Opening a Restaurant at the Worst Possible Time: Part 2
Opening a Restaurant at the Worst Possible Time: Part 2
Bargaining v. A Man Of Principle
5-min read
This is the second in a series of long-form write-ups on my experiences in helping out in the food & beverage industry in a developing country. This particular section dives into how we successfully got the DPCC license, added steps to a bridge, reverse-engineered the biggest alcohol distributor’s pricing strategy, and attempted (and failed) to negotiate while purchasing plants for the pond.
1. Introduction, The First Week & Bargaining 101
2. Licenses, The Bridge Conundrum & Picking Potted Plants — you are here
3. Locked Social Media Accounts, Staffing, Utensil Shopping & PR nightmares
4. The Menu, First Look (Video), COVID-19, Kitchen Setup & Bulk Computer Equipment
5. Some Statistics, A Failure, Stopping the Bleeding & Future Plans
Licenses - A Vicious Cycle
The beauty of India is also one of its many flaws — work gets done but at its own leisurely pace. Any opportunities to fast-track a project are quashed on a district, local, and central level. Everything is unnecessarily interconnected and complex — like an SOP from hell. The Standard Operating Procedure for licenses is similar to unhealthy symbiotic relationships.
About 40% of all animal species are parasites, and about 100% of government institutions feed off people’s happiness and prosperity.
Each subsequent license is contingent on previous permits — you cannot apply for multiple applications in parallel. On the 26th of December, we received the Delhi Pollution Control Committee (DPCC) consent order, which meant we could move forward with the Department of Tourism license and then work on Liquor. We were also at a crossroads in terms of how to proceed:
Scenario 1: 17 documents are required for an L-17/ L-18 in Delhi (including DoT), and the ₹5L quarterly fee didn’t justify opening up and then reapplying/ repaying in Q2.
Scenario 2: Apply for a temporary day license while we wait for the actual one - but this would have many more restrictions in regards to how we operate.
Spoiler: we ended up going with the former, and due to the pandemic, we didn’t even have to apply for the temporary P-10/ P-13.
Why we had to add steps to a bridge
The owner of the restaurant has an eccentric interest in Japanese culture, which bordered on obsession — which was the primary reason for a custom-built garden bridge on the property. The importance of a bridge is mainly for accessibility, and so people with disabilities don’t have to deal with steps.
A brief primer on arched bridges:
‘Its semicircular structure elegantly distributes compression through its entire form and diverts weight onto its two abutments, the components of the bridge that directly take on pressure.
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The natural curve of the bridge dissipates any pressure outwards greatly reduces the tension of the underside of the arch.’ — Lamb & Morrissey
The bridge was designed such that it didn’t have enough runway and started at a steep angle, which made it impossible for young adults to walk on comfortably, and seemingly impossible for elders to cross. We had to rework the blueprint and add steps in front.
Reverse-Engineering Alcohol
There are many caveats you need to keep in mind when distributors price liquor, and they offer discounts based on status, potential continuous business, and, most importantly, quantity ordered. Alcohol accounts for more than half of the sales for any f&b, and a reasonably priced drink goes a long way in repeat customers.
I ended up calculating the pricing list of one of the biggest distributors in India (well one of the two) — figuring out the best cost for a crate where exact MRP is calculated as 6 bottles in one case, wherein it should be as 12 bottles for a total of 9L.
‘Bar markup is typically high — often 200 percent.’ — Dubner & Lape
Excise duty in Delhi is a whopping 65% of the wholesale price, and this is before the restaurant even gets their hands on the product. Figuring out the best prices to acquire alcohol at reasonable rates not only benefits management, but the trickle-down is in the interest of patrons who can enjoy cocktails at a much more competitive price.
The eight brands I focused on ranged from wines, liqueurs, vodkas, and single malts, in the mid to high-range category. Armed with a total of twenty-four products, which were bifurcated based on a brand name, distillation, maturation, and if it was blended. Going back to the distributor and negotiating with this information would be game-changing.
You will be shocked to know how much a bottle of Glenlivet 12YO actually costs!
Two Peas in a Pot
We were also tasked to go to multiple nurseries and find out the best prices for plants that were going to get placed around the water feature. There are many landscaping companies around, but for the amount we were ordering and the seasonal availability of the particular plants, we wanted almost all of them recommended us to head to Greenways.
Greenways Nursery’s owner railed us. Remember, when I said I learned a lot about bargaining? All of that went out of the window as soon as we met the owner of GN, an ex-president of the Indian NurseryMen Association — so you know he was completely legit. A staunch proponent of no B.S. and a man of principle — he wasn’t up-selling, nor was he overcharging, so why should he offer us any room for discounts?
After window shopping, we ended up with this list —
No. Plants Quantity Price Total ₹
1 Fern 4 2,500 10,000
2 Equisetum 20 250 5,000
3 Lotus 1 1,500 1,500
4 Water lily 5 350 1,750
5 Heliconia 105 250 26,250
6 Umbrella 2 250 500
7 Water hyacinth 20 250 5,000
8 Ficus black 25 1,500 37,500
9 Spider lily 15 20 300
10 Bougainvillea 15 250 3,750
Grand Total ₹91,550
Our first draft had multiple more plants and was costlier by a factor of two, but after talking to the owner, we realized our negotiations were at a standstill. I tried everything, from telling him to kadaar (respect) us since we would be bringing repeat business, would refer other people, and be good for the money. He scoffed and didn’t budge. There was no leeway, and we ended up empty-handed and discount-less.
His prices weren’t terrible — he had a great product, which was geographically close to us, could fill the complete order, and deliver on a reasonable date, and the landing price was clearcut without any hidden costs. I incorrectly assumed I’d be able to drop it by 10% for old-times sake, but he took us for a ride.
The icing on top was when he said this final cost excluded delivery. We confirmed the final order and left the property in defeat.
In the next part, I’ll go into how we got blocked by Instagram, retained staff, ordered cutlery, and let go of a Juul-smoking representative of a PR company.