choose to keep on working from our house because of the factor that we have named “work and life quality.”

Even when making our enterprise scalable, which currently has 34 employees, we keep on implementing our philosophy of successfully working remotely.

Back in 2008 we were the only exception; we were the only start-up working with no office. Today, many start-ups adopt this new working mechanism.

We studied how to implement this methodology with 26 start-ups that also work without an office in order to be able to improve as an enterprise based on experiences of our partners. We’d like to share throughout this article, focused on 3 main pillars, everything we have learned.

Email and teleconferences are not adequate

Working with this methodology, working with no physical office, makes constant communication essential. But most relevant is to define as a starting point “how” we communicate within this context in which we don't physically see each other every day.

The road to follow is definitely not the one of the email (Gmail) and teleconferences (Skype). These were the two mechanisms we used during our first years of work and we were wrong without doubt.
In the first place, the email per se wasn’t developed from its origins as a tool to manage and optimize team work. And let alone for, as it was our case, turn it into a to-do-list (like we all do day after day.)

On the other hand, Skype ends up being our worst enemy like back then were the meaningless face-to-face meetings which were a total waste of time with our boss. In our case, we had previously worked as software programmers for IBM, Microsoft and Intel and we unquestionably considered meetings as an obstacle to our productivity (writing code.)

During the third year of our startup we decided to change to Basecamp and we now use Trello. These are tools, which unlike the email, were created with aim of team working efficiently despite the fact that each one is in a different place in the world. What it’s most important is that it allows us to control “where” each one of us and our colleagues are working in real time (without having to bother them via email.)

In this way we reduced the email interaction to almost zero, and we directly eliminated teleconferences. Our start-up policy is not to have group meetings anymore. Everything is communicated through text. For programmers like us, who need between 4 and 5 constant and straight hours of work in order to reach our maximum potential, any distraction or interruption that attending a meeting generates, results in directly losing those 4 or 5 working hours.

Task division is the key to success

The second pillar we identify as essential based on our own experience as an online start-up but also based on what we have learned from other entrepreneurs was to define since the first day “what” each one of the members of the project must do.

This is another item in which we also made mistakes.

Going to a workplace and personally seeing each other allows us to be in constant contact with our mates and interact with them to define what each of them will do, so as not to have several people working on the same task, doing redundant work, and in the end, wasting time.

Each one works from a different place, this is very frequent. The lack of assignment of tasks and responsibilities is the main cause that we identify as a factor for failure in this working methodology. Let's not forget that we are a start-up. We won't have bosses or project managers tell us what and when to do something.

As entrepreneurs, when we start, we don’t know exactly what to do since that is the aim of the new project: trying new things, innovating day after day and being able to finally find a repeatable and long-term scalable business model. However, we need to minimally define the responsibilities.

For example: one of the founders is going to be in charge of only programming, where we use GitHub that is an excellent tool for building software: 

The other founder will be in charge of legal and/or accounting tasks (where we use FreshBooks).

Finally, the last founder, will take care of client support, where the best tool for us is Help Scout:

After this, when we move forward, we’ll be able to divide more specific tasks of our start-up and its functionality as they arise daily (data base backups, billing and control, etc.)

I understand if this item seems obvious and even simple. In fact, it seemed like that to us at first too, but over time it ends up becoming the backbone of progress of our start-up. Having somebody responsible for each area (technical area, administration area, etc.) is the only way to successfully move forward every day based on clearly defined roles and responsibilities accepted by everyone.

Our office is our clients

Finally, an item I personally define as “unquestioned” emerges from growing hand in hand with our clients. In our start-up, as it can be read in the title of this section, we metaphorically define our office (which we don’t have) as our clients’ office.

What we mean with this is that when we are really working as a start-up, is when we are sitting next to our potential client in their office and learning from them: what it is that they need, how they interact with our tool, what pieces of advice or critiques they can give us, etc.

Not having an office which we have to show up and work at every day doesn’t mean we should stay working locked at home. This can lead us to a disconnection with the outside world, where our start-up is going to develop and which it will interact with in order to grow and become a big enterprise that offers real and concrete solutions to its clients.

The best tool we use to keep track of meetings with our clients is ToutApp that integrates with your Gmail account and save us a lot of time every single day:

How to Retain Top Employees

Written by Carrie Wynne on Thursday, 29 May 2014. Posted in Running a Business

It is people that make a business succeed or fail.  Each employee is motivated by something different. As Managers we need to meet our employees where they are and see them as individuals. This may mean revising some procedures and protocols that once worked for our companies. Our job is to retain top talent and uncover the key motivators for each employee and there are patterns and similarities for each generation. 

This infographic from Olivet Nazarene University lets you take a look at that.  For example we know that Generation Y loves to get feedback and prefers not to wait until review time to receive it. If you aren’t communicating with this employee on a regular basis they may go elsewhere.  Generation X dislikes being micromanaged and prefers a lot of independence.  You will lose a Gen X employee if you don’t understand and learn to navigate the waters. 

Both generations respond well to companies that implement retention plans such as professional learning and graduate degrees. Engaged employees will invest effort to see that the organization succeeds and they feel emotionally connected to the organization.   They want to do a good job and feel a great sense of accomplishment when the organization succeeds. 

People want to be involved in decision making and contribute to a culture of trust by taking ownership of problems and creating solutions.   You will see the differences along with the similarities in this infographic to help you find out what’s possible for your organization in terms of building a strong healthy team of dedicated employees. 

People don’t leave companies, they leave bosses.  When you genuinely connect with your employees as humanly as possible and understand the way they prefer to operate, a shift happens that will be mutually beneficial.  

 

The Benefits of Hiring MBA Level Employees vs. Everyone Else

Written by Carrie Wynne on Wednesday, 07 May 2014. Posted in Running a Business

The debate about an MBA’s value to your firm goes beyond productivity or performance. The case-study approach used in MBA degree curriculum's requires students to evaluate business dilemmas and to formulate the best plan of action, which is easily applied to real world situations. MBAs are sought after for their ability to think critically, deal with ambiguity and solve complex problems.

Mark Swartz, Canadian Workplace Specialist says, having one or more MBA’s on staff can signal your commitment to professionalize your operation. This could improve the perception of your company in the eyes of customers, suppliers and competitors. Strategic hiring decisions are often signaled by organizational goals and there are long-term benefits to hiring MBA level employees.

Thomas Robertson the dean of the Wharton School at the University of Pennsylvania says that business schools need to continually strive to stay relevant, and he thinks the MBA is one of the best tools a businessperson can have. It is more about the MBA level employee and how they fit into your organization then it is about which school they came from.  MBA degrees from smaller institutions offer the same training and remain remarkably similar across different institutions. 

Here are 3 reasons why hiring MBA level employees is a smart idea:

STRATEGIC THINKERS

These students were trained to trouble shoot, frame problems, and make recommendations.  All companies have certain flaws and some of these may in fact be critical, hindering real growth and lessening the company's overall competitive edge and profitability. They are well prepared for Entrepreneurship and have the capacity to understand and provide a fresh outlook on the complex issues surrounding company operations. In fact, one key component that Dr. Graydon Dawson of MidAmerica Nazarene University points out in this infographic about student’s recession proofing themselves is that students can greatly benefit from starting their own businesses while in school.

LEADERSHIP CAPABILITIES

Employers hire MBAs because they have the knowledge, training and skills necessary to be an integral part of a management team.  Problem solving and the ability to hold a vision at a higher level is an advantage when hiring an MBA employee.  They are trained to collaborate and build teams to achieve goals and understand the benefits of cross-functional team dynamics.

AMBITION

MBA programs are designed for high-achieving leaders who are ready to accelerate their career success. John Pantano, co-founder and vice president of sales and marketing at Lawrence, Massachusetts-based Radianse hires MBAs because they have professional training in problem solving. Pantano looks for MBA candidates who are ready to answer more than just stock questions. They’ve done some research and called a few customers. You get a sense of how they might spend their first 60 days on the job, and that is impressive. 

There are some common arguments against hiring an MBA in a smaller organization. 

According to Mark Swartz, Canadian Workplace Specialist some of the general drawbacks to hiring MBA’s include the person becoming over-qualified fairly quickly because there’s not enough room for them to move up the ranks fast.  Some companies would rather have someone with a decade or two of real experience.  Tossing an MBA into the mix might unsettle things and staff members who are performing adequately might begin to hear that you’re planning to replace them with younger more highly educated employees. It comes down to the individual and how they fit into your organization. 

MBA programs cover fundamental business disciplines such as marketing, finance, accounting, human resources, and information systems. MBA level employees are strategic thinkers that take an analytical approach. They are able to manage multiple aspects of the business while implementing change.  You can throw the difficult tasks their way and they will perform according to expectation.

The advantages prevail over the disadvantages of hiring MBA level employees.  If their goals are aligned with your company goals making a decision to hire an MBA level employee is a great investment.  They are an asset to any company looking for growth and efficiency.

Business Seating Guide - Where to Sit in Professional Settings

Written by Matt Zajechowski on Monday, 05 May 2014. Posted in Marketing a Business

In the business world, we face many high pressure situations on a daily basis.  Everything from interviews, presentations, business lunches and sales meetings. With so many important things to focus on, one often neglects one very important detail in all these key situations and that is where you should sit. I know it may sound like a small detail, but where and how you sit can have a positive/negative impact in key business situations. The seating experts at Seats and Stools have put together a really cool infographic that shows where to sit for professional success in several key situations that most people deal with on a semi-regular basis. The infographic from Seats and Stools can be seen here

The graphic covers the following business situations: interviews (both group and one on one interview’s), brainstorming sessions, presentations (1 to many, co-presenters, panel presentations and sales meetings) and also the all important business lunch. The graphic also shows where the interviewer/presenter is likely to be seated and then shows where the best location to sit is.  Be sure to follow this seating advice to ensure professional success in the workplace. Have you encountered similar success/failure in regards to where you sit in key business situations?  You can see the entire graphic below.

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