Tag Archives: budgeting

Restaurant Budgeting

Thinking about opening a restaurant or food service space?

Here’s a quick primer on budgetary considerations if you are. (Steakhouse, lunch deli, breakfast cafe, bakery, coffee shop, wine bar, beer store, saloon, bistro, fast food, slow food, barbecue, buffet, cafeteria, tea house, greasy spoon, vegetarian hot dog stand, ice cream parlor, pizza pizzeria, concession booth, diner… what am I forgetting?)

Highcraft Beer Market

Start with equipment. I’m assuming you’ve already resolved the concept, the cuisine, and the chef. If not, that’s first before you can figure out what equipment it takes to produce it. Most food service businesses struggle the most with what they need versus can afford. Commercial kitchen equipment is very expensive compared to residential appliances. You can often find used equipment to save significantly, but you’ll still need $50k-$300k depending on your selections for oven, range, grill, exhaust hood (and fire suppression system), toaster, microwave, fryer, coffee station, beer taps, refrigerators, freezers, walk-ins, refrigerated display cases, refrigerated and steam tables, plate warmers, dishwashing sinks, and dishwashers.

The next most expensive category are the utilities and all the water, sewer, grease traps, fire sprinklers, heating, air conditioning, ventilation, electrical, and lighting they support.

Highcraft Beer Market

Bathroom requirements are relatively simple for a small retail space, so expect $10k for a single bathroom with plumbing, fixtures, exhaust, and required specialties: grab bars, mirror, toilet paper dispensers, soap dispensers, mirror, paper towel dispenser/dryer, trash cans, etc. Larger establishments or a full restaurant will need several times more.

Next comes furnishings—cabinets, casework, custom millwork, displays, tables, chairs, host station, artwork, signage, and point of sale.

Finishes are usually inexpensive unless they are lavish, dramatic, or architectural. Flooring is typically the most expensive, but ceramic or vinyl tile are efficient. Exposed concrete floors are also popular but end up being more expensive to satisfy the health department requirements to be sealed. Ceilings over food preparation areas must also be sealed and cleanable. Walls can be painted or have more sophisticated finishes.

Highcraft Beer Market, conceptual rendering

Lighting is critical for retail spaces. Not only do the illumination levels need to be high, but the color rendering quality much more accurate than typical residential or office lighting. Brands design packaging to sell product and quality lighting shows off that design to its fullest potential.

Construction must be done by a licensed contractor unless you have the experience to do it yourself. The local economy is brisk right now (one of the highest in the US) and I recommend clients budget a 20% premium in pricing.

Highcraft Beer Market, pre-renovation

For design, an architect can walk with clients through the entire design–construction process, including building code analysis, design, architectural and engineering documents for permitting. I also assist clients to find a qualified contractor and administer the construction until completion, tailored to what you need. By fee schedule, design is “supposed” to be 8-12% of construction costs between $100k-$300k, roughly $8,000–$36,000. But it really depends.

For example, a small space that was recently renovated for food service will be much simpler than a large cold shell (no utilities) not intended for food. A stand-alone building is obviously even more complex. It helps if the landlord has drawings of the existing space versus the architect field surveying everything. The level of service can vary, too, from less detailed drawings for experienced clients or extra assistance to incorporate branding into the design and selection of equipment, finishes, fixtures, and furnishings.

Property Condition Assessment

rooftop view… behind the scenes of the design process

Pre-purchase investigations and renovations always begin with a visit to the property and a tour of the existing building. The first question I always ask is to obtain any documentation and information available about the facility. But frequently, no drawings exist and little, if anything, about the building is documented.

Not a problem.

I’ve recently refined and formalized a detailed initial survey and inventory process for an existing building as a Property Condition Assessment (PCA). Having this detailed method gives comfort that we’ve turned over all the stones and looked systematically for potential pitfalls before the design process. The team looks at everything from the foundation to the roof, the architecture and all the engineered systems in between, and the site beyond.

With a couple of key engineering experts and a contractor to test various budgetary scenarios, clients end up with:

visual walk through with the team
detailed architectural survey
survey plat with known site plan information
printed and electronic CAD formats of the surveys
building code analysis
accessibility analysis
interviews of individuals with potential information about the building
municipal and authority research for recorded and outstanding problems
descriptions of all the systems
inventories of all the building equipment
summary of any physical deficiencies along a good-fair-poor scale
descriptions for remedies of poor conditions needing immediate repair
photographic summaries for the systems and findings
budgetary analysis for remedying all the discovered deficiencies

This is all documented in a formalized report, useful for purchase negotiations or evaluating the scope of additional projects within a facility.

water heater tangle

Whew! Producing all this is a lot of work, especially trying to complete it in just a week or two. It’s definitely more thorough than the average field verification route. But this methodical approach takes a building from 0 to 100 with a comprehensive document foundation for making any future explorations or decisions. And its in portable electronic formats, not scraps of paper stashed in the mechanical room.

I figured this process expansion and formalization would establish a great place for an architect and engineering team to begin a renovation, but I’ve recently been finding that a PCA is equally useful to an owner as an initial benchmark of building data, sometimes the first such record since it was built decades before.

I like it when we figure out how to solve multiple problems with a singular effort.

Harrison Bergeron

Equal?

Written in 1961, Kurt Vonnegut, Jr.’s Harrison Bergeron is a classic. The three-page short story can be found online here and elsewhere.

The year was 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

This story comes to my mind often in architectural practice. Many who know me have read it at my urging. Despite our best intentions, projects are utterly encumbered by codes, laws, and regulations in the attempt to create safety, opportunity, and equality.

Not that any of these are, in themselves, bad things. In fact, utopian vision has driven architecture for at least four millennia. I am actually a proponent for great design and good craftsmanship that is inclusive, accessible, and universal. Slightly larger spaces aren’t just for injured employees, aging residents, or disabled visitors. They also help encumbered firemen in smoke-filled air trying to rescue occupants. In that context, what’s a few more inches?

Still, our endeavor to create great is slowly being truncated by our compromise to create barely adequate. Great design takes great time, and the more factors there are to consider, the longer it is going to take and the more it is going to cost.

I suppose inflation is the natural course of civilization simply due to this ever-expanding growth of requirements. But is there a way to simplify? At what point can we no longer afford the growth of regulation? With U.S. federal government debt at $19,963,980,500,000 (trillion), haven’t we exceeded our capacity to pay for these demands?

Project Math

Dilbert 2009-12-07

As explained by Scott Adams, design has to be resolved before the final cost of a project can be established. Yet I’m often asked how much a project will cost even before a napkin sketch.

But defining the project isn’t difficult and doesn’t take long. For a small project, it might just take an hour. And even if more information is needed, what is outstanding can be mapped out the first meeting.

Terms

The goal is the project definition. We can also define its constituent terms:

PROGRAM = Space Names + Space Sizes

The program is simply a list of all the spaces needed. These might adjust as details emerge, but an initial program is key to start design.

SCALE = Program × Efficiency Factor

It’s difficult to figure out non-spaces: thicknesses of walls, chases, corridors, stairs, mechanical rooms, electrical closets, utility rooms, storage, and other incidental uses. Some factoring of these inefficiencies is required to better predict the final area of a building.

QUALITY = Non-quantitative project parameters

High quality design, envelope, energy efficiency, finishes, furnishings, fixtures, and equipment will have a more dramatic effect on budget than its size. For example, low grade builder homes can cost just $75/SF and take just a month to build while an exquisite jewel might cost more than $600/SF and take two years. Quality is the most significant factor in a building’s cost and needs to be decided at the beginning of a project.

SCOPE = Scale × Quality

Although defined early, adjustments between these two factors is a component of the design process. This blog attests that Better Than Bigger and we often find that great design may supplant the need for overly large spaces.

SCHEDULE = Time to complete the project

Can a contractor take two years to finish a small project? Must he complete the work before the home owners return from a three week vacation in Europe? Does a school renovation need to be worked on after hours? Are there elaborate security and cleanliness requirements for a hospital renovation? Does a large house and garden renovation need to be used for a lawn wedding? Will a home owner build in his spare time? All of these answers may dictate stringent schedule parameters. Depending on the responses, any of these may impact the design and labor costs of a project significantly.

BUDGET = Funds allotted to the project

Unfortunately, the design, construction, and real estate industries wildly swag irresponsible $/SF numbers around like water balloons. But an accurate project budget considers quality, schedule, and numerous factors beyond simple labor and materials. To be complete, a budget should also include contractor’s overhead and profit, general conditions,^* building permits, printing, furnishings, many items usually outside of the contract purchased by the owner like appliances and mailboxes, surveying, architectural and engineering services, municipal charges, utility costs, cleaning, and even move costs.

PROJECT DEFINITION = Scope × Schedule × Budget

The final project definition is the goal to begin design. However…

DESIGN = Resolution of the project definition

We want design to discover opportunities. Exploration is the purpose of planning. (Otherwise, we would always charge on to a job site hammering a bunch of lumber together hoping for the best. Ever see that happen?) Drawing and modeling is much cheaper than making construction mistakes, but the bigger benefit is that design finds opportunity.

So we begin with the project definition and make iterative design passes to progressively refine the terms and results. This may be more linear or more explorative depending on the project and the client. But these basic definitions must always equate at any point in the process.

Summary

Space Names + Space Sizes = Program

Program × Efficiency Factor = Scale

Scale × Quality = Scope

Scope × Budget × Schedule = Project Definition

Project Definition × Resolution = Design

If you are starting a project, try defining each of these terms. And feel free to contact me to discuss and maybe sit down together and start sketching solutions.

* General Conditions: Numerous contract conditions that stipulate the execution of the construction contract. These are very broad and depend on many project particular specifics. Examples include insurance, length of time to complete, product submittals for selection and approval, payments, review of the work, trash and dumpsters, protection and cleanup, bathroom facilities, access to the site, parking, drawing conventions and conflict resolution, and potentially many others, even to inappropriate or illegal behavior on the job site.