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How To Hire a Restaurant Consultant
by Ron Gorodesky and Ed McCarron

Mr. Restaurant Owner: Got a second?

Ms. General Manager: Sure, what's going on?

Owner: Food and labor costs are going through the roof and my loan we got in '01 is ballooning in three months. We need to get a control on costs and need to refinance now. The restaurant financing market is horrible. What should we do?

GM: I have some ideas about controlling costs, but really don't have the time to implement them since I am really busy managing the day-to-day activities. As for refinancing, I wish I knew. That is really outside my experience.

Owner: That makes two of us! Maybe we need to bring in a consultant.



At some point in their restaurant lives, most restaurant owners will either retain a consultant or work with one on a project. Consultants sell time, experience, credibility and the ability to find information. They can advise you on a variety of issues including concept development, interior design, development assistance, financial information systems and real estate. Their product, or deliverable, can take the form of a written report or a hands-on approach.

The term restaurant consultant is a broad definition encompassing a wide variety of disciplines and areas of expertise. In our firm alone we have experts in real estate, design, litigation, accounting and operations. While the types of consultants can vary widely, the selection process and client/consultant relationship are similar. Here is a primer to help you make more profitable use of a consultant.

HOW DO YOU SELECT A RESTAURANT CONSULTANT?
Once you have determined you need a consultant, begin the search process. Here are the basic steps.

  1. Begin a preliminary search. The goal of this step is to locate different consultants who appear to be qualified to assess the problem. Similar to receiving quotes on products, it is better to identify more than one consultant. A great source is a referral from your business colleagues. Find out who they have used in similar situations and if they were happy with the consultant's performance.

  2. Discuss the project with the finalists. Discuss the project with the winners of your preliminary search. The goal is to narrow the list down. If you only have two or three finalists, go to step 3.

  3. Ask for written proposals. Ask for a written proposal, company brochures, references and other collateral from the top candidates.

  4. Analyze the proposals. Look at each proposal carefully; if you have any questions, ask the consultant to explain them. Check references, also.

  5. Select the best consultant. Based on your analysis, pick the most qualified consultant to perform the project.

WHAT SHOULD THE WRITTEN PROPOSAL SAY?

A well written proposal typically includes the following:
  • Background information: this should include the issues involved based on your discussions with the consultant. The approach to the project including the deliverable, whether it is a report or hands-on assistance.
  • Information needed by the consultant from you to perform the project, usually in list form.
  • An outline of anticipated project completion dates.
  • A discussion of fees, expenses and payment schedules.

WHAT SHOULD THE WRITTEN PROPOSAL TELL YOU?
  • Does the consultant clearly understand the assignment?
  • What control do you have over the professional fees charged?
  • Are all items discussed presented in the proposal?

Keep in mind that "good proposals make good consultants" - Make sure you are comfortable with the proposal before you sign it and return it to the consultant. This will help mitigate future misunderstanding during the course of the project.

HOW DO RESTAURANT CONSULTANTS GET PAID?

There are many ways you can pay an outside consultant.
When hiring a restaurant consultant, select the fee structure which enables the consultant to produce the best results at the lowest price. However, do not hire consultants solely based on cost. Being "penny wise and pound foolish" will lead you to "getting what you paid for". For any case, a consultant will figure his/her fee based on anticipated hours necessary to complete the project and hourly rates.

One method of paying a consultant's fee is to asked for fixed fee. Ask the consultant to include in his proposal his estimated amount of time it will take to complete the project in hours and his hourly rates. For example, some firms will charge a flat fee for an operational analysis, like we at RAS do.

Another method is to be quoted a fee on a time at standard
basis, if it is unclear as to the scope and time length of the project.

Typically, out-of-pocket and travel expenses are billed separately from professional fees and this should be indicated in the proposal. These expenses are for such items as transportation costs, lodging and meals and report production.

HOW TO LIMIT A CONSULTANT'S TIME

Keep in mind you are paying for the restaurant consultant's time. As a
result, try not to waste his time by withholding information necessary to complete the project. A client who helps the
consultant use his time wisely usually ends up with a superior work product at a lower price and in less time.


Restaurant Advisory Services provides full-service consulting services to the restaurant and hospitality industries. The firm offers a full menu of advisory services focusing on every aspect of the life cycle of restaurants and other hospitality organizations, from pre-opening and conceptual planning, to day-to-day operations, to design and brokerage.



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