Irina Orekhova

Irina Orekhova

We’ve had a conversation with Irina Orekhova, the owner of the «Lost-and-Found Bureau» restaurant in Ekaterinburg about the post-COVID situation in the service industry, the hardships of transition from the work for hire to her own business, the unusual dishes and the «consumer terrorism».

The first and the most important question is: how did you survive the pandemic? What downsides, and maybe upsides, did you encounter at the end of it?

The main achievement for us is having survived it at all. We handled, or rather are still handling this situation with fewer losses than the other restaurants. The restaurants are not yet open in Ekaterinburg, only the summer terraces are allowed. Only a few have such spaces, so many people cannot work. I heard from many of my industry peers that they will not open when the quarantine is lifted.

Our restaurant is in a unique place in the center of the city, and we have two terraces: one in the park, on the opposite side from the main entrance, and the other one is in front of the park. Which is our great advantage. The Service for Surveillance on Consumer Rights requires us to observe the social distance, so there are half as many seats now. Besides, we had to promptly replace the soft furniture with treatable furniture. Long story short, there are many difficulties, but it is better than nothing. By the way, the resolution on the summer terraces opening arrived the day before in the evening, at six p.m. Because of that, we had to gather the employees that we had disbanded for the time of the quarantine, to buy the foodstuff overnight and to open up. But we handled this.

When the whole thing started, we thought that we would be closed for two weeks. However, soon it became clear that it would take longer, and we had to decide what to do with the leftovers of the foodstuff. The restaurant had a lot of them, and a lot of them are impossible to freeze. We suffered appalling losses because of this, both in foodstuff and in alcohol, the opened bottles of wine. It goes without saying that we have given something to the employees, trying to sell at cost price, but much of it ended up in the waste container.

And how long did it take you to launch the delivery service?

Since we had no idea how long the quarantine will take, and what would the government do to the restaurants in general, we decided to simply close and see what would happen instead of arranging the delivery service. Especially since we had substantial utility costs.

On the one hand, that was a mistake. Many customers chose other restaurants, and it was a little bit hard for us to fit into the process, to compete for the customers. On the other hand, it was a blessing, because I found out many things about my team, about the people whom I worked with. Three days before the delivery service launching, two key employees told me that they had not hired out to work as couriers with the cooks, and quitted. Ultimately, all who we were left with was one sous-chef who was, on top of that, a newcomer. However, it is he who handled many things during those hard times. He was optimistic and active; we revived each other. As a result, we launched the delivery service in three days, although the sous-chef still struggled to navigate in our kitchen, and he had to learn everything hurriedly. Now, this person is a head chef of the «Lost-and-Found Bureau», which I am only too glad. Essentially, thanks to the pandemic, we have found a kindred spirit, and the only people who stayed in the team were the people who had sought us, and those who we had sought.

Besides, I understood what a great lessor we had. She made concessions, and we only paid the utility bills and land lease for three months. It is incomparable with the full payments. Without her help, we would not have made it to the opening of the summer terraces, and I would be giving an interview entitled «How We Failed to Survive the Coronavirus» right now.

Another positive thing is that we received help from the government because we met their requirements. Those were not only the subsidies but also an interest-free loan that will be repaid by the government if certain terms are complied with. We will do our best to comply with those terms. In March, my husband and I have taken out a buyer’s loan to make the urgent payments including the salaries. Thanks to the opening of the summer terraces, we have repaid it, and we are with a surplus by now. Meaning that we have started to make profit and seek to generate reserves because we don’t know what September holds for us.

How else do you manage to cut down expenses?

We have installed SoftPOS application for all our employees. Now, the waiters accept payments using the FPS (Faster Payments System). This cut our commission costs by half.

Since when have you wished to start your own business? And why have you chosen the restaurant business?

I was born in Saint Petersburg. When I was 18 years old, I took a job in the hospitality industry, switched several places. I developed a real interest in what I am currently doing in «XXXX» bar, where I was employed as a waitress. In that very place, I got promoted to the position of the bartender, though it would be more precise to call that position «pourer», for what was there to mix ten years ago? Just whiskey and rum and cola. Back then, there was no need for the top-tier bartenders. People are drunk and having fun, and that is enough for them. I also worked as a «face control» worker and a manager. Soon I got to be hired as a startup entrepreneur, a person who launches new projects. I got hired for six months, tuned all the processes, and took up a new place. So, I launched several restaurants in Saint Petersburg, assisted in opening an «XXXX» bar on Savinskaya Embankment in Moscow.

By that time, I wanted promotion very much: not only the dances on the bar and «yays» but also something more serious. So when I got a proposition to launch a restaurant project in Saint Petersburg, I grabbed the opportunity. The owner wanted to arrange a space where people would be able not only to eat but also to have a good time. I suggested a jazz restaurant design, for there was nothing similar in the city at that time. This is how «48 Chairs» restaurant came to be. It is currently situated on Rubinshteina Street. Sometime later, I suggested those owners give me a share, make me a partner. They refused, and I understood that I would not become something more than a startup entrepreneur if I don’t begin to launch something of my own.

After another project in Moscow, I started to reflect upon my own business in one of the regions, because I saw more opportunities outside both capitals. Tatiana, my number two, had been born in Ekaterinburg, and it was her who suggested me to take a closer look at this city. I had a talk with the owners of «XXXX» bar, and they were open to the franchise license buying-out. After that, I sold my apartment and looked for partners, there were three of them at that moment. Before the opening of the «Lost-and-Found Bureau», I had several more projects in Ekaterinburg. We also opened an «XXXX» bar in the city of Tyumen.

Did something go wrong with it?

The project itself was a success. But you know how it goes, if things go well for a long time, everything develops well, you end up with blinders on. You only look forward, and sometimes you cannot look around and properly test the waters. In Tyumen, we chose a place for the bar that was in a residential house. In fact, the apartments were on the fifth floor and above, while the offices were lower. Still, that was a place where people lived. I liked that room very much, it was already fabulously modeled, and I thought that everything could be arranged without much pain. I was wrong. We continued construction for another year. We have constantly taken sound measurements and came to understand that we still did not fit into the noise limits.

This is where the question arises: when should an entrepreneur understand that a business doesn’t work out, that they should stop and focus on something else?

The time to stop was likely in the middle of that construction. However, remember the blinders that only allow us to look forward to the radiant future? Add this to the stubbornness that makes us go forward. In the end, we opened, worked successfully for two years, there were many customers, but there were many complaints from the dwellers, unending measurements and inspections. Instead of pursuing the development, I was drowning more and more in those drawbacks and conflicts. I understand the dwellers very well, and I would never again get involved in a similar project again, but we came to understand this «post factum». In the end, we found another room, started to model it, but at some point, we understood that we were terribly tired of Tyumen. We sat down, counted everything, sold the business, and left the city. The attempt to open a restaurant in the city of Sochi was another bad experience, but the business didn’t work out from the very beginning over there. That city’s administration and the southern mindset are not good for the normal business.

Today, I am fully focused on one project, the «Lost-and-Found Bureau» restaurant in Ekaterinburg. I don’t trust in the remote management, especially in our industry. The owner has to be familiar with the matter and completely immersed in the work of the restaurant. Yes, you don’t have to involve yourself in day-to-day affairs, such as human resources and the training, but you have to supervise everything and to know what happens in your restaurant.

How much does it cost to launch the restaurant business?

It can be done for different amounts of money. You could open a coffee shop, lease the equipment from the coffee producers or buy second-hand equipment for 1.5 million rubles, or even 600 thousand, as an acquaintance of mine did. For 150 thousand rubles, he purchased my entire stock of furniture and glassware that I no longer needed. He renewed and bush-fixed something and made a great bar. Hence, the price depends on the businessman’s goals, opportunities and tasks. In some cases, a project may cost a vast deal of money. However, I think that the average cost of opening a good restaurant ranges from 30 to 40 million rubles.

Let us speak about the «Lost-and-Found Bureau». How did you come up with such a name?

Initially, the idea of our restaurant was that each customer could find the tastiest, the most interesting and beautiful things here. And not only to find but also to buy! Everything from a painting and a table to glassware and a flowerpot. At some point, however, we understood that we had gotten a little tired of the need to buy something additional, swap around and fill the gaps. Selling of the interior design items is something different that should be developed by a competent person, but, unfortunately, I did not find such a person. I hope we will return to the original concept one day, but for now, we decided to delay that, and we look for only the tastiest things for our customers. Some items can be still bought from us, but we do not go public about it anymore.

How the interior design was made?

I have a favorite architect, he made several projects for me. However, I did not give him complete control over the restaurant. We worked together at the interior design, the concept and the color spectrum. In the «Lost-and-Found Bureau», there are many interesting exercises with green spaces. There is even a tree growing through a table. A trouble happened with it, by the way. There was excessive heat in Ekaterinburg recently, and the tree began to wither. We will think about how to save it. The «Lost-and-Found Bureau» has no bar, we mix the cocktails at the so-called «communal table»; also, we have an open-format kitchen. All those ideas were mine. We refined many things on the go. If you take the original project and see how the restaurant looks like now, you will see that the difference is tremendous. So, it is indeed my creation, my child.

The entrepreneurs can be conventionally divided into two types: some prefer to launch their business at their own expense, the others use the loaned funds, or look for investors. Which are you?

I think it is better to risk your own money. I would never forgive myself if I took an investor’s money, invest them, and then screw up. I prefer the partners who I am completely sure of. And I always contribute my share to the projects. Because it is another degree of responsibility. When you know that your own money is at risk, you will calculate and think through everything three hundred times.

The restaurant has been there for three years. Has it already begun to yield profit?

I still cannot say that it yields profit, but we would have the payback by now, if not for the pandemic.

Meaning that this is a long-run game.

Of course. However, as a companion of mine says, you can either deposit your money in a bank and have your 4 to 5 percent per annum, or you can invest them in a restaurant and try to gain more. But there is one nuance: you can take your money from the bank any moment, and in the case of a restaurant, you cannot do that. So you continue to pull this weight. In fact, each restaurant has its own payback time. For example, the «XXXX» bar that we opened in Ekaterinburg by the franchise, began to yield a profit in 11 months. After that, we accumulated the funds to invest them in the project of Tyumen (laughs).

Name three dishes that everyone must try in the «Lost-and-Found Bureau».

Speaking of the summer project, I wanted very much to arrange «Asia-style» there. It is our new trend, I like it very much, and we will most likely adopt it in the main restaurant, in addition to the European menu. The Asian cuisine is still at the zenith, and it is easier to prepare in terms of the delivery service. However, our chef reinvented the traditional recipes and created very interesting and unusual dishes. I recommend trying tartar roll with three species of fish (salmon, tuna and eel). It is dressed with truffle oil and served on mango mousse bed. It is a kind of choice for the girls. I am sure that the boys will like a spring roll with veal cheeks. Speaking of the main cuisine, you should really try our pizza prepared in the wood-fired oven. It has always been great, but now the chef refined the dough and the pizza became fire-tastic.

Judging from your Instagram, you like to travel. Have you taken something that impressed you in other countries, for your restaurant?

No, that didn’t happen. In many countries, especially in Europe, the restaurateurs’ thoughts about how to create the dishes and how to serve them, is much simpler than in Russia. Things can be really sad in terms of service there as well. In many cases, especially in Italy, the owner can be the waiter, the cook and the cleaner, all in one. In Russia, customers are spoilt. Tasty food alone is not enough for them. They want battery chargers beside every table, nurseries and fast and faultless service. Or, they demand to put two of them together at a table where eight could sit. You can rarely see such things in other countries. This is what I call «consumer terrorism». Sometimes, the customers come with their minds tuned to cavil about minor points and to get a discount, for example. However, such pretensions encourage the restaurants to constantly better their service and menu so that the customers remain satisfied. So, when it comes to the large-scale restaurants and not the high cuisine places, ours are in fact head and shoulders above the restaurants in the other countries. The fresh products often brought straight from farms, and a huge range of wines, are the things that are really valuable and cool in Europe. But people there do not lose much sleep over the serving and service.

Nine months ago, Sofia, your daughter, added to your family. How does the businessperson Irina get along with the mother Irina?

Very well. Although the businessperson Irina returned to work and was on-stream on the tenth day after the delivery (laughs). I seek to give maximum attention to my daughter. However, it should be taken into account that for a businessperson, their business is like the second child. Indeed, my daughter and my husband are the priority for me, but the restaurant is just as an important part of my life, and I have to find time for it. Although it is wrong to say «have to». I want to come here, to communicate and work with these people.

Do you make plans for the future? Do you look around in search of new opportunities?

Despite the predicament caused by the coronavirus, and the vague future, I have a couple of ideas. However, I got to take everything easier recently: it would be great if those ideas worked out, and I would not get emotional if they didn’t work out, that’s not a big deal. In general, it struck me that I am not interested in small projects anymore, and I want something of a larger scale. Not a small cafe, but a chain of coffee shops, not a humble country house hotel, but a large complex. The time runs very fast, and I want to invest it in something big. But those are the plans. For now, I will focus on my restaurant, and life will tell what happens next.