Novo restaurant and lounge is the “go-to” dining destination delivering eclectic and global cuisine in a distinctly San Luis Obispo atmosphere.

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Is Bigger Better?

Novo was presented with the opportunity to take over a vacant space next door.  Although Novo had a beautiful back patio overlooking the creek, it lacked sufficient indoor seating and waiting area on busy nights.  The Novo team was excited about improving the overall guest experience and the potential to use the extra space to expand the menu.

 

“Expanding would generate more revenue, offer more seating options, especially on rainy days, and improve the overall feel for our guests.  I was particularly excited about adding a raw bar to broaden the menu and give my guests even more to choose from.  The benefits were so clear, but we needed it to make economic sense.  So, we hired Rolando to help us think through all the variables and perform a break-even analysis.  He had helped us with our other business, Mint + Craft, and we knew he’d do the same great job for Novo.”
 

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You have to spend money to make money…

The new space needed to be transformed into a vibrant environment consistent with the rest of Novo.  The Novo team had to invest in additional furniture, fixtures, plates, glassware, silverware, flooring and new construction. The additional space would also result in higher rent, utility costs, property taxes, insurance, staffing and debt service without generating incremental revenue for months.  
 

 

The writing was on the wall.

Rolando and the Novo team combined their extensive expertise to project foot traffic, larger check averages and increased table turns to anticipate revenue and expense growth.
 

“It was clear almost immediately that the math just didn’t work.  There was no doubt the expansion would have improved the restaurant, but the break-even revenue target was too high.  Rolando’s model was clear and accurate.  He walked us through the assumptions we needed to make, and because of that, the decision not to expand was easy.  Rolando was a big part of that.”
 

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Robin Covey – Owner

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