Opportunity Knocks
Be Careful What You Wish For
Sometimes opportunity knocks. Sometimes it picks you off in the crosswalk. Sometimes… you need to be careful what you wish for.
Looking back over the past year of endeavor to open a second restaurant we find so many stories within the story. Back and forth negotiations to select a site, agree on the size and resolve the lease terms, each of these phases had a life of its own. We involved an architect to complete an initial design and feasibility analysis. Then we used those documents to preselect the contractor and obtain a preliminary cost estimate. Once we signed the lease, paid the $20,000 deposit and executed the contract with a design firm we were off and running. Now we just needed to come up with another $400,000. No, make that $500,000. No worries, we had it all figured out.
The layout of the dining room includes premium space for private dining and group events. A number of our customers had expressed interest in participating in our growth and expansion as the great location and strategy for group dining sounded exciting. Our customer base includes decision-makers for Nike, Columbia, Intel and a number of other businesses that drive Oregon’s economy. We moved forward in the belief that a venue that directly addressed the unmet need for “a place to meet” would be attractive to these customers. First, though, we needed to finalize the design to the point that we could make some convincing promises.
On the day we executed the lease and paid the deposit I signed the design contract and got that process rolling in earnest. Problem was, it didn’t roll. One can’t know the whole story here, but bottom line is that the staff architect was let go a little over a month into a very tight timeline. Once a wheel comes off it is very difficult to maintain highway speeds. Once you’re in the ditch, well… The lease required that we submit plans for permit no later than December 23rd. It was important to get into the plan check queue at the City of Beaverton as we were informed it could be a full month before the they could even give the plans a glance. We met that deadline, but even then the construction documents were not ready for bidding. Then, six measly days later, the City provided us with a checklist; the plans had already been reviewed! And still the construction documents were not ready.
Work that should have been completed in November was incomplete at the end of December. We soldiered on. We made the corrections and resubmitted to the City just as the last material selections were made, plans and specifications were finalized and the docs put out to bid. I could see it coming but I didn’t know how big it was. We were going to be over budget – but by how much? One expects that the first round of estimating would not be the last and that, once detailed information was available, value engineering is the natural next step. The problem was that all of this was happening at the last possible minute.
Two weeks after resubmission the City called to announce that the permit was ready to issue. But we still didn't even have the final numbers - they were due the next day - and now my free rent clock was running. How might I finesse this? The that afternoon Gramor (the developer) called to congratulate us on the permit issuance and inquire when we planned to start construction. End of finesse. The next day I got the bid, $300,000 over budget. It was a bad day.
But a customer and friend (Jose) that I knew to be a world-class problem solver came in to eat that night. He convinced me that I didn't have a big problem. I had two medium-sized problems and one small problem. I had a small problem with design and larger problems with my landlord and cash flow.
Next: Promises & Requests