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Overcoming costs to create an all-American food concept

Friday, 22 February 2013 | By Michelle Hammond

my-best-mistake-pj-steak-thumbPJ Chang spent several years scouring the globe for the perfect spot to set up an all-American restaurant, before finally settling on Australia, but costs and compliance proved a challenge.

 

Chang, who works alongside his nephew James Chung, is the owner of PJ’s Steaks – an American restaurant located in Brisbane’s West End.

 

“We chose West End because there is a lot of diversity here but it’s not as crazy as Fortitude Valley. West End has an eclectic mix of people, with hippies, professionals and the wealthy,” Chang told StartupSmart.

 

PJ’s Steaks is responsible for introducing Brisbane to the “Philly cheesesteak”, a sandwich consisting of steak and melted cheese, which hails from the US city of Philadelphia.

 

After experiencing his first Philly cheesesteak in 2000, Chang spent several years looking for the ideal market in which to set up an authentic American restaurant.

 

In 2006, he travelled from Korea to Australia in order to undertake market research before migrating to Brisbane in 2008.

 

“The Australian market is kind of limited. There are not many competitors here, compared to big countries like America or Japan,” Chang says.

 

“I think I really wanted to give people more options with their food, so that’s one of the reasons why I bought this menu to Australia… That motivated me to start up this business.”

 

Keen to create the perfect atmosphere in his restaurant, Chang convinced his nephew to relocate from the US to Australia. This, he says, was one of the best things he did.

 

“He was born and raised in the United States, so he can give me [insight into] an American concept – like ideas and their eating habits,” Chang says.

 

As a result of Chung’s influence, PJ’s Steaks is peppered with American paraphernalia such as New York number plates and Yankees merchandise.

 

The menu, meanwhile, is the perfect embodiment of “dude food”.

 

While the business has been successful from the get-go – breaking even in its first month – Chang admits he struggled to get a grasp on a few things.

 

“I think [it took] about half a year to find the right place, and to set up shop took about three or four months,” he says.

 

“I learnt a lot about city approval, council approval and suppliers. I didn’t know about much in Australia.”

 

Even deciding which brands to use was a dilemma, he says.

 

“I didn’t know which brand is the best and most reliable and cost-effective,” he says.

 

Meanwhile, start-up costs soared, reaching $200,000. While Chang was able to cover the costs, both he and Chang say starting up a business costs more than anticipated.

 

“Even if you’ve planned out everything to the last detail, if there’s one thing to count on, it’s that something will crop up and throw you for a loop if you don’t have spare cash,” Chang says.

 

“Renting our equipment was the smart thing to do because we kept our cashflow intact, and we could try out the equipment first to make sure it was right for us and then choose to buy or upgrade later on.”

 

The restaurant, which has now been open for more than six months, employs six part-time staff and a full-time manager. While Chang says it’s too early to talk revenue, he hasn’t ruled out franchising the concept.

 

“I will build up one store but maybe there’s room for two or three more in Brisbane. I’d also be going to a big city like Melbourne or Sydney,” he says.

 

“My advice to others is to tap into a niche market with your own specialty and you’ll find it much easier to survive.”