Wednesday, July 24, 2013

Alumna Profile: Judith Ordaz on Opening a Mexican Restaurant in China

HNC has well over 2,000 alumni working in a variety of fields all over the world.   As an example of the diversity of career paths followed by our graduates, we asked MAIS '13 alumna Judith Ordaz to tell us more about the Mexican restaurant she recently opened in Nanjing.  We encourage all incoming students to go visit her restaurant!

Judith Ordaz

Valentina's on Guangzhou road #16.
瓦伦缇娜 广州路16

Below are some of Judith's tips on opening a restaurant in China:

"Many foreigners who have spent time in China will tend to experience longing for familiar foods and environments.  When this happens it is not uncommon to hear conversations about what an excellent idea and profitable business opening a restaurant would be.  After all, you have identified the market demand and you are ready to fill it.  After going through the same process, I decided to go ahead and open my very own Mexican restaurant in the city of Nanjing.  This article is specific to my experience and is meant to be for reference only.  If you are serious about pursuing this entrepreneurial route, assuming you have found reliable partners and can fund your project, here are a few things you should keep in mind:

First: Location. 

We have heard this many times before: location, location, location, and it is true.  Take enough time to find a place that is suitable to the type of restaurant that you plan on building.  There are two options: to use a space that was formerly a restaurant or to use a space that was not used for a restaurant previously. The first option involves finding a place that is currently being used as a restaurant, or was previously used as a restaurant.  This type of space will require a transfer fee (转让费), which means the current restaurant owner or previous restaurant owner will want a sum of money just to transfer the place over to you (some places not suited to be restaurants will also want to charge this fee).  In the city of Nanjing the fees range from 130,000 to 250,000 RMB.  The second option is to find a space that is not or was not a restaurant.  In most cases, this will mean there is no transfer fee or if there is, then it will be at a significantly lower cost. What does this option mean?  You will have to build and remodel.  Depending on the size of the place and how fancy you want your design to be, professional decoration (装修) companies will usually give you a price per square meter (around 10,000 RMB per square meter), in addition to the materials needed. 

Other things to consider when you rent are: can there be open fire in the building? (Many building regulations don’t allow this, which forces you to only use electricity, which can reduce your profit significantly). Is there access to water? And if not, is there a way to get it? Is all the paperwork in order?  This is extremely important so you can register your business without delays.

Second:  Equipping Your Restaurant. 
If you end up doing your own remodeling, you will have a lot more work to do.  After the decoration company has finished their job, you will still have an empty restaurant.  This means it is your responsibility to shop for tables, chairs, kitchen appliances, and the restaurant’s soft décor ().  All cities have markets that sell everything for restaurants and hotels.  In Nanjing it is Boqiao Market (南京博酒店用品有限公司) on #45 Jianning Road .  This is the place to find everything you need, from dishware, to kitchen appliances, to furniture.  They can custom make the things you will need to fit your kitchen dimensions.  Keep in mind you should go well in advance before the decoration is finished, since some things can take up to ten days to be delivered.  When you visit these markets, do not be shy to bargain.  You can also have custom uniforms for your staff made here.  As for your restaurant’s soft décor, it depends on the type of restaurant you are building.  I found myself bringing most of it from Mexico. Remember, the soft décor makes up about 30% of the restaurant’s total environment at the end of the day. 

Third:  Registering Your Restaurant. 
This is the most important step.  If you cannot register your restaurant, everything else you do is pretty much useless.  To get the business permit (营业执照), you need your lease and the certificate of house property title (产证) and take it to the Administration for Business and Commerce Office. They will also need to make sure your restaurant’s Chinese name has not been used before in the province (so hold off on printing anything, making signs, or getting a website before confirming this).   You will also need a bank account to be associated with the business; at this point a personal bank account will suffice.  You can also open a joint account with your business partner(s).  After applying for the permit, which can take anywhere from a week to two weeks depending on how busy they are, your restaurant will be inspected to make sure it follows the safety and sanitary regulations required. 

Fourth:  Actual Business.  
After going through the process of making sure your place is ready, there are still things to consider.  These considerations involve hiring workers and giving them appropriate training.  As for your ingredients, you will find that the closest fruit, vegetable, and meat market already deliver to all the restaurants in the area.  In the case of Nanjing, many restaurants in Ninghai Road, Shanghai Road, and Guangzhou Road get their ingredients from the market in Hankou Road under Suguo.  They are happy to deliver to you daily, you can give them a call the night before with what you need, or just have a set number of things you need daily.  You can also negotiate for a cheaper price with them. 

Make sure you have a marketing plan, and have assigned a part of your budget to it.  While it may seem that you have an original concept that everyone will like you have to keep in mind that in China you are not just competing against restaurants that are similar to yours, but you are also competing against any foreign restaurant in the area.  There are only so many foreigners, and they have a set budget to eat every day, so it is important to also consider your Chinese clientele.

These are a few basic, but essential, things that should be helpful when considering opening a restaurant in China.  Make sure you have a realistic business plan, be prepared for any setbacks, and whatever you budgeted your total investment cost to be, make sure to have at least an additional 30% as a cushion.  When things get stuck along the way, gifting cartons of good cigarettes can help speed the process up." 

Judith Ordaz Peña is from Chihuahua, Mexico. She went to the University of Arizona to receive her Bachelor’s in Political Science, minoring in German and Chinese studies. While pursuing her undergraduate degree she came to Nanjing as a Gilman Scholar to study Chinese Politics and Sino-American relations as well as to learn Chinese. Judith went on to work for U.S. Congresswoman Giffords, led a state-wide Human Rights Organization campaign in Arizona, and successfully directed a City Council campaign before returning to China to attend the Hopkins Nanjing Center.