Posted on May 6, 2013

YO. I made a one-stop Cheat Sheet/FAQ for all your startup related q’s, you’re welcome bro.

Do you ever wonder what goes in to building a joint like Shake Shack, or even Ravi’s? I don’t, but I’ll tell you anyway.

Last week i was telling you about the importance of picking the right spot for your biz. It is now when you have to believe: Build It, And They Will Come. This is the time where you must summon your nerves of steel, because everything you didn’t predict is about to happen!

This is the most costliest, and time-consuming part of the whole food startup. It can vary anywhere between 200-400dhs/sq ft to build a place. That’s why i ended up not doing it 🙂 Anyway, I’ll impart what i learned from others in the industry:

You need somebody to design your place, and then you need people to fit it. Normally you get contractors who offer all the services including the design, approvals, fit-out. Here, i’ll start you off, Rotospace are really good to deal with, you can see their work in Parisa’s Gourmet Restaurant on Sheikh Zayed Road (go when you’re hungry, Parisa has awesome food). You’re welcome.

Because the smallest thing can trigger the longest delay, it is always best to take your contractor to a location BEFORE you sign up for it, and let them scout and inspect for potential snags. It can be the most innocuous thing – I recall, when i was looking at a location in Media City, the contractor immediately noticed that there wasn’t enough electric load there for a restaurant, and to get more it would add heavily to the quote since the wiring work is very expensive. You should’ve seen the look on the estate agent’s face when we discovered that; either he was lamenting a lost sale, or his moustache drooped.

So, location inspected and satisfied, what follows is a drawn out process where designs have to be submitted to Dubai Municipality for approval. This is the complete layout design of the outlet including kitchen, utilities, dining etc. Municipality will correct it so it conforms with regulation, then this will back and forth for a while ‘La’, this fire hazard, change it habibi’. Once approval is done, the actual fit-out work starts, the contractor then is responsible for everything from top to bottom, the flooring, the lighting, cooking exhaust (that’s the ventilation, not a chef on overtime), A/C ducting, furniture, fixtures, signage etc.

Time is EVERYTHING here. When you sign your lease, the landlord nominally gives you a 3 month grace period to complete your fit out, after which you must start paying rent. I have heard stories where fit-outs have taken anywhere from 2 months to 10 months! I’ve seen myself, even in new areas like Business Bay, a shop sign goes up, and months later they still haven’t opened, the guy must be bleeding rent money.

Now, an important aside here. Let’s recap then the amount of capital you need to build a place, I mentioned in chapter 1 you are looking at starting easily 700-800k just for a small basic takeaway including a buffer for unknown costs. Consider that for a moment, that’s £120,000 in the UK. That buys you a house! Of course this is ok if you have that kind of money to throw around. Maybe you’re a Russian oligarch or a refugee ex-president. But imagine if these are your life savings, or money you cobbled together from family and friends? That’s a lot riding on uncertainty.

It’s for this reason we decided we will not build a shop until we have a strong steady proven business (especially the concept of rotis being so new). So we came up with an idea of a “Pop-up Shop”, a self-contained, condensed unit which can keep food hot, store chilled items, store packaging, and be branded by our signage.

We decided to cast around for an existing outlet which would allow us to be a shop within a shop. Because our concept is very straightforward, it requires little space and electricity. We had a friend in the catering business who could cook our recipes, so this is really an extension of our “find a place to make it, find a place to sell it” principle. Granted, now you have to share up your pie with extra parties, so the profits are slim, but the idea was to establish ourselves without throwing away cash and becoming a zombie restaurant.

This has its downsides too of course. Finding partner outlets is not easy, it’s like being a door-to-door salesmen, knocking at each outlet asking the manager if you can set up your little idea in their space. I felt like one of those cold callers who greet you by your first name as if they’re about to invite you to the pub ‘Hi Tahir?’, ‘Yes’ (always the wrong answer), ‘It’s Clive’, ‘…..Clive?’, ‘Yeah, you know, Clive, from Off Shore Oh Sure Savings LLC’ (sorry if you’re reading this, Clive).

Anyway, a small-ish tip, at the start it’s good to go after small independent retailers, they tend to be a bit more daring and gung-ho. When we started, I took some samples to an independent supermarket in Tecom, the guy was like ‘cool, come in and start next week’. No contract, no formality. I, LOVE, that. That hearkens back to old school, business trust, where just your word counts! Anyway, they have closed down now… but, my point being, look around hard enough, and you can partner with someone and start small, go after bigger outlets once you have credibility.

Another way to help your costs buying out a restaurant in a distress sale. This saves you alll that hassle of getting the license, approvals, the fit-outs etc. However because of that, the previous owner will ask you to pay ‘Key Money’ which is money to take over the business, and this depends on many things such as location, size of restaurant, but it’s cheaper than starting a restaurant from scratch.

This is my advice to the small entrepreneur: in this region go in carefully, but especially so if your concept is untested elsewhere (eg something like Pret a Manger from UK would work a charm here, that’s a risk you can throw cash at. Roti, not so much!).

Well I’m running out of things to write about now. Comment if I’ve missed any thing or if you want elaboration on a topic. Hmm maybe the next one can be  about staff… i can write a book about that!Photo 04-10-2012 11 51 47