At some point in time, about every ten to fifteen years, a remodel is no longer a choice but a necessity. It’s important to stay fresh and keep the revenue stream flowing, but remodeling can be expensive. When profits go down during a remodel, even the thought of surviving this can leave restaurant owners nervous. However, when done right, remodeling can give a big boost to sales, inject new life into a tired brand, and attract new customers.
Contemplation & Planning
A restaurant remodel is an opportunity to make more than just cosmetic changes. They’re a chance to audit your restaurant and make functional changes where they are needed. This should include processes, staffing, menu options, and your point-of-sale technology. An all-inclusive remodel’s cost can range from $200-$750 per square foot.
First, be sure to align your remodel with the type of restaurant you operate, for example:
Starbucks: before you order a coffee, you walk past coffee mugs and incidental items. After you ordered, you sit down to relax while your drink is made, often spending 5 minutes sitting in an overstuffed lounge chair listening to an acoustic version of a pop song from recent years. Instead of trying to sell you an expensive cup of coffee, Starbucks makes the drink part of an experience.
Compare that to Dunkin’ Donuts. From their setup to their slogan, they’re very candid about their goal: to get you a tasty cup of coffee and donut as quickly as possible, so you can get on your way. Dunkin’ Donuts and Starbucks technically sell the same products; however, they are targeting customers with different needs, their approaches are completely unique.
Think about what makes your establishment unique, then focus on your values. If you’re about simple, homemade diner food you’ll want a warm, inviting, homey feeling. If you an independent coffee shop, you’ll want to have a mix of seating and small tables, and perhaps a record collection behind the counter with a sound system that links into a record player. If you’re focused on efficient, quick service then an interior designer who specializes in workflow efficiencies in a remodel is something to consider.
Depending on the extent of your remodel, like adding or removing walls, it may require additional work for electrical, ventilation, air conditioning/heating. These added expenses can really dig into the budget and can lead to discovering issues that would otherwise go unnoticed. For example, when removing a wall, an engineer or original drawings are crucial to identify any structurally necessary beams or supports.
Also keep in mind a remodel does not have to include all new furniture. If things are in good shape, a simple re-stain or refresh upholstery to spruce things up. Your regular patrons are sure to appreciate your blending of the old and new. Instead of purchasing obviously mass-produced artwork, partner with a local artist, gallery, or college to include unique photos, paintings, or artwork. Other small details like a power wash or fresh coat of paint and landscaping updates should be part of the remodel as well.
Once you understand what you are looking for in a restaurant remodel, it’s important to get an idea of what it will cost. The easiest way to do this is to have a contractor come in and discuss your ideas. The cost of a remodel will depend on many factors, from the scope of work to be completed to the kind of materials you select. Consider cost-saving alternatives, such as composite materials instead of marble for countertops, or other composite products and alternatives for finishes.
Budgeting and Financing
When it comes to budgeting for a remodel, you must consider more than just the literal cost of the construction. A simple remodel can be completed within a month, while a typical remodel can take about eight weeks. Before starting a remodel, simply have all the details nailed out to minimize downtime. Your customers will appreciate it in the long run.
In considering the full cost of the remodel, consider adding 10 to 15 percent as a contingency for those unexpected items that remodel present and costs for any time you are closed. If closing is out of question, there will be additional costs associated with keeping dining and construction areas separate. An option here is to have ‘Remodel Take-Out Specials’ or ‘Delivery Only’ in your customer loyalty app.
It is more common than not to shut down a restaurant entirely at some point in a remodel simply because of the noise, smells, and dust. If you are concerned about your budget in the short-term, consider a business loan. Discuss options with several banks, including local credit unions which are more likely to have specialized loans for local, small businesses.
Marketing a Remodel
First and foremost, once you have decided to remodel, inform the staff. Whether you have plans to keep staff on payroll or not, be honest and inform them of the plans. For staff that you are invested in and want to keep after the remodel, have a personal discussion with them. These steps will help keep staff on board and potentially excited for coming back for the Grand Opening.
Next, when you know exact dates for the remodel, make an announcement to your regulars personally as they come in. They’ll feel appreciated for being regulars, which will help bring back their business after the remodel. Once you have and established start date, prepare with signage and ‘Pre-Closure Specials’ to help increase profit before the closure and ensures people are in the know.
Have a significant-sized sign on your building or in your windows so those passing by ‘see’ that you are closed. Include updates about the remodel on your website, including some details, and post an occasional photo on your social media platforms. To follow up on this, once you know a completion date, start advertising “Re-Opening Soon” or “Re-opening in (month)” and include updates in all the same areas you included in your closure announcement.
Once you have a strong restaurant remodel plan, finances, and marketing in mind, it is time to find a contractor to do the actual work. A good practice is to get three quotes from established contractors. Check their references and visit the sites of recent jobs completed. If you know of another business who has had a successful remodel, ask them who did the work.
As the work gets underway, be sure to check in regularly and ensure work is being completed to your expectations. This is, however, not meant to be an invitation to chit-chat or advise workers on how to complete the work. That will only hinder progress and your timeline. Communication should be direct with the project manager, which in turn builds respect for your business.
When the project is near completion, and you start looking at punch list items, take your time. Evaluate every inch to ensure the work has been completed. This should include testing new light switches/fixtures, insuring any other new fixtures work if the painting looks crisp, and cove base has clean corners.
As work comes to an end and a new certificate of occupancy is issued, work on Grand Opening plans, and begin marketing it at least two weeks in advance. Once construction is complete, bring staff in and have a training refresher, especially for any processes that may change because of the remodel. Then, a few days before the Grand Opening, it is good practice to have a soft opening. You can invite family and friends (and regulars) to join in celebrating while working out any kinks that come along with changes.
Any restaurant remodel can be tricky and expensive, but with the help of experts to guide you through the process, you can enhance your business operations and environment. With planning, financing, and marketing, you’re ready to hit the ground running on your remodeling project.