Location Location Location. Location....aaand more Locations

I must say that this business of trying to start a business has taken us on many adventures, which we love to share with you.

Over the past few weeks, we have been scouring the streets of Boston for retail space. In fact, you may have seen us. We have been all over the place: through Beacon Hill and the West End, up and down Newbury St. several times, in Fenway, near Berklee, Kenmore Square...we're exhausted from all this walking. What we have found from our thorough exploration is a record number of open retail spots. We collect phone numbers from the "for lease" signs and text message them over to our broker, John, who then calls on these properties.

We have run into some interesting characters on our quest for the perfect location. For instance, Chin and I were walking through Fenway and saw a dingy looking storefront that looked like it used to be a Mediterranean cafe. There was no sign, so we went next door to a karate studio and Chin asked the owner if he had any information on this neighboring space. He then referred us to an office building next door to talk to the people who own the entire block. So we found the office and rang the bell. A frazzled woman came to the door and informed us that the spot about which we were inquiring was currently undergoing renovations to be leased out in the future. We left our contact information and bid her adieu.

And in the Back Bay, we saw a For Lease sign in front of a corner property...a convenience store. Chin decided to ask the employees about the space.

Chin: Hi, could you tell us when you guys are closing? (ok, perhaps this wasn't the most sensitive of approaches)
Employee (in a thick Middle Eastern accent): What?! What makes you think we are closing?!
Chin: Uh, there's a For Lease sign out front
Employee: But what makes you think it is us??
Chin: Because the sign was in front of your store. We assumed--
Employee: No! What makes you think it was not the store above us?
Renee: Because the sign was on this property.
Employee: Why you asking?
Chin: We are trying to open a business.
Employee: What business?
Renee: None of yours.

Never in my five years of living in Boston have I seen so many empty spots on Newbury St. I never thought I would see the day. Our adviser informed us today that there was a live news cast on Newbury reporting on this anomoly, "a record number of vacancies in the last eight years," they said. Now, don't get me wrong, I think it's quite depressing that fashion and specialty retailers are being forced to close up shop because of the recession. That said, it does give new businesses an opportunity to move into a playing field that would have been a distant dream a few years ago.

A Word About ITEC

For those of you who don't know, and I'm sure many of you don't because it's entirely unimportant: ITEC (The Institute of Technology Entrepreneurship and Commercialization) is a program in conjunction with my and Chin's alma mater, Boston University, that helps budding entrepreneurs start up their businesses. Every year ITEC hosts a business plan competition, whereby three teams are chosen to present to a panel of venture capitalists their start-up proposals. The grand prize is $50,000. I have entered this competition twice now -- once last year for a web-venture and this year, for saus. We submitted our business plan and hoped for (and expected) the best.

Here is the email I received today from ITEC:

Thank you for participating in the ITEC $50K Business Plan Competition. This year we received many very impressive business plans. Picking the top finalists was more challenging than ever before. While the judges were impressed with your plan, they did not feel confident that it is ready yet to go to the next round in the Competition.

We thank you for sharing your plan with us and wish you the best of luck with your business. You will be receiving specific feedback from the judges next week. In the meantime, we encourage you to continue participating in ITEC events and look forward to seeing you at the Business Plan Competition on Wednesday, April 8 at the School of Management.

Of course, we continue to be available to help you with growing your business. Please do not hesitate to contact us for support.

No, ITEC, no you will not see me, nor any of my teammates, at the competition on April 8th. I will be too busy watching Lost after a long hard day of renovating our space and smoking tobacco with our investor dollars (oh calm down, just Washington). Am I bitter? Heck yes. We didn't make it because we are not the right kind of company. It's time we dispel the negative stigma surrounding restaurants. There are outrageous statistics out there that claim something like 90% of restaurants fail in their first year - this is completely untrue. I bet I can take a handful of quick-serve restaurant concepts and a handful of software concepts and find that the two are equally profitable, if not one more successful than the other (restaurants).

The Business of Restaurants

There is a popular saying that "successful restaurant entrepreneurs are not in the restaurant business, but in the business of restaurants". This just says that the latter takes an operational approach, with careful planning and research of the market, while the former is usually based on a whim and a family recipe.

As we get closer to implementation, we are taking all the necessary early measures to ensure that ours will be a restaurant that is process-savvy. That said, we are currently designing a flow-chart, basically a map of our operation beginning with the customer who walks in, places his/her order and from there, how long it takes for the order to be received and served with all the proper variables in place.

I'm sure this is all very riveting for you, but poor operations leads to waste, low quality in output, employee dissatisfaction, and as a result, sub-par customer service.

Also, we have recently been in touch with one of our industry sources, a good friend of mine. He encouraged us to seek legal counsel early, thus avoiding the headaches that will inevitably come later. Our lawyer will deal with our licensing, equity and dividend distribution agreements, and lease negotiations when we have our space.

SBA Bashing

So here is the deal with the SBA (Small Business Administration): a little over a year ago, this was the government source for start-up and small business funding. A year ago, Saus probably could have swindled the SBA for a loan. It's not that there is something particularly special about the agency -- it's basically a glorified bank -- in fact, it teams with banks to provide loans to entrepreneurs at a Federal interest rate....a little over a year ago, that is.

If you are an entrepreneur trying to obtain seed money at this time, your efforts to do so through the SBA might be futile. Recently, I met with the resident food service expert at the SBA and dragged our adviser along in case there was a glimmer of hope for a financing option. We soon discovered there was not. The banks have more financial jurisdiction than even our own government in that due to their loan terms for small businesses (that is, in order to secure a loan, must have been in business 2+ years), the SBA consequently was disabled from its lending. Simply, the banks control everything. The 7(a), which is the SBA's general business loan, was down 40% from last year. The good news, however, is that in 2008 the SBA was able to lend to some of the largest companies in the United States (Lockheed Martin, Dell, etc.) -- do these sound like small businesses to you? In fact, 1/6 of the money doled out by SBA went to the top 10 largest firms in the US.

Let's just hope for all the job creators of the future that the banks, followed by the SBA, begin lending to small businesses again.

So to add humor to this dark and dismal landscape, I have included an online conversation I had with our adviser about the SBA:

Adviser: We should rename the SBA from Small Business Administration to something more appropriate
Like No Start-Up Loans (NSL) or No Jobs Here (NJH)...
Sent at 8:34 PM on Tuesday
Me: Shouldn't Be Agency
Adviser: Ha Ha, yes I could not think of anything good for SBA
You are a quick wit you.
Me: not really, my quick wit would originally have said, Shit Bagger Association
Adviser: Har Har.
Small Business Anti-Christ
Another pot of gold for the shameful business advocates (aka lobbyists)
Sent at 8:38 PM on Tuesday
Me: haha
Small Business Annihilator
Adviser: ha ha okay you win
Me: i think ill cut and copy this conversation onto the blog