June 5, 2014

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Recipe for Success

Are You Ready to Open a Restaurant?

By Pamela M. Olson

June 5, 2014

Take one step into Saffron Valley, a downtown Salt Lake City restaurant, and the aromas enfold you—curry, ginger, roasted vegetables, mint, garlic—an intoxicating blend of spices fill the air and draw you up the stairs toward the dining room, summoning you on an aromatic waft.

Lavanya Mahate rises to greet you from a table in the corner of the restaurant. From there she can see the entrance, the dining room, the buffet, the kitchen—every angle an owner would need to survey the happenings and flow of the lunch rush.

“This is my office today,” says the smiling Mahate, pointing to the small table and her laptop. From here she can oversee the daily operations of not one, but two Saffron Valley locations. The first is in a shopping center in South Jordan and the second, the one we’re in now, a renovated pagoda that was a landmark Japanese restaurant for 64 years, aptly named Pagoda.

Three years into restaurant ownership—and thriving—Mahate can now reflect on the steps she took that ensured her first restaurant would survive and the lessons she learned that would help her to open the second location. 

How to Survive

One of every four restaurants close (or change hands) within the first year of business. Over a three-year period, that number rises to three in five, according to a study by H.G. Parsa, published in 2005 in the Cornell Hotel and Restaurant Administration Quarterly. The study is consistent with others that dispute the widely believed and much higher failure rate of nine out of 10.

Still, it’s nice to be among the two out of five that are still alive and kicking after three years. Mahate started with a strong foundation in marketing and business, a degree in mass communication she earned in India, and a master’s degree in integrated marketing communication from the University of Utah. For eight years she worked at the Salt Lake Chamber helping other women follow their dreams of starting businesses. “I began to understand that you must follow something you feel passionately about—not just money—but you must still learn to think like a business person,” Mahate says.

Not naïve, Mahate knew she did need money to open a restaurant. In 2009, she began to build that fund by creating a line of spice blends called East India Pantry that she sold in local stores and at the Downtown Farmer’s Market. Once this took off, Mahate was able to leave her job at the chamber and dedicate her efforts to the spice company. Three months later she opened the first Saffron Valley.

In the beginning, Mahate used a lot of low-investment avenues to gauge the market and test her products, such as teaching classes and trying out new dishes at the farmer’s market or catering events. She embraced social media from the get-go, especially Facebook, as free vehicles to get her brand and product in front of as many people as possible.

The Right Ingredients

So, you think you want to open a restaurant?

Here are some tips from Mahate to set you on the right track:

Begin with a business plan and timeline.

“I began my plan six months before I opened. Once you have that established (and secure your location), three months should be enough time to get your restaurant open.”

Build a good team.

“Don’t try to do everything, but also don’t settle with bad people. Find the right people and put together a strong team.”

Appreciate your team.

“Money, recognition and communication are what motivate people,” says Mahate. “Learn to appreciate the good relationships. Nobody will care about your business as much as you do, but if they care about it half as much as you do, that’s good.”

Spend money where you have to—but only where you have to.

“I love food and cooking, but I hired chefs for my restaurants. It’s my vision, but I brought chefs from India to cook my recipes. You can’t do everything by yourself.”

Hire a bookkeeper on the first day.

Be patient.

“The first year is always the roughest, even with a good plan it was still rough. Take each step at a time.”

Embrace social media.

Use your “start-up” energy while it lasts.

“In the beginning, we took every catering event, now we have pared them down.”

Be different and know your target audience. “What makes Saffron Valley different from other Indian restaurants in Utah is that they all serve the same Northern Indian style cuisine. We serve North, South, a bit of East and West—we really excited the Indian community of Utah.”

Stay positive and go with the flow.  

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