“The financial crisis has helped us to grow”, said the Chief Executive of Buenos Aires, an Argentine steakhouse restaurant, the second group enterprise steakhouse in London
The ultimate Argentine experience is the motto of Buenos Aires steakhouse restaurant. With six restaurants around and in London, this company has learned how to expand itself amid the global financial situation.
Cristian Barrionuevo, chief executive of Buenos Aires says that in 2011 sales fell 10%, however this did not stop him from opening one restaurant per year. 2012 was the big bet. Buenos Aires opened last summer its sixth restaurant in The City. To rent a building in this area costs around £400,000 per year, however, Mr. Barrionuevo explains this has been possible because when many pubs are closing the situation changes and “now landlords give you more opportunities to let the premises”. For example, Mr. Barrionuevo obtained 18 months for free in the rent of the last building, what it means a total saving of £300,000. In this sense, “the financial crisis has helped us to grow”, continues Mr. Barrionuevo.
The greatest challenge for Mr. Barrionuevo was that he did not have initial capital to invest in his new business. With the revenue of one restaurant, he invests in the next one. “This way of acting always makes you feel in tension, you have to work harder to success since you have invested everything you have”, describes Mr. Barrionuevo.
Since in 2007, when Buenos Aires steakhouse restaurant opened its first restaurant in London, many things have changed. Now, banks give Mr. Barrionuevo loans because they see a continuity in his businesses. In the first restaurant there was more drawbacks to borrow money or to negotiate the contract clauses with the landlord. Once your business has developed a brand, name and logo, “you are the one to impose the conditions”, Mr. Barrionuevo explains. Nowadays, Buenos Aires is a Group Company with a turnover of more than £4m. Here, it is easier for them to expand their business.
Nevertheless, it has not been always that easy. Mr. Barrionuevo, Argentine by birth, had to move to Spain because his son had a skin disease and he needed the Spanish climate. There, in Valencia, he decided to open his first of all restaurants in 2006. His experience was definitely different if he compares Spanish and English (UK) businesses. As Mr. Barrionuevo specifies, “the expenses are higher and the benefits are lower in Spain because you pay the same amount to the suppliers as you would do in UK, but you earn less benefits” because the price costumers pay in Spain is lower. In other words, in Spain there is more work to do, and less benefits to earn. In these circumstances, Mr. Barrionuevo had to close his business in Spain one year later.
Businesses in UK
Mr. Barrionuevo opened his first restaurant in London in the area of Purley in 2007, what eventually becoming the “Steak Palace” of the area. A year later, the second restaurant was opened in Maidstone, which was the only Argentine steakhouse in Kent. In 2009 was the time of the Argentine steakhouse restaurant in Croydon. This time, a market study was already necessary to know the area and the public with the purpose to define his product and to build a particular style of restaurants. Next year, another restaurant was opened in Fulham, the first London based venue. In 2011, Mr. Barrionuevo decided to expand his business in the area of Wimbledon. In the new one (2012), Mr. Barrionuevo bet for the City, where he needed different strategy; or as he explains, “each area needs different inversion, because it has different clientele, and the one in the City has more bookings” since it is the biggest one among the sixth of them.
Know-how
Cristian Barrionuevo has worked in gastronomy since he was 15 and his experience, first as a employee and later as an employer, has made him to value his own business. As he relates, “the skill for success is to concentrate in the details”. 80% of his staff are Spanish-speakers with knowledge of Argentina’s traditions. The atmosphere, the quality of the food and human contact are essential attributes in Buenos Aires steakhouse restaurant. Mr. Barrionuevo points out that the most important thing is a good management of the product, “knowing every time what it is happening in your business”.
“Steakhouse business is on fashion and the Argentine steak is different”, explains Mr. Barrionuevo. All the products in Buenos Aires restaurant are Argentinian; from the wine, to the meat until the cook. “Everything can work if you know how to organize your business”, says Mr. Barrionuevo. Some products need more management than others and to know what everything costs and how much earnings it produces it is fundamental to maintain the business line. “We have to work harder to maintain what we have”, Mr. Barrionuevo says. He works from Monday to Monday and the secret is to be always available, definitely to be present.
This kind of restaurants has a specific target and the competence is still low because there is not one Argentinian restaurant next to another. Buenos Aires steakhouse restaurant has a strategy of innovation in menus, specialty dishes, or tango night!. Besides, Mr. Barrionuevo is thinking to introduce again some tapas menu in his next restaurant in 2013 as he did in his restaurant in Spain.
Nowadays, Mr. Barrionuevo has developed a sense of business, and he does not open a restaurant everywhere. Mr. Barrionuevo´s purpose is to continue growing but maintaining the same style, developing a brand identification and recognition of all his businesses.
A familiar chain
Buenos Aires steakhouse restaurant has grown, but it has not lost its identity. Mr. Barrionuevo identifies his company as a “family business”. Mr. Barrionuevo appreciates his employees as his friends. Some of them has stayed with him since he opened his first restaurant six years ago. In 2007, he needed some support for the initial capital to open his first restaurant in Purley, what it received from his friend and wine supplier. “He helped with in the worst moments and he is still working with me”, Mr. Barrionuevo mentions this behavior as a principle to maintain a business and to build strong relationships with the staff.
When you come in to Buenos Aires Argentine steakhouse restaurant, the local´s elegance grabs you. The informal style regarding quality/price, the Spanish language and music along with the quite atmosphere make you feel in another place out of the hustle of the city of London. Their objective is “to establish a place out of the business routine, where costumers can come here and relax”, specifies Mr. Barrionuevo. The image of the restaurant seems expensive, but as Mr. Barrionuevo says “we are one of the less expensive, specially among the City”.
Regarding to the finances, Mr. Barrionuevo explains that everything is well distributed according to the expenses. He needs a balance between the cost of food and staff, the bills and the rent of the premises. “If we have a net benefits of 15% in the Buenos Aires restaurant at the City for example, means a good equivalence, since we have to pay £75,000 of renting per quarter of three of our buildings”, specifies Mr. Barrionuevo.
The “forgotten army”
There is no crisis if there is money. Something as clear as that is what make businesses stay afloat nowadays. UK policy about lending money to start-ups is riskier than to lend it to a business already consolidated. However, Small and Medium-sized (SME) companies accounted for “99.9 per cent of all private sector businesses in the UK”, according to the Federation of Small Businesses (FSB). They are the ones that can make the economy grow, and therefore, they need backup from the government. As the UK's premier business lobbying organisation (CBI) proclaims “the British government should provide stronger support for medium-sized firms”.