How to create a “Hidden Gem” by Maximizing on a Small Restaurant Space?


With online shopping trends growing each and every year, we have seen a rise in small brand retailers closing their brick-and-mortar locations. This, in turn, has created an opportunity for the restaurant industry, to utilize these smaller footprints for a defined, compact food and beverage concept.

The old adage of restaurants needing 2,500 to over 5,000 square feet of space has diminished over the past five years (minus the recent surge in shared food halls). It is becoming more common to see a 600 to 1,500-square-foot restaurant thanks to the noted retail closures in addition to lower lease cost demands during a time where all other restaurant-operating expenses seem to be on the rise.

However, finding a high-quality location of this size that meets the required foot traffic and other design/operational components to operate a successful restaurant is still a challenge for an aspiring restaurateur.

With that said, there are many highly successful brands that are maximizing their small space and driving a record-high profit percentage per square foot— thanks to the lower rent and overall fixed costs.

Here are some points to take into account when considering a ‘small restaurant’ space:

1. Study Your Concept Choice

Understand your concept inside and out. Create a variety of financial scenarios and menu choices (and sizes), and determine the absolute minimum you will need to execute the concept in terms of space and financial projections.

Ensure you have a detailed feasibility study, concept plan, and business plan. These will further outline a carefully crafted start-up and operating budget, a vehicle traffic report, the required curb-appeal, and a break-even point analysis that aligns with the local market and smaller size of the restaurant.

2. Working with Designers

Working with a small space requires excellent attention to detail and knowing each and every local building code. Small spaces are much more difficult to layout than a larger restaurant. It takes much more than imagination and creativity. It is crucial that restaurateurs work with local and trusted schematic designers to carefully map out plumbing, electrical, HVAC, hood systems, walkways, fire safety, and minimal washroom requirements, etc.

Working with smaller spaces often requires a more strategic placement of these critical building components. Smaller spaces also come with a strict load capacity for electric, natural gas, air system, and plumbing which will have an immediate impact on choice (and placement) of kitchen and bar equipment. Understanding these challenges is critical before further investments are made.


3. Crucial Pivot Points

Smaller spaces require deeper systemized thinking. One must think before walking. It is ideal to work your way backwards from the kitchen, bar, and take-out counter design, while understanding the minimum space required for seating and/or guest services to maximize profitability.

In summary, it is ideal to layout your kitchen and bar first, prior to laying out the seating, to meet the basic needs of the desired menu and its flow of production.

Mobility or ‘pivoting’ is crucial, especially in smaller spaces. Consider the number of steps required by staff to reach workstations and guest tables. This all starts with the understanding of the word, ‘flow.’

At this stage, the desired menu concept should be complete. Using the menu and potential layout, walk-through the movement (flow) of each menu item from the receiving door through to storage, preparation, cooking, plating, and finally to the table (and back for washing, if required).

How many steps are required? Can staff effectively pivot within multiple stations? What is the flow of traffic like in the kitchen, behind the bar, and also around tables for both staff and customers? Mapping out the flow of traffic for each menu item, station, and service sequence is critical in all restaurants, particularly one with a smaller space.

4. Efficient Storage

One keyword noted above that cannot be overlooked is storage. This is often the number one ongoing challenge in a small restaurant space. This is where creativity comes into play.

Where and how will you store dry goods, beer cases, beer kegs, boxes of wine, and take-out containers, etc? Will you have enough fridge space in a smaller kitchen to store the fresh produce you need to execute your menu?

Operators also need to be strategic in their ordering and deliveries while really working their relationships with food and beverage vendors to maximize space and reduce the risk of running out of product due to minimal daily storage.

Within the kitchen itself, it takes additional creativity for storage of any cooking tools. It may be ideal to utilize the space above one’s head for this storage. For example, consider hanging pans off of racks installed along the exhaust hood system, or installing strategically placed hooks and/or moveable tracking systems to slide smallwares back and forth between stations along a wall.

In smaller spaces, you also have to carefully consider point-of-sale stations, table service stations, and beverage storage and where each will be located within the front-of-house to not obstruct or overwhelm a guests’ view while seated. Whichever the case, one must utilize every square inch while keeping in mind both the staff and guest experience.

5. Revenue Management

Yes, smaller spaces utilize minimal expenses in rent, staffing, and other fixed costs. However, smaller spaces often bring in a smaller portion of customers in relation to its size. This is where the right balance in menu prices, menu options, productivity, and the understanding of one’s concept and potential flow of traffic throughout the day, is crucial.

For example, a 1,500 square foot restaurant should require a kitchen of approximately 525 square feet (35% average), leaving 975 square feet for tables and guests services. This will, of course, alter pending chosen concept.

There are many tactical elements to operating a restaurant business and Restaurant Revenue Management (RRM) is one of them. In this example, how can one maximize 975 square feet of service space? A restaurateur needs to consider effective table size, table optimization, guest positioning, seating styles, and guest duration to maximize both space and revenue opportunities.

Having a concept that is scalable is key along with a concept design that is sustainable, profitable, and consistent while delivering memorable guest experiences. In summary, don’t be afraid to create a restaurant in a smaller footprint— it may, in fact, be the hidden gem your market both wants and needs!