He flies under the general public’s radar, but anyone involved in the underbelly of Boston’s food scene knows him as the restaurant kingpin. Michael Staub has helped to open and consult with more than 100 eateries over the past 35 years, including such names as L’Espalier, Sel De La Terre, Salamander, Providence, Chez Henri, Les Zygomates, Olives, Lumiere, the Elephant Walk, The Fireplace, Tomasso, Hungry Mother, State Park (known as the casual spawn of Hungry Mother), Commonwealth, Catalyst, Craigie on Main, Kirkland Tap and Trotter, Tatte Bakery (all four locations) and Asta.
So what can he teach someone who wants to open their own restaurant?
Staub is the director of Group M. Inc, which provides pro forma and operational services to start-ups and existing restaurants. Work includes concept analysis, location searches and capital structures, which often culminate in the preparation of a business plan to receive bank or private placement financing. His business plans have been successful in fundraising through traditional banking, commercial SBA guaranteed loans, and limited partnerships.
Years ago Staub ran The Charcuterie in Wellesley, before selling it at a profit. He then enrolled in Boston College to study small business finance and earned his MBA. During his time at Boston College, Staub worked for Cambridge-based CDIA, a real estate development company. While there, he was the project manager for The Common Market, an eighteen-unit food market.
So how does Staub know who will make it, and who will fail?
“There is a small sample of qualified chefs, and the people who are going to reach out for help are the ones who realize how difficult it is,” says Staub. “Many of them have been through the experience as a sous chef or a general manager, not having had the ownership responsibility.”
Making the step from employee to owner is huge, says Staub. Typically, he says, it takes at least a year from plan to plate.
Staub says there are three main balls that are up in the air at any given time. You’re looking for location, money and a concept. Typically, he says, people have a concept, but don’t have the location or the money. But you can’t get the location or lease without the money. And you can’t get money from a bank or any individuals without a lease and a good concept.
“Chefs, by nature, are multitalented and must multitask, as there’s so much going on. But they are also very shortsighted because of their timeframe,” says Staub. “If you think about it, they’re open for business from 5:30- 10 pm five nights a week, so they have 25 hours of business to make $2 million a year. Their focus is very intense, but typically not long-term.”
What do new owners find the most surprising while going through this process?
“How long it takes, and how far away from cooking it is,” says Staub. “There’s no food-related part of this process for months on end. It’s leasing, hiring, budgeting, dealing with general contractors, lawyers, architects, investors, and landlords.”
More and more stakeholders are becoming involved in these processes. It’s also getting more complicated because now landlords are a source of capital, says Staub.
“Landlords are funding a lot of these projects so there’s a whole other set of negotiations that must take place through the leasing process, such as discussing what the tenant improvement allowance will be, how it’s going to get funded, and how the money will be paid back.”
In addition, the landlord is now in your business to a certain extent, because they’re getting paid back through a percentage round.
So how does Staub have a knack for picking winners?
“I’m getting better as I’m getting older,” says Staub. “It’s a small enough community that you can research and reference people- find out if someone is for real. But generally you can get a sense if this is going to work within the couple of conversations. “
Some of the initial questions Staub asks before taking on a new client include: what’s your background, who have you worked for, have you had P & L responsibility, have you had financial responsibility up to this point, and what do you think this is going to cost.
“It’s important to understand their experiences and expectations- both in terms of money and time- and what team they have behind them,” says Staub.
The problem as a consultant is that you can give advice all day long but clients don’t have to take it.
“There are some very stubborn people who don’t have a real understanding of the financial consequences and their fiduciary responsibility to the people who have invested a lot of money in them,” says Staub.
People can get into the business relatively easily, but to endure is difficult, Staub says. He quotes the great French chef Ferdinand Point who said, “To make a great dish once is easy. To execute it every single night, year in and year out, that’s the challenge.”
Staub’s top five tips for someone who wants to open a restaurant:
• Get more money than you need
• Hire a good team
• Don’t marry the first person you kiss
• Institute regular reporting and do it.
• Take inventory
Staub refers to a maxim in accounting that states: You can’t manage what you haven’t measured.
“Understand what you’re going to measure and consistently measure it so you can manage it,” says Staub. “Understand how you’re going to keep score.”
Different people have different expectations, he explains. Some people keep score by how much money they have in the bank today, while others are happy if they’re doing their art and they’re making a living.
Michael Staub is a consultant and business advisor to the restaurant industry. Contact Michael Staub: 617 576-2989