Why the concept comes first

Almost every decision in the rest of this book depends on your concept. The kind of property you need, the kitchen equipment you buy, the number of staff you hire, the prices you charge and the way you find customers all follow from it. If the concept is vague, each of those decisions becomes a guess, and the guesses do not always fit together.

Imagine an owner who says, “I want a nice place with good food.” Nobody could disagree, but it gives no help when choosing between two properties, deciding whether to open at breakfast, or setting the price of a main course. Now imagine an owner who says, “I want a counter-service café for office workers and shoppers, open from breakfast to mid-afternoon, selling freshly made soups, sandwiches and cakes at a price people can afford every week.” That owner already knows a great deal. They need a busy street, not a quiet one. They do not need a large cooking range. They need to serve people quickly at lunchtime. They will close before the evening.

A clear concept also helps landlords, lenders, designers and staff understand what you are building. And it helps customers, who often choose where to eat in seconds, from a shopfront or a few lines on a phone screen.

Your concept will change as you test it (Chapter 3), but you need a clear first version to test. That is what this chapter produces.

What a concept is made of

It helps to break a concept into seven parts. Each part is a question you need to answer. They are closely linked, so a change to one usually means a change to others.

1. The food and drink. What you sell, and what kind of cooking it needs. A menu of cakes and sandwiches needs very different skills, equipment and staff from a menu of roasts and stews.
2. The customer. The main groups of people you want to serve. Not everyone: the people most likely to come often and spend enough.
3. The occasion. The reason and the moment a customer comes to you. A quick breakfast before work, a family lunch on Sunday, a meal delivered on a tired weekday evening and a birthday dinner are all different occasions, even for the same person.
4. The price level. Roughly how much a typical customer spends. This is often called the average spend: your total sales divided by the number of customers.
5. The service style. How the food reaches the customer. The main styles are counter service (customers order and often collect at a counter), table service (staff take orders and bring food to the table) and delivery or collection (the food leaves the building in packaging).
6. The atmosphere. What it feels like to be there, or, for delivery, what it feels like to open the bag. This includes the look of the room, the noise, the lighting, the music, the speed and the way staff talk to people.
7. The name. The word or words that carry all of the above in a customer's mind.

Many new owners start with the food, because that is what excites them. That is fine, but do not stop there. A good menu offered to the wrong customers, at the wrong time of day, at the wrong price, will struggle.

The formats this book covers

A format is the basic shape of the business. This book concentrates on three formats that suit a first-time owner with a limited budget. It also mentions two smaller variations.

The daytime café

A café that opens from breakfast to mid-afternoon, usually with counter service or simple table service. It sells hot drinks, breakfasts, light lunches and baking. Drinks are quick to serve and cost relatively little to make, so they are an important part of the income. The kitchen can be small, and the owner's evenings are free.

The small casual restaurant

A restaurant with table service, usually open for lunch, dinner or both, often serving alcohol. It needs a full kitchen, trained cooks, front-of-house staff and more money to set up. In return, customers spend more per visit, and the business can build strong loyalty with regular diners and families.

The cloud kitchen

A cloud kitchen, also called a dark kitchen or delivery-only kitchen, cooks food only for delivery or collection. There is no dining room and no customers inside. Orders usually arrive through the delivery apps, and later perhaps through the owner's own website. Rent and fit-out can be much lower, because the kitchen does not need a busy street or an attractive shopfront. In exchange, the apps take a large share of each order, and the food must still taste good after a journey in a bag.

Two variations: takeaway counters and food trucks

A takeaway counter is a small shop that cooks food for customers to take away, sometimes with a few stools. It sits between a café and a cloud kitchen: it needs a busy location like a café, but has little or no seating. A food truck or food stall is a mobile kitchen that trades at markets, events or regular pitches. It is cheap to start, but depends on weather, events and permission to trade in each place. Much of the advice for cafés and cloud kitchens applies to both.

Format	Main strengths	Main demands
Daytime café	Smaller kitchen; drinks give good margins; evenings free; simpler menu; easier to staff with less experienced people	Needs a busy, visible location, so rent is higher per square metre; low spend per customer means many customers are needed; lunchtime rush must be served fast
Small casual restaurant	Higher spend per customer; room for loyalty and regular bookings; drinks add sales	Highest set-up cost (full kitchen and extraction); skilled chef needed; late nights; more staff to manage; alcohol needs a licence
Cloud kitchen	Lower rent and fit-out; no dining room to staff; can test menus and add brands quickly	Delivery apps take a large share of each order; ratings and photos decide sales; food must travel well; evening and weekend work; packaging costs
Takeaway counter	Small space; few staff; quick service	Needs strong passing trade; spend per customer is often low; competition from nearby takeaways
Food truck or stall	Lowest start-up cost; can move to where customers are; good for testing	Depends on weather, events and pitches; limited space and storage; permissions needed for each place

Who your customer is, and why they come

“Everyone” is not a customer group. A business that tries to please everyone usually ends up with a long menu and no strong reason for anyone to choose it. It is far better to describe two or three main groups clearly and build the business around them. Other people will come too.

For each group, try to answer five questions:

• Who are they? For example, office workers, parents with young children, older people who live nearby, students, couples, families, people working night shifts.
• When do they come? Which days, and which times of day.
• Why do they come? What need are you meeting: speed, comfort, a treat, a healthy lunch, a place to meet a friend, a meal they do not have to cook?
• How much do they spend? What they are likely to buy and roughly what they would pay. Look at what similar places nearby charge.
• How do they find you? Walking past, a recommendation, a mapping service, a social media platform, a delivery app, a sign on the main road.

The third question, the occasion, deserves the most thought. The same person may use a café for a quick coffee on a weekday and a long breakfast with a friend on Saturday. Each occasion needs something different from you, and you cannot be best at all of them. Choose the one or two that matter most to your main customers, and build your menu, layout, hours and staffing around those.

Think about the week, too. If your main customer group only comes on Saturdays, you will need a second group for the weekdays. Chapter 8 shows how to turn your customer groups into a forecast by day.

Price level and what it means

Your price level is not only a question of what customers will pay. It decides how many customers you need, how fast you must serve them and what kind of experience they expect.

At a low price level, each customer brings in a small amount of money. To cover the rent, the wages and the other costs that you pay whatever happens, you need a lot of customers. That means a busy location, fast service and a menu that can be produced quickly. At a higher price level, each customer brings in more, so you can survive with fewer of them, but they expect more: better ingredients, more skilled cooking, more comfort and more attention from staff. Both can work. What rarely works is a high-cost operation at a low price, or a low-cost experience at a high price.

Two kinds of cost matter here. Variable costs rise and fall with sales: the food and drink you use, card fees, packaging, and delivery app commission. Fixed costs stay roughly the same each month whether you are busy or not: rent, most wages, loan repayments, insurance, energy. Every sale has to pay its own variable costs first. What is left over goes towards the fixed costs. Once the fixed costs are covered, what remains is profit. Chapter 17 shows how to calculate your break-even point, the level of sales at which you stop losing money. For now, a rough check is enough.

For a cloud kitchen, the same thinking applies, with one large extra cost: the commission charged by the delivery apps. Commission is the share of each order that the app keeps in return for finding the customer, taking payment and, usually, delivering the food. It is taken from the order value before you see any money, so it has to be built into the concept from the start.

You do not need exact figures yet, only a rough sense of how many customers your price level needs. If that number looks impossible for the location you can afford, change the concept now, not after you have signed a lease.

What makes you different

Customers already have places to eat. You need a reason for them to choose you instead, and to come back. This does not have to be something nobody has ever done. Usually it is simpler: doing an ordinary thing noticeably better, or doing it for people who are not well served at the moment.

Useful ways to be different include:

• A gap in the area. There is no good breakfast within walking distance of a large group of offices, or no family restaurant in a suburb full of young families.
• Quality that people notice. Cakes baked on the premises every morning; stock made from scratch.
• Speed and reliability. Lunch served in five minutes, every day; delivery orders that always arrive hot and complete.
• Warmth. Staff who remember regulars' names and orders. This costs little.
• A clear specialism. A short menu that does one kind of food very well.
• Value. Generous, well-made food at a fair price. Value is not the same as cheap.

Be careful with differences that only you care about. A rare ingredient or a clever name may delight the owner and mean nothing to the customer. The test is simple: would your main customers notice it, and would it make them choose you over the place they use now? If you are not sure, the testing in Chapter 3 will tell you.

Writing your concept statement

A concept statement is one short paragraph that describes the whole business. It is not an advertisement. It is a working tool: something you can read to a landlord, a bank, a designer, a chef you want to hire, or yourself on a difficult day, to remind everyone what the business is for.

A good concept statement answers the seven questions from earlier in this chapter in plain words. It usually runs to three to six sentences. You can build one from this pattern:

• [Name] is a [format and service style] in [kind of location].
• It serves [main food and drink] to [main customer groups], who come for [main occasions].
• It is open [days and hours].
• A typical customer spends about [average spend].
• It feels [three or four words about the atmosphere].
• Customers choose it over other places because [what makes it different].

Here is the statement Clara wrote after several drafts:

“The Linden Tree Café is a counter-service daytime café on a busy shopping street near the town's bus station. It serves good coffee, breakfasts, soups, sandwiches, salads and cakes baked on the premises every morning, to shoppers, office workers and parents with young children. It is open from 8 am to 4 pm, Tuesday to Sunday. A typical customer spends about £11. It feels bright, friendly and unhurried, but lunch is served quickly. People choose it because the baking is home-made, the food is fresh and fairly priced, and families are made welcome.”

Clara pinned it above her desk, and read it again whenever she was tempted by a new idea.

Write a first version quickly, then improve it. Ask someone who does not know your plans what kind of place they imagine when they read it. If their picture matches yours, the statement is working. Worksheet 2.1 gives you a guided version to fill in.

Naming the business

A name is the first thing many customers will know about you, often before they see the food. A good name is:

• Easy to say and spell. If people cannot say it, they will not recommend it; if they cannot spell it, they will not find you online.
• Suited to the concept. A name that sounds like a formal restaurant will confuse people looking for a quick coffee.
• Not too narrow. A name tied to one dish or one fashion can become a problem if you change the menu later.
• Distinct from nearby businesses. Customers should not confuse you with a competitor.
• Available. Nobody else should already be using it for a similar business, and you should be able to use it online and on social media.

Before you become attached to a name, check it. Search online for businesses with the same or a very similar name, especially food businesses. Check whether the website address and social media names you would want are free. Then check the official registers for your country. Using a name another business has already protected can force you to change your signs, menus and packaging later, just when customers are starting to know you.

Multi-brand cloud kitchens

One kitchen can sell under more than one name. A cloud kitchen might sell rice bowls under one brand, and burgers or breakfasts under another, from the same staff and equipment. Each brand has its own name, menu and listing on the delivery apps. These are sometimes called virtual brands.

The attraction is clear. The rent, the equipment and much of the staff cost are already paid, and a second brand can bring extra orders when the kitchen is quiet or reach customers who would never search for the first kind of food.

The risks are real, though:

• More complexity. More dishes, more stock and more to go wrong at the busiest time.
• Capacity at the peak. If both brands are busy at the same hour, the kitchen can fall behind, and late orders damage both sets of ratings (Chapter 8).
• Customer trust. Be honest with customers about where their food is cooked, and follow the delivery apps' rules on listing more than one brand from one address.

A sensible rule is to make one brand work well before you add another. Look for a second brand that uses many of the same ingredients and equipment, and that sells at different times or to different customers from the first. Tom opened with one brand and kept his idea for a second menu in his notebook, for later.

Keep it simple at first

New owners are often tempted to add more: a longer menu, extra hours, catering, events, a second brand. Each idea may be good on its own. Together, they can overload a new business before it has learned to do its main job well.

A simple concept helps in the first year:

• Fewer dishes mean less stock, less waste and more consistent food.
• Fewer opening hours mean fewer staff costs and a more manageable week for you.
• A clear idea is easier for customers to understand and recommend.
• When something goes wrong, it is easier to see why.

Keep a list of the ideas you are not doing yet. Some will become good additions once the business is steady. Chapter 20 looks at when and how to add to a working business.