Spigolo Restaurant Remains a Hit

I was rummaging through my archive of interesting food and restaurant articles and came across one called “Start Your Own” featured in a 2006 page of the New York Times.  I thought the article would be appropriate for the blog as it describes an ambitious young couple risking to start their own restaurant in New York City where an estimated 60 percent of new businesses fail within two years.  Today the restaurant still exists and most recently was featured again in an interview by New York Times food critic Frank Bruni.

How did they do it?

Scott and Heather Fratangelo are the perfect example of first time restaurant owners who have achieved success through a well thought out plan.  In 2005, the couple’s Italian eatery opened in the Upper East Side of New York.  Within six months, the restaurant was a hit, a favorite dining choice for the affluent and a New York Times two star restaurant.  The couple knew what it would take to survive.  With Scott’s prior cooking experience from the Gramercy Tavern and Union Square Café, he would take charge of the kitchen.  Heather would divide her time between being a pastry chef, wine consultant and hostess.  The end result was saving the couple $100,000 in annual salaries.

The Fratangelos were like many new restaurant owners.  They had a vision of the restaurant space but little did they know of the various regulations which prevented their vision to come into reality.  So, the couple accepted to turn the 1,100 square foot space into a small 32-seat restaurant.

Successful Management

Labor Control

Spigolo is open for dinner seven days a week. A shift consists of two dishwashers, one prep cook, three cooks, one pastry assistant, two servers, one runner, and one bartender and in the winter one coat check-person.  Besides tips, each server receives a $20 per shift base pay.

Inventory Control

Spigolo goes through $4,000 worth of food per week with the goal of having almost nothing left by the end of Sunday.  The restaurant also goes through $1,500 worth of wine and $500 in liquor.  Inventory is kept to a minimum to avoid paying a bill all in one shot.  State Liquor Authority requires receipts to be paid in full at the end of every 28 day cycle with no exceptions.

Rules of Appearance

Employees purchase their own uniforms as way to take full responsibility for their appearance.  Scott has also implemented a $1 fine for every soiled napkin that is not placed in the laundry basket.

The Financial Breakdown

This is how Scott and Heather’s investment breakdown appeared:

Personal Savings of $160,000 were matched by a friend’s father who added another $160,000.  This provided a comfortable safety net for the couple.

Startup Costs:

  • Security Deposit = $14,000
  • Construction = $260,500
  • Liquor License = $4,500 (2 years)
  • Lawyers = $9,500
  • Sidewalk Café Permit (2 years) = $3,500
  • Architect = $3,500
  • Tables, Chairs & Dishes = $8,000
  • Start-up Food & Liquor = $8,000
  • Equipment = $30,000
  • Total Start-up Cost = $341,500

Monthly Expenses:

  • Rent = $14,000 / month
  • Staffing = $25,000 / month
  • Insurance = $666 / month
  • Food & Liquor = $25,800 / month
  • Estimated Monthly Expense = $65,466

Calculating a Benchmark

The Fratangelos kept their business plan simple and focused on two main benchmarks: calculating the daily break-even point ($3,000) and the average check required for achieving it ($52).

For example, it required 215 plates of gnocchi all priced at $14 to achieve the daily break even.

Starting Out

Scott and Heather Fratangelo understood what it would take to make a profitable business.  They realized operating a restaurant especially in New York could potentially be a disaster.  To avoid failure, they broke down what they had to do.  Because of the size of the restaurant, they knew that they had to step into multiple roles and manage their time well.  By doing this, they could save $100,000 in annual salaries.  At the time of when the article was published, the couple estimated they were already earning $8,000 to $9,000 profit per month only after a year.  However, this was only possible since Scott and Heather were working in the business.  If the couple were to hire chefs and other additional staff, their profit margin would drastically slip.

Scott predicted that when 2007 came around, the couple’s total investment of $480,000 would be fully paid off.  That would be two years since the opening.  Since the average return on investment is within three years, the Fratangelos are on the right track.  There hasn’t been any update on whether Scott and Heather had paid off the investment last year.  However, with recent reviews by the New York Times and other restaurant review sites, that is a sign of success.

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August Top Restaurant News Stories

New Premium Grapes Sold for $910 in Japan

A new breed of grapes has made its debut in northwestern Japan where it has been a state-led project since 1994.  Slightly smaller than a ping pong ball, the Ruby Roman grapes have a tomato like color and fetch for about $26 per grape.  That is what one Japanese hotel paid for to serve its guests at the upscale hotel.  700 grams, 35 grapes and $910, Wow!

Score a Last Minute Table for a Price

Gabriel Erbst is co-founder of www.tablexchange.com.  Based out of New York, the company has caused a ruckus between several restaurants who are angered by people who are making reservations for the sole purpose of selling them to someone else.  Recently the company has offered their online services to Chicago and already many restaurateurs are wary of the site.  Miae Lim, co-owner of Mirai, Japonais and Brasserie Ruhlmann believes, “It make you feel like you have no control over your reservations and that there is some guy at home making all these reservations and just selling them.”  Erbst and his partners have installed safeguards to prevent multiple reservations of one restaurant.  For most, that’s not enough.  In the first week of August, there were dozens of reservations for hot restaurants L2O, Charlie Trotter’s, Frontera Grill, Graham Elliot and Mirai Sushi all being sold for $10 to $20.  Although the site practices are on the border of illegal scalping, the Chicago Department of Business Affairs and Licensing has approved it, calling it a service like any other service offered.  According to Erbst, the Chicago site has attracted more than a hundred registered users within 10 days of launching.  Would you pay for a table?

Fat Kids Pay More to Eat

Managers of the Oulton Hall Hotel in Leeds, Yorkshire has started weighing kids to determine how much their meal will cost.  Although the owners of the hotel say it will be voluntary, kids who are not weighed will be automatically charged 11.25 pounds, half the price of adults.  Overweight kids are charged more.  Although some view the tactics politically incorrect, general manager Sean Boyce believes it’s a way to help reduce the cost of dining out. If a child weighs five stone then the meal will be charged 5 pounds while children weighing 10 stone will be charged 10 pounds (one stone = 14 lbs.).

Coca-Cola Goes Hybrid

Coca-Cola Bottling Company announced it will purchase 142 made-in-Canada commercial hybrid delivery trucks for its North American operations. The heavy duty trucks will run on gasoline and electricity.  Twenty-two of the trucks will be used in Canada.  Fuel consumption will improve by 32% and reduce polluting emissions by 32%.  When traveling under speeds of 50km/hr, the 340 volt battery will kick in to power the hybrid vehicle.  This results in reduced exhaust emissions during slow traffic.

Baskin Robbins Launches Upscale Cafe

Café 31 is Baskin Robbins’s latest concept.  The ice cream chain revealed its 2000 square foot prototype in Foxborough, MA which offers upscale desserts such as fondues, cakes and other sweets all created by an in-house pastry chef.  Parent company, Dunkin’ Brands Inc. plans to open next year in New Jersey, New York, Chicago and Los Angeles.  Café 31 is described as a fast casual restaurant in the ice cream segment.  Menu items range from $3.95 to $5.95 including a shareable fondue dessert for $11.95.

No Pay Increase for Starbucks’ Executives

In an attempt to focus on Starbucks turnaround efforts, salary raises will not be awarded to vice presidents or senior management this year including CEO Howard Schultz.  However, store and regional level employees will still receive a 3.5% increase while other employees would receive 2%.  Last month, Starbucks reported their first quarterly loss due to restructuring.  The coffee chain is closing a total of 600 stores and has already cut 1,000 non-store jobs.

Wal-mart’s Latest Retail Concept: Marketside

Wal-mart’s latest venture is Marketside, a one-stop shopping solution for bargain priced meals and fresh grocery items.  The first four Marketside stores will open in Mesa, Arizona with each covering 15,000 square feet.  Wal-mart’s total revenue is expected to top $400 billion this year.  With the addition of Marketside, it should be interesting.  Check out their site, www.marketside.com

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3 Essential Kitchen Knives

Iron Chef Masaharu Morimoto never enters the kitchen stadium without his custom made Japanese knives retailed at $4000 and $5000 each.  In fact, he has a collection of 80 knives.  Even master chef and TV icon Julia Child had apparently 60 knives in her collection.  Unless you are pro or a foodie that seeks the very best, then you don’t need to worry about spending thousands of dollars.  For most, three knives are all you need.

A Knife Block Provides More

Forget about those knife blocks and forget about how they will look in the corner of your kitchen.  Do you really want to spend hundreds or even thousand’s of dollars on some knives?  Many manufacturers trap consumers in purchasing a knife block calling it the essential.  You will soon realize that most of the time you only use two or three knives. For the everyday home cook, a chef’s knife, serrated knife and paring knife are the basics for cooking.

1. A Chef’s knife

The chef’s knife is really the main knife for all cooks.  Best for chopping vegetables, butchering meat and mincing herbs, the chef’s knife handles over 90% of the cutting required to prepare a meal.  An 8-to-10-inch chef’s knife is recommended.

What do I Like? Personally, I enjoy using the 8-inch chef knife for its weight and ability to maneuver quickly making the cutting easy and smooth.

2. A Serrated Knife

The serrated knife is one of the most efficient ways of slicing.  Normally, we think of slicing through bread, but really its one of the best ways of slicing through tomatoes, citrus fruits, quiches and pies.  An 8-to-10-inch serrated knife is recommended.

What do I Like? Although some people prefer using an 8-inch bread knife, I like going with the extra 2-inches. I find shorter bread knifes have a tendency to catch the knife tip on larger bread loaves.  This can cause an uneven and messy cut.

3. A Paring Knife

The paring knife is best for more delicate work that requires precision.  It is best used for peeling and coring apples and tomatoes, deveining shrimp and cutting citrus segments.  The fine blade also allows clean slicing of soft fruits (i.e. strawberries, plums, blueberries) without damaging the flesh.  A 3 ½ -to-5-inch paring knife is recommended.

What do I Like? I prefer a 3 ½ inch paring knife.  However, a paring knife is more based on preference since the weight and balance are not as important. The main thing you should look for is a comfortable grip with a sharp blade that is slightly flexible in order to handle tight areas.

What else do I need to know?

As for any knife whether you spend $25 or $300 a knife, you must keep them sharp.  A dull knife is more dangerous than a sharp one.  A knife can easily lose its sharpness by making contact with food or a cutting board.  By using sharpening steel, knives can be quickly restored.  Keep in mind a sharpening steel does not necessarily sharpen a dull knife, but instead it realigns the cutting edge.  At some point, a knife should be sharpened by a sharpening stone or electric sharpener.  If you are not too familiar with using either of these devices, then the best way is to leave it to the pros at a kitchen store.

Two key tips to remember are:

  1. Avoid using glass or acrylic cutting boards. Wood and plastic boards are the best and will avoid dulling or damaging the knife.
  2. Do not place your knives in the dishwasher.  The detergent can dull the knife and rust can form depending on the type of metal the knife is made out of.  Always wash knives by hand and dry immediately.

Brands that are worth checking out are knives by KitchenAid.  They are not part of the elite group of chef’s choice of knives, but they do the job.  If you are really passionate about cooking and don’t mind to spend the extra dollars Wüsthof Classic is my brand of choice for its stability, weight and sharpness.

Selecting the right knife can be challenging, but whether it is for home or commercial use, choosing the proper knives are essential.  Remember, three is all you need.

Photo credit: instapp

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