
What It Costs to Open a Restaurant in San Francisco - NaOH
https://sf.eater.com/2017/6/27/15733554/cost-open-restaurant-robin-adam-tortosa-san-francisco
======
klodolph
During a team review last year, I remember mentioning that I wasn't "excited"
by work per se, but that I didn't expect nor desire excitement from work. For
me, books, traveling, and music are exciting, and I get a sense of value and
self-worth from the relationships I build with other people. But I work in a
big tech firm. A coworker of mine actually questioned whether I was in the
right field, saying that a lot of the successful people in our industry are
excited by work. I can't remember his exact wording.

Maybe I'd be able to work harder if I wrapped my self-worth up in my work, but
I saw what that kind of attitude did to my father. He would come home drained
and tired, and wouldn't be available during the week to do something like
watch a TV show together. On the other hand, my mother had a fulfilling job,
but she didn't have the same kind of emotional stake in it. She turned down a
promotion because while it would have advanced her career, it wouldn't have
served her interests as an individual.

"I understand it’s very unhealthy, but I base my self-worth off the success of
my job." That's the quote at the bottom of the article. There's a gulf between
knowing something is unhealthy and building a healthy life for yourself,
something I wish more people would respect.

~~~
JusticeJuice
Honestly, I think it's healthy to not view work as part of yourself - but I
think the people who do, know that as well.

I've got a job offer for a very nice job, doing software development next
month. The pays great, the people, the are great. However, I'm desperately
looking for a product design job - because it's 100% my dream. I am fully
aware that it's not healthy to tie my self worth to my job, and I should focus
on financial stability, and work / life ratio.

But i'd just feel so unfulfilled, and at the end of the day, I just can't help
it. Being excited to get up in the morning and go to work, also means getting
hurt when it goes wrong.

~~~
klodolph
It's a perfectly valid decision to make, but I have a couple reservations.

First, when you say that it's 100% your dream, I can't accept that assertion
at face value. Maybe this is cynical on my part, but the fact that your dream
lines up so neatly with our cultural definitions of what it means to be
successful is too suspicious to be a coincidence. So my cynical take on it
would be that much your dream was given to you by other people, and only a
small portion of it is truly yours. (There are rabbit holes here, for sure.)

My second reservation is that it's meaningless to "accept" that something is
unhealthy without a solid understanding of the consequences of unhealthy
behavior. I can accept the unhealthy consequences of eating a donut, because
they're broadly familiar to me (an expanding waistline, elevated risk of heart
disease in my future). I know people who have had heart attacks, I know people
who are too heavy to comfortably hike the trails I love. But it's meaningless
to accept that pouring yourself into your work is unhealthy unless you
understand what the consequences are. I have friends who can barely enjoy
being retired, even though they didn't really "enjoy" working, either. I have
friends who have been depressed and unable to enjoy life for months after
project failures. And I know people who have had panic attacks at school or
work, panic attacks bad enough to call an ambulance.

There is no definition of free will that everyone can agree on, but in my
book, understanding the consequences of our actions, and the ability to change
our decisions as our understanding of consequences changes, are requirements
for exercising free will.

------
jjeaff
"A fire department permit worker told Tortosa that it would take him two to
four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of
overtime with a four-hour minimum), Tortosa could pay for him to look at it
right now."

Can someone please explain to me how this isn't extortion and bribery?

~~~
techsupporter
> Can someone please explain to me how this isn't extortion and bribery?

Easy: it's part of the "pay per use" idea that a lot of people seem to think
that government should have. Just like express toll lanes or a $7 express bus
along side a $3.25 local with three times as many stops, if you want
_something_ and don't care how long it takes, choose the low- or no-cost
option. If you want it RIGHT DANG NOW, choose the high-cost option.

It's not bribery, it's just business...and people seem to think that
government should operate like a business, so we get this fee-for-service
setup.

~~~
curiousgal
>It's just business

It would be that if your tax money wasn't already paying for the guy's job. I
see it as blatant bribery.

~~~
dragonwriter
Tax dollars are paying for the regular work on the FIFO queue; satisfying the
expedite request without impacting the regular work on the FIFO queue requires
additional hours of work to be done in the same time, which costs money that
the taxpayers, through representatives, have elected _not_ to pay for. Rather
than prohibiting such extra work outright, they permit it to be done, at the
requesters expense.

It's a two-tiered system that favors those with more resources to expend, but
it's not bribery.

~~~
jjeaff
I'll be very surprised if anyone is actually pulling overtime to get your
paperwork done. My guess is they just put it to front of the line and work
continues as usual, overtime or not.

------
elchief
I'm a programmerby trade, but I own a restaurant in Vancouver. A friend owns
3. Several other friends own several other restaurants. It's a restaurant
town.

Anyways, it costs from about $50,000 to $1,000,000 depending on the brand and
the size of the room. Averaging around 100k for a non mom-n-pop sit-down place

Mine was about $40k, but it's tiny

Boneta (which was award-winning and loved) was cheap at around $70k

A big Boston Pizza, which is not a great place to eat, is gonna cost $200k+ or
so, and a big Cactus Club could hit a mil

A higher price doesn't mean a better restaurant. In fact, I'd say a strict
budget can make it more appealing due to creativity

~~~
jaclaz
I am used to think in cost per square meter, 700,000/116 sqm makes 6,000 US$
per square meter (if you prefer 700,000/1,250 makes 560 US$ per square foot).

That is a very, very high unit cost, even if SF is costly (but the US$ 8,000
month of rent seems to me like "appropriate" and all in all in line with
"common" market values).

There is no reference to the number of seats for the new restaurant that I
could find, but judging from:

> In the end, the 24 burnt orange leather chairs, 13 wood sushi bar stools,
> and nine tables — finished with the Japanese wood burning shou sugi ban
> method — set him back $19,760.

It should be 24+9=33 seats, which makes it an extremely small restaurant.

More than 20,000 dollars per seat is more than "high" as I see it it borders
to "crazy".

~~~
jaclaz
Re-reading, mistake, my bad, 24 chairs + 13 stools =37, anyway almost 19,000
US$ per seat.

------
paulsutter
The best starter restaurant is those little lunch places with no seating: just
a counter and a long line, you see them around downtown. Less risk on many
levels. Every desk in those office towers is a person who needs to get lunch.

A friend in the business says that's usually the second restaurant business
someone opens.

~~~
irrational
>Every desk in those office towers is a person who needs to get lunch.

Do you have any insight into why so many people buy lunch instead of bringing
it? I've had a desk job for about 20 years now and I think I've bought lunch
maybe 10 times when for some reason I wasn't able to make my lunch that day.
It seems to me that buying lunch is more expensive and a person will probably
eat more calories. I can't imagine it is a time issue, I probably spend less
than 5 minutes putting a lunch together every day. That is far less than the
time required to go somewhere for lunch. I assume it also isn't an issue of
wanting to get away from the desk - most office places I've seen have lots of
places a person can go and eat.

~~~
iaabtpbtpnn
I go out for lunch basically every day.

Price: Within reason, who cares? I don't have a wife or kids or any
obligations really. What good is a six figure salary if I have to micromanage
what I'm spending on _food_?

Calories: Diets don't work, so who cares? If the meal is too big to finish
then I'll take half home for dinner, like I did today.

Time: IDK if you eat a cold turkey sandwich for lunch every single day or
what, but it would probably take me 30-60 minutes to make the things I often
eat for lunch, if I even had the ingredients. I don't have the benefit of
hours of kitchen prep before the restaurant opens.

Getting away: This is a big part of it actually. Not just leaving my desk, but
leaving the office entirely. Walking around the downtown, remembering what
it's like to be a human being in the sunlight.

I realize these answers may not match your lifestyle but I'm just trying to
give the insight you asked for, from a person who does this.

~~~
grecy
> _Price: Within reason, who cares? I don 't have a wife or kids or any
> obligations really. What good is a six figure salary if I have to
> micromanage what I'm spending on food?_

This mentality always blows me away and I am genuinely curious.

Has it not occurred to you that if you spend less, you can work less? (i.e.
part time or retire sooner)

I cut things like this out of my spending, now I work a couple of years then
travel a couple of years, first time I drove to South America, now I'm driving
around Africa.

~~~
Merad
Unless you are eating $20-30 lunches every day, the difference really isn't
that great. It really boils down to: spend money to save time, or spend time
to save money?

A typical week of lunches for me is one meal out with coworkers (~$15), three
meals at the work cafeteria ($6-8, we'll assume $8), and one day WFH that we
won't count. Average cost of $9.75 per meal, and no time invested. If I was
taking my lunch, I'd probably be looking at $2-3 worth of food per day, and at
least 15 min of prep time per day; more if you count extra time needed for
grocery shopping and so on. I'm not pulling in a fat SV 6 figure salary, but
even so my hourly rate is upwards of $40 per hour, so the meal prep time alone
is equal to what I'm spending on lunch.

Personally, I'd rather have the time than the money. YMMV.

~~~
hahamrfunnyguy
Even if you value your time at $40/hr doesn't mean you're going to GAIN any
income for the time spent prepping food. Since I don't get a paid lunch break,
I prefer to eat at my desk and work through lunch. This way I can leave an
hour or so earlier each day.

I figure I've been able to save an extra $25,000 since I started consistency
bringing my lunch ten or so years ago.

------
pg_bot
This guy should have hired someone else to design the dining space. There
entire experience is disjointed and not appetizing. The walls make me think
that there is a plumbing problem from the tenant above, all of the furniture
is geometric while the dinnerware is handcrafted and asymmetric. He spent a
lot of money custom making chairs that belong in a 60's airport lounge, that
all of his friends also dislike. For the amount of money spent, he could have
had a beautiful restaurant.

~~~
klodolph
"Lizarraga hand-poured the rose gold resin that drips down the main room
walls, a technique she has never used with this medium before."

Presumably she will never use that technique with the medium again.

A couple golden quotes about the same subject:

“I was very excited when the chairs came and then everyone I showed them to
hated them. Like everyone. They either hated the color of leather, or they
hated the design, or both,”

“A lot of people are going to hate the design. It’s not for everyone, and I
understand that. But the feeling of the restaurant is so important to me and I
wanted to be 100 percent involved in every aspect,”

It's not a flattering article... laid bare, it seems to depict a man who
obsessed over decisions outside his competency, and paid out the nose for
self-indulgent decoration.

~~~
joering2
"But the feeling of the restaurant is so important to me and I wanted to be
100 percent involved in every aspect,"

I hate to be this guy, but it feels like a perfect #1 example of why startups
fail -- he basically designed restaurant for HIMSELF.

I honestly wish him good luck of cloning himself 100,000 times and being happy
to eat at his own place and pay for each bill to return $700k of initial
investment.

------
seibelj
Hearing all about dealing with the government permitting process and
government workers made me so mad. Government should help business, not get in
its way.

~~~
branchless
Yet nobody mentions the far higher rent.

~~~
seibelj
The rent is an entirely separate issue. The delays with permitting and the 14
different departments can be solved without dealing with the highly complex
issues surrounding high rent.

~~~
branchless
Yet once the restaurant is in place the rent continues month after month, year
after year. The permit delays / fees are less pernicious. And less $$.

------
prawn
This sounds like an opportunity along the lines of @pud's DistroKid:

 _" By paying a company $5,000 to secure his beer-and-wine license, Tortosa
was able to skip the work himself of that particularly involved process, which
includes minutiae like mailing notices to every single resident within 500
feet of the restaurant. For Robin, the company mailed out 586 notices."_

~~~
smelendez
It's hard to scale, liquor license rules vary a ton from city to city and
state to state, and many jurisdictions personal connections matter a great
deal.(Not to mention out and out corruption). And some cities have a license
cap, so you have to know of someone who's selling an existing license to even
be able to bid on one.

Plus you have to deal with the fact that some of those residents might
actually object to your business opening. Even if they don't, your company
probably still needs somebody who can show up at a meeting, greet the people
in power by name and convincingly reassure everyone you're not secretly trying
to open a nightclub and pretending it's a sushi spot.

------
justin_vanw
Wow, this is like a how to guide on how to not run a business.

Raise a bunch of cash, go into a location that has so much wrong with it, blow
literally all the cash plus $1k just setting up furniture and permits...

Why wouldn't you find a restaurant that just went under and buy out the lease?
Take over the kitchen in place (buying the equipment from the bankrupt owner
who just wants out), do a revamp on the sitting area, and spend pennies on the
dollar compared to this? Added advantage that all the zoning and permits are
already complete?

~~~
Mikeb85
Despite what you've probably heard, restaurants actually fail far less than
other types of start up businesses. In a booming economy there will be very
few built out restaurants available to buy, and they'll probably have some
sort of fatal flaw. Plus, you get TI money if you take over an empty space,
and as you can build out how you want, the rewards are potentially better too.

~~~
justin_vanw
Restaurants may fail less often than other startups, but the potential upside
is microscopic compared to other startup type businesses. Restaurants are the
opposite of scalable: costs scale basically linearly with revenue, but worse
complexity of managing the business scales not linearly, but still very poorly
with revenue.

------
jpatokal
There's a menu here: [https://sf.eater.com/2017/6/23/15864260/robin-sushi-
menu-hay...](https://sf.eater.com/2017/6/23/15864260/robin-sushi-menu-hayes-
valley-san-francisco)

Omakase courses $79-$179. The profit margin of a _successful_ restaurant is
around 5%, so he's going to need >100,000 customers at $100/head just to pay
off the $700k he's put in.

~~~
maxxxxx
Is the margin that thin even in that price range? I would think the 5% number
is for cheaper restaurants but not for higher prices ones.

~~~
ryanworl
The most profitable restaurants are typically the ones with cheap food. It is
counterintuitive, but true.

~~~
learc83
There's a difference between profit and profit margin. A cheap restaurant with
a low margin can be more profitable due to volume.

~~~
ryanworl
Yes, and fine dining is typically worse in every metric imaginable. That's why
there is no McDonald's of fine dining. Besides being an oxymoron, the business
model is terrible.

You turn over fewer tables with more expensive food, more staff, more real
estate, more everything. Then the landlord raises your rent, sucks out all the
profit, and you're done.

~~~
mrleiter
Exactly. The part where the owner raises the rent and eats the profit is a
horrible thought. But it made me think. Take a look at the World's 50 Best
Restaurant list Top 10 [0]. 4 out of the Top 10 are located in cities that I
expect the rent to be below national average. I myself have dined at
Azurmendi, which currently sits at a hill top somewhere in the Basque
countryside, really remote. Maybe they can afford to be remote and pay less
rent because they are on this list or strive to be on there.

[0]
[http://www.theworlds50best.com/list/1-50-winners](http://www.theworlds50best.com/list/1-50-winners)

~~~
baby
I find it absurd to rate restaurants from best to less best. I prefer the
michelin rating star.

------
RcouF1uZ4gsC
>A fire department permit worker told Tortosa that it would take him two to
four weeks to even look at Robin’s paperwork — or, for $536 ($134 per hour of
overtime with a four-hour minimum), Tortosa could pay for him to look at it
right now.

This makes me very angry. This is approaching the corruption say in India that
Modi is trying to get rid of where every local official requires a bribe for
them to do their job. I hope this kind of behavior is severely punished.

~~~
pc86
It's a pretty standard practice. You can wait the standard amount of time for
the work to be done in queue, or you can pay for the additional time required
to get it done faster. The government has to pay that worker overtime to do
additional work, and if it's that important to Tortosa he should be the one to
bear that cost, not the taxpayers.

~~~
RcouF1uZ4gsC
I am fine with the government charging an expedited fee officially. Individual
officials charging expedited fees soon turns to a culture of bribery.

Edit: A commenter posted [http://sf-fire.org/file/2156](http://sf-
fire.org/file/2156) which shows that this is an official policy. I can't edit
my parent comment now, but I am fine with this.

------
3dm0nd
All of that $ and a shit website,
[http://robinsanfrancisco.com/](http://robinsanfrancisco.com/), that has poor
on-page and off-page SEO...

~~~
curiousgal
Ugh [http://robinsanfrancisco.com/img/](http://robinsanfrancisco.com/img/)

~~~
pc86
PDFs in the img directory makes me sad.

------
kelnos
This should be titled "What it Cost to Open _My_ Restaurant in San Francisco".
Costs are ridiculously variable in SF, depending your location and what kind
of restaurant you build.

A couple years ago I invested in a new restaurant in SF. I believe the total
amount spent as of opening ended up around $400k, maybe a little more.

Sadly, it folded after about a year. Restaurants are difficult, especially in
a hyper-competitive market like SF. I probably wouldn't invest in one again,
even if it was being built by a team with previous restaurant successes. There
are just too many variables, and SF is over-saturated with restaurants.

------
hagope
Was expecting more of the operational costs of running a restaurant, rent,
utilities, food, labor etc. This article focuses on all the stuff he bought to
get to day 1...interesting, but not that useful.

~~~
klodolph
Wouldn't the tile for such an article be "what it costs to run a restaurant"?

------
clamprecht
Does anyone know: What kind of numbers (revenue, expenses, profits) are
typical for a medium-successful restaurant of this size in SF? I'm just
curious. I know zero about the restaurant business, except that I've heard
that the failure rate is high.

------
shash7
I think those gold stained resin walls look great, however it also depends on
the background wall color. If they don't keep the wall clean enough, those
stains would look cheap.

Honestly I'm excited by the crockery and interiors. The chairs don't look
comfortable but I would give this restaurant a shot.

What I don't understand is the overzealous budget Mr Tortosa has in this
project. In my opinion it would be wiser to spend a lot less on the restaurant
and slowly upgrade it over the next couple of months or years. Also, by the
looks of it they could have easily shaved off couple of 10 grand just by
properly planning and anticipating the license wait period.

------
HappyTypist
If you're looking for a chart of the breakdown, I made one with Canva here:
[http://i.imgur.com/nK56ERu.jpg](http://i.imgur.com/nK56ERu.jpg)

~~~
curiousgal
I would've considered a different color palette.

------
gorkemyurt
He doesnt even have a full bar, that would have been another 300k for the full
bar alcohol license.. Restaurant looks amazing, just the right location. I
think he is going to make a killing.

------
shalmanese
For another, IMO much more interesting take on the nitty gritty of opening a
restaurant from scratch, Serious Eats had a series from Tyson Ho on opening
his Brooklyn BBQ restaurant Arrogant Swine:
[http://www.seriouseats.com/building-a-bbq-
restaurant](http://www.seriouseats.com/building-a-bbq-restaurant)

------
obstinate
What it costs to open a _fancy_ restaurant with top quality finishes including
walls dripped with _rose gold resin_.

~~~
jpatokal
He spent half a mil on rent, construction, kitchen equipment, permits, etc.
Artwork, furniture, plates etc (= the "fancy" stuff) came in at "only" $100k.

~~~
cassieramen
I can't believe that half the time and about 15% of the budget were all due to
permitting delays. That is totally nuts.

~~~
mahyarm
And you wonder why the rent is expensive

------
briandear
Delayed because of a permit application’s font size? Is there a regulation on
the proper font specifications?

Why do people tolerate this kind of government? It seems like this
ridiculously Byzantine process is filled with too much discretionary power,
ripe for abuse.

On another note, why is paper being used at all?

------
tim333
I chatted to a guy from Chicago who'd opened a successful rib place in Saigon.
Apparently it would cost over $1m, which he couldn't afford, to do in Chicago
but cost $30k in Saigon. Not that operating in Vietnam is without it's
difficulties.

------
cryptozeus
Tl;dr Amount Spent to Date: $701,095

Final total: $701,095

------
angersock
A more interesting read is the continuing trials and tribulations of DNA
Lounge, DNA Pizza, and the (now defunct) Codeword.

Seeing the city of SF totally fuck up over and over on things as simple as
"when is the street outside going to be under construction" is absurd.

