So, You Wanna Open a Restaurant in Portland…

by Michele Reeves on April 13, 2011

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Portland, Oregon is a foodie mecca these days, luring chefs and inspiring restaurateurs with our unbeatable access to an incredible array of locally grown produce and meat. (And when I say “local,” I mean practically a stone’s throw from the city.)

If you count yourself among the intrepid souls who want to make their culinary mark in Stumptown, then read on because this is what you need to know…

We keep senior hours. Portland is a tough town if you plan on completing two full turns a night for a sit-down restaurant, because everyone in this city wants to eat between 6:30 pm and 7:00 pm. That’s it. Not before. Not after. And we don’t do late night en masse. 8:45 pm is late night here. Really late. (Tony Ten01 closes January 2011.)

There are five people with money to burn in Bridge City. We just don’t have the wage base to support a lot of high-end restaurants…so we don’t. They come, and, unfortunately, they go. If your entree items are all consistently over $25, you are going to have a tough time making it. Successful restaurants that do well in good times and bad usually are perceived to be a good value (large portions, for instance) or carry a perception of value (tapas, for instance, something you could order a few wee bites of and leave with a small check. You never do, but you could…). (Lucier lasted approximately seven months).

We’re a one horse city. I mean that affectionately, and love everything that it implies. Unfortunately, for restaurateurs, that means our people to restaurant ratio is low. So, unless you sell massive amounts of really cheap food along with a low-margin item that you produce yourself (beer, for instance), don’t even think about opening a restaurant much bigger than about 1,500 SF. If you do, I can guarantee (okay, almost guarantee) that you won’t fill it and you won’t make it. (12,000 SF Todai closes in January 2011).

Don’t recreate the Taj Mahal. Many a great restaurant has been felled by ambitious buildouts in this town. For all of the previously-mentioned reasons, you have to keep your establishment nimble. Tenant improvements should be simple and cheap and square footage (and therefore requisite staffing) minimized as much as possible so that you have manageable overhead expenses. If you don’t, you will be treading water and losing money until you close. The smartest operators are very savvy about finding spots with landlords willing to do a lot of tenant improvement work, taking over existing restaurant space, or buying a failing restaurant that they can rebrand. (Fenouil Falls in April 2011).

The food press/blogs have their favorites! They adore their native sons here — not necessarily homegrown talent, but people who have worked their way up through the ranks in well regarded local establishments. Like all cities, there are incredibly mediocre restaurants that get great press, and there are gems that get no lovin’. Just remember, if you are a hotshot chef from another city, don’t expect to ride into Portland and be greeted with fanfare. (Kin Restaurant Review).

Location, location, location. Portland has a ton of retail options, which is great…and not so great. We have neighborhood commercial, downtown, and dense mid-rise and high-rise districts. And, within these, are a million micro markets with very powerful and distinct identities. On top of all of that, we are loathe to leave the little quadrant of the city we call home (N/NE, SE, SW, and NW). You can be a great eatery, but if you are mismatched with your neighborhood, you are going to have to work harder, much harder, to lure people in your doors. (Belly says Bon Voyage in April 2011).

UPDATE: Kin has closed its doors. The Portland Mercury said it better than I could:

In a perfect world, the culinary community would have been proud enough of chef Kevin Shikami’s assertive yet delicate flavors and superior technique to support his admittedly shitty location and relatively high price points. The restaurant is beautiful, cozy, and serves great food. It’s a damn shame when that’s not enough.

{ 10 comments… read them below or add one }

Emily P. April 14, 2011 at 10:16 am

Awesome post! Here are some random thoughts: Seems like one way some people break in is to start with a food cart/food window, making a lot of friends with local press, and then opening a space close to your original location. I’m rooting hard for the restaurants in my neighborhood (Woodlawn), but they sit largely empty except on Fridays and Saturdays when the masses feel like eating out. Also, I think late night eating is where it’s at. Too bad I have to work early in the mornings!

Michele Reeves April 14, 2011 at 11:16 am

Thanks Emily! I think your point on the food cart route is spot on. It is an affordable way to get started and make a name for yourself…absolutely. As to good local restaurants sitting empty…whenever I pass one, I want to run in, roll up my sleeves, and help them craft a marketing plan! Unfortunately, it’s not always just about the food. *sigh* As for late night dining…I have two kids, so someday, maybe in ten years, I’ll be able to partake of that particular scene! But it is still a tiny part of the food niche…I mean, when was the last time you saw a wave of people enter a sit down restaurant between 8:00 pm and 9:00 pm on a weeknight? It’s rare, for sure. (This was a huge adjustment, moving back to Portland from Argentina, where people really don’t start eating until 10:00 pm or 11:00 pm!)

jonathan berube March 20, 2012 at 12:56 pm

my wife and i are in the process of opening a restaurant in portland, and i keep running across your article in the course of my online research. it really seems to me that you have hit the nail on the head, raising several unique and important points about portland dining in a concise article.

since you do seem so accurate and insightful, i wanted to ask if you might be able to recommend a restaurant advisor/consultant. while we each have 20+ years of experience running restaurants, opening one from scratch is something else and we’re looking for a little bit of guidance when it comes to the more financial/business related aspects. thanks in advance for your time.

Michele Reeves March 21, 2012 at 2:40 pm

Hi! Great to hear from you and glad this post kept coming up!! A blogger always loves to hear that. I do have a few people I could recommend. I would love to know more about your concept before giving you a name though so I can be sure it’s a good fit. Try me at my office (503-867-8465) and let’s chat.

lorenzo daliana June 27, 2012 at 2:33 pm

Hey folks, not sure who may know and/or remember me from over the past 20 yrs cooking here in P-Town. More fitting was my restaurant on Mississippi ave that I had to close after 6 yrs. Thank you all for the kind support and allowing me in to your stomachs and friendships. I have desided to take a new career path with respect to restaurant work and how I may be able to help. Historically we are an industry that works long hard hours with not much more then a paycheck and that awsome glass of wine at the end of the night. If you are able to land that corperate job and qualify for benefits…..score, but most of us know the reality of that. Todays economy and retirement saving, major medical, sick days, vacation days……what are those about. I would like to see restaurants offer some benefits (something is better then nothing), I believe I have come across some programs that are completely voluntary and can be choosen “A la carte” and will cost the business owner nothing, in fact, there may even be an overall savings. Please feel free to google me and review my efforts in our indusrty. My cell is 5035502827, should you want to hear more about the programs and schedual time for us to meet and help. Thank you all and dont burn the onions, ciao.

Michele Reeves July 3, 2012 at 12:47 pm

Lorenzo, great to talk to you and connect again! Glad everyone in your world is doing well.

Kathleen Zorn November 27, 2012 at 9:28 pm

I just opened (5 months ago) a cafe/tea house in Multnomah Village that shows great promise. I have no experience in the restaurant business and my big concern of the moment is my staffing costs. My customer base is so sporadic I never know what is going to happen from one moment to the next. If I send someone home because it’s slow (as everyone seems to recommend) there’s a good chance that we’ll get a rush of people and won’t be able to service them well. Obviously we are still trying to increase our customer base. In the meantime, I could really use some advice. This is a 12-table cafe with 2 staff (plus me) that do everything–cook, wait (although we take orders at the counter) and bus/dishwash. We do breakfast, lunch, and afternoon tea. I spend most of my time on the marketing end of things and it’s working, but will take some time. In the meantime our labor costs are through the roof. I’m reading articles on the web but they are about huge restaurants with tons of staff. I don’t know how to pare our staff down any further without losing both customers and staff. Is there anyone out there who can help with small cafes?

Michele Reeves November 27, 2012 at 9:49 pm

A few thins to think of off the top of your head:

1) What are food costs?
2) What are labor costs?
3) What are rent and utility costs?

(These are literally the top three costs for restaurants.)

The top two you really want to be no more than 55 – 60% of gross sales for solid profitability. (If this number is higher than 55 to 60 percent, then you need lower overhead and increase volume to be profitable.)

The third item you want to be less than 10% of gross sales.

So I would look to see where you are on these metrics and make adjustments accordingly. You might want to shift the menu so it is less labor intensive during part of your day, for instance.

What are your most profitable items? Is it the tea? Then figure out how to sell more of it from a volume perspective. Plan regular events, tea tastings, tea education, etc.

Have you worked backward, asking yourself, “Based on how many people come to my restaurant now, and the average check size, how many more do I need to bring in the door to build it to to be profitable?” Once you figure out that number, you need to decide if the increased number of people you need to see in the door is a realistic number. If you learn you need to bring in 400 people a day to be profitable, that might be a tall order and would require a change in your business model.

A coffeeshop typically makes money off of volume, not sit down customers. Tea shops can’t typically generate the same volume because people are addicted to this product in the same way as coffee. So selling tea retail, tea accouterment retail, and food can help with profitability.

I’ll send you a quick email outside the blog to talk further and see if I can connect you with someone who might help!


Alli Fodor July 18, 2013 at 2:25 pm

Hi Michelle! I just came across your article in some preliminary restaurant research. It has been my dream to open a restaurant in a smaller American city for a few years now, and when I visited Portland this June, something clicked. However, I am completely afraid. That is not to say I will let it hold me back, but there’s a ton of work ahead of me at the present. My question is – finally – what do you believe is the first real step in opening a restaurant? I have the menu/recipes, a vision down to a science, and drive. I lack finances, a real business plan (not even sure what that even means…), and most importantly, experience. What would you say is the best next move for someone in my position? (I am 22, recently graduated, and eager as all hell!) Would it be culinary school? Business school? Or work as a waitress/hopefully advance to a managerial position? Sorry for all these questions, but I’d love some feedback! Much appreciated.

Michele Reeves July 22, 2013 at 3:11 pm


Lovely of you to write and check in! Here are my thoughts. First, I think it’s a really good idea to work in the restaurant industry for awhile, in whatever capacity you can. There you will see the good, the bad and the ugly. You want to go into it with some realism about the business and its challenges: 1) Staff that turns over frequently 2) Being at the mercy of your dishwasher–if they don’t show up, guess who is washing the dishes? 3) Managing cash flow–restaurants can have very lumpy revenue, but you still have to pay people in regular increments that don’t necessarily match your revenue. 4) Reinvention. Retail and restaurant are always about reinvention…creating a new experience for customers and clients. 5) The really really long hours.

Unfortunately, there are two sides to the restaurant business–the art and the science. Having recipes and vision is fantastic. And if you execute on those, even better. The art is important. But it doesn’t mean that you will be profitable. One of the most successful restaurants in the world, El Bulli, would sell out their season a year in advance, but ultimately their model was not financially sustainable. This happens a lot even with smaller scale restaurants, as well. You have to craft menu and concept around both the art and the science–what will bring people in, what is your market, how many turns are you going to need to be profitable, is that number realistic, how easy is it to source your menu, what are your food costs, how big a role will alcohol sales play in your projections, what type of prep/staff are you going to need, etc.

So work in a restaurant for awhile, if you are still interested, then consider a path to learn more: culinary school, management, whatever, and then build from there!

Good luck. Let me know how it goes!!

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