Does Your Restaurant Need a Renovation? How to Plan, Budget & Execute a Successful Overhaul
In the ‘50s, mid-century modern designs were everywhere. In the ‘70s, it was dark booths, velvet and velour. In the ‘80s, chintz tablecloths and preppy pastel color schemes took over the design scene.
Today, the latest in restaurant design is rustic-industrial spaces with minimalist details made from natural materials like wood and metals. Eventually, every trend goes out of style. To keep up with the expectations of modern guests, every career restaurateur will eventually have to get through a restaurant renovation.
A restaurant remodel is a daunting idea. But if your restaurant has been around for a while, it may feel outdated, and that’s not what any restaurateur — or guest — wants. Freshening up your restaurant’s look can give it a new atmosphere and energy that better appeals to your guests. It can help bring in new ones and keeping old ones coming back time and time again. A restaurant renovation can also benefit you and your staff, by redesigning the restaurant’s layout to be more functional and efficient.
Redesigning your restaurant is a ton of work, but all that planning, budgeting and execution can pay off once you have a fresh, functional space. Here’s how to keep it as pain-free as possible throughout the process.
Planning a restaurant renovation
Before a single tool gets lifted, there’s a ton of planning that needs to go into the renovation. Step-by-step, here’s what you need to do to plan for a major remodel.
Stage #1: Research
The first step to any restaurant renovation project is research. First up is deciding whether your restaurant even needs a renovation. For that, ask yourself these questions.
Is anything, from furniture to kitchen equipment to building infrastructure, failing and in need of repairs or upgrades? Is anything so outdated that it’s in danger of failing?
Have guests left feedback for your restaurant that the decor or atmosphere is lacking?
Is your restaurant’s layout so inefficient that changing it could significantly improve your staff’s ability to serve guests?
If you answered yes to any of those questions, a renovation might be a good next step. Now, you need to decide what about your restaurant needs to be updated.
Are you just refreshing the decor to make it more modern?
Are you changing the entire restaurant layout to make it more efficient with better flow?
Are you making needed upgrades to your kitchen equipment?
Are you addressing renovations due to guests complaining about things like noise levels?
The way to answer these questions is research. One way to get an idea of what you should update is to research the most successful restaurants in your city and neighborhood. Pay them a visit. Pay attention to the layout and the design. Think about what you need to do in your restaurant to make it even better than those other successful establishments.
Another good practice is to collect feedback from your staff. If the kitchen needs a remodel, no one will know what’s needed better than your back-of-house staff. If the dining room doesn’t flow with its current layout, your servers can give you insights on that too.
Lastly, you might consider reaching out to your guests. If the decor or the vibe in your restaurant are turning people away, guests are the ones who can tell you that. Send out a survey, look at your comment cards, or look for online reviews that mention your restaurant's design.
Stage #2: Planning and timing
Gather all of your own research and the feedback you’ve collected from your staff and guests. Use it all to determine what your renovation is going to entail.
Once you know the extent of your planned remodel, you can start planning the timing of your restaurant renovation. This is important, because a remodel will affect a restaurant’s ability to operate, and a major remodel could leave your restaurant closed for weeks. It’s important to plan your renovation so it has a minimal impact on your revenue, so if your restaurant has a slow season, that’s probably the ideal time.
A good strategy would be to decide your timing by deciding the date you want to reopen by, then working back from there. Most importantly, if your renovation is estimated to take three weeks, don’t start exactly three weeks before the date you want to reopen. Delays and problems happen during most renovations, so plan for some extra time into the schedule so you don’t end up closed when the high season rolls around — or worse, advertise a grand re-opening party and miss it.
Stage #3: Communication and outreach
There are a lot of people who need to be in the loop about a restaurant renovation: staff, suppliers and, of course, guests. Keep everyone updated on your plans for the timing of the remodel, as well as when and how long you plan to close or cut back operations to get the work done.
Use a number of channels to communicate about the upcoming changes:
In-restaurant flyers or announcements
SMS through loyalty or POS systems
A great way to involve guests in your renovation plans is to send out a survey asking what they like about your restaurant, and what they’d like to see changed or updated. It will get them interested and tempt them to come see what’s changed once you open your doors again post-remodel. This is a great social media marketing opportunity, because you can show before-and-after and progress photos throughout the renovation that will help get guests excited about coming to see the changes for themselves.
The key is to use this downtime to your advantage--build up to the big reveal and re-launch!
Budgeting for a restaurant renovation
One of the most important parts of planning a restaurant renovation is budgeting for it — so much so that it deserves its own section here.
Average cost of a restaurant renovation
Calculating the average cost of a restaurant remodel wouldn’t mean much, because costs vary according to so many factors and every restaurant’s situation and needs are different.
One contractor budgeted around $300,000 to renovate a 2,000-square foot restaurant in New York City. Here’s how those costs broke down.
That sample budget can give you an idea of the types of costs involved in a renovation, but your own budget may be very different. Costs for each line item will depend on how extensively you plan to renovate, the size of your restaurant, your timeline and the cost of labor and materials in your area.
When thinking about how much you can spend on a remodel, consider financial factors like:
Your current sales
Your current expenses
Whether you’re eligible for financing
The kind of loan terms you could expect if you chose to finance a renovation
How much you can afford to spend out-of-pocket
How the remodel will affect your revenue in both the short term and the long term
Whether or not the renovation will increase your restaurant’s bottom-line (in other words, will you get a positive return on this investment?)
One of the biggest factors in your budget is whether you decide to completely close your restaurant for a short time, or just partially close it for longer. You’ll have to consider both, and how much each option will cost you, keeping in mind that closing, fully or partially, will add the cost of lost revenue to your total restaurant renovation cost.
Setting a realistic budget for a restaurant renovation
Taking into account all the financial factors — your cash flow, whether you’re securing financing, whether you’re going to close down and for how long — decide how much you can afford to spend on a renovation. No matter what, do not spend more than you can afford. And keep in mind that because of contingencies, most renovations go over budget, so your realistic restaurant renovation cost estimate should actually land at a number that’s less than what you can afford to spend.
Executing a successful restaurant renovation
With all the planning done, it’s time to execute your renovation. There are still a few things to keep in mind to make sure it goes off without a hitch.
Hiring the right professional
No matter what your restaurant renovation needs may be, there’s a professional who can help you execute them to perfection. While some basics, like a new coat of paint, can be pulled off by you and some helpers, other jobs truly require professional help.
If you’re remodeling your decor, a professional interior designer can help you create a look that’s timeless and classic within your budget. And if the new decor requires woodworking, new carpeting or tiling, those are jobs that are best left to the professionals who know how to do them right.
If your restaurant renovation will involve changing the layout of the space or updating the kitchen, you’ll need to be sure your electrical, plumbing, water lines, heating, HVAC and lighting are all up to code. A professional can make sure that these jobs are done not only safely, but within legal requirements for your area. Hiring the right architect or contractor will add more cost to the renovation, but not nearly as much cost as if you have to do the job over because it doesn’t meet code.
Pro tip: If you see a restaurant renovation in your area that was done well, reach out to the owner to see if you can get the name of the contractor. You can also reach out to your network of restaurateurs to see if they’ve worked with contractors or other professionals whom they’d recommend for the job.
Prioritizing critical needs
Remember when we mentioned that things can and (probably) will go wrong, and your renovation is likely to go over the initial estimated cost? The last thing you want is to focus on cosmetic improvements, and leave critical problems like outdated wiring or leaky plumbing, for late in the renovation when you may end up without enough money to finish them. Prioritize anything that’s critically in need of a fix before shifting your attention to things like the decor.
Shout it from the rooftops social media
You put so much time, effort and money into your restaurant renovation, so of course you should let as many people know about it as possible. Post construction updates on your social media. Send out email blasts. However you can, advertise the fact that you’ve just accomplished a renovation. Studies show that restaurants that have been renovated see a 10-20 percent increase in sales, but that won’t happen if no one knows about all the hard work you put into it. Spread the word. Consider hosting an event, like a grand re-opening party, to invite guests to see the new and improved space and celebrate a job well done.
There’s nothing easy about renovating a restaurant. Renovations take a careful plan and a strict budget to execute well. But once a renovation is done, you’ll have a fresh space where you — and your staff and guests — can truly enjoy the fruits of all that labor.