Doing the Budget Crunch

Are money woes keeping you from a renovation? Experts suggest ways to do it on a shoestring.

FoodService Director - renovations - New York Institute of Technology - Purdue UniversityRenovations always breathe new life into a foodservice operation, but when it comes to noncommercial foodservice, capital budgets more often than not are tight. However, doing quick fixes on a shoestring rather than  implementing a major overhaul can often work wonders, given a little experience, solid planning, product knowledge, good advisors and a bit of ingenuity. FSD asked several design consultants for their thoughts on the topic.

When planning a renovation, says Thomas MacDermott, FCSI, Clarion Group in Kingston, N.H., “you should consider that there are continual changes in both the taste preferences of customers and in the methods for satisfying them.” He recommends using pre-fabricated and mobile equipment “to the fullest extent possible. That means that you don’t have an enormous investment in any part of your foodservice operation, the kitchen and the underlying work. You can discard something and replace it without spending a lot of money.”

Free advice: Budgets can be kept low by working with distributors, agents and dealers in place of consultants “if you get a good installation vendor,” says Jarlath McArdle, construction project manager for Project Solutions, LLC, construction managers and consultants based in Colorado Springs, Colo. “They have a lot of knowledge of what is available.”

Veteran consultant Georgie Shockey, principal of Ruck-Shockey Associates, Inc., in The Woodlands, Texas, sees it as preferable to have good preventative maintenance from the outset. “It will extend the life of the equipment. Coming in four, five, six years later to do it will help, but you won’t [get as many] useful years out of the equipment. There are only so many times you can make repairs, and eventually you will need to replace them.”

Who decides: Working on a shoestring also requires being “careful in terms of who is directing and driving the process,” says McArdle. “Chefs typically get involved because they are the end users, but often chefs are prima donnas. They want the very best of the very best, and they usually over-specify what they need.”

Middle bids: Securing suppliers and contractors is another place to find savings, McArdle points out. “You don’t have to pay the top dollar. Get three bids. Typically, the lowest won’t get the job finished, or he won’t stand behind the work. The middle guy is the one to go with.”

Stay open: Remaining open during renovations is another way to help defray costs. Best, says Shockey, is to limit the menu items “and have them change daily or more. I’d rather see [operators] do a few things well than a lot of stuff poorly.”

She also recommends bringing in local vendors to fill the gaps, “and if  available, take the menu to the grill station outside for a change. Make the pricing simple to calculate if you have to go without sophisticated registers—everything at $5.00, for example.”

Keep it: “The first thing is to try and reuse as much equipment as you can, because the price of equipment has surely gone up from whatever it was originally,” says Dan Bendall, a principal at FoodStrategy, Inc., a consultancy in Rockville, Md. A local repair service can  “give you a quote on how much each item will cost to refurbish or upgrade.” If the cost of the refurbishment is going to be 50% or more of the replacement equipment’s cost, he adds, buy new.

Pay more: For additional savings, try paying more. “If you buy good equipment it’s going to last you longer,” says McArdle. “If you buy cheap stuff it is going to continually break down, and your maintenance costs are going to be higher.  You will waste a lot more time and energy with maintenance people coming in and out of the kitchen if you buy badly and cheaply.”

Used equipment: The “simplest and easiest” way save money on a renovation project, however, is to “buy the stuff secondhand,” maintains McArdle. “Restaurants are always going bust. The industry has the second-highest incidence of bankruptcy of any business. Consultants are always telling you to stay away from used equipment because typically they may be getting a percentage of the amount spent. But you can go all day long and get stuff that is inexpensive, 30% to 50% off the price.”

Don’t skimp here: Areas in which it could be unsafe to cut corners include “anything that is high volume and needs to produce at peak times, like grills or fryers,” says Shockey. “You want these to be ready, and not failing or  mis-sized for the volume. Staff tend to take too many shortcuts if they can’t get the volume out of them.”

MacDermott adds dishwashing machines, “particularly the big ones,” to that list. “The equipment has been sitting in one place for a long time, and when you disassemble and move it there are all kinds of internal parts that may be held together with cobwebs and grease.”

Shockey agrees that dishwashing should not be handled on a shoestring—“especially when the volume is high. If my dishwashers have to put things through two or three times to get them clean, it’s not helping the bottom line.”

Where else should an operator never try and cut costs? “Fire suppression systems,” says McArdle, and HVAC systems. “If you have a smoky environment it’s going to be a nightmare to work in.” In the end, he adds, “You get what you pay for. If you cut corners and don’t put in an adequate fire safety system, then you have a fire, your place burns down. Typically, to do a good job you need to spend the money that needs to be spent. You just have to be careful about how you are spending it.”

Watching Your Dollars

At NYIT, cost-consciousness is always a foodservice concern.

FoodService Director - renovations - New York Institute of Technology - Purdue UniversityInnovation is a way of life at the New York Institute of Technology (NYIT), even when it comes to cutting costs on renovation projects.

The college has three main locations: in Old Westbury and Central Islip on Long Island, and at Lincoln Center in Manhattan. Food is served at a single cafe in Central Islip, and out of several outlets at Old Westbury, where the staff also prepares meals for 90% of the college’s off-premise catering.

Robert Rizzuto, NYIT’s director of dining services, says that he and his staff came up with some innovative solutions during the school’s recent renovations. Though there was an osteopathic medical center with a food servery area in place already, staff members and students were asking for an upscale coffee bar.

What Rizzuto and his department did was remake the area without the help of architects. “Our people in-house started by creating the menu,” which is built around a Seattle’s Best coffee program. The facility was designed “around our needs, and what we want to serve. It’s very simple: some grab-and-go fresh muffins and bagels, and of course the coffee.”

The staff naturally needed to follow the Nassau County Health Department codes, which are “pretty strict,” says Rizzuto, “so we had to put a hand sink in the dishwashing room and a couple of low-boy refrigerator freezers.”

They also installed a display unit with one refrigerated side, “like a bakery refrigerator, and actually built [the facility] around that.”

One of NYIT’s priorities was to watch its costs. “We had a budget in mind for it, and we kind of worked around that budget,” Rizzuto says. While electrical and plumbing concerns cost more than anticipated, equipment cost less. “Basically what I did was spec out the equipment and go to three different purveyors,” he recounts. “Quite frankly, we ended up getting the equipment from (cash-and-carry wholesaler) Restaurant Depot.”

Doing so significantly reduced the shipping charges and generated other savings, he says. “I was able to get some pieces of equipment for $800 to $1,000 less than I would have paid through another distributor. That was where a lot of my big savings came in.”

Rizzuto insists that operators “absolutely must know their product” in order to get the best value out of it. “Let’s take a piece of refrigeration, for instance. You have all your different brands, and you need to know something about each of them. What one piece of equipment can do as opposed to another one, and the length of life, can be quite different.”

Such details can make a big difference depending on the project. As Rizzuto explains, “if you’re putting something up but you think you’re going to renovate in another three years you may want to go with a piece that is less expensive even though it may not have the life expectancy.”

What to Do—and Not

Hindsight is always 20/20, so it never hurts to ask someone who has “been there” for advice.

FoodService Director - renovations - New York Institute of Technology - Purdue UniversityHolding the line on renovation costs was most definitely on the minds of administrators at Purdue University when it underwent a series of foodservice renovations. Director of dining services Sarah Johnson explains how she did it— and how she didn’t do it.

“There are several things you can do to make renovations on a shoestring budget.

One would be not to try and solve all your problems with a renovation. Try to limit your scope and pick the things you really need to resolve if you’re trying to correct some problem areas. Gather input from the staff, the people who are on the front lines working in that facility, and who have ideas about it.

But those folks also tend to want to do it all, and so you have to limit them, and try and focus them on what the main things are that you need to work on. Otherwise you just end up spending a lot of money trying to resolve a lot of things, and you may or may not be successful at it.

Work closely with the designer, consultants or architect so that they know exactly what you want. You can’t just give them the project and let them go with it without staying with them and letting them know exactly what you want and what your expectations are. Check and recheck. In the situations I have been in, I have found it helpful to recheck drawings, notes, conversations and e-mails. You always have to be looking at the details and trying to make sure that you’re covering all those things.

Another thing: change orders are very, very expensive. Once you have a project going—it’s been designed, it’s been bid and the contractor is working on it—it is really costly to make changes. Minimize any changes after you get into the project.

We’ve had that experience. We once went back and looked at the drawings [during a renovation] and thought, ‘Oh, we ought to do it this way.’ This was a couple of years ago. We were looking at some drawings, and one of the staff members said that we needed a door to carry the trash out. He said, ‘We’ve got to have it, we can’t do without.’ They convinced me and we said yes. Well, that door cost several thousand dollars.  Had it been designed in originally, it probably wouldn’t have been much at all.”

We also make sure we have a lot of help in estimating and managing [renovation projects]. We have a lot of people from the architects to the consultants to the university’s facilities people, everyone working together and using our collective experience to do it. We’ve had some issues and some overruns, but generally they have been pretty successful.” 

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