Entrepreneurship Hustle: From Business Plan to Real Success

1. Introduction: My name is Michael Chernow. I am a restaurateur in New York City. I'm born and raised here in New York so I really haven't moved far. So the first restaurant I opened up with my business partner Daniel Holzmann is called The Meatball Shop. We opened up in February of 2010, not far from where we're shooting today in the Lower East Side of New York City. So we've since opened six meatball shops. So we have six in total. We've opened five more after the first one. And about a year ago, I took a sidestep from the day-to-day operations at The Meatball Shop because I'm very passionate about fish as well. I'm also very passionate about creating, so I felt like my sort of, not my job at The Meatball Shop was done, but my creative desires were sort of at a standstill because The Meatball Shop knows - we know what we sound like, we know what we look like, we know how we walk, we know how we talk, and that's really what I'm great at, creating all of those things, putting a team together to really generate culture. I've since opened a restaurant called Seamore's. It is a very fun, super approachable, accessible, sustainable seafood restaurant, literally two blocks away from here, on the corner of Broome and Mulberry and NoLita of New York City. So today, I'm going to be discussing with you guys brand conception, or conception of brands, building of a brand, creating culture, and sort of opening up a business. If you're wondering if this class is for you, I'm here to say, "It is." You don't need anything for this class outside of the desire to want to create. I don't know if I'd call myself a serial entrepreneur, but I'm a hustler. I'm always trying to figure out ways to create and add something to the ethos. And so I believe that anybody that is a creative entrepreneur who wants to start their own business would benefit from this class. I've learned so much in the last six years that I've been in business, I am grateful to share it. 2. Your Idea: I think there's something like 24,000 restaurants here in New York. A thousand restaurants open and close every six months. Most people that go out to eat have a five restaurant cluster. It's a five restaurant cluster, there are five restaurants that they love to eat, three of which they eat at very regularly and the other two, they'll eat at once a month, once every six weeks. The only way to really do that is to come up with something unique. Walk through the space, walk through the market and really absorb what is there and what is not there. There was not a single restaurant in New York City that focused on local New York fish. I wanted to have a place where the check average, which means what one person pays to sit down and eat is the check average and so I wanted to have a place where it was like $35 to come and eat an amazingly fresh delicious plate of food that was seafood based that was local. It's niche both of those concepts but in order to be competitive today, you have to come up with something like that, that's appealing. A concept is really locked and loaded for me when I feel totally confident with the menu. When I know aesthetically what the restaurant is going to look like. When I have a mood board and I have the pieces in place where I feel good about it. When I have an idea of who the team is going to be to help me build the concept and when I have essentially a fully executed business plan. The first thing I really figure out is what am I serving? What am I cooking? What are my guests going to be banging down the doors for? Not necessarily designed completely, like you're going to see it in the restaurant but halfway there. We want a menu that you feel confident with. I'm not telling you that you need to necessarily cost everything out right away but you need to know how much money people are going to be spending with you. One piece of the puzzle that I will say is very important to take into consideration today is most people, no matter how rich or how much money they have, do not want to spend a lot of money today. We were in a serious hole for years. From end of 2007, early 2008 till about 2012 when things started to look bright again. So, because of that time, I believe people really became passionate about not spending a lot of money on food and we see that industry-wide. Even the most celebrity of celebrity chefs who have a three Michelin star restaurants and $500 per person to eat there have created burger places, sausage places, they're taking a new approach because the general masses today are eating out more and more and they want a place to call home and they don't want to spend $100 every time they walk through the door. So, they want to eat somewhere twice a week and have consistency and be able to afford it on a regular basis and feel good. So, you got your menu, right? The next thing is how the place looks and feels. So, for me the food needs to be surrounded in an environment that compliments it. For instance, the meatball shop, think of a warm cozy bowl of meatballs, the way I've designed that restaurant is thick reclaimed wood, maroon velvety painted distressed walls, really cool old industrial lighting, cozy, warm, feeling good. I'm going to step into a bowl of meatballs and warm up and cozy up. Seamores, by the sea, big windows, open, airy, bright, white, pops of color and so the aesthetics for me and the design for me is a huge part. I love designing the restaurants it's one of my favorite parts and really putting together a very curated mood board based on inspirational images. This mood board can be as little as 20 images, which would be great if you can really hone in on what you want to do in 20 images, awesome. Seamores, I got down to I think about 20 or 30 images but when I was imagining what this place was like I was just and I had a couple of 100 inspirational shots that were really getting me going. So, you have your menu, you have your mood board, your imagery and then you start thinking about the team of people that you want to bring along with you. Team in the beginning phases of building a restaurant typically means partners. When thinking about a partner, my suggestion to you is if you are sitting in a room and the person you're thinking about partnering with you is like, "Yeah, we should do that, yeah, that sounds great, oh, that's such a good idea, I was thinking that," bad partner. Not a good partner. Why? Because partners are there to do different things and if you guys are great at the exact same thing and are always on the same page and agree to everything, you could always be wrong. What you should do also is immediately define what your role is and what their role is or the others roles are. That should be as clear as day, what your roles and responsibilities are, what the delineation of labor is going to be. It should be very clear and it should be detailed on paper. So, now you've got either your team or not. For the meatball shop, I have partners, I have Daniel and we have a board that are small partners in the business. For Seamore's, I have no partners, that doesn't mean that they will not be partners because I believe giving equity to amazing talent and an amazing team is mandatory. With Seamore's, I had a great team and I have a great team of people that helped me build this business and I will be giving them equity in the business because of how hard they work and how passionate and dedicated they are. So, now we've got menu, we've got aesthetic, we've got team, business plan and all that stuff fits right into the business plan. 3. Your Business Plan: So the business plan, which is essentially your ticket. It is a guide map and you create the map. It is as much for you as it is for generating revenue or for raising capital to open your business. Typically, a business plan starts out with an executive summary. An executive summary is one page, that says exactly what your business is. Clean, clear, concise. As thorough as you can possibly be in one page. Investors, typically, will receive a business plan. They will read the executive summary. If they are intrigued, they will skip over all the other stuff that you've spent months on creating and go straight to the financials. They will look at the numbers and they want to see if it makes sense. They want to see if you are being realistic or unrealistic. Simple is always best. You don't want to hand somebody a Bible. You want to hand somebody a 10-page document that they can actually receive and it's palatable for someone. So, the first page is the executive summary, one page. The next page is your anticipated sales and profit. So, you want to have a small paragraph of what you're going to make and how much revenue you're going to actually drive, and what goes to the bottom line. That's the second page. You want to list your management, the people that are going to be working on your team, whether they're partners or whether they're just essential management to the business, general manager, chef, so on and so forth. Then you want to talk about the description of concept. You want to talk about the food. You want to talk about the design, and the aesthetics, right? You want to break down the corporate structure. How the business is formulated, where the business is formulated, is it an LLC or not. Then you want to get into your market research, and you should do extensive market research, and just understand also, that these stuff is for you. It is definitely there for the investor as well but predominantly it is for you. You want to know who your competition is and what the risks are, and you want to be realistic. When you put your competition and risks header in, you don't want to say, "No competition. No risk. This is a win win for everyone. Give me your money." This is not realistic. You want to be real there. Then your financials. So, when it comes to financials, for a restaurant, investors typically want to see your one financials, projected financials, and then they'd like to see a five-year projected plan. Then the financials have to be realistic. If the financials are not your strong suit, that's the one area where I believe you can bring in somebody to help you. But yeah, I would get familiar with everything and understand your demographic, understand your market, understand your menu. All of that stuff. I would not hire out those things. Bringing somebody in for financials is advised. 4. Your Pitch: So, now we're at the looking for money phase, right? One thing to understand and one thing to know is that most investors invest in you. They're actually investing in you, they're not necessarily investing in the business and the concepts. So, always have your best face on because the way you carry yourself, the way you present yourself is instrumental in the success of raising capital. Most people start with their friends and family. I mean, that's where most young entrepreneurs, startup companies, that's where they go. They go first to their friends and family, to the people that know them. For the first restaurant that I opened up, we had 14 investors. I didn't ask anybody who didn't have a net worth of over a good amount of money because I felt it was the first thing I was doing and I don't want anybody to really lose a great deal of money. So, I asked a bunch of people that were well-off if they wanted to kick in $20,000, $30,000, and I was able to scrape up the money. That's how it is really in the beginning. You have to ask everyone and anyone. That's why I said early on in the lesson that great entrepreneurs are friendly and kind to everyone because you never know who you're talking to. Take business cards, network, get out there, meet people. I highly recommend going through your contact list and picking out the people that you think could potentially be interested, and then not sending them an email with your business plan. For the first time, you sit down, you ask them if they can take a 15 minute coffee with you so you can present them your plan. In the best case scenario, you have two to three investors. I don't like to have one investor because I feel like if you have one investor, they feel like they own you. Most businesses that start have many, many investors, many investors. If the goal for you is to build a concept, to build a brand that's going to grow that you will ultimately sell down the line, whoever you sell that business to doesn't like to deal with a pool of investors. They want to deal with like one to three, so that they can buy them out one fell swoop, and everybody goes and he's happy. But if you've got 15, 16, 18, 22 investors and you go to sell your business and one or two investors are like, "No, I don't want to go." or "I want more money for my shares." It creates a bit of a problem. So I would say try to keep it as compact as possible when looking to bring on investors. But in the beginning, that's very, very hard, very, very hard. I mean, I opened up my seventh restaurant and I have seven investors. I took a humongous risk, humongous risk at Sea Mars, huge. I personally cut a check for $110,000 out of the money that I've earned busting my butt. That was very, very scary, right, to secure the location that I'm in at Sea Mars before capital was fully committed. It's terrifying, my wife's wanted to kill me, but I went out there and did it because I was totally confident in the brand and the concept that I was going to work. So, the best bet is to put skin in the game yourself. So, you say, yes, like if an investor asked me, "Are you putting in money?" I say, "Of course, I'm putting in money. I always put in money." That could be as little as the first time I opened up a business with Daniel. We each put in our life savings. I think it was $15,000 or $18,000. That's all we had, that's what we started the meatball shop with. The two of us each put in $15,000 or $18,000. But like at that time, investors were like, "Wow, these young kids, they're putting in their life savings. I'm in." It's very, very, very hard. It could be some of the most frustrating, stressful things entrepreneurs have to do, raise money. 5. Your Location: As you're developing your business plan obviously in the restaurant business, location, location, location. I go out there hard actively looking without money so that I can have an idea of what's out there. How much money per square foot this restaurant's going to cost. Is there actually inventory in the market for where I want to be? Typically there is, if you look hard enough. There is inventory and there is a deal that you think you can potentially make. Then that's the deal that you put in your business plan. We are going to open up a restaurant at bla bla bla address. So, when you write your business plan, have an address in, that you would like to be in, so that investors can visualize it. But don't get emotionally attached to it, because you're not able to secure it until you have the capital. So, I've written business plans before, with a location, for instant, Seymour was not always on the corner of the northern Melbourne, I had another location in the lower east side that I was close to. When I really decided that I was not going to take that location and I was going to look further, I had to take it out of the business plan, and write a note to the potential investors and or investors that I was moving the location based on circumstances. Either somebody took the location, I just didn't get a great feeling about it, after spending more time in there, or I found another location that's a lot better. The latter, I found another location that's a lot better, is much easier for investors to hear. So, what makes a good restaurant location? There are a number of things there are very practical things and then there are emotional things. First the practical things have to work. You cannot open up a restaurant in New York and in most places within 200 feet of a church. If there's a church on the block, don't think about it because you will not get a liquor license, and you need liquor to survive. So, do not open up a restaurant within 200 feet of a church. It's very very hard to close to impossible to get a full liquor license meaning you can serve spirits, wine and beer, if you're within 500 feet of a school. So if there's a school within 500 feet, look somewhere else. Unless you're so passionate about the location, get on the phone with a lawyer, because at this point you should have a lawyer that's helped you this far. Ask them, "Hey, a liquor license attorney, do you think I have a chance of getting a liquor license here?" You cannot operate a full kitchen unless you want to do electric kitchen without gas. You've got to make sure that there's gas there. You also want to make sure that there is enough electrical amperage in the restaurant, and if not, is there a possibility that you can upgrade the amperage? Most restaurants you need three phase 400 Amp. So that it can take the load of all the electrical appliances that you'll be using there. The other piece is, do you want to corner space or do you want an inline space? You're going to pay for a corner. Pay a lot for a corner. You're going to pay less for an inline. Inline means in the middle of the block, corners the corner. Sidewalk cafe. Do you want to have a cafe in front of your restaurant? Huge asset. It's not cheap it's like, anywhere from $10,000 to $15,000 a year, you rent it from the Department of Consumer Affairs, the DCA, you pay them yearly to have a sidewalk cafe. But, every seat is worth a lot more money than that. The more emotional sort of feeling assets are facets of finding a great restaurant come from within. You want to walk into a place and feel good. You want to walk into a place close your eyes and see the restaurant. That's how I do it. All the other things need to check out, but you need to feel it in your chest, in your heart that this is the place. I know that sounds a little foo fee. A little woo woo. But it's real. It's real. I've never taken a restaurant no matter how good the deal was, no matter how awesome location was. If I walked in and I didn't feel it, and that feeling is hard to explain, but you'll understand when you're there, I didn't feel it, I don't do the deal. 6. Defining the Brand and Your Leadership: Your brand is essentially who you are. I like to think about my core values early on because your core values ultimately help design your mission. Pass the mic and you say word, word, word, word, word, word, word, word word, and you go around until you guys don't feel like you need to go around anymore. If there's long list and you lay out the list, you put it up on a whiteboard and you talk about it. You now are down to four or five and I think that that process takes takes time, it's a constant ongoing thing as you're developing the business, but I do believe that once you're in the place where you guys are signing a lease, you should know that, you should know your core values. Look, when I think of the brand of Seymour's as we did this exercise and what we came to was Seymour's is an old boat. It's an old boat, wooden boat that's painted bright colors. So like a really bright orange and bright blue, and it's in a tropical place with this great boat, there's old boat that's just been around for a long time and there's always people involved and there's great music, and that's sort of like what Seymour's is, the meatball shop is a vintage Land Cruiser. The vintage Land Cruiser that's rugged and fights through the dirt and the dust and gets through it just like a rugged beast of a tank of a car. That's like what people really like discovering when they walk into your restaurant, they want to know what you look like, what you sound like, how you feel, what you talk, who you hang out with, the music that you play, the way the place looks, is there sunlight, is there not, is it dark, is it bright? All those things. That's why traveling is awesome because you get to travel and you get to find out all these cool things. Well, people do the same thing when they come to your restaurant, they want to find out all the cool things, they want to lift up the rock and see what's underneath there. But brand is a physical, almost tangible thing, and culture is not, culture is who you are, brand is what you are and culture is who you are. The philosophy behind our culture is our guests and the people that come into our restaurant are second. They're not a number one, they're second. A number one is the staff, the crew, the team, because if your staff is very excited, feel supported and confidence, going out there onto the floor and walking into battle every single day like we do, the guests will be taken care of incredibly well. Incredibly well, why? Because the staff is very, very happy to be there. So, that's a philosophy that I've had from the very beginning only because I've worked in restaurants for so long and I know what it feels like to be taken care of and I know what it feels like also to not be taken care of. That's something that I would put at the forefront of any business that you create specifically in the restaurant business because it's a people business, it's a people management business, it takes a lot of people to run the business. I'll just go quickly off on one little tangent because I think this is super important to think about. The restaurant business is one of the only businesses that for one person to sit down and make a transaction with you, it takes a team of 10 people to create. So one person walks into the restaurant, they're greeted by a host, the host takes them to the table, that's one person. They're brought water, bus boy, that's two people. They're greeted by a server, that's three people, the bartender makes their drink, that's four people. Then the server puts the ticket into the computer which then gets to the expediters, that's five people. The expediters then passes off your food order to typically the appetizer station or the garde manger, six people. Then to the hot station, seven people, then to the dessert, eight people. We're already at eight people. Eight people to create one transaction is a lot of people, and that's not everything, you have a manager, you have a chef, you have dishwashers, you have food runners, we're at 11 people already, and you're just one person. To make that one ticket happen, you need 11 people to make it work, as opposed to many other businesses where you create a large sum of something, you put it on a shelf, and it's just making money for you, people are just buying it. Every single time a transaction has to be made in a restaurant, a large team of people have to be involved in order to make that money happen, and that's the culture that we've created at the meatball shop and at Seymour's. I believe that that is a culture that I want, I don't walk around thinking that people work for me, people work with me, we worked together. In the military, you get pushed to leading your army into war because you fought your way to get there, and you've proved to get there. The difference in business is if somebody just comes up with an idea for a business, they're thrust into this leadership position, and if they're not ready for it, they crack and the business falls. It's a 360 degree exercise and an asset that you create when you develop these core values that ultimately leads your mission, which ultimately projects your culture as a business. 7. Implementing the Culture: So, in terms of implementing culture, the best way to do it is really through training. Every single time somebody comes on board, you hand them a training packet that clearly defines the core values and the mission, where you talk about all the things that you do as a company, you talk about the days off that you guys have, you talk about what you do as a team. For instance, every Wednesday morning, at Eight O'clock, we have a fitness outing at Seamore's, every single Wednesday morning, huge part of our culture. It's a big part, it's one of our core values, wellness. Creating this culture of being good, feeling good, 50 percent of my staff are members at the New York Sports Club around the corner because we got them a very good deal there and that's huge. You can create things like that in your business you just have to come up with the actual, you have to feel the core value and execute on it. So, the way we go about communicating our core values at Seamore's is every single month, the front of the house and the back of the house have a full staff meeting. So, every month, the back of the house will meet, the whole entire team, and the front of the house will meet, and then every other month, we will meet as a full team. We start off every single meeting with our core values and our mission. That propels the sustainability of culture at Seamore's. We consistently reiterate it. One other small little thing that goes an enormous, enormous long way is every single manager is mandated to say hello to every single person that works in the restaurant, the first thing they do. The first thing any manager, if they're in the back of the house, meaning in the kitchen, or the front of the house, meaning on the floor in the front of the restaurant, any manager that walks through the door before they put their stuff away, before they do anything, they walk through the restaurant and they greet and say hi, high-five or a hug to every single person that works there. So important. I never leave that restaurant or walk into that restaurant without greeting every single person. I'll tell you one thing, the staff, they love it. Why? Because I fucking care, pardon my language, but I do. I care. I'm passionate about it. If I see a manager, it happens naturally, once they start working but if I see a manager walking into the restaurant and immediately running downstairs, I walk up to him and I say, "Hey, say what's up to your boys. Say what's up to your squad. This is where it starts." So, another thing that I do or that we do at Seamore's and The Meatball Shop that I think is super important and integral to the success of sustaining our culture is holidays. I can't tell you the amount of Christmases, Thanksgivings, Christmas Eves I've had to work in my career as a restaurant person. So, I made a commitment to my business partner, my business partner made a commitment and me no matter what, we would close on Christmas Eve, Christmas day, Thanksgiving. Those days, we close every single year. It doesn't matter how great or how not great the business is doing, we close those days. It gives every single person an opportunity to get to their family because someone who has to travel, they have to travel out of the city, they'll typically request the day before Christmas Eve and the day after Christmas to be away, and it gives everybody a chance to be with their family, everyone, and that's huge. That's never been done for me before. We also give a little bonus to everybody for the holidays. Everybody gets a gift. There's 320 people I think that will get them [inaudible] now, everybody gets a gift and then we do at the Meatball Shop every year something called Bowler Day, where we shutdown the restaurants again, we shut all the restaurants and we take the team out as a huge team, all the restaurants and we go on an outing. We typically do it on Labor Day and we go to the park and we play sports, we play football, we barbecue, we do all that, then we rent out a huge bowling alley, we take over the bowling alley, we fill the bowling alley. Then there's a band that comes and those little things that cost a lot of money, but those things are what the buzz people talk about, what's the buzz all about? The buzz is all about when your staff walks out of the restaurant waving your flag, you want your staff to wave the flag high, high as they can. You want them to be- I know how excited I am to say that, I'm partner, a co-owner in the Meatball Shop and on Seamore's, I know how that makes me feel when I say that. My goal is, everybody that works with me at the restaurants, I want them to feel as proud to say, I work at the Meatball Shop, I work at Seamore's, you want your staff to feel proud about that. I have a philosophy when it comes to hiring that we say hiring on a smile, I hire on a smile. I'd much rather hire you if you can look me in the eyes and smile and genuinely say, "I want to work here." Than somebody that hands me a resume that says that they've worked in every single great restaurant in the world for the last 30 years and can't look at me in the eyes. I know that I can teach somebody how to serve tables, how to buzz tables, how to cook fish, how to make meatballs. I certainly know that I cannot teach somebody to be genuine. So I look for genuine people when I hire. Typically, if you start with a strong team, anybody that joins afterwards want to be right up there with them, they work as hard as they could possibly work so that they keep up with the strength. Typically, the team will if people are falling to the wayside will pick them up and carry them together, if they're great people, because it's a people business, so hiring is very very important just know that you cannot teach kindness and hospitality, you can teach people how to be technicians, you can you can hone skills, but you can't teach people to be warm-hearted and in our business, the hospitality business you have to be warm-hearted. 8. Creating the Ultimate Customer Experience: So customer experience. Guest experience. The way I think about this, is I've got 60 to 70 minutes to win, and it starts from the second the guest sees the front of the restaurant. Literally, from the minute they make eye contact with your restaurant, boom, the clock is ticking. If the sidewalk is clean, the windows are nice and clear the store front is nice and clean, that is like awesome, that is when the first impression is always the lasting impression. They walk into the restaurant. They're greeted by the host. Is the host smiling and I'm excited to see them.? Is the hosts have their head down and trying to figure things out? If there's a long wait, immediate slash. It's amazing to have people waiting for you at a restaurant. It's not amazing for the guest. Guest immediately are there's a little notch on the belt. They're like, "Damn, I want to eat." Once they're greeted, they are told that they have to grab a drink in the bar or they go somewhere else or whatever it is but you're still the clock is ticking. From the second that they walk through the door, the clock is ticking. They get brought to a table, they given water, immediately. If the water's not at the table within 30 seconds, they have to raise their hand and ask for it, and that's not fun. So, the water's dropped at the table. So far, so good. Now, the server gets the table, the server ultimately gets the table right after the water gets to the table. The server then gives the second or third, really the third greet because the buzzer that brings the water to the tables should be happy and excited and welcoming them. Third greet, server gets to the table. So, the server greet them with a big, old smile. Is this a happy experience? Is this a great thing? Or is your culture shining through your staff? Ideally, the guess is getting the food in when the drinks hit the table. Drinks at the table, food goes in. You want the food to be in the kitchen no later than 20 minutes, because you want to give the guest 15 minutes to wait for their food, 10 to 15 minutes to wait for their food, and another half an hour to eat. Ultimately, if the vibe of the restaurant is, I say, 60 to 70 minutes because the way we've created our restaurant, which is something I'll get into next, with music and siting and energy is fast-paced, it's moving quickly. It's like if you have a quiet restaurant with not a lot of tables around you and soft music and super comfortable, padded chairs, people are going to spend all day in there. But if you have a restaurant that's cranking the music, it's fast-paced and lots of people, people tend to just keep up with the pace. So, they've eaten their food, you ask them if they're done, you kindly take their plates away. You ask them if they'd like dessert, if they would like dessert, then you have to add that extra 10 minutes onto the cheque, meaning the difference between 60 minutes and 70 minutes. If they'd like dessert, you bring them dessert menu, you ask them what they'd like. Ideally, the dessert comes out of the kitchen as quickly as possible. You smile the whole time. You ask them if they'd like their bill once they're done with dessert. You bring them there bill. You thank them very much. They pay their bill. They stand up. They walk past anybody that worked in the restaurant, and that person then thanks them, welcomes them to come back. They walk past the host. The host thanks them. Welcomes them to come back. They walk out the door. They leave. That is your opportunity to succeed, period and done. It's 60 minutes to 70 minutes in my restaurant. When I closed my eyes and I thought about what Seamore's was, it is this like bright, airy, clean, fresh, smooth, simple restaurant. So, what I thought was I wanted a lot of windows, I wanted a lot of sunlight, I wanted it to be crisp and fresh by painting it white, predominantly, and then I want it to be like cool and and unique by adding like splashes of color. Boom, splash of color over there, wall of color over there. The surfaces Seamore's, all the tables are whitewashed wood, the communal tables and the bar are really cool patina zinc. When I did that, I wanted to create a backdrop, and I know this sounds crazy for Instagram, for photos, because I you know today everybody takes pictures of their food and I'm a design oriented guy. So, when I see a great shot on Instagram, I'm like, "Oh, that's a great shot." So, I wanted to be able to create every single shot that people would take their food in the restaurant for the cool backdrop. Like if you look at cookbooks, you will see like reclaimed wood or whitewashed wood as the backdrop for dishes or slate or zinc. First of all, whitewashed wood and zinc are just cool, and they look good, but it's another thing to add to the guest experience when somebody takes a picture and they are like, "That's the best background ever." Tiny, little details like that and also, of course, the staff benefits from all of that stuff as well. There's something that I call restaurant noise, and there's great restaurant noise and terrible restaurant noise. Restaurant noise to me is the perfect marriage of music, people talking, glasses clanking, plates clanking, fire going. It's this level, this like calming noise that I am able to clearly pinpoint when it's done well in a restaurant. Trying to get that restaurant noise right is not easy. Sometimes the music's out of whack. The acoustics are not great. There's no sound dampening. You want to be able to have a conversation, hear the music, experience the activity that's going on around you. It's tough one. People tend to spend a lot of money on figuring that one out. 9. Understanding Success: So, before we close, I want to talk to you guys about what it looks like down the road, after you've opened. What should it look like after month one? After Month three? After six months? After a year? Five years? So on. The way you determine success is, at the end of the first month, you should feel good. You should feel good, and if you don't feel good, your restaurant is empty. It didn't work. I'm here to tell you that. If you really feel bad at the end of your first month. Now, there's a difference between feeling bad and feeling like you could be doing better. Feeling bad is like, ''Oh, my God, the restaurant is empty, lunch, and dinner, all the time it's empty, I'm in trouble.'' Feeling okay is like, ''Well, we're doing 100 covers a day, we wish we were doing 150 or 200.'' You can fight through that. If you've projected properly, and conservatively, and after three months, you're way below your projections, you should start to think about ways in which you can increase revenue and tighten up on your costs and labor. If you are where you are supposed to be, high five. Because that's awesome. If you've surpassed where you're supposed to be, based on the projections that you've laid out, unbelievable, keep it going, don't go crazy, don't make a distribution to your investors in the first quarter. Wait at least two quarters. I've made that mistake before. Once you make a distribution, your investors expect a distribution every single subsequent quarter, hold your money in the bank, don't make a distribution, don't spend all your money because you never know what can happen. The restaurant is a seasonal business and it's ups and downs. At six months, if you're still at your projections, amazing. If you're surpassed, even better. If you're way below, financially, if you're not doing the revenue, if you're doing revenue, and your costs are through the roof, you can fix that. If you're not doing revenue, that's where the trouble resides. You want to make sure that you're doing the revenue. Costs and labor can always be fixed. Sales much harder. Much harder to generate more sales, much easier to trim labor and costs. If you've made it to a year, I'm here to tell you that you've got a great chance in surviving. As you grow, you want to do your year over year sales, that's how investors valuate your business. Not only how much money you bring in, not only how much money you bring to the bottom line, but are you doing year over year sales increases? Because that's important. Then down the road, in the event that your exit strategy as I would like to build this business to five restaurants and sell it for X multiple, the things that you've got to consider are consistency, labor, because typically, when you grow a business bigger, you have to hire a team that knows how to do that. Typically, when you have to hire a team that knows how to do that, you spend more money than you make, because ultimately, the goal is to make more money at the end. If the end result is a sale of your business, meaning another big huge massive restaurant conglomerate comes around and scoops up your business, and you get acquired. If that's your goal, the things that you want to keep in mind are consistency and product. That's how you keep guests around. You want them to walk into your restaurant in June, and have a plate of food, walk into your restaurant in January, and have the exact same plate of food. That determines the qualitative success of your business. If you can keep things consistent, and that goes all down to systems and processes, and that's if you want to sell your business. You can also live a perfectly normal great life with a successful restaurant or two. Everybody thinks they have to go into the restaurant business today and open up 200. 10. Closing: So, what does it take to be a great entrepreneur? I have a little secret that I carry in my back pocket at all times. The business of business is relationships. Smiling and being friendly, is the number one secret. That's just it, like, in any situation, in every situation, err on the side of friendliness and kindness. I genuinely have a passion for people for the human engagement, not everybody has that, but I certainly do have that. More than food, more than beverage, more than hospitality. I'm really about, like I can sit and talk to you, for hours and hours and hours and truly enjoy myself. I also believe that a great entrepreneur knows what he or she is good at, and what he or she is not good at. Trying to be good at everything, is a big mistake. Understanding your strengths and weaknesses is a huge part of success. Because, typically, if we're not good at something, we try to spend more time on that or we do spend more time on that because the other things come easy. So, if you don't focus on your strengths, ultimately, you spend too much time focusing on your weaknesses. So, find other people to help with your weaknesses, and then you'll not get stressed out and frustrated because you're actually enjoying what you're doing. So, your project for this class is to share your restaurant concept. You can share that in many different ways. You can share the fully executed business plan, you can share a menu, you can share a mood board, you can share just the concept and the idea, you can share your core values, you can share your mission, you can share what your culture, like what you would love your culture to be, you can share your restaurant name, you can share any phase of development that you're in. We just want you to share. We just want you to share.