As restaurant consultants and service providers, we have the privilege of working with some of the most delicious brands in the Middle East and all across the world. This section is dedicated to sharing our knowledge and learnings; think late night musings about why are donuts shaped like, well, donuts; some industry and legal insights from the ‘serious ones;’ and just simply our love for food and giving back what we’ve learnt to aspiring restaurateurs.

Common Mistakes When Launching a New Restaurant

It’s very unfortunate but we see well many often smart people get in the restaurant business and make many the same mistakes.
Today we are going to discuss some of the most common missteps and poor decisions that we see first time restaurant owners making both before and then after the restaurant opens.
If you decide to move forward and open your own restaurant, being aware of these common pitfall should be extremely valuable as you make those crucially important planning and startup decisions that can literally “make” or “break” your restaurant.
Avoid these common errors, and you will dramatically improve your chances for success.
We are going to discuss this topic within the framework of the three steps to restaurant success:
1. First of All, find out what they want, remember, it’s not about what you want to sell, or what you are passion about cooking, it’s all about what to the people in your market want in terms of Food, Beverage, Atmosphere, Service, Style, Price, Speed and so on.
2. Step 2, is Go and Get it.
After listening to the market and identifying what they want, you have to create it, that means finding the right location, and in incorporating the design, ambience, equipment, menu, recipes and skills needed to give your market what they want
3. And then Step 3, Give it to them.
Once the restaurant opens, you’ve got to be ready with the well trained capable staff to execute and deliver the high quality guest experience that your customers want consistently every time, and you have to be able to do it in a profitable manner.

Just to review further, the first two steps take place in the startup phase before the restaurant opens, and those decisions will determine whether you have a shot that having a good restaurant which is providing the experience that appeals to a sufficient number of people in your local market.

Step 3, Give it to them, begins on the opening day when the focus shifts from the startup activities to taking care of customers, ensure the quality and the consistency and managing the financial aspects of the restaurant.

These activities will determine whether the restaurant becomes a “good” that is a profitable business.

So, here are the common mistakes we see connected with Step 1, Finding out what they want.

1 Number 1, WRONG CONCEPT:
• Is we see many independent owners starting restaurants without finding out what the people in the local market actually want to buy.
In other words, instead of being market driven and determining what type of concept or experience that restaurant should provide, they started out focused inward, on the menu or the products that they prefer to sell, or the type of restaurant that they want to own and operate.
So, as a result, they begin the process of planning and developing the restaurant based on an idea or product or experience that they are personally passion about, before identifying if it’s something that people actually want.
If you cannot articulate who will want what your restaurant will offer and why they want it you will have a serious problem.
Now, do some folks get lucky? Yes they do!
But relying on luck is not a winning business strategy, especially when putting hundreds of thousands of dirhams or more on the line, THAT is a recipe for disaster.
Don’t make the mistake in believing that just because you and possibly a few friends or family members think you have a brilliant idea for a restaurant that anyone else in your town or area will think so too. You must find out the people in your market want to buy.
So how you find out what they want to buy!
You have to go out and talk to as many potential customers as you can and you ask them, what restaurants do you go to on a regular basis now and why?
And what kind of dining experience would you like to have that currently isn’t available.
Ask them to be specific, what kind of food, location, service style, price points etc.…
Would they be attracted to and how often they would go?
Talk to people and then listen very closely to what they say. Talk to enough people and I promise you, you will end up accumulating lots of incredible valuable information, and you will likely discover that what they want, is quite different than what you initially thought.
That is the first and the most important step in the process. Just because you built it, does not mean that they will come, unless, you are able to give them what they want. So FIND OUT what they want.
• We also see many independent restaurants are open that we refer to as “Weak Concept”, in other words, the restaurant has few of any meaningful distinctions that defining characteristics that set them apart from the competition, or delivers a clear compelling value proposition, it lack of distinction often means that the restaurant either intentionally or by default is attempting to appeal to everyone.
And when you try to appeal to everyone, very often, you end up appealing to no one.
One of the main reason many first time independents lack to find the characteristics is that they are focused almost exclusively on the food and the menu in describing their concept and restaurant .Sure, the food and menu is important, in most of the restaurants, it will be THE driving force of the concept, but never forget a restaurant today is SO much more than just the food, it’s about the entire dining or guest experience.
• In addition to the food and menu, a restaurant’s concept should encompass everything about the restaurant that touches the customer, PHISICALLY, VISUALLY and even EMOTIONALLY.
Let me explain.
A concept description should include meaningful and unique characteristics and design, atmosphere, service and even includes values, culture and other important aspects of your operation.
This could mean distinctions in sourcing products, sustainable practices, support for certain causes.
In other words, all the elements that define not only what’s on the menu, but also you are in a distinctive ways you intended to do a business.
Why this is so important?
The one reason is the largest living generation, millennials, those who are born between 1982 and 2004, tend to be particularly interested in the values and the operating practices that the companies they do business with.
They are looking for more than just products and services, they want an emotional connection with the companies that they patronize.
Millennials also spend more money dining out than non-millennials.
So when you are talking to potential customers, be sure and listen for all the things that they would like to see embodied in local restaurant.
Not just about the food and the service style, ask questions that drill down deeper to learn what types of values, business practices and other characteristics that they look for in companies that frequent on regular basis.
Again, listen to your market, let them tell YOU what THEY want and plan accordingly, your odds of success will go up dramatically

2. Now let’s move to common mistakes and step 2, Go and Get it.
• Another way to missteps, especially for first time operators has to do with finances.
Particularly the initial startup or the capital investment of the restaurant.
Often the first time restaurant owners in particular, their total startup cost in relation to the sale potential of the restaurant, let me say that in general the anticipated sales volume should be at least 1.2 to 1.5 times the Total Startup Cost of opening the restaurant:
For example, if it’s going to cost 1,000,000 Dirhams to open a new restaurant, there should be a high level of expectation that the restaurant in this location will be capable in generating annual sales of at least 1,200,000 to 1,500,000 Dirhams.
For every Dirhams of startup investment there should be an expectation of generating at least 1.2 to 1.5 Dirhams in sales for the project to make economic sense.
In a location there is LEAST, one thing you must do in considering any location is to prepare a reasonable conservative projection of sales volume based on an estimated check average and anticipated a daily guest counts. THIS is a very very important exercise to conduct in analyzing any site or location.

• Also, cost overruns are common for first time operators because there are always and surprises always end up costing more money. This puts many new restaurants in a position of starting out in a hole in owing money more than they have, that is why, under capitalization is such a big reason many restaurants go under shortly after opening or within their first year.
They simply runout of cash before the restaurant has a chance to become profitable.
We always recommend first time operators add at least a 20% contingency to the startup budget for unforeseen startup expenditures and cost overruns.
• Also, since many first timers are unfamiliar with the construction details, contracts, and choosing and working with contractors, problems often arise that extend the construction period or cause the project to go over budget.
• Another big mistake, is choosing or settling on a poor location.
As you can imagine selecting the wrong location can be devastating for a restaurant.
Here are few the most common location mistakes:
a) First, a restaurant opens in a wrong market.
b) Next is poor access or visibility, especially for the new concept, the location must be convenient and easy to access. Even the smartphone apps that help people find you online, still there is no substitute for a highly visible and appealing store front and sign that lots of people see it every day.
c) Another common mistake is going into a location that is too expensive, a good rule of thumb is that occupancy cost should be no more than 10 % of your yearly projected sales.
Occupancy cost includes rent, common area maintenance, insurance, real estate fees etc.…
Even if you have a stellar concept and lots of customers, if your rent is too high, it will seriously handicap your restaurant’s potential for success.
As you can see the restaurant business is much more than just serving food and customers, it’s also about numbers and making smart business decisions.

3. Now let’s move to step 3, GIVE IT TO THEM.
I’m talking about some of the common mistakes that occur once the restaurant is open.
• Number 1 in the operating phase is the lack of systems
Systems in a restaurant includes checklist and forms and manuals and procedures and other tools to ensure that the restaurant is organized and operates in a consistent predesigned and determined way all day every day
And these systems need to be in place and functioning on DAY ONE!
So that means that the process of assembling and creating some level of operating systems should begin way before the Opening Day. That is actually it is a very important start up activity.
In many new independent restaurants, there is no standard recipes, or instructions how to prepare every single item on the menu exactly the same way every time.

For more info please visit www.restaurantowner.com

Do You Need a Consultant?

• Every restaurant has challenges; that’s just part of life in the business world. So how do you determine whether your challenges warrant a consultant? Here are a few questions to ask yourself:
• Do you have a serious problem that just doesn’t seem to go away?
• Are you about to make a big decision in an area where your expertise is limited?
• Do you need an outside, objective opinion of how your restaurant is doing?
• Do you spend all of your time, and then some, managing daily operations and have little or no time to think and plan strategically?
• Is the restaurant consistently falling short of achieving its financial goals?
• Is the restaurant in crisis-management mode much of the time?
• Is your business transitioning into a new stage of development or growth?
If you answered yes to one or more of these questions, a consultant might be able to provide you with the expertise, answers and solutions you need.
________________________________________
Always Request a Written Proposal
A professional-looking, well-written proposal is a good sign you’re dealing with a good consultant. A proposal should contain these basic elements:

    Background.

Should be a brief but concise description of the problem and the effect it is having on your business. Does the consultant have a clear understanding of the problem and what’s causing it?

    Objective

. The expected outcomes and results of the project, preferably in specific, measurable terms. For example, our objective is to assist in the development and implementation of procedures and cost controls in the areas of sales and labor that will lower the restaurant’s prime cost 5 percent to 10 percent within 90 days. Deliverables, such as a report with formal recommendations, manuals, and checklists, should also be detailed here. Is this consistent with how you define success?

    Scope of services

. This section includes the functions to be performed and the plan for accomplishing the objectives discussed above. Who will perform the work, where the work will take place and a timetable for completion should be included. A list of information and personnel needed from the restaurant should also be provided. Does the plan make sense and are the functions and services to be performed likely to result in your objectives being met?

    Qualifications

. This includes an outline of the skills and abilities of the consultant. It should show related experience and resumes of the people who will work on the project. Do they have the skills and experience to guarantee successful completion of the project?

    Fees, expenses and payment schedule

. Consultants have different ways of billing for their services but it’s usually best for the operator to ask for a fixed fee for the scope of services to be performed. Depending on the nature of the work, consultants may also quote an hourly or daily fee. If this is the case, make sure an estimate of time required to complete the functions described in the Scope of Services is included in the proposal. Travel and other incidental expenses are usually billed separately from the consulting fees and these items should be addressed in this section also. Does the total cost of the consultant appear reasonable in proportion to the potential benefits you reasonably expect to derive from their work?

For more info please visit www.restaurantowner.com

Starting a restaurant: Be thoroughly prepared before taking the plunge

This post is cross-published with Data On a Plate.

 

A large number of entrepreneurs enter the food service industry with concepts and dreams alone, hoping that their venture will be successful because they’re offering something new to the market. It cannot be emphasized enough how critical it is for entrepreneurs to do their homework before jumping into the restaurant business. It starts with asking if the market is prepared to accept what you are offering.

Any amount of time, money, and effort spent on the groundwork for your restaurant can only benefit your business in the future. If you’re investing half a million to a million dirhams on a restaurant in the UAE, you’d rather spend the time and money initially learning from experts and getting your business strategy right than regretting it later when you start losing every single penny that you’ve invested. There are so many common mistakes we see entrepreneurs making that could have been avoided easily, and we also see them being repeated because of their carelessness.

 

Think beyond location

Nobody can argue against the importance of location for a restaurant business. If you can afford a prime location, take it only for the right reasons, such as your target customer, tenant mix, and propensity to consume.

However, the majority of new entrepreneurs face the reality of not being able to get the best locations. Furthermore, it would be unwise to spend all your capital acquiring a prime location and risking your cash flow, particularly if your brand is new to the market.

New restaurateurs must start thinking of alternative ways to get the attention of customers, such as better service and delivery. Good examples of such restaurants in Dubai that have created the wow factor include Freedom Pizza and Smiling BKK.

 

Have realistic ROI expectations

The restaurant business in the UAE is a capital intensive business, requiring from 1 million to 2 million dirhams. Don’t expect returns for at least the first two years. In the third year, you’d be lucky to recover some of your costs. If you survive up to the fourth year, you’ll start seeing a return on your investment.

It is common for restaurateurs to recruit the available talent, spend money on their training, and find out that they don’t perform up to expectations. Be prepared for hiring costs. You may need to hire and rehire until you have the best team.

 

Create a roadmap for expansion

If you want take the franchising route for expansion, take that into account in your business plan and develop your brand accordingly. The vision and commitment required for franchising a brand is different from those required for organic growth. Franchising demands the preparedness for co-ownership of the brand. It is important to have that mind-set even before you open your first outlet. This would require you to direct all your efforts to make your brand attractive to potential investors in the future.

If your restaurant is not ready for franchising after its first outlet and you need more confidence, open a few branches, test, and perfect your business models before talking to franchisees. If you’re not interested in franchising, consider launching smaller formats, which will make it easier for expansion.

 

Don’t become the barrier to growth

As captain of the ship, avoid becoming too comfortable that you forget the vision you had initially. You cannot be the jack of all trades. It’s easier to delegate responsibilities to the right people as long as you direct them towards your vision.

Avoid becoming entangled in the complexities of managing day to day operations that you start resisting change and gradually becoming part of the problem yourself. More importantly, keep the excitement of entrepreneurship alive and maintain the enthusiasm you had while starting out.

Event: How to use technology to create a competitve advantage

We’re pleased to welcome Mr. Ian Ohan, CEO of Freedom Pizza for our 4th F&B Mentor Series event.

Drawing from the local success of Freedom Pizza (formerly NKD Pizza), Ian will talk about “How to use Tehcnology to create a competitive advantage.” Now we know Freedom Pizza has a great reputation for its swift deliveries – so it will be interesting to see what role technology has to play to make that possible.

All yout fast food/fast causal restauenters and aspiring foodpreneurs, this is one event you shouldn’t miss!

Event Details

Date: Wednesday, 30 September, 2015

Time: Doors open 7pm; Talk starts at 7:30pm sharp

Venue: The Bureau Dubai (Souq Al Bahar)

RSVP on our Meetup Group

Imago Mentor Series #3: Franchising 101

Last month, Aseel F&B in partnership with Imago Growth Accelerator and The Bureau Dubai hosted Mr. Murad Al Nasur from Boubess Group. Mr. Murad, a 30 year old vetran in F&B industry shared some key insights on Franchising 101 for beginner franchisors and franchisees.

 

Below are some key highlights from his talk.

Key Learning #1: Know the brand inside and out

For both franchisors and franchisees, it is important to know the essence of the brand they have created/are bringing to the market. Some of the questions that need to be asked are:

  • What are the strengths and weaknesses of your brand? How do you mitigate the weaknesses?
  • How does the operation work? This includes the detailed processes that can be passed on to a franchisee.
  • What are the key elements that you need for a brand to succeed?

 

Key Learning #2: Know your customers

It is imperitive to understand your customers before you enter a market. You need to answer questions like:

  • Who do you want to serve?
  • As a franchisee, why did you choose that particular brand for your customers?
  • Does the brand suit the client’s taste and preferences?
  • Who are your preferred markets (in terms of geography and nationality)?
  • How is the competition in the market you want to enter?

 

Key Learning #3: Match the product to the customer
Match the product to the customer, not the other way around. A lot of people select brands as opposed look at the need it is solving – and for a concept to be successful it has the solve a need first and then be paired with a successful brand.

 

Key Learning #4: Be Original 
We see many copycat brands in the marketplace and that is the worst startegy to stand out, espeically in the long run. Invest in creating and running original brands that offer something unique to the marketplace.

 

Key Learning #5: Hire people that suit your brand

Corporte culture is everything. In addition to the required on-the-job skills, it is important to hire people who represent your brand DNA.  

 

We thank Mr. Murad Al Nasur for this wonderful talk. If you are looking to become a franchisor or a franchisee, contact us to schedule a free consultation.

Imago F&B Mentor Series #2: Your success as a Restaurant Owner requires passion!

Entrepreneur.com states “Without passion you’ll run out of energy long before your actions yield the desired result.”

Imagine how much more important passion becomes in a competitive restaurant industry that depends on people & service!

On June 10, 2015, Aseel F&B and Imago hosted Entrepreneur Coach Moustafa Hamwi to find out more on how to be passionate yet practical, how to connect it with business, how to keep passion going when you run low, and how to convert passion to profit.

Watch the video below or on our YouTube channel.

Food vans on a roll in the UAE but rules are leaving a sour taste

Article Published on 7Days.

Food truck businesses in Dubai are expected to grow further as entrepreneurs seek a cheaper way to start restaurants, a business consultancy firm has said.

Aseel F&B has helped several businesspeople open up their restaurants on wheels in the past year – and three more are on course to start serving soon. Co-founder of the consultancy, Disha Pagarani, said organisers of all sorts of events around the city are open to the idea of inviting food trucks in to sell.

She said: “It’s a very recent business and it’s very new – but it’s on the rise.”

Pagarani said that the business would quieten down for summer but get busy again come October. “There are two food truck businesses we helped in the past and they have already started operations – Caramel and Onion. Two more are in the process of launching.”

But Pagarani said the main challenge these entrepreneurs face is sorting out the legalities of their businesses. She said there “are no clear guidelines” when it comes to food trucks – they are limited to where they can sell in the UAE - and owners have to secure approval from four government agencies.

The Department of Economic Development must approve the firm’s business plan, Dubai Municipality must give permission as it is the emirate’s food inspector, the RTA needs to give the green light as the truck will be on the road, and DEWA gives the go-ahead as the business will be using water and electricity.

“Food trucks are not as cheap as you think,” Pagrani said. “There are legal expenses and other factors depending on what you want to serve. For example, some entrepreneurs might want the food truck where they can cook live in front of their customers.”

To start up a food truck business, the cheapest costs about Dhs500,000 and the most expensive up to Dhs2 million.

One business, Moti Roti, started operations a few months ago with an investment of “roughly” Dhs500,000. But it lasted just one month. The owner of the truck, Tahir Shah, said that he was allowed to sell only at events and parties.

“We would sell at street nights in JBR and other events,” he said. However, Shah, who has temporarily closed down his business, insisted that even if he had sold just at events for an entire year, he would not have made enough to cover the cost of his initial investment.

“It’s not a regular income”, he said. “The events and parties won’t happen every day. It’s limited.”

He added that regulations should be considered giving food trucks a designated spot – or that they can drive around and sell.

How to start a food truck in Dubai? [Infographic] [Video]

On Wednesday, 13 May 2015, Aseel F&B in coordination with Imago Growth Accelerator and The Bureau Dubai hosted an event on How to Start a Food Truck in Dubai. Tahir Shah from Moti Roti, shared his insights on owning and operating a his own food truck business in the city.

The turnout for the event was incredible with over 120 RSVPs through our Meetup Page and Facebook event. We’re following up on this event with an inforgaphic that visually showcases some of the steps an entrepreneur will need to take to secure a food truck business in the city.

 

Food Truck in Dubai

 

You can also see the event video below.

Imago F&B Mentor Series – Food Trucks in Dubai

Have you seen those food trucks across Kite Beach and wondered how to start your own? Join us for Imago‘s first F&B Mentor Series with our friends at Moti Roti and find out how you can set up your food trucks in Dubai!

Speaker Bio

Tahir Shah is the founder and Managing Director of Moti Roti, the region’s first gourmet Pakistani popup shop and food truck.

Born in Doncaster to Pakistani parents, he grew up in a household rooted in a rich food culture where roti was shared at the table every night.

Graduating from Hertfordshire University he spend over 10 years working for Nokia, moving to the Dubai office midway through his career. Here, lamenting the lack of quality quick food options for office workers, he stumbled upon a new fast-food trend from the states known as Fast-Casual. This instilled in him a desire to change the face of Pakistani food, too long associated with butter chicken, naan, biryani, overshadowing the true style of food enjoyed at home, especially the humble Roti.

In 2012, he bit the bullet and started up Moti Roti. Within 3 years he has got his popup shops into 3 locations, and was nominated Restaurateur of the Year 2014 and will be amongst the first homegrown concepts to start a Food Truck.

Event Details

  • Date: Wednesday, 13 May 2015
  • Time: 7PM – 9PM
  • Location: The Bureau Dubai (click for location map)

Aseel F&B Launches Imago for Food & Beverage Industry

Aseel F&B, a Dubai based consultancy dedicated to providing turnkey solutions for start-up and established businesses in the food and beverage (F&B) space, today announced the launch of its new initiative Imago – the MENA region’s first accelerator dedicated to growth stage food and beverage companies.

Imago is a growth stage accelerator that works with upcoming F&B entrepreneurs to scale their businesses. The program provides a strong course curriculum, growth stage financing, affiliation with strategic partners, as well as access to the best minds in the regional F&B industry.

Speaking about the initiative Naaz Noor, the Founder and Managing Partner of Aseel Group said: “Working with F&B concepts in the GCC over the last four years, we realized that there are a number of high growth potential start-ups that haven’t been successful in scaling their operations. Some reasons for this have been factors such as: entrepreneurs having an unfocused growth strategy, allocating capital in the wrong areas, lack of funding to support growth objectives, lack of internal processes and systems to successfully grow, difficulty in finding the right talent, and sometimes unwillingness of the founder to grow beyond the first location.

However, we believe that with the right attitude, knowledge, mentors, investors and partners, F&B companies can rapidly scale to achieve high growth. Imago has been created to fill this gap and to provide F&B entrepreneurs with high growth potential the right tools, contacts and techniques to truly take their businesses to the next level. We have some great mentors already supporting the program and we are looking to reach out to many more who can provide their expertise to upcoming entrepreneurs.”

Imago is a 3-month program commencing in May 2015 which will allow participants to learn, plan and grow their businesses. Candidates from categories such as café and beverage concepts, fine dining, fast food concepts, desert concepts, bar and lounges or any other unique food and beverage concepts can apply for the program.

Featuring regular talks from industry experts throughout the program, the first four weeks of the program will aim at refining candidate’s business plans and laying a solid foundation for growth. Candidates will work hand-in-hand with Imago’s mentors and partners to create systems and processes that will help in the execution of their growth strategies.

The next two weeks of the program will involve candidates pitching their idea to potential investors with the aim of securing funding in exchange for a percentage of the business, arranging debt financing, or securing a deal with one of Imago’s partners.

In the last month, with the funding in hand, participants will begin implementing their plans to reality with a team of mentors, advisers, and partners guiding them through their first practical steps towards growth.

Currently in its initial stages, the program aims at inviting candidates from different sectors of the F&B industry to apply to the program. Candidates looking to join the program will have to fill in an application form and fulfill certain criteria such as their business needs to be locally based, candidates should have been in the business for at least 2 years or more.

Mentors already part of the program include: Mohammad Yousuf, Director of Emerging Products and Innovation, Visa; Srinivasan Arun, Partner, Venture Consulting; Mehdi Mourtada, Managing Partner, Nexa Omnicard; Murtaza Manji, Business Coach, Action Coach; Rajeev and Simran Samtani, Co-Founders & Managing Partners, Xcel Accounting; Amit Vyas, CEO, Nexa; Shahram Safai, Partner, Afridi & Angell; Nabil Al Sayed, CEO, Masar Training & Startup SWAT; and Tariq Hameed, Senior Director at Alvarez & Marsal.

As one of the mentors, Tariq Hameed, Senior Director, Alvarez & Marsal, said: “This is a much needed initiative for early stage and start-up entities in the F&B sector and I am keen and excited to help breed success through my contribution. We need to see more of such initiatives that foster innovation and entrepreneurship, across other sectors too.”

All candidates applying to Imago Accelerator would have to pay a fee of $300. Candidates who are selected for the Imago Accelerator program will have to pay a nominal course fee of $3000.

 

About Imago
An initiative by Aseel F&B, Imago is a growth stage accelerator providing food & beverage entrepreneurs in the region with a strong course curriculum, growth stage financing, affiliation with strategic partners, and access to the best minds in the regional F&B industry.

Aseel F&B is a Dubai based consultancy dedicated to providing turnkey solutions for start-up entrepreneurs and established businesses in the food and beverage space. Conceptualized with the aim of providing high growth potential F&B startups that haven’t been completely successful in scaling their operations with solutions, the Imago program aims to help F&B entrepreneurs by providing them with benefits such as: access to industry renowned mentors and exclusive talks, a strong action-oriented program with hands on support, as well as funding and networking opportunities.

For media inquiries, please contact:
The Public Relations Company
Kay Braganza
kay.braganza@tprc.ae
M: +971 50 7681 684

Anita Aidasani
anita.aidasani@tprc.ae
M: +971 55 957 4860