Tuesday, April 27, 2010

For Prospective Employees

A few comments on the questions:

*  Look up terms you're unfamiliar with or unsure of.  Google them.   

*  Don't think too hard.  Simplify each question, make it relate to your own life.  Everyone has a trade deficit with some business.  Everyone has wondered if they're getting a good or bad deal.  Some of these questions merely ask about your mundane activities.  Don't let the questions overwhelm you. 

*  You don't have to find the receipt of your last grocery bill and search through your fridge and internet to find the nutritional quantity of the items purchased.  Just pick up 5 items from your pantry or fridge and do the math.  Again, don't let the questions overwhelm you.  We're not trying to pry into your life.  We're not judging you based on what you eat. We're just letting you know that our employees will at some point be expected to build a menu. 

*  Be yourself. Be candid. 

* Ask yourself if you would find answering these questions a chore or stimulating.  Would you answer these questions for the fun of it?

Sunday, April 25, 2010

Practical Nutrition

We once discussed weight-loss efforts with someone who was trying to lose over 100 lbs and had lost 14 pounds since joining a gym and hiring a trainer.  She was working-out two hours a day and was doing her best to follow her trainer's advice on nutrition.  But she seemed distraught over her trainer's nutrition recommendations.  She was willing to change her eating habits.  However, she was concerned about the cost of following the diet her trainer proposed.  She was already spending money on gym membership and a trainer and wasn't sure if she could afford to put more time and money into eating "proper" nutrition.   

Her trainer asked her to follow a diet that included a cup of strawberries ($4/lb) and a cup of blueberries ($8/lb) each day. We thought, why eat fruits like strawberries and blueberries in March, when they're expensive?  After all, there's a variety of produce available during March that provide, at a much lower cost, most of the same nutrition in strawberries and blueberries. 

This woman had the will-power to lose weight and she wasn't a picky eater.  She was willing to spend money on a gym membership and training sessions and went out of her way to find time to work-out.  She was willing to follow a regimented weight-loss diet that she was unfamiliar with. But her trainer made proper weight-loss nutrition an exorbitant cost for her. 

She soon stopped going to the gym. We're not sure if she stopped her weight-loss regimen.  If she did end her regimen, we wonder if the cost associated with following her trainer's nutritional recommendations had anything to do with her decision.    

Regardless of what really happened and the final outcome, this story can be used to illustrate one of the problems facing nutrition science.  Nutrition science, filtered through media outlets (ie magazines), tells us what we should eat to be healthy.  But this information isn't localized or personalized to meet individual needs.  Nutrition science findings often aren't disseminated in a way that takes into consideration individual circumstances.  Life-style magazines just tell  readers what they're supposed to eat to lose weight and be healthy. But some people work 12 hours a day and don't have time to prepare nutritionally dense produce.  Others can't afford to purchase fashionable fruits and vegetables (of controversial value) like organic acai berries.  Most people don't have the time and/or money to exactly follow nutrition science advice.

Nutrition science isn't useless.  It just needs to be disseminated in a way that makes sense to individuals.  That requires getting people to understand nutrition concepts instead of thinking of nutrition science findings as directives.  Most people, because of time and/or economic constraints, can't *follow* nutrition science directives.  It may be more effective to get people to *understand* nutrition concepts so they can make nutritional science information relevant and practical to their lives.

Just as not everyone can afford to drive the safest car available, not everyone has the time and income to eat the healthiest food.  But we believe many people can have the option to drive safer cars and to eat healthier foods.  Our goal is to improve lives, and not to make people live the ideal life.

Saturday, April 24, 2010

Price-Point

We'll start with one size -- 24 oz -- and aim to price all smoothies at $4.09, $4.50 with tax.  This keeps operations simple and reduces labor costs.  Fewer coins to deal with means the customer-line moves faster, as we don't have to worry about not having enough pennies, nickels, and dimes, and it'll encourage us to develop drinks that offer the most nutritional value per dollar.  We'll offer different sized drinks if we think it'll increase demand enough to justify the additional labor costs to do so.  

(We've yet to decide on the price of a scoop of Matrix whey protein).

We'll be sure to keep our prices lower than those of our main competitors, Emerald City Smoothie and Jamba Juice.  To maintain our prices, we have to develop a work-flow process that reduces our labor costs and wastage.  We want to keep prices low by figuring out more efficient methods to produce our products, and not by reducing quality. 


To maximize sales without sacrificing profit, we want to keep prices at a point where enough people think it's more cost-effective to get their servings of fruit/vegetables from us than on their own.  One can make one of our smoothies for $2, assuming they shop at places like QFC or Safeway, have a $500 dollar blender, and are willing to learn how to make one.  So we have to figure out the convenience cost to customers.  That is, how much is the average health conscious customer willing to pay to let someone else produce what they need/want?  We need to keep the cost at a point where enough customers will think that it's better to purchase their smoothies from us than to deal with the hassle and risk involved in purchasing and preparing produce (cleaning, cutting, waste) to make a nutritionally comparable smoothie made by Fresh Fruit Smoothies.   

Our prices are determined not just by the quality of our smoothies, but also by how well we can control the cost to make them.

Friday, April 23, 2010

Build-out

Some photos of our build-out work.


The bar came from a vacant store in the plaza.  The cabinets we received for free from Habitat for Humanity store in Sodo.  We still have to purchase a countertop.


Beginnings of our scrap wood wall.  This design is inspired by local carpenter-artists Luke and Jake who were the first to design such a wall for a restaurant in Seattle (Frank's Oyster House and Champagne Parlor, which we highly recommend for its food, service, and decor).  Our design and construction is nowhere as polished as theirs.  On the left you'll see the beginnings of a face made of scrap wood.  The mouth protrudes enough to be used as a bookcase.  We'll either stain or paint each piece of wood. 

This probably isn't the best time for us to be spending as much time as we have with restaurant design work.  A smoothie shop isn't as dependent on design as are some restaurants.  But now that we've started it, we have to finish it before opening.  This design project may not be the best use of our time, as we have many other issues to deal with. 

Hopefully, the design, which is unique in our area (not so much in politically Green parts of Seattle) will prove attractive enough for people to spend time in our lounge area and use it as a public gathering place.  None of the smoothie chains offer comfortable sitting areas and most smoothie customers aren't accustomed to hanging out in a smoothie shop. 

Our design could generate some controversy.  We'll explain more in another post.  

Luke and Jake also designed How to Cook a Wolf, Tavalota, and are currently working on Ray's Boathouse. 





This is a refurbished 1912 couch we purchased from an estate sale.  It's proving problematic, as a few gym members tell us that they don't want to see it get ruined.  Someone insisted that we purchase vinyl covering for it because "it would be a crime to ruin it." 

The concerns are legitimate and we probably should've gone with a darker colored couch that doesn't inspire as much sentimentality.  But this was the best we've found and its style and structure fits well with the store decor.  It's comfortable to sit-on for activities such as discussion and reading, but not so much so that people will fall asleep on it.


Our granite tile tables, made and provided by I don't remember the place we got it from.  The legs we received for free from some architect getting rid of stuff.  We spent $80 and an hour of our labor for four of these tables.

Help Wanted - Job Description

We don't have a detailed job description.  We're leaving it up to prospective employees to figure out how they can leverage their skills and experiences to add value to Fresh Fruit Smoothies customers and to impact how people think about smoothies, health, and nutrition.

 

Menu Explained - Smoothies as Meals

We considered two types of customers -- ones who drink them as a meal and those who buy them as an indulgence, like they would a frappucino or a candy-bar.  (Many of us are somewhere in between and use smoothies as occasional meal supplements or snacks). The former tend to care less about taste and more about the nutritional qualities and convenience of a smoothie.  The latter want instant gratification.  Our aim is to attract both types of customers by meeting the needs of those who are primarily concerned about the health benefits of a smoothie and introducing smoothies as satisfying meals to those who don't consider them as such.

Up until recently, we used smoothies as meal supplements (morning juice, evening desert), not as meals in themselves.  A fruit smoothie never seemed to keep us satiated for more than an hour or two, especially after engaging in strenuous activity (which boosts metabolism).  While the strong-willed ignore their hunger pangs, others, like us, don't like to feel hungry.  Based on research, we began to include nutrition dense vegetables such as sweet potato, yam, and azuki beans in our smoothies.  Compared to fruits, these vegetables provide more fiber and protein and are (thus?) processed more slowly in the stomach.  We feel full for 3-4 hours after drinking a potato or bean smoothie.  Drinking a sweet potato/yam/bean smoothie feels like having a meal.

The problem with potato/yam/beam smoothies is that they contain more calories than that of our fruit smoothies.  But because they're more satisfying, they can ultimately reduce daily caloric intake.  We assume people snack more when they're hungry than when they're not.  We try to develop a menu that meets different nutritional, psychological, and physical needs. 

We expect some to be reluctant to try potato and bean based smoothies.  We hope some free samples and effective salesmanship will change their minds.

Our favored pre-workout drink is the Jalapeno-Yam/Sweet Potato Smoothie.  The jalapeno functions as a caffeine alternative and boosts metabolism; the yam/sweet potato keeps our blood sugar levels steady for up to 4 hours.  There's enough carbs and protein to support a rigorous workout.  The sweetness of the yam/sweet potato makes the jalapeno spice more palatable, less shocking.

We'll continue to explain the menu and include nutritional data in another post.

Wednesday, April 21, 2010

Job Titles

We're placing an order for business cards.  Now that we have our own company, we can choose our own job title.   It's like getting a promotion. We're moving straight to the top.  Take that, boss!    

As expected, we immediately encountered problems.  We both want the same title -- Court Jester.  Both insist on first claim.

We're going to settle this with a boxing match.  Not the Chinese way of handling the disagreement, as we're too cheap to throw dishes at each other.  Not the American way of handling it either, as we don't have the money to sue each other.  At any rate, because of Andrew's 50 lb weight advantage, he'll have his right hand (he's right-handed) tied behind his back.  Someone is going to have their ass kicked, someone will be The Court Jester.

Chinook, our dog and CEO, will officiate.  Stay tuned.

Menu Explained - Cost Control and Nutritional Density

Using fresh fruit instead of powder and syrups increases our risk and labor-costs.  We have to be concerned about the perishability and price fluctuations of produce and the labor-cost of procuring produce on a daily basis.  We have to minimize waste. 

To reduce risk, we've decided on a menu that changes seasonally and primarily relies on tropical fruits.  Prices of fruits grown in temperate climates are volatile, while those of fruits grown in tropical climates tend to be stable.  Temperate climates are unpredictable; tropical climates are constant. 

So we'll probably have bananas and mangos year-round.  (And we'll probably be learning alot about the political and economic infrastructure and climate of places like Panama and Ecuador).  Mangos are nutritionally dense and keep well for many days in cool storage.  Bananas don't keep as well but at least they're easier to prepare.  We may add other tropical fruits such as papayas once we know more about them. 

Berries don't keep well and are too expensive for us to use for most of the year.  We'll use them when we think their prices are reasonable for our operation but we have to very careful to not waste them.  We'll do our best to use lemons and limes throughout the year because their distinctive taste (high acidity) is too important to not have. 

Vegetables seem hardier, less impacted by volatile weather.  Yams, sweet potatoes, and beans keep well and will likely be available year-round.  We expect the price of soy to remain stable throughout the year.  Expect smoothies that include kale and beets. 

Our other consideration is the nutritional density of our products.  Fitness fanatics are obsessive about protein to carb to calorie ratio.  Many want to get as much protein out of each calorie as possible.  We're not just competing on taste and cost of a smoothie, we have to develop products that provide the right combination of nutritional value (with emphasis on protein) at a lower cost per dollar than that of our competitors.  We're hoping that customers will accept azuki beans , which offer more protein (and fiber) per dollar than does protein powder.  We'll offer protein powder, but at an additional cost. 

We'll continue to explain our menu in another post.

Tuesday, April 20, 2010

Tentative Menu

At least 4 servings of fresh fruit/vegetables in most smoothies.  

Mango Smoothie (mango, banana, lemon, orange juice)
Popeye's Secret (spinach, mango, banana, lemon, olive oil, vanilla soy)
Olive Oyl (olive oil, avocado, banana, carrot juice)
The Iditarod (vanilla ice cream, soy milk, mango)
Bacon Milkshake (vanilla ice cream, soy milk, bacon)
Strawberry Smoothie (strawberry, banana, lemon, soy milk)
Strawberry Mango Smoothie (strawberry, mango, banana, soy milk)
Jalapeno-Yam Smoothie (Jalapeno, yam, carrot juice, soy milk)
Red Bean Mango Smoothie (Azuki beans, mango, banana, soy milk)
The Paris Hilton (artificial sweetener, corn syrup, mocha)

We'll explain the menu in another post.

Store Name

It took us awhile to think of a store name.  The first name we settled on was "Happy Beans Smoothie (HBS)."

We chose HBS because we want to introduce azuki beans as a cost-effective alternative to protein powder.  We also wanted a distinctive and catchy name that intuitively generates fun web and storefront designs.  Imagine smiling beans jumping around!

While we liked the name HBS, we were never comfortable with it.  Though we may think HBS expresses our childlike enthusiasm for smoothies, others may interpret us as immature, not to be taken seriously.  To us, the idea of bean based smoothies is interesting, but others may find it weird and gross.  We see happy beans jumping around.  Others may see turds making funny faces.

We then considered "Healthy Bean Smoothies."  More serious sounding but it still assumes that people will be intrigued by the idea of bean based smoothies.  And some people equate "healthy" with nasty. Too problematic.

In the end, we chose a pedestrian and straight-forward name -- "Fresh Fruit Smoothies (FFS)"  It's neither sexy nor mysterious (not that HBS is either), but it concisely describes our shop as a place that serves smoothies made with fresh fruit and not with artificial flavoring. We think it's a name that most people will understand. 

The name FFS also means there's less pressure to make bean based smoothies sell.  In our moment of self-absorption and grandiosity, we imagined ourselves revolutionizing the smoothie industry and the American culinary culture by force-feeding Americans blended azuki beans until they they say they like it.  We had to remind ourselves that our goal, at best, is to introduce new ingredients and to help people cost-effectively fulfill their needs.  We can't expect people to like our products.  We can only try our best to make products that people will enjoy and purchase.

Sunday, April 18, 2010

Help Wanted -- Interview Questions

Since we plan to keep the store open from 6am-10pm M-F, and 8am-?pm over the weekends, we'll need employees.  We need time during the day to purchase produce and to track inventory.  And we need to walk our dog (we're interested in hiring a dog-walker). 

We've compiled a list of interview questions for prospective employees:
* Use "discriminating" in a sentence. Use "picky" in a sentence. 

* "Economics isn't a zero-sum game, where there's a loser for every winner."  Provide an example of this dictum.  If you don't agree with it, explain why.

* Do you carry a trade deficit with a business?  Are you concerned about it? 

* Sell this dish to a health conscious customer.



* A restaurant receives a party of 20.  Each party member decides to pay with a credit card.  How does this impact restaurant operations (ie customer service) and labor costs?  (Answer this question in fewer than 5 sentences). 

* From your last grocery bill, estimate the amount of protein, calories, and carbs you purchased per dollar.



These questions have been posted on our storefront window.

We're reluctant to explain how we came up with these questions until we stop using them.

All but one of the questions above -- "sell this dish..." (used by some restaurants hiring servers) -- are original and thus, likely not to have ever been addressed online.

Marketing

We don't plan to spend much funds on marketing. We'll put up signage over the storefront -- as required by the landlady -- and on the plaza-sign post, build a basic website, and create a Facebook page. We won't bother with print ads or coupons.  We don't expect any amount of marketing to make our shop a destination spot.  We're assuming most people won't travel long distances for a smoothie.    

As mentioned before, we envision our smoothie shop is a parasitic business that will primarily draw its customers from 24 Hour Fitness users. Our assumption is that 24 Hour Fitness provides us with a self-selecting customer base that doesn't need to be convinced to purchase nutritious smoothies.  They just need to be served well and provided with smoothies that meet their nutritional and taste expectations.

Of course, we'd like to attract those who aren't gym members and we'll eventually work toward diversifying our customer base. But we're concerned that focusing on satisfying too many types of customers may dilute our brand and negatively impact those interested in health and nutrition. For instance, we could offer bubble tea (not healthy) but we haven't figured out a way to offer such drinks without impacting our reputation as a health food shop.  

Another consideration is our lack of experience with such an operation.  We don't know how to minimize labor costs and to control risk.  We need time to figure out how to cost-efficiently best serve our core customers .  We initially can't handle too many different kinds of customers.  And ultimately, we want to attract more customers not by catering to those who aren't concerned about the nutritional qualities of a smoothie, but by making more people aware of how a smoothie that contains 4 servings of fresh fruit can positively impact the quality of their lives while reducing their cost of living.



Saturday, April 17, 2010

First Ad

Our first advertisement.  




Tutti Frutti, On Rutti
Tutti Frutti, On Rutti
Tutti Frutti, On Rutti
Tutti Frutti, On Rutti
Tutti Frutti, On Rutti

A-bop-bop-a-loom-op a-lop-bop-boom

   --- Little Richard

We wonder if trying to get a jingle in the heads of those born prior to 1960 will get us sued for some infringement.  Or worse, the right people won't and the wrong people will understand the sexual connotations of the lyrics (we're beginning to realize that those of our parents generation were (are) very naughty). Chances are, most people will read it wonder what it's about.  We're hoping that mystery builds anticipation. 

"Tutti Frutti, on Rutti" roughly means "fruits combined, coming soon"  (or does it?  anyone speak Italian?)

Thursday, April 15, 2010

Permit Process

In King County WA, a smoothie shop that uses fresh fruit instead of powder is considered a food establishment.  To operate legally, we have to apply for a food service permit (county).  We also have to apply for a plumbing permit with the city.  Since we're not tearing down or adding walls, we don't need to apply for a builders permit. 

It costs $728 to *submit* the food service application.  Approval of the application *may* cost more.  An application that isn't acceptable will require a payment of $128/hour for additional review.  With that in mind, we decided to hire an architect -- ModusVStudio -- experienced with and knowledgeable about commercial permit processes and cost-efficient interior design.  Since we're working with a tight budget, we don't have the option to fuck-up the food service application and to make costly design mistakes. 

The food service application involves providing "professional quality" as-built drawings, equipment floor plan, finish-work schedule, menu and work-flow process plan, and on and on and on.  The architect assessed the utilities infrastructure of our shop and discussed with us possible designs to maximize cost-efficiency of daily operations, short-term and long-term.  He helped us locate sinks, prep tables, and service area based on the available plumbing infrastructure and developed a general work-flow process that will keep labor costs to a minimum. 

Once we settled on a design, the architect drew the plans and sent them to us 2 days after our on-site meeting.  We reviewed them, discussed other design possibilities, architect made appropriate revisions, and we submitted the plan to the county.  Start to finish in 4 days.  If we had done it on our own, it would've taken us at least 2 more weeks and increased significantly the chances of our application being rejected.  It costs $90 per day to not have our shop in operation.  We need to take advantage of the free rent days as best we can.  The architect was worth it.

In retrospect, we probably should've had a contractor or architect experienced with commercial code requirements to review the space before we signed the lease.  They can help assess build-out costs of a space.  Luckily for us, the utilities infrastructure of the space turned out to be adequate, though not ideal, for our uses.  While the current plumbing infrastructure isn't up to code to handle an ice-maker and prep-sink in the front service area (floor drain sink and reverse drain required), our architect and plumber figured out ways to make do with what we have in a way that fits our budget.

Once we have the food service permit, the inspector will investigate the site to ensure that we have sufficient equipment (esp. refrigeration) for the operation.  She'll probably use our work-flow process plan to guide her inspection.  

The plumbing permit is straightforward and is available over the counter.  We just need to fill out an application and list the fixtures we plan to install.  A commercial plumber is required to install the fixtures, even if it's just a wash-sink.

We hope to have our plan approved within 2 weeks of this posting.  Again, each day we're not open costs us $90 in overhead.  

For those considering opening a commercial operation, our architect's website is: www.modusvarchitects.com.  ModusVStudio also has a website devoted to commercial permit processing services: www.ezbuildingpermit.com

Wednesday, April 14, 2010

Location and Restrictions

The store is in a plaza located just off I5 and on the King/Snohomish county border.  We don't have car and foot traffic numbers.  Subjectively, the area feels very busy.  

The storefront below.

It's tucked in a corner -- low visibility -- but it's next to a 24 Hour Fitness gym that receives an average of 1000 sign-ins per day.  Notable neighbors include a Thriftway grocery store, Starbucks, and Blockbuster.  The plaza we're located in is just off I5

The main advantage of the location is that it's located next to a busy gym.  We assume that gym goers are much more likely than the average person to be interested in a smoothie, either as a health supplement or as a post-workout reward.  For instance, muscle-builders need pre and post workout nutrition to maximize training effect.  Those who go to the gym for social reasons may consider a smoothie a guilt-free reward for their hard work.

The interior is 1563 sf and divided into 2 sections, a back kitchen and front service area.  It's probably too large for our needs, so we're going to maximize use of the space by creating a lounge area that's a composite of  those at Starbucks and bubble tea shops.  If nobody wants to hang out in our shop, then we'll consider subleasing a part of the store.      

The front area below. 



There are drawbacks to being located in a "busy" location that includes international chains like Starbucks and a regional grocery store like Thriftway.  Chains will often insist on including restrictions on what their neighbors can sell.  Landlords are likely to oblige because chains add prestige and stability to a commercial plaza.

Here are a few restrictions on what we can do:

*Can't sell coffee or tea based products, unless it's offered in a restaurant (Starbucks)
* Can't offer deli service (Thriftway)
* Can't offer restaurant service (Thriftway and Blockbuster)
* Can't sell health supplements (Rite Aid)
* Can't sell x,y and z food items.  

The list goes on.  However, we can sell baked goods (the one concession the agent insisted on receiving from the grocery store) so anyone who wants to start a bagel/bread shop, let us know.  We'll sublease part of the space to you if you can make good baguettes. 

We'll discuss more about these restrictions in a post about the menu.

Tuesday, April 13, 2010

Negotiating the Lease

The space we've leased has been unoccupied since December 2007, just after the US housing bust and 6 months before the Great Recession hit Seattle.  It's a 1563 sf space divided into a back kitchen area and a front service area and is located in a plaza just off I5, on the Snohomish/King county border.  There are 20 stores in the plaza, including a full-service grocery, 24 Hour Fitness, Blockbuster, Starbucks, Massage Envy, and a hair salon.  

It took nearly 3 months to negotiate the lease.  We began with a review of the space and mining for traffic patterns.  We checked to ensure that the location of electrical outlets and plumbing were sufficient for a smoothie operation.  Insufficient utility infrastructure can significantly increase start-up costs.  We probably should've had a plumber or architect look over the space.  At any rate, the space was adequate, though not ideal, for a smoothie operation.  The back kitchen area had the plumbing we needed for food-prep work -- proper drainage for 3 compartment-sink and wash-sink, and a floor drain for an ice-maker.  The front service area was more problematic, as it only had plumbing for a wash-sink, meaning prep-work would have to be done in the back kitchen (at least during hours when health inspectors are working).  This could increase labor costs because the person handling the service area can't do prep work.

We only considered the traffic coming from 24 Hour Fitness, and not car and plaza traffic, because we assumed that 24 Hour Fitness customers are more predictable than the average person who drives by the plaza -- those who work-out regularly take nutrition more seriously and are more likely to consider smoothies/protein shakes as necessities, meals.  Those not interested in nutrition tend to treat smoothies as luxuries, like candy, and therefore aren't reliable customers.  Corporate 24 Hour Fitness won't release their traffic information, but the manager of the gym told us that they average 1000 sign-ins per day, which matched our qualitative estimate of its traffic patterns.  We'll discuss more about traffic patterns in another post.    

Finding the infrastructure and traffic pattern acceptable for our needs, we sent the leasing agent a letter of intent (LOI) that describes what we intend to do with the space.  After the landlord agreed that our intention met the plaza' use guidelines, we received a preliminary lease.

It took us a week to review the lease.  We discussed lease negotiation tactics with someone in the commercial real estate business and carefully considered how each requirement impacts the business.  Some of our requests include:

* Option to break a lease.  Landlord asked for a 5 year lease.  We agreed but asked for an option to break the lease if the 24 Hour Fitness gym next door doesn't renew their lease in 2013.  We consider the smoothie shop a parasitic business, one that doesn't draw people to the plaza and instead leverages businesses existing in the plaza.  We're not sure if the smoothie shop can survive without the gym.

* Extending store hours.  They asked for a standard 8am-6pm.  We asked to be allowed to stay open as early as 5am and as late as midnight (we need to work around gym crowd).

* Time for build-out (free rent).  Landladies typically give up to 3 months free for build-out and we were offered 2.  We likely won't need more than 2 months to begin operations, as the space doesn't require much renovation.  But we're novices at operating smoothie shops and it'll take us at least a month to figure out work-flow processes and customer needs.  And we can't hire workers until we've figured out work-flow processes.  So we asked the landlord to give us 4 months of free rent so that we'll have enough time to work out the kinks and become profitable.  Summary of our argument:  we don't have much start-up funds and thus, we have nothing to protect us from a disaster (like the power outage in 2006 that kept the plaza closed for a week); we don't have money for signage and free rent will give us the funds to put a sign that costs 5k; we need 2 months of operation to understand customer needs and business operation processes.  In other words, we need time to not worry about profits and paying rent, and to instead figure out how to run the operation.

We tried our best to frame our response in terms of how our version of the lease agreement benefits the landlady.  The agent told us that the landlord wants shops that quickly become profitable and stable. Using this information, we responded that 4 months of free rent would increase the chances of our shop being stable and fully operational within 4 months.  The free rent gives us the flexibility to adapt to customer needs at low risk and to complete build-out in a shorter time-frame.  The landlord gave us 4 months of free rent and we promised that we'll put up signage within 60 days of opening.

If we had more credibility, we probably could've gotten the landlord to pay for tenant improvements or an additional month of rent because of the weak economy.  But we don't have credibility. The landlord doesn't know if we can operate a smoothie shop.  If we were Starbucks, the landlady would probably go out of her way to ensure we get the space.

In the end, we got what we think we need to make this shop work.  We hope to begin operations a month into the lease.  That'll give us 3 months of business operations without having to worry about rent.  We'll use the money saved to install signage, add additional equipment and furnishings, and perhaps take a few risks.  We're confident that the store will look complete within 4 months of the beginning of the lease.

Why We Started a Smoothie Shop

We've always wanted to start a restaurant because we're foodies.  We love thinking about ways to produce food.  We enjoy cooking for and serving guests.  We care about nutrition and health.  We want to know what it takes to cost-efficiently maximize nutritional intake.  We wonder about the relationship between ecology and food preparation.  We're interested in agricultural trade and production.  We fantasize about introducing new foods.  And we're preachy and idealistic -- we want to reduce obesity in the US vis-a-vis expanding people's palates and knowledge about food and nutrition. 

We've talked about starting a restaurant for years but never had the courage to do so.  We were concerned about the financial risk involved and the loss of paid vacation time that comes with working a salaried job.  We couldn't imagine closing shop to visit family and our favorite destinations.  It seems that restaurant owners get at most two weeks off per year. We weren't prepared to make the sacrifices to start a restaurant.  

We're starting this smoothie shop more out of necessity than luxury or courage.  Andrew got laid off and found it difficult to find a job that compensates enough to pay the bills (don't become a writer, or be a really good one!).  We got to a point where we decided that the potential benefits of starting a smoothie business outweighed its risks. It was either be "poor" or take a risk.  The threat of "poverty" motivated us to take a calculated risk and to pursue what we've always wanted. For us, necessity is a powerful motivator. 

 Why a smoothie shop?  We can't start a restaurant because we don't have the experience or credibility to do so, even if some consider us good cooks and we've won the two Rusty Chef (private cooking competitions) we've competed in.  Preparing a meal for 50 isn't the same as making one for eight.  Neither of us have worked in restaurant operations since adolescence.  We're not familiar with food-prep work-flow processes, which involves figuring out cost-effective ways to deal with issues like perishability of produce and labor-time.

A smoothie shop offers the ideal setting for us to learn about food work-flow processes without taking on the risk involved in opening a restaurant.  Smoothie shops don't require expensive vents and cooking equipment; a sandwich prep station, a couple blenders, and a refrigerator are all that's needed (or so we think).  Smoothie shops also aren't labor intensive to run as, say, a 40 seat restaurant.  We lose nothing more than our own labor-time if we don't sell anything for an hour.  With a 40 seat restaurant, we could be losing $100 an hour in labor costs if we don't have business.  A smoothie operation is the ideal bridge to a restaurant operation.

And we're not smoothie novices.  We've been making 2 smoothies per day for years.  We know how to make a smoothie and consider it an integral part of our diet.  We don't, however, know how to make smoothies for paying customers.

Finally, we found the ideal location for a smoothie shop -- next to a 24 Hour Fitness gym that draws 1000 visitors per day.  As our plumber put it: "with a location like this, you've got to be a fucking idiot to not make this work."

Thursday, April 1, 2010

Introduction

This blog features the beginnings and growth (and demise?) of a smoothie business located in a Seattle suburb.  Our goal is to share our experiences with operating a smoothie bar and lounge and to exchange ideas with those interested in nutrition, food, and the restaurant/smoothie industry. We'll also use this blog to learn from our mistakes, and in turn, about ourselves.

Enjoy!