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When goes from chef to owner

20 November 2008 by

It's hard enough being a chef, but it surely pales beside actually owning a restaurant - dealing with rents, rates, partners and ultimate responsibility for the whole business. As Bryn Williams at Odette's becomes the latest chef to take the plunge, Tom Vaughan finds out how to make the transition from cook to kingpin as painless as possible

"All of a sudden, it's your balls in the vice, and each day the vice gets a little bit tighter" - this is the colourful assessment from chef-patron Sat Bains of the transition from head chef to owner. In 2005 he became yet another in the kitchen to buy the place he worked in - it's now called Restaurant Sat Bains.

Now he has been joined in those ranks by Bryn Williams, who last month purchased north London restaurant Odette's from entrepreneur owner Vince Power. Williams has a similarly blunt take on his new position. "If this goes tits up, I've got no one to blame but myself," he says. "The bottom line is, it has to work. If not, I'm out of a job - and a flat."

As his plain speaking suggests, the switch from employee to employer is one of the biggest transitions in a chef's career. There are several hurdles en route, but none is more challenging than actually buying the property.

Williams says that the chance to purchase Odette's came up over a few glasses of wine with Power a year ago. "The purchase has been on my mind for 12 months now," Williams says. "It's a nice local spot people thought I owned it anyway and it was time to stop moving around and put my mark on a place." The topic may have arisen fairly naturally in this case, but Williams insists that he would have enquired after the ownership in time. "I'm a big believer that if you want something in this world, you have to go and get it," he says. "Nothing comes to you you have to ask."

The major issue for an aspirational head chef is whether to pursue the purchase of their current place of work or to buy a new restaurant. The infrequency with which head chefs acquire their employer's premises is most likely down to one reason: popularity. If a restaurant is well-liked, the owner will be reluctant to sell and if he does, the business will cost more as a going concern. It's often a cheaper option to buy somewhere else and renovate it.

Luckily, though, says Williams, he secured a favourable deal with Power.

And, he points out, the restaurant already had a steady stream of locals and regulars familiar with the dining room and his cooking, meaning that he could hit the ground running. The mistakes typical of any new business are likely to have been made already, in the preceding two years.

Once a purchase has been made, a head chef who previously was tasked with cooking and managing the kitchen's general profit, and nothing beyond, will all of a sudden have to turn his hand to the piles of paperwork and reams of red tape that come with running a business.

In this regard, Glynn Purnell, chef-patron of his eponymous Birmingham restaurant, says that there are two things the embryonic businessman needs: "A good accountant and a good woman." At Purnell's and at Restaurant Sat Bains the chefs' respective partners help out with the running of the place - for Purnell, this involves managing all the books and the payroll.

Both Bains and Williams versed themselves in the mechanics of running a business before taking control. "I've always been good with money," says Williams. "Even as a kid, I managed my pocket money so I was never short. But for six months before I bought Odette's I was in the office learning the ropes, knowing what was going in and going out."

Bains also trained himself to step up to the challenge of taking over. "I've been gross profit-oriented as a chef," he says, "but learning the operational side of things is a different ball game. I've learnt so much about the books because I didn't want my head stuck in the sand. I'm obsessive about the accounts - they fascinate me. I relish knowing about the financial side. It really excites me, and it's a new challenge for a chef as well."

Sacrificed days

Williams has sacrificed one day in the kitchen and one of his days off to pore over his new restaurant's finances. Now, every cheque is written and each wage payment is transferred by him and him alone.

Intricate know­ledge of the running of the restaurant helped enormously. "You have to deal with things like the council and, because I know how many rubbish bins we put out each week, I could save £10 a week on that," he says. "Now I can cut down how much we spend on flowers, because I know what we're ordering. You get into every nook and cranny. The past two years have been a great learning curve."

It seems that attention to detail can become an obsession. James Mackenzie, who left his position as head chef at the Star Inn in Harome, North Yorkshire, to begin running the Pipe and Glass Inn in South Dalton, East Yorkshire, in 2006, says that mentally, compared with running a kitchen, a business is a 24/7 job.

"When I was at the Star, I cared about standards," he says, "but a certain mindset does change when you take on ownership. You start thinking about things on your day off, and talking about it with your partner. I think that's the difference - staff don't realise that you're constantly, constantly pondering over the business."

That's certainly the case with new boy Williams. He now thinks about Odette's from the moment he wakes up. "I'm looking at tables now, always checking," he says. "The owner is always in the building now before, he came in for dinner and didn't see the side of the restaurant that was slightly hidden."

Mystery customers

However, Guy Holmes, director of consultancy The Restaurant Ingredient, says that this fastidious mindset, while necessary, should not spill over into the cooking. He suggests that, rather than sneak front of house to check on service, a new chef-patron should arrange mystery customers to come in, pay for the meal as a normal customer would, mark down all their observations, and report back for reimbursement. "It'll take a weight off the chef's mind," says Holmes. "He won't feel the need to go front of house and check on tables and customers."

The relationship with staff can, of course, change when a colleague becomes a boss. It's important to manage these and not to become overbearing. "To completely change your relationship with staff overnight can be difficult," says Holmes. "Suddenly, when everyone has a staff beer and a staff meal, it appears like they're taking money off you. Things change, but it's dangerous to become too obsessed."

Staffing also takes on a new perspective - and it's not necessarily the hiring but the departing of staff that becomes hard to deal with. "When someone leaves it hurts just as much, probably more," says Bains. "When they go, the standard you have instilled in them goes, too. You want them to go somewhere better, and sometimes they don't."

This is part of the most significant change between chef and owner - things become a lot more personal. While this can be positive in some ways - it breeds passion and makes you more of an aggressive marketer, according to Bains - it also leaves you more exposed.

Owners have the opportunity to act on customer feedback and change the restaurant, but because it is often their own taste that is being questioned, criticism can hurt a lot more. Williams says that the first advice he was given by a successful businessman customer was not to put too much of himself into the restaurant, because it's a business and the first rule is to make money.

But that can be easier said than done, says Bains, especially if people are rude. "Do you take it more personally?" he asks. "Yes, because you put so much more of yourself into it. We're passionate, we've worked hard to get where we are, and I'm not going to stand there and take insulting remarks - those days are gone. What I'm into is constructive criticism."

Bains gives the impression that he's ready to take plenty of things personally - and, surely, to make a restaurant one's own, that individual touch is necessary. Praise then can be especially gratifying.

The other upside is that ownership opens doors. While Williams says that he never intends to turn his back on cooking, he would not be averse to adding to Odette's, should it prove successful.

"I'm a chef first and foremost, but once I've got Odette's running, maybe I could add a pub and a deli in the same area," he says. "It's an opportunity that I might add to. I don't want to take over the world, but I do want to control my own destiny."

A check list for taking over your restaurant, by Minesh Patel, partner at Stevensdrake solicitors

1. Research

  • Prepare a business plan.
  • Obtain accountants' advice on the financial viability of the business and whether you should set up a limited company or operate as a sole trader or in partnership.
  • Organise bank accounts and VAT registration.
  • Get your personal licence.
  • Instruct surveyors/experts to advise on the condition of the property and consider whether any plant, machinery or other fittings breach current legal requirements (eg, fire safety, facilities for the disabled, etc).
  • Obtain an independent valuation of the business.
  • Instruct specialist solicitors to advise/deal with you throughout the process.
  • Review the terms of the Premises Licence if it is a pub, along with authorised planning use and drinks ties.

2. Licensing

  • Obtain a Personal Licence.
  • Ask your solicitor to review and deal with the transfer of the Premises Licence. The Premises Licence will also need to be transferred to you, and a new Designated Premises Supervisor appointed.
  • Apply for consent to any intended alterations to the premises.

3. The process

  • Obtain a suitable contract from your solicitor, with information on the property, title, the business, licences, staff and equipment included in the sale.
  • Provide for an Energy Performance Certificate for the premises.
  • Commission structural and other surveys if you are buying a leasehold property.
  • Liaise with the seller regarding the transfer of the Premises Licence, staff, contracts, leased equipment, etc.
  • Exchange contracts and agree a date for completion in the near future.
  • Deal with the physical handover of the property check the inventory deal with the transfer of staff, the stocktake and arrange for the security of the property.

4. Funding and security

  • Organise your finances and any security that the bank requires.
  • Consider what assets you need to operate the business and the best way of financing such assets.

5. The landlord

  • Provide a rent deposit or a dilapidations bond to make sure necessary repairs are done.
  • Obtain an Authorised Guarantee Agreement from the seller, addressed to the landlord, to guarantee that the buyer complies with the tenant's liabilities under the lease.

6. Dilapidations

  • Identify any necessary repairs at an early stage.
  • Address the issue of who will be responsible for what repairs, and make sure the price reflects the answers.

7. Staff

  • Carefully draw up staff contracts.
  • Take advice regarding TUPE regulations. These protect and preserve the employment of staff, so attempts at redundancies to facilitate the sale may constitute unfair dismissal.

8. Timescale

  • Be realistic about the time frame - on average, a transaction takes 8-12 weeks.
  • Do not commit to borrowing, place orders, sell or rent out the property, cease employment or take on staff until contracts are exchanged.

Tips for aspiring owners

  • As head chef, treat the restaurant like it's your own, and learn everything you can about the operational side.
  • Make sure you have proper support. A good accountant and someone to help with the books is a good start.
  • Pay attention to detail. Make sure that every part of the business is thoroughly addressed by you or your team.
  • Don't try to do everything when you take over. Delegate and implement means of checking standards independently - for example, by the use of mystery customers.
  • Don't take things too personally first and foremost, the business must make money.
  • Give yourself some time off otherwise, the stress and responsibility of running your own business will drive you mad. Switch off the computer or Blackberry occasionally.
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