Field Investigation Recap / Introduction to the Menu

The day started with each group getting up in front of the class and discussing the restaurants were were assigned to investigate. To recap, we were split into five small groups and sent out at the end of last class to check out local Italian eateries in the Chelsea area of Manhattan.

The content of the discussion centered around the three tenants of the concept statement: Design, Service, Food. From determining what these three elements were about, we took educated guesses about what these places did to be competitive; Chelsea has a LOAD of Italian eateries, multiple spots on each block. Here is a quick breakdown of what we looked at, and in italics how it differentiates themselves.

• Da Umberto -- high end prices, clubby, hard to notice. Quiet date spot
• Olive Garden -- illusion of a bargain, family-friendly, familiar to commuters and tourists. Safe & unchallenging
• Le Zie -- Ugly decor. Inexpensive. Interesting, fresh menu. For locals
• Il Bastardo -- Modern with nice traditional touches. Space to socialize & drink. Not-so-quiet date spot
• Bar Baresco -- Very wine oriented, lots of small plates. Sit for a snack and a drink

My team covered the last one. The presentation in class was a bit of a practice in public speaking, and I ended up speaking for us. Since we were there when it was closed, my wife and I had lunch there yesterday. The food was good, but we were offered wine and opportunities multiple times -- at one point my wife mentioned her pregnancy to politely get the waiter to back down. That caught the attention of the class, a few murmured congratulations. Huh. There is something to this public speaking thing. After that little pregnancy-aside, they seemed more alert to my comments about the design of the bathrooms (individual rooms with mirrors on three walls for checking yourself out), the large backroom (which according to the waiter, used to be a disco back in the day) and the slightly loud Euro-disco music in the dining room (which would of probably evoked a stronger negative reaction from an older clientele.)

Second part of today's class was an introduction to the menu. As mentioned earlier, one of our texts is called Management by Menu, whose pretense is that all planning, design and strategy in starting and running a food service operation is determined first by the menu. Richard proposed the question: What does a menu tell you about a restaurant.

• kind of food served
• level of dining
• clientele targeted
• service level (depending on how simple or complex dishes are determines the amount of training both front and back of house staff need, as well as how much staff)
• preview of the atmosphere and decor
• beverage selection
• operation information
• expectations of how much time the client will spend (a snack joint is a quicker turn around than a fixed menu with 6 courses)
• determines your equipment (a grilled steak will require a steak and....a grill)
• food & beverage cost
• space needed (expensive restaurants tend to give more wiggle room to each diner than a fast casual, which will pack 'em in)

A well designed menu is a key to success, in both it's content and graphic design. Richard quickly sketched two menus on the board. One was the proportion of an 8 1/2 by 11 piece of paper, the other was long and thin. The first had two dense columns of squiggles, the later a few small bunches of squiggles punctuated by spaces between them. From these basic sketches, we could infer that the first was from a lower-end place that could accommodate snackers and drinkers to a diner with a broad appetite, while the later was probably on the higher-end, demanding more of a commitment from the client in terms of time and money.

The class ended with another round of the mission statement workshop. Jazzman was absent, Pastry still hasn't written one, so we reviewed Northfork's statement again first, the coffee and gelato cafe in Long Island's Northfork. We bounced around the idea of the clientele's expectations -- if they are up there going to wineries, well, that's not kid friendly. Perhaps take the concept of the winery and transpose the coffee and gelato product on it? A flight of small tasting cups of coffee, matched with a flight of small tastes of gelato?

Then we got into mine, the first time it underwent the scrutiny of my fellow students, who seemed to dig it. While defending it and explaining it more thoroughly to Northfork, she said she started getting hungry for pizza -- I guess that's a compliment to me, that my enthusiasm got her motor running. Richard joined us and chimed in on my concept, giving some pointed (but always kindly) advice and pointers. I won't go into it here, but he did hint that opening a restaurant to create a reputation to market a pizza product on might be the way to go. I'm not surprised, as opening a restaurant is the whole gist of the program. However, there must be a way to make a reputation in pizza in ways other than just opening a storefront....maybe hooking up with a celebrity chef? Partnering with a known restaurant? Associating with another brand? His comments made me think, and will revise and add notes for tomorrow's class.

Introduction to the Menu / Mission Statement Workshop (Baresco, you're on notice!)

Richard started the day with 'Odds & Ends', where students speak of their restaurant experiences from the past weekend, through the filter of what we study. Russian Pam Anderson seems to go out a lot, late at night, with her husband -- they hit up Spice Market and Fig & Olive on different nights, both in the Meat Packing district. Other than being surprised by the lack of business they were doing on weekend nights around midnight, she was primarily annoyed by the 'small plates' of F&O being too much food -- no one likes to over-order.

The Ramen Kid described waiting for 2 hours to get a seat at a hot ramen bar, and drank a lot of sake in their bar while waiting. The advantage of hype -- people are not only happy to wait for a table, they spend on high-profit booze and the line itself becomes a sort of advertisement for others.

Whitey Sushi Cook described a dinner at a high-end sushi joint that offered nothing by way of dessert -- that annoyed Richard, as it's such an apparent way of pulling in a chunk of cash easily, particularly when the restaurant is not busy and you don't need to vacate the table. I chimed in, as I went to Korean BBQ with my friend K this past weekend -- I never get dessert at Asian joints, but she was in the need for a sweet and ended up getting the ONE thing they had for dessert -- red bean ice cream. It was good, but still. They were in a big hurry to get us out of there, there was a line.

I spoke of my recent experience at Batali's Otto -- the cold temp, the distracted waitress, the over-cheesed and poorly-made pizza. The professor said that underlined the fact that most people don't know what good food is -- places with a name like Batali can get away with sub-standard food because people just assume it must be good because of the media cloud. Richard went on a bit about the design of the restaurant -- the front is a very elegant bar...that is almost all standing room. They can pack in a lot of people for those high-profit drinks. Looking from the bar, you see a long dining room, with tables to the left and right, all spaced pleasantly with lots of room to move. However, when you pass through, there is the main dining room, with its smaller tables, chairs that bump up next to your neighbors, and waiters who must serve from only one spot at the table because theres no space to get in there.

Our introduction to the menu was not what I expected. It started with a simple question:

Why do people go out to eat?

Here is what the class threw out, in no particular order:

• Do not have to/want to/able to/no time to cook
• Special occasion
• Socialize
• Convenience
• To be served
• Entertainment (or as some restaurant reviewer once coined, "Dine-utainment")
• No equipment (Pepe's in New Haven has a coal-burning oven, I do not)
• At work
• For a business meeting
• Travelling/touring
• Exploring a different cuisine
• Killing time
• Get out of the apartment
• To be in a warm/cool room
• Seems like it's cheaper (though even with the cheapest places, it's usually not if you really know how to cook.)

And two things that the professor pointed out that we did not mention:

• Hungry
• Nutrition

If your going to try to meet the needs of your clients, your concept should focus on the first list. If you think your client is coming to your restaurant mainly because they are hungry and seek nutrition, you're most likely going to be derailed by everything else that goes into how one chooses a restaurant....

And the next question was:

Why do you choose one restaurant over another?

• Convenience
• Cost/value
• Location
• Consistency/reliability
• Perks/promotions
• Food quality/quantity
• Service & staff
• Ambiance & decor
• Recommendation
• Beverage selection
• Sanitation
• Habit
• See & be seen
• Entertainment value

All these factors serve to make a restaurant competitive. Richard again pointed out that food is just one of many factors -- in most cases, it's not the factor that makes you competitive. In fact, it's more likely to hold you back. When thinking of a strategy for long term competitiveness, certain things will serve you better than others. Being cheap is not particularly effective, as shown by the fast food price wars started by Wendy's then mimicked by all the chains. Burger King's flame-broiling over McDonalds, now there is a factor that would be neither cheap nor easy for a competitor to take over. As is Lombardi's coal-burning pizza oven.

Next up was more Mission Statement Workshop. We each introduced our statement at the table and chose which one to pick apart. Both Jazzman and Pastry didn't write one: dudes, why are you spending your time and money here if you're not going to do the work? Chicagoette had semi-formed statement about a Mexican-themed home style restaurant, and I presented my statement about my pizza product, but took it off the table as not being a restaurant (and felt a bit egotistical to put it forward, as no one else seemed to want to lead the table.) Lenin-Pisser had switched seats with Northfork, a blonde lady with a mission statement about a coffee/gelato cafe attached to an (already existing) artisinal coffee roaster on the Northfork of Long Island. That makes me a little excited because B 'n me have been spending vacation time on the Northfork since we met, so maybe forging a new connection with it could be really cool.

Professor opened up talk to pick apart the other groups. Russian Pam Anderson had an idea for a Mediterranean wine bar in the west village, which sounded like a strong concept but her grammar was lacking a bit. Whitey Sushi Cook had an idea for a sake-smoking bar, which Richard pretty much shot down from the start as being illegal in NYC, where the statement said it was to be. The smoking restaurants that were grandfathered in after the smoking ban will be losing their smoking rights soon, and the legal trickery needed to open a smoking restaurant makes it nearly impossible now.

I asked the professor for his view on the effect of the smoking ban in bars and restaurants in NYC, and he said it was exactly as predicted: there was a small dip in customers briefly, but soon came back stronger than before and stayed that way. Proof positive that the bottom line is that there are more non-smokers who like to go out than smokers, but non-smoker's behavior don't make smokers want to stay home or leave early.

We spent the last half-hour broken up into random groups and were then sent out to explore some assigned Italian restaurants in the neighborhood. On Wednesday we'll reconvene with notes, and write concept statements for them. Problem is, at 11am on a frigid Monday, any restaurant that doesn't do a breakfast service is very closed. Bar Baresco looks very nice from the outside, with nice modern leather-backed seats, but I'll just have to hit it up tomorrow for a meal with the wifey. Bar Baresco, look out, I'm comin' to student-review you!

The Critical Path (Sherpa & His Hot Dog Mountain)

Richard opened the class with "In the News," in which the class will bring in food-related bits from the media and chew them over. Since none of us were prepared, Richard expounded on bits that caught his eye -- much of it from the dining section of Wednesday's NY Times. Squirrel in British cuisine, City Wine's concept of a wine bar that partners with a winery (to allow customers to 'make' their own wine and store casks in the basement), crushing drop in private parties for the big Meatpacking district restaurants, Bruni's review of a restaurant. Richard is open in his dislike for what many food blogs call "the Bruni," because he feels Bruni's critiques are a bit over-the-top. From a restaurant trade magazine, an article about corporate chains looking to incorporate rice as a central starch in new dishes because it's cheap.

The one article that caught my ear was about a hot dog vendor who recently won a bid on a location in front of the Metropolitan museum. He is going to pay $360 grand a year for the right to sell hot dogs on the northern end. That means he needs to generate about $1000 a day just to pay for the license. With a $2 hot dog, we guess his average sale will be $3. On a 10 hour day, he'll need to make 657 sales a day 7 days a week to cover that nut. That's 66 sales an hour. More than 1 sale per minute. A cart can't possible hold that much inventory, so someone has to be hired to restock multiple times a day. And perhaps another person to cover some shifts on the cart. To just break even. And let's not mention the other hot dog cart a few feet away who is sharing the corner because it's run by a veteran, who by law does not need to have a license!

The bulk of the day was dedicated to reviewing 'the Critical Path,' the framework that will be explored over the next six months. Here are the bare bones of it:

• Market Research: all about the needs and wants of the client. Who there are, how they communicate.
• Mission & Concept: Goals and key elements. What your business is going to do and how it's going to do it.
• Site Selection: Many variables are determined by the where. Rent, size of location, traffic patterns, competition -- all will determine whats served and for how much.
• Revenue Projections: Sales = # of seats x turns x average check (turn means how many times the tables are turned over for new customers over the length of a time period.) This can be worked out with a mix of assumptions and observations of similar places.

Financial Analysis: This is made up of a number of critical statements

• Capital Budget: start up costs. Research & Development, construction, equipment.
• Working Capital: salaries, inventories, money to cover expenses until break-even.
• Investment: Capital Budget + Working Capital. What you gotta get to get going! Hi there, rich person! Want to take a risk?
• Income Statement: a.k.a. Profit & Loss statement. Sales - costs = profit(or loss). Costs from actual material, labor, operating expenses (napkins, flowers), fixed & occupancy (insurance, rent, etc.)
• Break Even Analysis: at what level of sales does profit and loss equal each other? Higher the break even point, the higher the risk to the investor. The hot dog vendor in front of the Met has a ridiculously high break-even point.
• Cash Flow Statement: the timing of when the money comes in and when it goes out. The profit and loss statement is about what was gained or lost in a specific amount of time, while the cash flow statement is just about the money -- you can buy enough eggplant for three months, and the P&L will reflect that, but the cash flow will just say you just spent a lot of eggplant money in one day. A cash flow statement is, at it's simplest, the most recent accounting of your checkbook.
• Balance Sheets: Assets - Liability = Owner Equity. Everything the biz is worth - everything owed & all the debt = everything you actually own. Like the P&L, but a comprehensive look at the whole thing. The other statements kind of dwell in the past or project the future, this is the one that says where you are right now.
• R.O.I.: Return on Investment = Profit / investment. If you make $50G profit in one year, and Mr. Investor gave you $500 grand, 50/500,000 = .1 or 10% R.O.I. It'll take Mr Investor 10 years to recoup before seeing a profit on his money. A while ago that was considered low. Today, people may be happy with that.

All these numbers can be fudged, especially early on when it's based on projections and assumptions. The best numbers are accurate, truthful, and salable to investors.

The second half of the class was dedicated to the mission statement. The statements gotta say:

• what you are
• how well you do what you do
• who your clients are
• where you and your clients are
• which needs of your client your meeting

AND

• do it in one or two sentences.

Oy! It is from the mission statement that the next step develops from: the concept is directed by the mission to determine 1) design & decor, 2) service and 3) food & beverage product.

So the class broke into four groups. We each threw out a concept, chose one for the group then attempted to write a mission statement through brain storming. I was sitting with Jazzman, Lenin-pisser, Chicagoette and Pastry. Both Chicagoette and Jazzman mumbled something about a family-style casual restaurant of indeterminate cuisine, Pastry mumbled something about a bakery of no specific style, and Lenin-Pisser spoke of a Georgian wine bar with live jazz and small plates. I announced my pizza concept which I sketched out last night, but I dismissed it as not being a restaurant and not ideal for this exercise. So we went with Lenin-Pisser.

What: a wine bar with live jazz that serves wine from the Georgian region of the once Soviet Union and small plates of fusion Georgian food. How well: very well! We were a bit stumped on this one. Who: younger couples, adventurous singletons, expats, jazz fans, evening crowd. Where: someplace urban with a good 24 hour residential/commercial mix. Like the Village or he L.E.S. Needs being met: Georgian food outside of the Brooklyn enclave. Limited non-tourist jazz option on the Lower East Side.

By committee, this is the sentence we produced. English is Lenin-Pisser's third language.

Georgian Wine & Jazz introduces an elegant mix of Georgian small plates, fine Georgian wines and live jazz to adventurers in the Lower East Side.

Richard tore it apart, but kindly with good humor -- I remember cringing whenever Chef Al would give criticism, it was always so harsh. Anyway, where to begin? The names doesn't say 'what' exactly. Perhaps adding 'Lounge' or 'Cafe' will be more descriptive. Adventurers on the Lower East Side do NOT look for elegance, they look for excitement, fun. What kind of jazz? Really loud in-your-face stuff that's the center of attention, or quiet background stuff good for conversation? IS this more of a bar where the food is secondary and in service of the wine, or do people come here to eat, with focused wine-drinking just at the bar? Just because the LES doesn't have a Georgian wine-jazz bar doesn't necessarily mean it needs one. Is this concept appealing to the customers on the LES or to you? Georgian theme and jazz seem to be eclectic -- it doesn't seem to make sense together, but the vision of the proprietor seems to make it make sense. This doesn't seem to be eclectic, it just doesn't make sense.

I guess a mission statement made by an uninterested committee in 5 minutes will never be that great, but it's the process. For Monday, we all have to deliver 4 to 8 sentences. One to two sentences each on a mission statement and the three factors of a concept.