How to open a restaurant?

1
How to open a successful
restaurant?
A practical guide

3
In this presentation I will show you how to
choose wisely the right concept and
location for your restaurant so that you
have a good chance of becoming successful
businessman

4
We will be talking about 4 main things
Choosing the concept Analyzing target group
Choosing the right location Analyzing your business in Excel

5
What we will show in this presentation is a part of extensive
on-line course where you can get all additional resources
including Excels
How to open a restaurant?
Click to check my course
$95
$50

7
There are 4 things that you have to get right when opening a
restaurant
The right concept Served to the right target
group
At the right location Perfectly executed

8
Getting the right concept means deciding on the following
things
Type of food served
Service level
Look & feel
Size
Capacity
Needs it covers
The right concept

9
You cannot build everything for everybody so you should rather try to be
something for somebody – in this case specific segment. Therefore, you
have to answer some questions
Who you concentrate on?
What is their socio and
demographic profile?
What is important to them
How do they communicate?
What is their consumption
level?
Served to the right target
group

10
Even the best concept can only work at well chosen location where you
target group is present. To decide whether location is good or bad you have
to measure the size and quality of traffic
Total traffic at given location
Who does constitute the traffic?
What is the reason for the
traffic?
What % of traffic does belong to
your target group?
What is the seasonality of
traffic?
What is propensity to spend?
At the right location

11
Finally you have to execute the concept according to the promise
conveyed by the concept and the brand in a consistent manners
Recruitment machine
Training machine
Consistency of service
Procedures and checklists
Data driven supervision
First-line management
Perfectly executed

12
Why you should work
first in a restaurant?

13
Restaurant is a type of very physical
business. It is a mini factory. To understand
it you have to work there. On top of that
you can learn a lot of nice things

14
Below you can find things that you should pay attention to
while working in a restaurant. Later they will prove priceless
• What does the consumer like, prefer, buy,
order?
• How old are they, what gender are they?
• To which social group do they belong?
• What is the customer segment?
• How many consumers visit the restaurant
daily?
• How many consumers stay inside and order
the food?
• How big is the conversion rate?
• How long does the restaurant prepare meals?
• How much do ingredients cost?
• How big is the restaurant?
• How many clients can fit in the restaurant /
What is the capacity of the restaurant?

15
How You should choose
the right concept?

16
Introduction to choosing
the right concept

17
There are 3 main ways to get the concept
Franchising
Cloning
Developing new concept
F
C
D

18
To chose the right concept you have to learn more about
concepts the following things
Type of food served
Service level
Look & feel
Size
Capacity
Needs it covers

19
The method you will use for finding the right concept depends
on the type of concept you will choose
Concept
Storecheck
Franchising concepts base
Marketplaces with recommendations
Restaurant’s Fanpages
Keyword Planner
Industry reports
On-demand marketplace
F C
C D
F C D
C D
F C D
F C D
C D

20
Introduction to store-
checks

21
5 10 15 5 35
Number of SKU
Location:
Number of salesmen:
Competition: Saturn, Karen Notebook, iSpot
Size:
Number of SKU
Presented products
Structure of the exposition (%)
=100
PC Laptop Printers Phones Monitors Photos Others
-
3
E
+
Knowledge of
the product
offer
Sales skills
How active
salesmen are
Behavior
Usage of
marketing
materials
Level of service
• Salesman was able to respond to the request placed by the customer and it seemed that he had
deep knowledge of the products
• Salesman did not try to figure out what price level I was interested in. Surprisingly was proposing
always the cheapest products
• Salesman did not show the full potential range of benefits coming from the purchase (price of the
software was for some models incl. in the price, possibility to buy in installment)
• Salesman was very enthusiastic during the talk
• Salesman did not try to convince that the price is good and did not try to understand why I leave
without the purchase
• Salesmen did not try to do some cross selling or up-selling to other customers who purchased the
base products
Shopping mall
70 sq m
2
Other observations
Here you can see an example of store check for B2C – a shop
selling computers
Laptops:
Pendrives: Firma No. of pieces
Cool drive
Kingston
Toshiba
6
1
1
Brand No. of pieces
HP
Toshiba
Asus
Sony
Samsung
Lenovo
Fujitsu
10
11
5
3
2
1
1

22
10 5 85 00000
Store profile
Location:
Rating of the location:
No. of salesmen
Competition level:
Size:
Number of SKU
Presented products
Structure of the exposition (%)
OSB Others
=100
-
3
E
+
Ability to adjust the product to the
customer
Technical knowledge and
knowledge on the application
of the products
Ocena pracowników składu
Center
1
500 m2
4
Service level
3
Plywood
Chipboard
MDF i HDF
OSB
Plank
Veneer
Countertops
Furniture fronts
Fittings
Other
0
0
0
2
0
0
0
0
1
1
Number of competitors in
radius of 3 km
3
Fittings
No. of SKU
Lead time
Home delivery
Other services offered
Shop with fittings
Limit on receivables
Payment terms
Other non standard products
immediate
n/a
no
Yes
n/a
n/a
Building materials
Here you can see an example of store check in B2B sector
for a company selling wooden semi-products
Sales skills
How active
salesmen are
Knowledge of
the product
offer

23
Example of store checks
in restaurants

24
Let’s have a look at the store check done at a Bobby Burger – a
slow burger concept
Country of origin  Poland
Typical size
In sq m
 60-120
Investment needed
In thousands of USD
 50
Average price
In USD
 6.5
Production of food  Produce
to order
Staff
In people per shift
 1+ 2 cook
Monthly revenues
In thousands of USD
 45
Number of open restaurants
In pieces
 38
Food Main competitors
Basic Data

25
Let’s have a look at the store check done at a Café Vincent – a
french cafe and bakery
Country of origin  Poland
Typical size
In sq m
 130
Investment needed
In thousands of USD
 200
Average price
In USD
 3.5
Production of food  Produce
to shelf
Staff
In people per shift
 2+3 baker
Monthly revenues
In thousands of USD
 100
Number of open restaurants
In pieces
 4
Food Main competitors
Basic Data

26
Franchising concept
database

27
If you are interested in franchising you should go through
following bases
 You can find here general info on the concept (investment and cash needed, general
description of the concept), fees (franchising, royalties, advertising), links to social
profiles of the concept
 You can select data using filters (type, investment size, location, age of the concept,
segments)
Franchising.com
Description
the webpage of the concept
segments)
 There is a ranking of the franchising concept and its historical development
 Historical development of the number of units and development over the last 1-3
years
 Links to related articles
Enterpreneur.com
the webpage of the concept
segments)
 Examples in Poland are: : http://franchising.pl/ , http://portalfranczyza.pl/,
http://franczyzawpolsce.pl/
Local databases in
your country in
local languages

28
Recommendation
marketplaces

29
Recommendation marketplaces give you a chance to learn what is
important for them. Reviews give you great starting point
 Yelp develops, hosts and markets
Yelp.com and the Yelp mobile app,
which publish crowd-sourced
reviews about local businesses, as
well as the online reservation
service SeatMe and online food-
delivery service Eat24.
Description
 164M
Number of visitors
(all world)
 2 in US in Travel
 54 in US in All
#Ranking in Appstore
 50K in New York
 95M reviews
(19%
restaurants)
Number of
restaurants
 24 in US in
Food&Drink
 6M
 124M  5 in US in Travel
 165 in US in All
 31B  2 in US in Social
networking
 5 in US in All
 Zomato - similar to Yelp;
concentrates on restaurants. Strong
in Asia and Easter Europe (thanks to
acquisition)
 TripAdvisor is the world's largest
travel site*, enabling travelers to
plan and book the perfect trip.
 10K in New York
 Profiles of restaurants of the
facebook. Facebook allows giving
reviews
 37K in New York
 n/a data

30
Check the whole the on-line course where you can get all
additional resources including Excels
$95
$50

32
Restaurants are communicating with potential customers using extensively
social media. You can learn a lot through their accounts and social media
 How important it is for your type of concept?
 How many fans do they have?
 How do they communicate with the customer?
 How the concept and dishes look like?
 What specific concept is praised or criticized for?
Description
What you can
learn about the
concept?
The most
popular social
media used

33
Keyword Planner -
introduction

34
You can learn a lot by having a look at the searches fed into
the google
 You can see for what people were searching
and how many searches there were
 Size of the market (in terms of people
interested or rough number of transaction) can
be estimated on the basis of it
Size of the
market
Description Tips
 Key word planner gives you estimate how much
you would have to pay per click for a given
keyword
 If you know how much paid traffic you want to
attract you can estimate the needed budget for
google AdWords (ads showing when people
search)
Potential
money you
would have to
spend on
marketing
 Use many different phrases
 Look what keywords pop-up
 Look how many clicks there were per
keyword
 Look at the price per click but also look for
the number of searches performed. Ideally
you would want to have a lot of searches
at lowest possible cost
 AdWords gives some estimation on the
level of competition
 Sometimes it is not that optimal (for
conversion purposes) to go for Page 1 in
searches. Those willing to go beyond Page
1 are more likely to convert
 Always when thinking about the marketing
budget have in mind how much you
benefit from a customer. CAC should be
much lower than LTV

35
…here you have an example of key words for t-shirts in USA

36
Keyword Planner –
example for restaurants

37
Using Keyword you can check the popularity of specific
concepts on the basis of how many searches were made
 You put in the Keyword search some words that
can help you see what is the most popular
concepts. For example if you want to see the
situation in San Francisco you should put “San
Francisco restaurants”
 Afterwards you put the same phrase in Google
o see what answer you will get. You do the
same for the keywords suggested by Keywords
Planner,
Popularity of
concepts
Description Aim
 Discover to what extent people use the
restaurant
google to look for a restaurant
 See what is really popular (how man
people search for a specific concept, what
is he competition what phrases do they
use
 Keyword generated related words connected to
the keyword you have submitted
Specific words
used by
people
 See how do people phrases they searches

38
Ready-made reports on a
specific concept

39
Use the main research platforms to find any information
possible on specific concepts
Where you
should search
for ready
made reports
Description
 Full market reports
 Interviews with CEOs, owners, managers
 Commercials for specific concept
 History of
 Franchising booklet / Franchising introduction
 Conference materials
What you
should look
for

41
Check the following on-demand marketplaces
 2.3M
Number of visitors #Ranking in Appstore
 n/a
Number of restaurants
 10.6M
 1.4M
 1.8M
 0.06M
 9 in US in Food&Drink
 23 in US in Foos&Drink
 4 in UK in Food&Drink
 8 in Germany in Food&Drink
 330 in New York
 330 in New York
 450 in New York
 n/a
Name and website

42
Check the following on-demand marketplaces
 0.7M
Number of visitors
#Ranking in Appstore
 n/a
Number of restaurants
 0.05M
 0.5M
 0.17M
 8 in France in Food&Drink
 n/a
 n/a
 Not applicable
 Not applicable –
operates many brands
 Not applicable – operates
many brands
 300 K
Name and website
 Not applicable –
operates many brands
 Not applicable – operates
many brands
 40 K

43
How to check whether the
location is good enough?

44
Introduction to choosing
the right location

45
There are number of methods that can be used to check
whether certain location is good for your restaurant or not
Location
Store checks
Google Maps
On-demand marketplace
Keyword Planner
Daily deal sites (i.e. Groupons)

46
How to use store checks to
check a specific location?

47
You should do store-checks at similar concepts and at the
location where you want to open the restaurant
Passing by
Engaged / stopping
Leaving
Taking away
In store

48
Have a look at the location related KPIs for Bobby Burger
concept
# of visitors  29
Conversion in-store
In %
 90%
Conversion take-away
In %
 3%
Engagement rate
In %
 10%
Estimated revenues
In K USD
 45
Location Data

49
Have a look at the location related KPIs for Vincent concept
# of visitors  44
Conversion in-store
In %
 7%
Conversion take-away
In %
 73%
Engagement rate
In %
 3%
Estimated revenues
In K USD
 100
Location Data

50
How to use Google Maps to

51
Traffic
Competition
BigSmall
Small
Big
 Sweet spot – big market and weak
competition
 May also mean that it is too early to
enter for some reasons
 What matters for you is the traffic of
your target group
1
When you are looking for a location you are actually
looking at market size and competition level
 Big market with established players
 You are likely to get your share of the pie
 Probably difficult to be massively
successful
2
 Potential niche - you may create small
successful business
3
4
 Avoid as it will be a blood bath
 You will compete with many players
for small market

52
There are 3 main question that you have to answer
What is the catchment area
How many altogether restaurants there are in the catchment area
How many of them are similar concepts

53
Catchment area can be just a street at which your restaurant is

54
Catchment area, especially with a lot of delivery / on-line
orders can be a whole area

55
How to use on-demand
marketplaces to check a
specific location?

56
Similarly like the google Maps we check the on-demand
marketplaces
Define the address for which you want to check
Define the category you are interested in
Check how many restaurants there are within the distance
Define the distance within which you consider them competitors

57
How to use recommendation
sites to check a specific
location?

58
Similarly like the google Maps we check the on-demand
marketplaces
Define the address / district / neighborhood for which you want to check
Define the category you are interested in / filters
Check how many restaurants there are within the distance
Define the distance within which you consider competitors

59
How to use Keyword Planner to

60
How to use daily deals sites to

61
You can use the daily deal sites to see whether certain location
is not too overcrowded. High level of deals suggests that you
can have troubles
Overall discount
level for the
location
Number of restaurants that provide daily
deals in the location
Total number of restaurants in the
location
Category discount
level for the
location
Number of restaurants in a specific
category (i.e. sushi) that provide daily
deals in the location
Total number of restaurants in a specific
category (i.e. sushi) in the location

62
How to analyze your target
group ?

64
There are number of criteria you can use to segment your
market
Type for criteria you can use
• Gender
• Age
• Location
• Money spend per meal
• Frequency of visits
• Type of cuisine you are serving
Examples
• Usually men and women
• 0-12 year old
• 13-18 year old
• 19-25 year old
• 26-35 year etc.
• The capital
• Big city, Average size city
• Suburbs, Center
• By states, provinces, districts
• Etc.
• 10-20 USDmax
• 21-35 USD
• 36-60 USD etc.
• Italian
• Fast food
• Sushi etc.
• daily
• 1 a week
• 1 a month
• From time to time (a few times a year)

65
We recommend choosing 2 criteria to create sensible segmentation. Below an
example of such an attempt – we took the frequency of visit and the spending per
1 visit to divide the whole market into understandable pieces
Casual
dating
Wealthy
nomads
Stay at
home
Fast food
freaks
Frequency of visits
Spending per 1 visit

66
After you have looked at the market it makes sense to pick 1 segment that
will become your primary target. For them you will be building the
restaurant, so you should know their preferences and needs
Casual
dating
Wealthy
nomads
Stay at
home
Fast food
freaks
Frequency of visits
Spending per 1 visit

67
Age:
After choosing the segment describe your ideal customer
from this segment
Expectation to design:
Frequency of dining out
Average Spending
Couples age 25-35 with higher
salaries
Cozy, with little resemblance to
chains
1 time every 2 months
100 USD / visit
Expectation to location: Interesting, unique
Expected CAC 200 USD
Time spend in the restaurant on a
1 single visit
They spend a lot – on average 1.5 h
per visit
Prices sensitivity Small

68
$95
$50

69
How to analyze targeted
customer segment -introduction?

70
You cannot build everything for everybody so you should rather try to be
something for somebody – in this case specific segment. Therefore, you
have to answer some questions
Who you concentrate on?
What is their socio and
demographic profile?
What is important to them
How do they communicate?
What is their consumption level?
What they like and dislike in the
concept?

71
The last group of on-line tools puts at your disposal numerous
solutions giving you in-depth knowledge of your competitors
and markets
Targeted customer segment
Off-line interviews
On-line interviews
Facebook Audience Insights
Analyze profiles of your customers on social
media
Ready made reports on customer segments
Food Bloggers

72
Off-line interviews for
understanding the customer
for known concept

73
Where you can find respondents?
• You can follow people you do not know; If they follow you back you
can write to the
• Do not spam these people, have some interaction with them before
you ask the for interview
• You can easily get in touch directly or through comments on posts
• You can also join groups and invite them to participate in the tests or
interview
Family, Friends, Neighbours
Where Type of Restaurants Comments
Twitter
Facebook
• Limited number of respondents;
• Small differences in demographics;
• The answers may be subjective;
• On the other hand, you can count on friends for honest answers
• All
• All
• B2B catering
• All
Customer in the concept you are
exploring
• All • You can get fast and easy information from first hand from customers
present in the specific concept
• They can show you on the spot what they like and what they dislike
Recommendation sites
• You can approach people giving positive and negative comments
• The group is a bit biased – they are usually more active and more
critical than average customer
• All

74
There are a few rules of interviewing to keep in mind:
• Minimum of 15 respondents
• Talking face to face
• Do not record - take notes
• Prepare script of the interview
with ready questions
Source: Lean Analytics: Use Data to Build a Better Startup Faster; A. Croll, B. Yoskovitz; Running Lean, Ash Maurya
• Take a photo of the respondent
and the food they have
ordered

75
People say what they think the other person wants to hear, so use
the 4 measures to prevent "guiding the witness" (push polling)
Do not
show your
emotions
Ask
specific
questions
Dwell on a
subject
Watch for
signals
• Avoid biased expressions like: "Do you agree with that ..." – it may lead them to the answer you expect;
ask questions in reverse, so that he has to disagree with you to show that he cares about the problem
• When the respondent knows something about you, i.e. you're a vegetarian, he will be inclined to
positively respond to questions about the protection of the environment
• Look neutral, do not send signals, and do not suggest any point of view
• We get an honest answer when we put the respondent in uncomfortable situations, for example ask for
prepayment of 100 EUR
• The more specific questions, the more realistic answer
• Ask about friends. Do not ask him if he "smokes pot", but "what percentage of your friends are doing it"
– reflects his approach
• Ask 5 times the question "why"
• You can interview accompanied by a partner who will follow body language of respondents; maybe
something causes nervous ticks and indicates a sense of discomfort
• Columbo-style question: unexpected question that asked after you had already said goodbye to the
respondent. In this way, you can surprise and confirm or deny something important, what has been said
earlier in an interview

76
Off-line interviews when
creating new concept

77
As a part of the market research you have to define what
characteristics should have in your MVP. Off-line interviews are
perfect for this purpose
Find a problem worth
SOLVING
Find a solution that
someone will WANT TO PAY
for
This will determine the features and
functionalities of the MVP

78
Conducting face-to-face interviews is very important because
it allows you to find or confirm the existence of the problem

79
There are a few rules of interviewing to keep in mind:
• Minimum of 15 respondents
• Talking face to face
• Neutral place
• Do not record - take notes
• Prepare script of the interview
with ready questions

80
While interviewing have in mind the following advices:
Set the stage
Identify the
segment
Introduce the
problem
Test the
problem
Verify the
solution
Ask for
something
• Highlight the aim of the meeting
• Explain what you will talk about and what you will ask him to do
• Check which segment he/she belongs to
• Collect the demographic data and specify the segment to which belongs the respondent
• Explain the problem
• Explain how you came across the problem and why you believe it is important
• Sometimes not to lead the witness speak generally about problems in the respondent field or skip this stage
entirely /move it to the end of the interview
• Ask the respondent to rank problems from the most important to the least important
• Ask about other related issues / problems they think are worth mentioning
• Try to understand respondent ‘s point of view
• Discuss problems in the order of importance and how the respondent solves them what solution he is using
• If he does not show interest this it means that there is a discrepancy between your business model and the
reality
• Ask for another meeting to discuss the solution (in the future this may be one of the first customers) once
you have something that shows
• Ask for several contacts to his friends to also perform a conversation with them

81
Pay attention to the signs saying that your idea is a good one:
YES
Money
Did they already
try to solve the
problem?
How interested
is he?
Nonverbal
communication
 The responder wants
to pay for your
solution right away
 The respondent tried
himself to solve this
problem
 The respondent has a strong
interest and passion in
talking about the problem
 The respondent is
animated and leaning
forward (positive body
language)

82
Disturbing signs that may show that the idea is not entirely
good:
NO
Focus
Did they already
try to solve the
problem?
How interested
is he?
Nonverbal
communication
 Respondent is not
focused on the
conversation and the
topic; seems distracted
 Respondent did not
undertake any attempts
to solve the problem
 The respondent talks
a lot about
everything but not
about the problem
 The respondent is slouching in
his chair of his shoulders are
slumped; shows a lack of any
interest (negative boy language

83
Use interviews to answer 3 important questions:
Is the problem serious?
Does the
problem affect
a large number
of people?
How the
problem has
been solved so
far?
or
or

84
You need to assess all interviews according to
standardized scores
Design assessment
criteria
Define
responses
Assign
points
 4-10 criteria  3-4 closed replies  Fore example. use scoring
system form 0 to 10 points
per answer
 Come up with at least 4
criteria for scoring
respondent's behavior during
the meeting
 Come up with 3 types of
answers, to which you can assign
your observations, for example:
• Yes
• More or less,
• No,
 or
• Yes, by itself,
• Yes, at my request,
• No
 Assign scores to answers for
example:
• Yes-10 points ,
• More or less-5 points,
• No-0 points
 Set the threshold for judging
whether it makes sense to
solve the problem or not –
should be around 75% of
Maximal Total Score
# options
Description

85
If the total score is below set threshold then
you should reconsider what to do next
Is the total score
above the threshold?
YES
Proceed with market
research
NO
Abandon the idea
Look for a subset of
interviewee for which
the total score was
much higher

86
Below you can find some examples of evaluation criteria allowing
you to check what is the attitude of the respondent to the problem
 Did the respondent sort by importance the problems presented by you?
 Has the respondent been undertaking any active steps to solve his
problem?
 Was the respondent focused during the interview and engaged in the
conversation?
 Did the respondent agree to another meeting related to the
presentation solution?
 Did the respondent refer you to other people with whom you could
talk?

87
Using the top-down and bottom-up analysis you can
calculate for how many people the problem is interesting
enough so they can spend some money on the solution
TOP-DOWN ANALYSIS OF AVERAGE RESTAURANT
REVENUES
• The total amount spend by people in the USA on eating
in restaurants
• The percentage of the amount spend in NY
• The number of restaurants
• The calculation of revenues per one restaurant
BOTTOM-UP ANALYSIS OF AVERAGE RESTAURANT REVENUES
• The average number of tables in a restaurant
• The percentage of reservation of tables and average price per table
• Multiplying the number of days in the year (including seasonal effects)

88
Suppose you want to design a new solution that helps
people lose weight…

89
…then you should check whether people are
trying solve the problem and if yes how do they
do it?

90
The fundamental question to yourself:
Do I want to deal with this problem over the next 5 years?

91
People say what they think the other person wants to hear, so use
the 4 measures to prevent "guiding the witness" (push polling)
Do not
show your
emotions
Ask
specific
questions
Dwell on a
subject
Watch for
signals
• Avoid biased expressions like: "Do you agree with that ..." – it may lead them to the answer you expect;
ask questions in reverse, so that he has to disagree with you to show that he cares about the problem
• When the respondent knows something about you, i.e. you're a vegetarian, he will be inclined to
positively respond to questions about the protection of the environment
• Look neutral, do not send signals, and do not suggest any point of view
• We get an honest answer when we put the respondent in uncomfortable situations, for example ask for
prepayment of 100 EUR
• The more specific questions, the more realistic answer
• Ask about friends. Do not ask him if he "smokes pot", but "what percentage of your friends are doing it"
– reflects his approach
• Ask 5 times the question "why"
• You can interview accompanied by a partner who will follow body language of respondents; maybe
something causes nervous ticks and indicates a sense of discomfort
• Columbo-style question: unexpected question that asked after you had already said goodbye to the
respondent. In this way, you can surprise and confirm or deny something important, what has been said
earlier in an interview

92
Where you can find respondents?
• You can watch someone that does not necessarily have to
reply with the same;
• Do not spam these people, only when they mentioned about
an interesting question you can speak to them;
• It allows you to reach a large demographic data;
• You do not have to have their in your contacts;
• There are specific groups you can join. They focus on specific
topics
• All contacts are mutual
• By searching you can specify the size of the market, i.e.
restaurants, because they have own pages
• You can also join groups and invite them to participate in the
tests or interview
Family, Friends, Neighbours
Where Type of business Comments
Twitter
Linkedin
Facebook
• Limited number of respondents;
• Small differences in demographics;
• The answers may be subjective;
• On the other hand, you can count on friends for honest
answers
• Mobile application
• Site media
• Retail
• B2C Products
• B2C Services
• UGC
• SaaS
• SaaS
• Site media
• B2B Services
• B2B Products
• B2B
• Mobile application
• SaaS
• Site media
• all

94
You can use a specific tools to conduct fast on-line interviews
Tools
Source of
respondents
Sample size
• Facebook groups, fanpage and facebook / instagram ads
• Twitter
• Specific to the branch. For restaurants could be food blogs, recommendation sites,
• 50-100 with at least 50% being your targeted customer segment

96
Facebook Audience Insight is a module available to Advertisors
but can be also used for market research

97
Customer profile on
facebook

98
You can learn a lot by looking at your potential customers
profiles
 Try to figure out what language use your target
group, how do they communicate and with
whom (family, friends from school, friends
sharing their passion etc.)
 Visual language (photos, images) are as
important
Language and
the way they
express
themselves
Description Where to look for it?
 You can check what people are interested in
and what kind of communication from brands
/companies they react toLikes
Activity
 Comments
 Staff put on the timeline
 Photos
 Pages liked
 Liked posts
 You can understand better what do they do in
real life
 Comments
 Staff put on the timeline
 Photos
 Events

99
Ready-made reports on
customer segments

100
Who produces ready-made reports?
On-demand
marketplaces
Market research
agencies
Others
 On-demand marketplaces on
the basis of their transaction
provide some statistics
especially on seasonality,
average tickets, preferences
 Behavior of customers
observed by on-demand
marketplace may differ from
the customer behavior at
restaurants
 Some market research
agencies produce on regular
basis reports on consumers
and the overall competitive
landscape
 Part of reports are usually
available for free
 Media site devoted to
restaurants / cooking
 Franchising association
 Consulting companies helping
restaurants
 Consulting companies helping
franchisors and franchisee

101
Testing the concept of a
restaurant with MVP

103
What is MVP?
The minimum viable product is that version of a
new product which allows a team to collect the
maximum amount of validated learning about
customers with the least effort
(Eric Ries)

105
Characteristics of MVP
Has to be much cheaper than the end-product
You can do it much faster than the end-product
It consists of ONLY the most important features
(from the perspective of customers)
You can easily modify it as you get feedback from
customers
Enables you to test most of the hypothesis
comprising your business model (especially the risky
ones)

106
You can gamble and open at once the restaurant of your
dreams yet it will be prohibitively expensive and
painstakingly long…….
Cost: 80-1000 K
Lead time: 3-12 months

107
… or you can try the Food Truck as the MVP….
Cost : 10-100 K
 You test the
whole concept
 You can test
many locations
 You can test
menu
 You create
brand
awareness and
future demand
 Pricing can also
be tested

108
… the role of Mr Sandwich who goes from one office to
another and sells sandwiches enables you to test many
aspects as well
Cost : 1-2 K
Lead time: 1 months
 You can test
many locations
 You can test
menu
 You create
brand
awareness and
future demand
be tested (for
limited range of
products)

109
… another great MVP is catering – especially if your
menu is wider and more diversified
Cost: 2-10 K
 You can test
many locations
 You can test
menu
 You create
brand
awareness and
future demand
be tested

110
If you dislike the fuss of going around you can have
as MVP dinners at your place – first for friends and
after some time the acquaintances
Cost: 1-4 K
 You can test
menu
 You create
brand
awareness and
future demand
be tested (with
some small
tricks)

111
…. Or if you want to test also the look and fell of the
restaurant just rent an apartment near the targeted
location and with small changes create mini restaurants
Cost: 5-10 K
 You can test the
whole concept
 Only 1 location
can be tested
 You can test menu
 You create brand
awareness and
future demand
 Pricing can also be
tested

112
….when you wonder what MVP you should choose compare
them in terms of time and money needed and also….
540
55
2 6 3 8
Restaurant Food Truck Mr. Sandwich Catering Diner at your
place
Rented
apartment
Average investment needed
In thousands of PLN
8
2
1
2 2 2
Restaurant Food Truck Mr. Sandwich Catering Diner at your
place
Rented
apartment
Average time needed to create Product/MVP
In months

113
….and also have a look what and to what extent you can test
with specific MVP – concentrate on those features which are
the most risky
 Restaurant
 Food Truck
 Mr. Sandwich
 Catering
 Diner at your
place
 Rented apartment
Concept Location Menu Brand awarenessPricing Look and feel

115
When you want to set up a restaurant you have to not only
face the monthly recurring costs but also invest a huge
amount of money into the place

116
Have a look what you will spend your money on long before
opening of the restaurant
Purchase of the place
Furniture
Design
Kitchen equipemt
Domestic
Appliances
Computer, cash
till, POS
Uniforms for
employees

117
There are plenty of monthly costs that have to be paid every
month
Food and
drinksUtilities (water,
electricity, gas, waste)
Stock
Rental of the place
Services i.e.
book-keeping
Cleaning costs
Personel

118
Remember that apart from current costs you usually froze a
lot of cash in the stock

119
Let’s have a look at the simple model
 Number of meals per
day
 Number of days
Restaurant
# of
transactions
Revenues
Gross
Margin
Net Margin
Operating
Profit
 ATV - average
 Cost of marketing
 Franchising Fee
 Other Variable costs
 Fixed Costs
 % Gross
Margin
 % Food
ratio

120
In the part about the using store checks for location analysis
we were
Passing by
Engaged / stopping
Leaving
Taking away
In store

121
Before we go to Excel let’s talk about the logic we used to
build the e-commerce Excel model
 Conversion rate to
consumption at the
restaurant
 Conversion rate into
takeaways
Visits
# of
transactions
Revenues
Gross
Margin
Net Margin
Operating
Profit
 ATV for both
subgroups
 Cost of marketing
 Franchising Fee
 Other Variable costs
 Fixed Costs
 % Gross
Margin
 % Food
ratio

122
$95
$50

124
There are some
Daily Capacity
% utilization
% of Take-Aways
Average
Transaction
Value (ATV)
% of Ordered
via on-demand
marketplaces
# of daily
customers
% of Loyal
Customers
% Conversion
rate
% Gross Margin
Inventory in
days of sales
Sales Density Margin Density

125
Check my extensive presentation on productivity hacks to see
how you can me 10x more productive
Management consultant
productivity hacks
How to be lazy and still get things done
presentation

126
Subscribe to our channels:
www

127
Check my presentation on on-line models to understand
them properly
Business models
Practical guide for startups and entrepreneurs
presentation

How to open a restaurant?

More Related Content

What's hot (20)

Similar to How to open a restaurant? (20)

More from Asen Gyczew (20)

Recently uploaded (20)

How to open a restaurant?