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Your Business Model | What do Your Staff Need to do?

Your Business Model | What do Your Staff Need to do?

I have spoken about how the design of your store and the importance in workflow before, but today I wanted to really focus in on making it work for your business model.
For hospitality businesses, creating an efficient kitchen and a counter area with good service flow means you can serve more customers faster. To successfully plan out your kitchen and counter, you must thoroughly understand your business model. You’ll consider the tasks that need to be completed in each area and how your space can be best organised to make completing those tasks as easy and efficient as possible. So before you jump into the details of equipment and bench layout, the best place to start is to analyse how your business works and how the space should be laid out to best accommodate your service flow.

At fifteen years old, my first job was working as a fry girl in a McDonald’s restaurant. At the time, I never anticipated how well this would prepare me for my future career as a hospitality designer. McDonald’s is known for efficiency and consistency, and their kitchen is laid out to deliver large quantities of food – fast. So rather than laying out the kitchen space with a typical cook line, prep bench and wash up area, McDonald’s has thought through what they need their staff to do in the space and planned their layout based on that.

McDonald’s creates stations for each of the key tasks that need to be completed, such as the fry station, the burger preparation area, the salad preparation area, the grills and the pass. Each station is operated by one staff member and everything they need for their task will be contained in that area. In a busy three-hour shift, the staff member manning the fry station should only need to move once or twice to bring another box of fries from the freezer. Otherwise, everything they need is contained in their area. The McDonald’s business model is about fast food and their kitchen design is centred around delivering on that promise.

Thinking through the number of staff you will have in the kitchen and their roles will allow you to create stations. The advantage of stations is efficiency. For example, if your key product is burgers and you only have one team member on that entire task – running to the cool room to grab the meat, prepping the salad, grilling and assembling the burgers – you will lose a lot of time on them running backwards and forwards. Alternatively, if you can set up stations that allow one staff member to cook the meat and another staff member to prep the salad and assemble the burgers, neither of them will have to leave their area during the shift. I guarantee that you will make more burgers this way.

You also need to think through issues relating to cross contamination and food hygiene. Allow for separate areas for meat and fruit and vegetable preparation, and plan the service flow to avoid waste products coming into contact with food. This is a vital part of food licencing requirements and should be considered as part of your workflow.

Therefore, knowing how to lay out your kitchen starts with a conversation around your business model and what tasks your staff need to complete. To make sure your kitchen design is suited to what your staff need to do in the space, you must have this discussion with your designer.

Where are Your Customers?

Where are Your Customers?

Finding the right site for your new store can be key to the success of your business. I have been on hundreds of site visits with business owners and am often surprised that they don’t know what to look for or ask at this stage. There are a few aspects that you have to keep in mind when finding your winning location.

Research

Before you fall in love with a site do your research and make sure you are familiar with your numbers and the outcomes you are looking to achieve.  In retail leasing you should research your industry, your business and the shopping centre you are looking to go into. If you are not comfortable with understanding your key numbers and how your business costs relate to the rent your new business can afford to pay, it is always best to speak with an expert.

Location

Who are your target customers? Knowing simple information about your customers such as their average age, how far they live or work from your store and their hobbies or interest will help you to locate your new store in an area with good mix of customers who are right for your business. Surrounding business can be an important factor to consider when locating your new store. Competing business in close proximity can negatively affect your sales while complimentary business can actually increase business by sending customers your way. It can be helpful to jot down a list of what your existing sites have in common. Sometimes the things that make a site work can be surprising.

Accessibility

Having an understanding of your customer and complimentary business helps locate the area in which to place your stores. The next thing to consider is how accessible your store needs to be to your customers. How far are customers willing to travel to get to your store? Making your store as accessible as possible to your customers can have a big impact on sales.

I go into more detail in my upcoming book on what to look for in a site inspection and how to secure a winning location, along with the necessary people that you should be in contact with through this process. Click here to receive exclusive access to the first two chapters for free.

You are in the Experience Business

You are in the Experience Business

As a restaurant or café you are in the business of experience. Traditionally “going out” has always been an occasion. It may be a big family dinner, a social lunch with a group of friends or a romantic dinner for two. Whatever the meal or occasion your customers want a fantastic experience. They want to walk out the door raving about how much they loved your restaurant, your food and your service. They are waiting to be impressed.
Your customer experience is everything you do and everything you say about yourselves. This starts with the word of mouth your business generates which tempts a customer to come to your restaurant and finishes with the last friendly word from staff member as they walk out the door.

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Defining your customer experience creates the foundation for your store design. Before you can design a store which will appeal to your target customers you must first understand who your customers are, define your point of difference and uncover the unique experience you will create for your customers. I go into more depth about the process to develop your customer experience in my book ‘Open Restaurants that Flourish’ which is set to be released early March, so keep an eye out for that, but for now, here are three simple steps.

1. Discover

The first stage is about understanding your business and your customer.
What makes your customers choose your business and keeps them coming back? There can be a number of reasons. You have a unique product that only you can offer. Defining the experience you want to create for your customers helps to build the foundation for how you engage with your customers and guides the development of your store design. The design of your store and how your customers interact with the space is a key part of the experience you create for your customers. However before you can design a store that will appeal to your customers you first must understand who they are, define your point of difference and uncover the unique value you are already offering to your customers. The best store designs are a collaboration between an experienced business owner who can contribute the operational knowledge and customer insights and a design team who can translate this knowledge into a defined customer experience and store design.

2. Define

Once you have clarity on who your customers are and what makes your business unique the next step is to define your customer experience. Your customer experience is made up of your brand story, the personality of your brand (how you speak to your customers) and the look and feel of your store. As the business owner the story of your business is your story. You have set the vision and values of the business. Sometimes even the personality of your business will reflect your own. This is part of what makes your business unique. When I sit down with a business owner and ask them about their store, I hear how the business began and the journey that led them to open their first restaurant. I see their eyes light up as they describe their vision for where they are headed. However, when I walk into their stores there is often no evidence of this story. What a shame. Your story is part of your brand and it is unique to you.

3. Design

The first two stages set the foundation for understanding and communicating your customer experience. Now you are ready to start creating the experience! Creating your customer experience is about translating the central idea that differentiates you from everyone else into every interaction you have with your customers. You customer experience is not just your store design, it is your website, your marketing messaging, social media profiles, the attitude of your staff and the experience your customers have when they sit down instore. The experience your customer has of your business will usually start long before they walk into your restaurant.


You can sign up for a free download of the first two chapters of my book, in which I go into more detail about Discover, Define and Design here.

Choosing the Right Shopfitter

Choosing the Right Shopfitter

Some of my clients are wary of using a shopfitter because they believe they can spend less if they manage the fit out themselves. This makes them reluctant to commit to working with a shopfitter upfront even though, in my experience, their assumptions are rarely correct.

As a business owner, one of your scarcest resources is time. Although paying a shopfitter to manage your new store fit out on your behalf may appear to be a large expense, it is important to view this as part of the overall picture. The role of a good shopfitter is to provide expert feedback and advice on costs and how buildable your design is. This allows you to make informed decisions through the design and fit out process. Also, once the fit out of your new store begins, your shopfitter will manage the timeframes, subcontractors and costs to deliver the completed fit out by the agreed opening date.

The real cost of managing a fit out without this expert advice can be found in the cost of the mistakes and also the cost to your time. Very few business owners start the day with spare time and if your time is suddenly taken up solving problems on site that are well outside your area of expertise, the other areas of your business will suffer. And for the few weeks leading up to the opening of your new store, managing the fit out and finalising the approvals is a full-time job. If anything is missed or there are delays, it will often result in a delay to the opening of the store and a further loss of revenue.

Choosing the right shopfitter depends on your needs and your level of experience regarding opening new stores. If you are not yet confident in this process, finding a shopfitter who will be generous with their time upfront and give you a little extra advice will be invaluable. Many shopfitters will be willing to put in a little bit of extra effort to help build the relationship upfront. But be aware that your shopfitter is not getting paid until you have signed the contract, so the service they can offer upfront will have a limit. However, if your shopfitter is only willing to come on board once they have priced the job, this may not provide you with the upfront advice you need to accurately predict cost and any buildability issues.

Your choice of shopfitter will have a significant impact on the quality of your new store fit out. Choosing someone who understands your vision and works collaboratively with the rest of your design team will ensure your vision is translated into a successful end result. Good communication between everyone is critical to making the fit out process smooth and enjoyable for you.

What About Finance?

What About Finance?

One of the sticking points I see again and again with my customers is finance. Building a new store takes capital and most small businesses do not have the spare cash to pay for a store fitout upfront or are seeking a tax effective solution when funding depreciating assets. The finance option you choose will be based on your financial position and what is right for your business.

As a small business owner, the finances of your business are usually quite closely linked to your own finances. It is common for first time business to be financed by personal capital or personal loans. This allows you to open the doors on your first business but also puts you at a high financial risk if your assets or home are tied to the performance of the business. As your business grows and you open more stores, this problem repeats itself as you need to find capital to open new stores.

I met up with Dane Nicholson from HSS Finance and Xavier Gene from Econex Consulting  to discuss the different finance options available for Hospitality businesses. Understanding your options and when you need to apply for finance will avoid delays in opening your new store.

Commercial Lending

One option for financing your new store is to go to the bank. I have found this is often the first option my clients consider. However, it is generally secured against your personal assets and you cannot be guaranteed that your application for finance will be successful. Your ability to access finance will depend on the risk to the financier. Opening a new hospitality business is considered a high risk for the banks. Because there are more hospitality businesses who open each year to the number that survives, it can be a challenge to convince the bank that your business is a good investment. This is particularly difficult for first time business without a track record of success.

Xavier from Econex Consulting clarified why this is the case. Financing a store fit out is not creating a saleable asset in the same way as building a house. If you borrow $200,000 for a fit out, it is difficult for the bank to recoup this money if you default on the loan. The bank is more comfortable financing assets which have a clear resale value. Usually the bank will ask for other property or assets as security against the loan.

Applying for a commercial loan can be more straight forward for established business and franchises who have a track record of success and can demonstrate to the banks that they have proven systems behind what they do. Even in these cases the application is in the name of the business owner or franchises and specific to the individual site. Working with an experienced finance consultant will allow you to include all the information you need to have your finance application assessed.

Operating Lease Agreement

Because it is notoriously difficult to get commercial loans approved for the hospitality industry, there are a number of other finance options that have been created to fill the gap. A popular choice for hospitality businesses is an Operating lease Agreement.

Operating lease agreements are most commonly used for equipment and furniture. However, some financiers will be willing to cover other areas of your fitout including stainless steel and joinery. Unlike a commercial loan, which is a set dollar amount, an operating lease agreement relates to specific assets.

Dane from HSS finance summarized the basics of an operating lease agreement.

“With a rental agreement, the financier maintains ownership of the equipment, assets or furniture, similar to a secured loan from the Bank. The key advantages to this however include the ability to claim back GST on the payments in each BAS lodgement and claim up to 100% tax deduction on the total payment compared to a Bank loan whereby the interest component is only tax deductible. It also doesn’t secure your personal assets. Essentially this allows you to choose the equipment to want and, rather than purchasing it outright, pay for the use of the equipment as a regular payment. There is usually a term for the agreement and an ability to purchase the assets from the financier and take ownership of the goods.”

The advantage some business owners find with this form of finance is it allows you to keep your capital to get the new store up and running. With some lenders, you may not need to provide a security deposit as you would for commercial lending. This allows you to open the new store and still have the cash you need to pay for wages and suppliers during the first twelve months, which is usually the most challenging time for a new store.

With an operating lease agreement, rather than the bank loaning you money directly, the financier sits in the middle and absorbs the risk. Typically this form of finance does have a higher repayment than a bank loan however has more flexibility and can have tax benefits.

Chattel Mortgage

Another form of finance that may be worth considering is Chattel Mortgage. With chattel mortgage, you select the equipment and furniture that you want to go into your new store and the financier lends you the money to purchase those items. As with a lease agreement, the chattel mortgage is linked to set assets rather than a dollar amount.

The key difference with Chattel Mortgage over a lease Agreement is that you take ownership over the assets. This allows you to claim depreciation and has some tax advantages. Typically, the upfront payment will be cheaper than equipment finance but you lose some of the flexibility as you will be locked into a fixed term contract.

What Do I Need to Apply for Finance?

Finance applications for loans from the big banks are the most thorough, and must contain enough information to allow the banks to assess their level of risk. You may choose to make this application directly to the bank or go through a finance broker or consultant who can assist you with the application process.

As a general guide, your application should demonstrate the experience of the business owner in the hospitality industry and your financial position. The financier or bank is looking to assess their level of risk, make sure the business is viable and that you have enough cash in the bank to support the business through initial setup.

Xavier from Econex Consulting summarized what usually needs to go into a finance application. “If you are making an application to the bank, they will usually want to look at your business plan, financial plan and cash flow forecast for the business. To determine your financial position, you may need to provide your tax records, bank statements and statement of position. You will also to need to show evidence of your contribution and security.”

In your application you will also need to include a heads of agreement for your lease and site information. The location of your site is important to the bank in determining the viability of the business and your lease also contains key information round your lease period and lease amount.

For a lease agreement, the process is usually less rigorous. To start looking at finance, you will need two things: a site and indicative pricing. You will need to demonstrate your experience in the hospitality industry and your current financial position. What the financier is looking to see is that the business is viable. You will still need to demonstrate that you have cash in the bank sufficient to run the business and pay for any parts of the store fitout that do not qualify for finance as part of the lease agreement.

Before you can get finance approved on a rental agreement, you need a breakdown of the equipment costs and the other parts of your building cost that you are looking to finance. There will be elements of your fitout that won’t qualify for equipment finance. It is usually straightforward to finance equipment, steel benches and canopies. Trying to get equipment finance on things like plumbing and electrical is much more challenging. With a breakdown of costs, your financier will be easily able to tell you what he can and can’t finance.

When Should I Apply for Finance?

Timing for finance can be tricky. You will need to have finance approved before your shopfitter can start on site. However, before you can have a finance application approved, you will first need to give your financier a signed heads of agreement for your lease and a breakdown of your fitout costs.

This means that typically you cannot get finance finalised until your shopfitter gives you an itemised quote for your new store fitout. This is usually just weeks before you are wanting to start on site, any delays with finance approvals at this point will push back your store opening as you may be waiting on finance to pay your shopfitter’s deposit.

What is the solution? You can work with your shopfitter and designer to put together an equipment list and budget estimate much earlier in the design process. This budget estimate will only be indicative for your building costs and services. However, it should be quite accurate for your equipment. Your shopfitter should be able to give you an estimate for things like stainless steel benches and canopy. The financier can then sit down with you and look at the indicative costs for opening the new store and how much cash you have in the business.

This initial conversation should give you clarity on the amount you are likely to be able to finance. Starting this conversation early will also make sure you have everything your financier will need to approve the finance. Once you have the final itemised quotes through from your shopfitter, you can then sit down with your financier to run through the costings and finalise your finance approval.

How is the Finance Process Different for Franchising?

Finance applications for franchise stores follow the same general process as detailed above. The key difference is the backing of the franchise does help with your assessment of risk to the financier. In a franchise system, the lender has the confidence that the business will have systems in place, and have head office support for training. There is a level of credibility associated with recognised franchise brands that the operator knows what they are doing and will have vetted their franchisees.

For Franchise brands, the finance applications are still in the name of the franchisee. The franchisor should be able to provide more detailed information about the store costings and cash forecast for the store, however, the financier will look at each site individually as well as each applicant. Some financiers have agreements with particular franchises. However, the franchisee will need to demonstrate their financial position and viability before they will have the finance approved.

 

 

 

Are You Ready To Open New Stores?

Brian Keen from How to Franchise Simply talks to Renew Design and shares three decades experience working within the franchise industry. We discussed a simple strategy to set your business up for growth.0aeebbc

There are a handful of key ingredients that must be in place before a business is ready to expand. When a business owner first looks at expanding the business, they need to look closely at whether they have the right ingredients to open a new store.

The first one is the demand for the product. You have to make sure that there are enough customers who are hungry to buy your product. Secondly, you have to make sure that the business is profitable. A lot of people go out to franchise because they’re desperate to grow and they can’t grow their existing business because it’s not profitable enough. This should be a warning signal. Lastly, once you know there is a demand for your product and that you can sell your product at a profit, you have to know your business model can handle volume.

Preparing your business for expansion is a process of refining your existing business model. As you move through the stages, you will define and clarify your ideas.

  1. Firstly, you have to design the concept of your business. This is your brand messaging, customer experience, marketing strategy and your organizational chart.
  2. Then you need to define your business model a bit more by developing budgets and your territories.
  3. Once you have a clear understanding of your business model and figures, you can develop the detail of your operations manuals and store style guides.
  4. Finally, you are ready to deploy and open new stores.

Develop the Concept for Your Business

Expanding the business is basically taking what you have done and learnt and starting from scratch and saying;

“How will I change this?”

“What will it be like now?”

You may find you need to eliminate some things because they are not profitable. When you expand, keep it really simple. Most successful businesses that grow have a simple flow to them. Break it down to the minimum.

To simplify the operations of your business, start by putting an organization strategy in place. Usually in a small business, the business owner will be wearing several different hats. Before the business is ready to expand, you need to break it down into different segments. For instance, they may be administration, marketing, sales, production, and so on. You then need to describe very simply what those roles are and then list down the key five or six tasks under each one.

Breaking the business down and understanding the key tasks will form the beginning of the operations and procedures manuals. However, before you sit down and write your operations and procedures manuals you need to make sure everything works as effectively as possible.

Define Your Business Model

Once you have simplified your business model, the next thing you need to do is test your business model. Really look at the processes and expenses for your new store and how this will differ in the new stores to your existing store. Consider store setup costs, suppliers, wages and overheads. Allow for an additional marketing and advertising budget for each store.

For store setup costs, some of those figures won’t be viable when you are doing your preliminary budgets and you will need to revisit them later. Budgets for store fit out will vary for different sites however you should start with a realistic budget figure and refine this as you develop your business model.

Who are your customers? The key thing that most people overlook when opening a second store is understanding the demographics of the area in which you are opening. You need to do some research on the demographics, on the statistics, find out about the profile of the customer you are looking to attract.

There is an idea that is often used in marketing called your avatar.  Your avatar is your ideal customer. Profiling your ideal customers before you set up another store allows to look at the demographics in the new area and see how many of your target customers are in the area around your new store. Understanding who your customer is helps you to define your brand messaging and create the experience you want to offer to your customers. This will affect your marketing messages, the language you use to talk to your customers, and the look and feel of your stores.

Develop an Operational Strategy

Once you have defined your business model and customer, you are ready to document your operations manuals. The purpose of your operations manual is to allow you to communicate and train your staff in the operations of your business.  You will usually need two types of manuals, comprehensive training manuals and quick reference checklists.

In Franchising, it is pretty much accepted that you need to open a pilot store when you open your first franchise.  When you open your first business you still have things to fine tune. You need to test your store design and operational systems with staff. You need to see what works and pressure test your systems to find the holes and the things that you have overlooked.

Open New Stores

In the first few months of opening your new store you will be testing and modifying things. You will test the manuals, equipment, layout and business model to make sure it works as effectively as possible. When you open new stores, you need people who can assume significant responsibility, these may be managers or franchisees. You want them to step up to the mark, not because you’re paying them but because they love being involved with your business.

When you have opened your second store, you need to treat it like a newborn baby. What I mean is, monitor it very, very closely. Bad habits set in quickly, and having a system for monitoring the performance of the business will allow you to have the peace of mind everything is on track.

Expanding your business and opening new stores can be rewarding. Asking the right questions and planning in advance will help to keep the process simple.

Just Opened: Beefy’s Pies Mango Hill

Since opening their first store in the Sunshine Coast in 1997, Beefy’s commitment to creating award winning pies and connection with the local community has seen the business thrive. Last month, Beefy’s opened their eight store in Mango Hill  with a fresh design inspired by the history of the brand.

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Taken during the construction of the new Beefy’s store.

Designing the new store was not just about selecting colours for the walls, rather it was uncovering what works for the existing stores and creating a new store design that tied into the existing brand. Renew Design worked with Beefy’s Managing Director Mark Hobbs to define the experience Beefy’s create for their customers. Rather than starting with a blank canvas, we looked at the tradition and values of the brand to define what Beefy’s were already offering to their customers to make the stores a success.

Shopfront

The new Beefy’s store in Mango Hill.

The Beefy’s experience is first and foremost about enjoying a great pie. The idea of the pie is the subtle inspiration for many elements of the fitout. From the detailing of the entry to the warm timbers, the experience is designed to feel warm and homely. Quirky touches with a sense of humour  include the “ floating pie” lights above the shared tables.  The inspiration for the detailing of the new store interior came directly from the product.

Counter

Since opening their first store, Beefy’s have built strong connections to the local community. Regularly sponsoring local sports teams, schools and charities the stores are local in the way the operate at every level. Each of the Beefy’s stores are family-owned and operated and this sense of family extends to staff and customers. Supporting local charities and events is a big part of what allows Beefy’s to connect with their local community. This was something we wanted to convey in store to make it visible to customers

The new store sees a fresh take on the experience of visiting a Beefy’s store and the friendly welcome and first delicious bight of a Beefy’s pie as as good as ever.

 

Elizabeth Gillam on Food Franchising

A couple of weeks ago I sat down over a cup of tea and asked Elizabeth Gillam from Franchisee Success to share some of the insights she has gathered from ten years in Food Franchising. Liz bought her first Boost Franchise in 2004 and has gone on to open a Health Habits Franchise and Bucking Bull Carvery. I asked her to share some of her experiences starting out in Franchising and the keys that a business must have in place before they are ready to franchise and open new stores.

The Brand Story

Your need to communicate the value franchisees are getting upfront. Before you franchise a concept, you have to not only have a business model that shows profit but also you have to have a brand story. That is what people are paying for, you can’t just sell a dream.

“When I start working with business who are wanting to franchise, I ask, so what is your franchise model going to be?  We go through what their goals and aspirations are, what they feel they have to franchise and what their point of difference will be. Why is somebody going to buy a franchise over setting up a business on their own? They must be able to define what they will bring to the franchisee.”

The stores need to look similar and communicate the same story to the customer. When you are selling a franchise, you are selling not only your operations manuals but also the story behind your customer experience and brand.

Business Systems and a Leadership Team

To expand your business and open more stores you first need to free your time from the business. This takes an initial investment of time to record and systematise your business systems and test these systems with your leadership team. If you don’t have a leadership team in place your stores are not autonomous.

“You have to know your business inside out and upside down, what works, what doesn’t. You will need to systematise what you do and what makes you successful and then test that. The only way to do that is to put a leadership team in place that is running under those systems.”

In franchising, you are asking for a premium because your business is systematised. What is the system your franchisees will be buying?

The Pilot Store

In Franchising, you are selling a product, that product is your brand, store design and business systems. Setting up a company-owned pilot store will allow you to prove your business model and store design. You must come to the Franchisee knowing exactly what your product is. By the time you are opening stores for Franchisees, your time of trialling is gone.

“Your pilot store must be running at around 20% profit because by the time you franchise and lay out for marketing there must still be enough profit in each store that someone sees the value of investing in them.”

Elizabeth shares more insights into food franchising and tips for franchisees to increase profitability in her book  “Upsize Your Profit”. 

Building a Team of Experts

Building a Team of Experts

Whether you are opening your first store or fiftieth you will need to work with a team of people to make your vision a reality. Many business owners feel overwhelmed and out of their depth dealing with the fit out of a new store. Advice you can trust from people who have been through the process before can be invaluable. So how do you build a team of experts? Who do you need to contact? How much do you need to pay? The people you need are different for different store types. For Hospitality Business you will usually need a Retail Designer, graphic Designer and Shopfitter at a minimum.

Retail Designer

Your retail designer is usually the first person you engage and their job is to design your store and guide you through the fit out process. Your designer will work with you from initial sit inspection to develop your concept for the store and will produce drawing for council approvals and prising by your shopfitter.  Your designer will also help you to manage council approvals and centre management approvals. There are some designers who have a package price for different types of jobs while some will price based on the requirements of the job. You should expect to agree on the price upfront based on the services you need.

Graphic Designer and Branding

The services you require from your graphic designer can vary widely. Usually you will need logo and signage design at a minimum. You may also want your graphic designer to prepare menus, loyalty cards and marketing materials. As for the prices, it will depend on what you need exactly. Do you need to develop and unroll a new brand concept? If you have an existing logo and signage, you may only need a graphic designer to make minor adjustments.

Shopfitter

Your shopfitter helps you to manage building costs and is in charge of construction your new store. A good shopfitter will work with you from site selection all the way to opening your new store. He can provide you with advice regarding services and construction costs. During the fit out period your shopfitter will be mange the subcontractors and ensure your new store is completed on time and to a high level of finish.

Hydraulic Consultant

It is important for hospitality businesses to work with a hydraulic consultant for the design and submission of the plumbing and drainage plans. Their rate is usually a package price based on the amount of work required. Based on the consultants I work with I usually allow between $1000 to $1500 on small tenancy jobs.

Building Certifier

Your building certifier is in charge of issuing your building approval. They will look through your drawings before construction to ensure your design Meets the Building Code and will also inspect the completed store before issuing your Building Approval. The fee that they charge will depend on the size and complexity of your fit out and the degree of structural work. As a rule of thumb, I allow between $1500 to $2000 on tenancy design jobs, based on the rates my consultant offers.

Town Planner

As for town planners, their advice is only needed in selected fit outs like if you require a development application. Your designer should always check with a town planner upfront ton confirm if a DA will be required for your site.

Understanding who you need to talk to about what can make it easier to get started in a new store fit out. Speak with your designer or shopfitter first and ask for recommendation for people they work with often and trust. Good Communication between everyone involved in your store fit out will create the best end result.

Understanding Fit Out Costs & Limiting Financial Risks

There is a saying by Dave Ramsey that goes this way: “A budget is telling your money where to go instead of wondering where it went.”  Knowing where your money is supposed to go is an essential part of business expansion. Having a realistic budget will save you time and will free you from unnecessary delays and stress. It will speed up the process of building new stores, and curb possible hindrances caused by financial restraint.

Most business owners I have worked with often ask how much it would cost them to fit-out the new store. This is a common problem in the industry if you do not understand the design and fit out process that is why it is necessary to know the roles that your designer and shopfitter play in managing the cost of the project.

An entrepreneur must have a clear understanding of how he or she wants the new store to look like and operate. First, create a list of the furniture and equipment necessary to keep the business running smoothly would help determine how much it would cost to replicate the success of their already existing store. Second, get a builder to run through the description of the typical store layout and floor plan for an estimate of the fit out cost.

In a hospitality fit out, your key costs usually come down to four things:

  1. Equipment
  2. Services
  3. Fit out
  4. Consultants and approvals

Equipment

Put together a list of all the things you need, including, but not limited to your cooking equipment, bench top equipment, fridges and freezer, stainless steel shelving, storage equipment, and counter tops, plus all other equipment that will be included in your retail display and counter area.

Give your equipment list to your equipment supplier for pricing and also to your shopfitter and designer to allow them to understand the equipment you need to allow for in your typical store layout.

Services

Services are a hidden cost that can easily be overlooked and have a big impact on your budget. Knowing your equipment requirements is the first part to understanding your services costs. It is best to have a sit-down with your shopfitter so you could discuss the cost of the installation of the equipment. He can give you the price range for the installation of grease trap if needed, exhaust canopy, as well as electric circuits and wiring connections.

Fit out

Fit out costs can be a bit more challenging as there are a number of people involved in controlling these costs. The problem arises when pricing is only discussed once the design has been resolved and documented. The way the fit out industry works currently, most shopfitters will not price a job until they have detailed drawings to base their pricing on.

Understanding your fit out costs upfront relies on close collaboration between your shopfitter and your retail designer. The way I approach cost is to give the business owner as much information upfront as we can. To do this we put together a concept plan within the first couple of weeks of your store design and run through a value management exercise with your shopfitter which will ultimately give you confidence that costs are under control.

Consultants and Approvals

Completing a new store design takes a team of experts, such as the retail designer, graphics designer, shopfitter, and others who will assist you in different areas to get the best possible result. Knowing who these key players are, and understanding their roles will give you an idea of who you need to contact to understand pricing. We will discuss more of these on my next post.