Author Topic: Talk me out of opening a restaurant  (Read 2799 times)

mozar

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Talk me out of opening a restaurant
« on: February 13, 2018, 04:32:50 PM »
Hello Mustachians, I've been thinking a lot about what my dreams are. I used to think dreams had to be something lofty, but I literally dream about owning commercial kitchen equipment. I figure this forum would be a good place for me to write out my ideas and get feedback.

Concept: vegetarian fast casual

Phase 1
Buy a hot dog cart
There is a farmers market near my house and they are always looking for unusual vendors. There is also a commercial kitchen nearby with reasonable prices.
I would sell vegetarian hot dogs with a big variety of toppings. Use profits (?) to fund restaurant idea.
I think about restaurant concepts a lot and I was in awe at a recent vegan food festival where the line for hotdogs was 45 minutes long.Plus an hour long line for free plain hotdogs.

Phase 2
There is this awful chinese restaurant in my town. It only gets by because of the great location. The owner might be willing to kick them out if I offered more money. This happened with another property next door he owns. There is also a second floor space that is empty that is probably a bad idea. I don't have other ideas for a space right now.

Menu for vegetarian restaurant:
Lunch and dinner
Hot dogs
Hamburgers
Fried 'chicken' sandwich
Lasagna
Chips
Fries
Local wine and beer
Toppings, chips, and fries made in house (I day dream a lot abot commercial vegetable choppers). Would outsource the 'meat' making.

Open in the morning for baked goods and free wifi
Decor: colorful
Rest: commercial fridges and ovens, hopefully used. Grill top, to go counter, furniture, pots, and pans, money for salaries until it becomes profitable.
Accounting : will be as automated as possible
I'm ok with breaking even but losing money would suck.

Alright, come at me brah!
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swashbucklinstache

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Re: Talk me out of opening a restaurant
« Reply #1 on: February 13, 2018, 06:02:07 PM »
This sounds great! You have a dream, and you have walked three steps down the path towards owning a restaurant (a small vision, a big vision, and asking for advice). Especially good is that one of those steps is a smaller, less expensive step to see if you like it and another is free.

There are many, many more steps to go to be successful in this space.
  • To start in the meantime, can you describe your experience in the restaurant industry to date?
  • What is it exactly that you love/dream about with this? Is there any way you could scratch this itch without owning a restaurant?
  • Are you aware of the success rate of independently owned restaurants?
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wordnerd

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Re: Talk me out of opening a restaurant
« Reply #2 on: February 13, 2018, 06:09:46 PM »
I know nothing about the restaurant business, and you sound way more realistic than this guy...But given your thread title, I'll drop this cautionary tale here: https://torontolife.com/food/restaurant-ruined-life/

Mikila

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Re: Talk me out of opening a restaurant
« Reply #3 on: February 13, 2018, 06:11:42 PM »
The restaurant business is crowded.  People typically have so many options.  By appealing to a subset of people, you are both limiting your customers and yet, for that subset, you could have a lot of appeal.

That said, I've worked in a restaurant, and pleasing the customers can be difficult.  Some people come into the place in a bad mood, complain about everything, try to get free food by sending it back saying that they didn't like it, you get the idea.  If you can figure out a business model that appeals less to that type, you will increase your odds of success.

If you choose to do this, I would first apprentice myself to someone successful in that business.

crazy jane

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Re: Talk me out of opening a restaurant
« Reply #4 on: February 13, 2018, 06:11:50 PM »
Read Anthony Bourdain's Kitchen Confidential. It's brutally honest about the restaurant business.

mozar

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Re: Talk me out of opening a restaurant
« Reply #5 on: February 13, 2018, 06:28:49 PM »
1.To start in the meantime, can you describe your experience in the restaurant industry to date?
I've worked as a hostess, and a waitress, and I worked in the kitchen at a food co-op prepping food, making sandwiches, and doing inventory. I didn't like food prep. I enjoyed the customers, staff more.
I also ran an 'underground' food market for two years. I would find small time chefs and bakers who wanted to test out ideas and find places (restaurants, parking lots) that would rent their space to me for a few hours. I did everything including the marketing/ organizing/website. It was underground because at that time it was illegal for small food vendors to sell without a license/ using a commercial food prep space. Through my market (which had thousands of attendees) I was able to bring awareness to the issue and the law was changed in my city so that food business's with less than 10k in sales a year can sell without a license etc.

2.What is it exactly that you love/dream about with this? Is there any way you could scratch this itch without owning a restaurant?  I enjoyed the day to day of working in a restaurant but all of the ones I worked at were terribly run. I think I can do better with automating some things and higher wages for less turnover and I would be able to keep my own wages low.
Every once in awhile I talk myself out of buying a $500 french fry cutter that I can bolt to a wall. Kachunk! Would be cheaper than a restaurant.

3. Are you aware of the success rate of independently owned restaurants? Abysmal. But the ones with very short menus where they focus on just a few things do well around here.

Quote
The restaurant business is crowded.
There aren't that many restaurants in my town, so its more an issue of sustainability here.

Quote
Read Anthony Bourdain's Kitchen Confidential
I'm a huge fan of Anthony Bourdain. Thanks for the reminder to read his book.
« Last Edit: February 13, 2018, 06:33:28 PM by mozar »
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mozar

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Re: Talk me out of opening a restaurant
« Reply #6 on: February 13, 2018, 07:07:59 PM »
Quote
I know nothing about the restaurant business, and you sound way more realistic than this guy...But given your thread title, I'll drop this cautionary tale here: https://torontolife.com/food/restaurant-ruined-life/

Thanks for the article. I don't have kids, nor am I looking for riches. I'm also way better at stress management. Doesn't mean I'll be successful, but that guy is a mess. Btw the Toronto Underground market is what I did in my city.
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Bicycle_B

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Re: Talk me out of opening a restaurant
« Reply #7 on: February 13, 2018, 09:04:51 PM »
Not an expert, just pitching in.  Managed a profitable restaurant (a plain franchise, nothing gourmet) that went broke due to owner shenanigans.  Went on to study business/accounting and read case studies for fun en route to FI.  Was local activist for eight years.  Also am friend to idealists ranging from social activists to failed restauranteurs and failed hot dog stand owners.  Kudos to you for pulling together your underground market!

My intuitive guess:  your success or failure will depend on whether you act on enough hard cold business rules of thumb.  The Toronto Life guy priced too low, everything else just compounded that error.  Your idea that you will pay high wages and leave nothing for yourself worries me.  My friend the failed hot dog stand owner used the same logic.  My suggestion is to research more, develop more direct experience in related restaurants first if you can, or vigorously interview many many many related restaurants.  Get financials as well as visiting shops and interviewing owners/customers/staff.  Find people who buy restaurants, ask what they look for, get their advice.  Your risk drops as your business knowledge increases. 

Also, while you research, look for a partner with money and experience who is looking for talent/ideas.  30% of something where they put in the capital and some knowledge is likely better than 100% of something where you're the sole source of skill and funding.  If you win on the first restaurant, sell it, then take 100% of the second one.  Or use the first win to get an investor for the bigger second project.  If you're sole owner or operator, make sure someone on your team is a detailed profit analyst.  Follow their advice enough to make sure you're really making money.

Note the difference between generic stable restaurants (local institutions; successful franchises; etc) vs hipster cool restaurants that flame out after a year or two.  Tip from from a friend with 10+ years of high end industry experience: It's really common for the cool novel places to make money for 1 to 2 years and then die.  The hipsters move on and the Joe or Jane Sixpacks never came.  So be careful about that. 
« Last Edit: February 13, 2018, 09:24:22 PM by Bicycle_B »

cchrissyy

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Re: Talk me out of opening a restaurant
« Reply #8 on: February 13, 2018, 09:27:16 PM »
the perfect answer to your title question is this link   https://torontolife.com/food/restaurant-ruined-life/

your plan sounds more realistic and well-considered than his.  one fatal flaw that you might share is a lack of restaurant management experience. If you really want to do this, you should take a job in somebody else's restaurant for a year at least, getting hands on with the kitchen and the customers and the back office stuff. you will learn things that help you be successful, or you might learn that you don't want to run your own place after all. it will be a priceless education either way.

Goldielocks

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Re: Talk me out of opening a restaurant
« Reply #9 on: February 13, 2018, 10:49:51 PM »
Hmm...   the way to run a restaurant is to really know all of your prices / costing / accounting.   You need to know how much each napkin around the hotdog costs...   how much for the bun, relish, hotdog, etc.    How many you need to sell each day to break even for the hotdog stand cart fixed costs, etc.   You also need a mean business mindset about wages for others.  Maybe do profit sharing instead of fancier wages?

Some of this you will only figure out by trying.  The person in the article linked made the mistake of losing money and not figuring out why, and going into a restaurant anyway.

Also,   I think that your menu may be too large to start?  What's wrong with just Hot dogs (variations) , plus One "sandwich" built around a hotdog bun, and Fries / sides/ lots of choice of sauce and toppings?

 NYC Fries just sells fries.   A Taqueria place just does tacos (many variations).

Get the variety of your main ingredients down very, very low.   Mix and match..  eg. "gluten free option" is fries with a topping of X.  (the topping used for the hotdog).

Bicycle_B

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Re: Talk me out of opening a restaurant
« Reply #10 on: February 13, 2018, 11:08:27 PM »
PS.  It's fine to pay good wages if the high wages get productive staff, low turnover, etc.  I prefer that myself.
 But an incomplete plan with high costs is a recipe for disaster.  Make sure you have the complete package, that way you can provide stable jobs instead of laying people off after a few months.

My hot dog friend was correct when, as line manager in another business, he paid wages 15% above market in return for workers who were more than 15% above average.  With that plus some other techniques, he doubled productivity using the same equipment.  But he assumed because he was good at line management, he could run a business.  He was wrong.  Learn the business or you will learn what it's like to own a failing business.
« Last Edit: February 13, 2018, 11:12:41 PM by Bicycle_B »

AnnaGrowsAMustache

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Re: Talk me out of opening a restaurant
« Reply #11 on: February 14, 2018, 12:05:42 AM »
Have you thought of hiring said commercial kitchen equip to wannabe chefs? You can buy it cheap at auction. Far less risky than a restaurant.

sapphail

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Re: Talk me out of opening a restaurant
« Reply #12 on: February 14, 2018, 03:11:34 AM »
Ex-chef here, worked in the industry for just shy of a decade.

I often get asked if I'm ever going to open my own place, and the answer is HELL no. And I seem to spend a lot of time talking people down from getting involved in a brutal industry they don't know enough about. Please don't take what follows as needless negativity, it's just that I've seen far too many well-intentioned, enthusiastic people lose a LOT of money when their venture tanks.

Bear in mind that in most cities, the restaurant industry is saturated and probably has been for decades. Around 70% of all new food businesses fail in their first year, and that's an average year. In an economic downturn it's much higher. Even if you're successful, it will probably take you around 18 months to start making any real profit, since you'll have to repay your initial outlay (assuming you got a bank loan for start-up costs).

Food businesses tend to require a large initial outlay, as everything needs to be up to food code. Commercial-standard equipment does not come cheap, even if you get it second hand (which you probably should). They also have high ongoing expenses (linen, garbage removal, staff, supplies, replacing lost/damaged/stolen stuff etc.).

How much profit do you think the average restaurant makes out of every hundred dollars they take? Most people will guess in the region of 50%. Nope. The average profit margin, unless it's a fast food joint or similar, will typically be around 5-7%. And that's if you're actually successful. You're typically looking at 30% staff cost, 30% food cost, 30% overheads and 5-ish% contingency (because shit goes wrong all the time). Leaving you with not a lot left.

Expect to work around 80 hours a week for not a lot of money.

Don't get wrong, you CAN be profitable in this business if you REALLY know what you're doing and have a great product (I haven't gone into the vegetarian thing, but I will just say make sure you KNOW there is a sustainable market for it). But be aware that most people fail for one key reason - they simply don't understand what they're getting into. I would strongly suggest going and working in a restaurant if you haven't, and see if that kind of life is really for you. This is not something you do for lolz, and anyone who goes in thinking it will be easy fails and fails fast.

limeandpepper

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Re: Talk me out of opening a restaurant
« Reply #13 on: February 14, 2018, 03:36:03 AM »
Ugh owning and running a restaurant is so much work and takes up so much time. I've worked at restaurants and am happy to just be a staff member instead of an owner. Even if they're not actively working all the time and have staff keeping things under control, my restaurant bosses are usually still present, hanging around somewhere in the back office area, and they don't go on holidays much. You can do such long hours and the restaurant can be reasonably busy but with high overheads you might still only just break even or get very little profit. Unless you're addicted to the restaurant environment it's easier to just do a regular job, you're likely to have more free time and a better hourly rate that way.

Obviously some people do succeed and do amazingly well. If you're excellent at what you do and have a bit of luck on top you could potentially carve out a balanced lifestyle wonderfully different to that of the typical tired and toiling restaurant owner. But people who achieve that are even bigger outliers than early retirees I'd say. ;)

That said I won't dissuade you completely. If you're that keen, start with the hot dog cart idea and see how you go. At least the startup costs for that wouldn't be so high. You might decide to quit, or proceed further, or maybe you'll be happy with the cart and that would be enough for you. I sometimes do think about running a small cart business like that myself. It seems easier to handle at least and with not so much to lose, could even be fun. But a full-on thing - nope.

MrThatsDifferent

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Re: Talk me out of opening a restaurant
« Reply #14 on: February 14, 2018, 04:37:09 AM »
No.  Get the restaurant. Will it make you rich? Probably not. It will make life never boring and give you lots of interesting stories and when you finally get rid of it, youíll experience unparalleled relief and joy.  So do it! Who doesnít need more vegan hotdogs?

Roadrunner53

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Re: Talk me out of opening a restaurant
« Reply #15 on: February 14, 2018, 05:45:58 AM »
Go to the State Fairs and check out the food trucks. They travel from one State to the next for these State fairs. Each food truck features some unique food thing. Like At the Eastern States Fair there was this truck called Billie's Baked Potatoes. All they offered was baked taters and different fillings such as broccoli and cheese, chili and cheese with sour cream and other varieties. The taters are not cheap to buy but delicious. There was some kind of steak sandwiches, ice cream and just tons of ideas. I have heard that these people do the circuit of fairs and go to FL or the Caribbean for a month or two to vacation. They make really good money! There is a lady in a town about 20 miles away from us and she has this really cool food truck and makes some awesome food and soups. She found some spot in a corporate parking lot and people come from the office buildings for lunch. Then she kept the truck and got a gig at a corporate lunch room to provide soup and sammies to the employees. After that, she ended up opening up a restaurant. There are lots of opportunities but I think I'd steer clear of brick an mortar till you get your feet wet. Food trucks are becoming the rage. Lots of events encourage food trucks. If I were to have a food truck I would invest some money to paint the outside to be unique, give your food truck a memorable name and make sure it is always sparkling clean. Have your workers wear matching shirts with logos or aprons with the truck name on it. No dirty looking workers in grubby clothes. No workers with attitude. Must have fun people. People and children are more sophisticated these days and food trucks are beyond the hot dog. Also, it is important that you stick to a simple menu. A certain amount of entrees, salads and soups. Not like a diner with 20 pages of choices. Keep it simple with affordable foods. You could rent a space in a commercial kitchen and prepare some of your foods the night before to be ready to go the next morning. Do your homework, research what successful trucks do and put a plan together. Good luck!

Mr.GrowingMustache

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Re: Talk me out of opening a restaurant
« Reply #16 on: February 14, 2018, 08:01:55 AM »
Disclosure: I have no restaurant experience, but I have watched some documentaries, food network, Hell's kitchen (you might laugh but it's a wealth of information), and did a business case study on setting up a Subway franchise.

I personally think that owning a restaurant is probably one of the worst businesses that one can start. It needs long hours, extreme dedication, talent, location, financial return on investment, and finding quality employees is a problem. It seems like a high risk for low returns.
It seems that if you want your business to be successful you have to slave yourself away from the crack of down until closing to make sure that everything is in order, and you have to be on top of everything until you find those quality employees. You will need to juggle so many things that you might begin to hate most of it and not be able to focus on the tasks you want. Chefs spend something around 50-70 hours a week and can do 12 hour shifts on weekends, expect to put in at least that amount of time... and stress.

Now the food truck idea I really like because it cuts down a lot of the administrative work, reduces reliance on employees, truck maintenance is less then real estate, you can set your own work days/months and hours. And you can optimize that business to infinity. While in the truck you can focus on making delicious food! But if you want to be successful you will still need to put in long hours leaving not much room for other hobbies and interests

I still think it's a pain in the butt hehe :P

With dedication and passion you can succeed. Good luck!
« Last Edit: February 14, 2018, 08:05:42 AM by Mr.GrowingMustache »

Phoenix_Fire

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Re: Talk me out of opening a restaurant
« Reply #17 on: February 14, 2018, 09:03:35 AM »
My dad owned a restaurant for over a decade.  It was a ton of work, long hours, and the pay wasn't great.  I worked there for a few years during college and hated it.  Vacations were just about impossible to take and usually only happened for a wedding or a funeral. 

Now your food cart on the other hand could be great.  As others have noted, no employees to deal with, very low overhead, and you can just take a day off if you want to and aren't still paying rent on a place.  Maybe after doing a food cart, you could move up to a food truck, and from there eventually decide if you want to have a brick and mortar restaurant.

Start small.  You might find you like that and don't want the headache of dealing with more. 

You also mention that there aren't many restaurants in your area.  Is that because the ones that open aren't good, so they close?  Or is it that people there can't afford to eat out, or just choose not to?  Would there be a demand for your vegetarian hot dogs?  Personally, I would have a hard time going for a vegetarian hot dog.  Hopefully in your area there are lots of vegetarians.

Have you figured out what your pricing would be?  Where you would set up a cart?  What it takes to get properly licensed to have a cart?  There are actually a lot of steps and licenses to get legally setup from what I have been told.

If it does take off, you'll have to resist the urge to tell people to be frugal and quit eating out :-)

ReadySetMillionaire

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Re: Talk me out of opening a restaurant
« Reply #18 on: February 14, 2018, 09:17:21 AM »
I'm an attorney, so while I don't have any restaurant experience, my comments are based on dealing with business clients for 3-4 years.

Other posters have touched on this, but I will beat it with a hammer: it flat out doesn't matter what you would want in a restaurant, it only matters what the local market will demand and support.  In health conscious communities and cities, a vegan/vegetarian hot dog stand might do great; but, where I'm from (Northeast Ohio), people would smile as they drove by on their way to a steakhouse.

Thus, your desire to open a vegetarian themed restaurant cannot be based on your own tastes; it has to be based on a demand from the local market.  If that demand is not there, then this is a bad idea. 
No more zero days. Promise yourself that you will do one thing every day that takes you one step closer to your goal.

ohsnap

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Re: Talk me out of opening a restaurant
« Reply #19 on: February 14, 2018, 10:11:59 AM »
...
I'm ok with breaking even but losing money would suck.

Alright, come at me brah!

WHY would you be ok with breaking even?  Why would you even consider investing hard-earned money into a venture that you did not expect to provide a good rate of return?

rbuck

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Re: Talk me out of opening a restaurant
« Reply #20 on: February 14, 2018, 10:15:55 AM »
I am not a vegetarian but do cook a few meatless meals during the week. I personally hate vegetarian food that is dressed up to mimic a meat product. From a health conscious perspective though you are eating a plant product you putting everything on a sugary piece of bread. I don't know where you're at so I'm not sure what the demand for this type of menu is. If you wanted to go vegetarian it would be useful to have one or two of those items but also have some vegetarian meals that are showcase the vegetables.

mozar

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Re: Talk me out of opening a restaurant
« Reply #21 on: February 14, 2018, 04:19:27 PM »
I'm totally with you rbuck. I make regular vegetables for myself. I'm going by what was popular at the vegan festival.

I live in a crunchy small town near a major east coast city. And I'm an accountant so that part shouldn't be too hard.

I've thought about traveling to fairs but I don't like traveling that much. So I'm thinking up stuff I can do in my town.
This is all really hard to imagine but thanks for the comments.
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Cpa Cat

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Re: Talk me out of opening a restaurant
« Reply #22 on: February 14, 2018, 04:40:43 PM »
There's not a lot of risk to buying a hot dog cart - the start up costs are low. Check out permitting requirements. Price the items so that they're inclusive of sales tax so that they're round numbers and easy to make change on. Use Square or something similar with your phone for credit cards.

The real problem? It's highly seasonal and hot dog cart repairs can be pricey. Margins are slim. The city may have a lot of hoops to jump through and regulations. But at the end of the day, you can probably sell the hot dog cart second hand if the business doesn't work out, and you're not out a heck of a lot except for time.

Until you feel out the market on a small scale and build a reputation for yourself, I would not advise trying to offer a landlord more money for a lease that locks you in to a legal contract.

TrMama

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Re: Talk me out of opening a restaurant
« Reply #23 on: February 14, 2018, 04:48:08 PM »
If what you really want is to play with commercial kitchen equipment, why not find a way to do that without having to own the equipment. You could volunteer at a soup kitchen, get a seasonal job at a camp, volunteer at a girl/boy scouts camp as their camp cook, work in a hospital kitchen or nursing home, etc. Or you could get a job at a regular restaurant.


mozar

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Re: Talk me out of opening a restaurant
« Reply #24 on: February 14, 2018, 08:51:20 PM »
Quote
Until you feel out the market on a small scale and build a reputation for yourself, I would not advise trying to offer a landlord more money for a lease that locks you in to a legal contract.
I was thinking having a cart for a few summers and see how it goes. Fortunately I have a healthy fear of multi-year leases.

Quote
You could volunteer at a soup kitchen, get a seasonal job at a camp, volunteer at a girl/boy scouts camp as their camp cook, work in a hospital kitchen or nursing home, etc.

I like all these volunteer ideas.
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Pizzabrewer

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Re: Talk me out of opening a restaurant
« Reply #25 on: February 14, 2018, 09:23:54 PM »
Your plumber and your refrigeration person will make more money from your restaurant than you will. 


Pizzabrewer

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Re: Talk me out of opening a restaurant
« Reply #26 on: February 14, 2018, 09:48:29 PM »
Here's a very partial list of expenses you probably won't consider if you've not managed a restaurant:

pest control
hood cleaning
grease trap cleaning/maintenance
spoiled/out-of-date food
employee theft
customer theft
re-cooks/comps
plumbers to unclog drains, fix toilets/urinals, etc
refrigeration service (it's a rare month when one of your units doesn't break down:  walk-in cooler, freezer, reach-ins, lowboys, etc)
high labor cost on a slow night when you're too nice to send staff home early
parking lot snow plowing
replacing broken/stolen smallwares
upholstery repair/furniture replacement
light bulbs (you will have dozens or hundreds of lights of several different types)
music licensing fees
toilet paper (restaurants go through far more than you'd ever think)
printing fees
knife sharpening

Also consider having to deal with:
unfair customer complaints/Yelp reviews
absent/late staff
feuding staff
staff making inappropriate posts to social media
crooked and/or asshole codes enforcement officers can cost you $$$ and months of delays
negative press from failed health inspections because low-wage employees don't care if they leave a bag of flour on the floor
cleaning up bathrooms after customers do unspeakable things in them
dealing with the public, every day (you will learn to hate people if you don't already)
dealing with constant requests for charity donations
you have to watch your vendors like a hawk or they'll rip you off (slipping you old product, raising prices without notice)

You can expect all of the above (and more!) in a typical month.


Car Jack

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Re: Talk me out of opening a restaurant
« Reply #27 on: February 15, 2018, 07:31:09 AM »
I worked with a guy who came to his senses after managing a Ground Round for 3 years, went back to college and got his engineering degree.  Aside from the 80 hours a week you'll work, he told me that the bar made 100% of his profits.  The restaurant side was only a draw to get people in to buy alcohol.  They broke even which was fine because the food side was looked at the same as giving coupons, spending on advertising and other unprofitable activities designed to bring in people to buy alcohol.

So if your vegetarian hot dog kart has craft beer, you'll make money.  I would expect that otherwise, it will probably net you losses.

Roadrunner53

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Re: Talk me out of opening a restaurant
« Reply #28 on: February 15, 2018, 07:54:31 AM »
Not trying to put down your vegetarian hot dog idea but do some research on what amount of people are vegetarians and what are not. When I worked, there were a handful of vegetarians compared to the rest of us carnivores. Have a veggie hot dog on the menu but maybe you should focus on what the majority of people will eat. We have a little convenience store in my town that sells egg sandwiches for $1.99 M-F. It comes with bacon or ham. People, come in droves in the mornings to buy them and they buy other junk like cigs, news papers, junk food, lottos. They sell deli sammies there too, the place is a goldmine. The typical milk, eggs, bread, soda and other stuff. The deli and morning sammies is what draws people in. Sammies are pretty expensive too!

J_Stache

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Re: Talk me out of opening a restaurant
« Reply #29 on: February 15, 2018, 07:57:26 AM »
I was thinking having a cart for a few summers and see how it goes. Fortunately I have a healthy fear of multi-year leases.
Minimal risk involved in running a hot dog cart.  Once you get your name out there, you'll probably be happier and wealthier by renting space in a commercial kitchen to make your vegans dogs and sell them wholesale to the local coop or food store.  A friend of mine from high school has been successful with this route (http://jerseycityveggieburgers.com/our-burgers.html).

My recommendation for anyone looking to start a business that requires more than a few hundred dollars of initial capital is to apply for a SBA loan.  You don't need to accept the loan, but the process will ensure that you have a solid business plan and thought through all of your expenses.

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Re: Talk me out of opening a restaurant
« Reply #31 on: February 15, 2018, 11:24:12 AM »
The SBA idea above is excellent. They have some great people and are willing to help with the materails youíll need.
Then go find a couple of former restaurant owners. Talk to them about the behind the scenes stuff. The legal stuff. Finding and keeping staff. The ordering of food and supplies. The cleaning. The health inspectors.
The best investment in your venture would be a dinner with a couple of people who have done this before.
Take a pen and paper and take notes.


My parents were in the business. I know I can run a restaurant and have never been tempted.
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researcher1

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Re: Talk me out of opening a restaurant
« Reply #32 on: February 15, 2018, 12:10:55 PM »
Concept: vegetarian fast casual

I would sell vegetarian hot dogs with a big variety of toppings.

Menu for vegetarian restaurant:
Hot dogs
Hamburgers
Fried 'chicken' sandwich
Lasagna
Chips
Fries

I'm sorry, but this is an absolutely HORRIBLE idea!

I think this business plan would be a complete failure, even in the most liberal/hippie/college town in the country.

Vegetarian hot dogs?  Fried 'chicken' sandwiches?
These foods are not appealing at all, regardless of whether you are a meat-eater or vegetarian.

Roadrunner53

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Re: Talk me out of opening a restaurant
« Reply #33 on: February 15, 2018, 01:53:05 PM »

mozar

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Re: Talk me out of opening a restaurant
« Reply #34 on: February 15, 2018, 04:02:17 PM »
Thanks for all the business ideas!

For all of you that have not heard of this concept here's a restaurant in the major city near my city that has a similar menu: hipcityveg.com
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Blonde Lawyer

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Re: Talk me out of opening a restaurant
« Reply #35 on: February 15, 2018, 04:15:25 PM »
Make sure you have some vegan and gluten free items too.  The nicer restaurants in my area that have REAL vegan and gluten free items, not just salads, are making a killing! They can really mark up the prices too.  One of the vegan restaurants near me recently went under but I think it was poor staff management.  Food took forever to get at lunch and when you are trying to appeal to the business crowd that isn't going to work.  I agree that you should have both meat and non-meat items though to appeal to a bigger crowd if you are doing the restaurant instead of food cart thing.  A dedicated all gluten free kitchen though can be a major selling point.  I went to an amazing restaurant when I was in Chicago that had this.  They did vegan and meat items but had dairy substitutes that were amazing as well as delicious gluten free bread and pastries. I was the only gluten free / dairy free eater in my group but other people wanted to go back for breakfast on subsequent days because the food was so good.

Bicycle_B

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Re: Talk me out of opening a restaurant
« Reply #36 on: February 15, 2018, 04:29:46 PM »
Thanks for all the business ideas!

For all of you that have not heard of this concept here's a restaurant in the major city near my city that has a similar menu: hipcityveg.com

Make friends with the owner!  Get financials.  Find out what their problems are.  Ask if they want you to buy them out.  If they are happy but too busy to open another location, copy them.  Until you talk to them and/or verrry closely observe them (as in, spend a week tallying all of their sales by sitting in their restaurant), you don't know if they're profitable or doing their own version of what the Toronto guy did.

Is your city as big as theirs, or smaller - perhaps fatally smaller?

Would you be happy working in their shop instead of owning your own?  Could you work in their shop for a few weeks?

mozar

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Re: Talk me out of opening a restaurant
« Reply #37 on: February 15, 2018, 09:13:57 PM »
Quote
Is your city as big as theirs, or smaller - perhaps fatally smaller?

It's like a quirky college town.
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researcher1

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Re: Talk me out of opening a restaurant
« Reply #38 on: February 15, 2018, 09:36:50 PM »
Forr all of you that have not heard of this concept here's a restaurant in the major city near my city that has a similar menu: hipcityveg.com

I didn't see a single hot dog or bag of chips on that entire menu.

With This Herring

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Re: Talk me out of opening a restaurant
« Reply #39 on: February 15, 2018, 09:50:22 PM »
*snip*
Until you feel out the market on a small scale and build a reputation for yourself, I would not advise trying to offer a landlord more money for a lease that locks you in to a legal contract.

Knowing landlords, I don't think mozar would be successful in getting that location either way.  I can't think of any landlord who would kick out a long-time tenant for one who may pay a little more but is likely to go out of business in six to twelve months.
Go soak your beans.  You know you keep forgetting.

Goldielocks

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Re: Talk me out of opening a restaurant
« Reply #40 on: February 15, 2018, 09:57:12 PM »
Hey we aren't there.  We can't see the market or demand.

I do know that often what is in demand is food I wouldn't eat...  I mean, all you have to do is whisper "vegan mayo" and all those burger pictures suddenly look a whole lot less interesting.

In the 1990's I helped with the build / design for Yves Veggie Cuisine's first large manufacturing plant, known for their (dry?) veggie dogs and patties (Sorry M. Potvin! It's true and I can say it out loud now!).  This was before ground round  product was  sold and you had to chop your burgers up yourself to make a filling for lasagna.   I certainly did not appreciate the taste back then, (Preferring mushroom and vegetable obvious patties) but boy did they end up making a large profit over the next 10 years.

braje

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Re: Talk me out of opening a restaurant
« Reply #41 on: February 17, 2018, 12:27:30 AM »
Your plumber and your refrigeration person will make more money from your restaurant than you will.
This is no lie, my Dad did refrigeration

lhamo

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Re: Talk me out of opening a restaurant
« Reply #42 on: February 17, 2018, 01:55:10 PM »
Here's another cautionary tale about what happens if you don't respect that a food business still needs to be run like a business, regardless of what the underlying passion is that motivates it:

https://blog.usejournal.com/how-to-watch-your-successful-business-fail-in-5-easy-steps-a79a8af6e027

Before you head down this road, I would research every single episode of the many shows that focus on restaurants AS BUSINESSES (well, and as drama, but they do cover a lot of the business fundamentals, including:

Restaurant Startup
Restaurant Impossible
Restaurant Stakeout
Kitchen Nightmare
The Profit (selected episodes -- mostly focuses on things with franchise potential)
Shark Tank (again, has several case studies of restaurants that went the franchise expansion route, or food-oriented businesses)

Most of these shows have a LOT of discussion about the key elements of a food-oriented business, which include margin, selecting a location, how to choose and manage staff, and how to grow.
Wherever you go, there you are

mozar

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Re: Talk me out of opening a restaurant
« Reply #43 on: February 17, 2018, 04:20:06 PM »
Thanks lhamo
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Duke03

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Re: Talk me out of opening a restaurant
« Reply #44 on: February 17, 2018, 06:34:24 PM »
My wife's family is full of successful restaurant owners.  Her dad owns a place that consistently ranks in the top 3 in our state and has even been voted best in the country.  Her uncle owns a chain of two different restaurants that he built up from the ground up and has a cult like following.  I'm talking about people writing stories about his restaurants in books that have nothing to do about food.

With all that said they both tell people all the time not to get in the restaurant business and they have both been doing it almost 40 years each and are very successful at it and quite wealthy because of it.  So what does that tell you.  They both claim employees will steal you blind.  When they aren't screwing around and cause food to be sent back they are giving free stuff out to their friends and family.  When they get tired of doing that they just start taking cash out of the register.  Another issue is the cost of just meat.  It tends to vary a lot and your price will change every weak.  My father in-law orders around 15,000 lbs of meat a month.  Just a price increase of .50lb means a lot.  You can't be changing your menu prices every week.  I mean you can but it's going to piss customers off.  My FIL said last year his business' profit was down over 100k for the year because of beef prices. 

Both of my family members work 6 days a week 10-12hr days to stay on top of things.  That's what it takes to stay in the restaurant business for 40 years and to be on the top.  I wouldn't walk away from that I'd run as fast as you could.

clarkfan1979

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Re: Talk me out of opening a restaurant
« Reply #45 on: February 18, 2018, 12:17:12 AM »
My wife's family is full of successful restaurant owners.  Her dad owns a place that consistently ranks in the top 3 in our state and has even been voted best in the country.  Her uncle owns a chain of two different restaurants that he built up from the ground up and has a cult like following.  I'm talking about people writing stories about his restaurants in books that have nothing to do about food.

With all that said they both tell people all the time not to get in the restaurant business and they have both been doing it almost 40 years each and are very successful at it and quite wealthy because of it.  So what does that tell you.  They both claim employees will steal you blind.  When they aren't screwing around and cause food to be sent back they are giving free stuff out to their friends and family.  When they get tired of doing that they just start taking cash out of the register.  Another issue is the cost of just meat.  It tends to vary a lot and your price will change every weak.  My father in-law orders around 15,000 lbs of meat a month.  Just a price increase of .50lb means a lot.  You can't be changing your menu prices every week.  I mean you can but it's going to piss customers off.  My FIL said last year his business' profit was down over 100k for the year because of beef prices. 

Both of my family members work 6 days a week 10-12hr days to stay on top of things.  That's what it takes to stay in the restaurant business for 40 years and to be on the top.  I wouldn't walk away from that I'd run as fast as you could.

I worked as a server in college for about three years. The quality of life for the restaurant managers was very poor. Even if the restaurant is successful expect to work about 60 hours/week.

One of my friends in high school worked at a family restaurant. The family saved enough money to go on a one week family vacation. They put my friend in charge while they were gone and he probably gave away $200-$300 worth of food each day to his friends while the family was on vacation. 

clarkfan1979

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Re: Talk me out of opening a restaurant
« Reply #46 on: February 18, 2018, 12:20:58 AM »
Many restaurants/bars do not carry red bull because employees will drink them without paying for them. It's pretty much impossible to enforce, so the owners will just stop carrying it. If you carry it, at a wholesale price of $2.00/can you "can" expect to lose $24-$48/day on employees red bull habit.

Plugging Along

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Re: Talk me out of opening a restaurant
« Reply #47 on: February 18, 2018, 08:41:10 AM »
My parents owed a large restaurant in a great location.   When it was time for them to retire and sell, my siblings and I considered buying it.  They told us no friggin way!  It wasnít life they wanted for us, and it is HARD work.   They even had several partners whom were all trust worthy and just a smart and it was hard.  My dad worked 6 days a weeks for min 12 hours days.  He took one week off a heat for vacation, that was only possible because of the number of partners.

The biggest mistake people make in starting a restaurant is thinking that if they have good food and can cook, itís good enough.  Successful restaurants are about setting up business systems.   The margins are low, overhead is high.  Good cooks donít make good business people necessarily.  Thatís actuLly why my dad had business partners.  He didnít mind the cooking, and he had other partners that did the front of the house, administration, hiring, etc.  In fact if you are doing it because you love food and cooking, without any other experience stay in your own kitchen.  You will do more of it at home than opening your own restaurant. 

You first post is telling, you talk about the decor, menu, but very little about  the system.  You hope to break even?  Most awful idea that is face punch worthy.  In what time frame?   You wil be behind the moment you sign a lease for a restaurant, then pay for renovations, then you  have to hire staff.  The first year, you will be working to pay off your investment, plus the on going operating costs.    You will be lucky if you get your money back the first year, plus yo7 are more likely working for free.  Thatís not breaking even. 


Also a solely vegetarian restaurant is too isolating. Vegetarians are a smaller part of the population, generally you will not get many people tha will go with their vegetarian friends if that is the only options, at least not very often. Your food would have to be AMAZING for a non vegetarian to go.  What I see, itís that amazing.

For the hot dog cart, sure go for it, itís a small enough investment.  Again, I would add a meat option. 

My close friend at work is vegetarian and almost vegan, we go out for lunch often.  I would go with her if the place had no meat option, and there are a tone of places that have a vegetarian option for her.  Your hot dog cart may work,  cause we would sto0 their while she orders some things, and I would go else where. 

Rosy

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Re: Talk me out of opening a restaurant
« Reply #48 on: February 18, 2018, 08:34:25 PM »
My grandma's family owned a successful local restaurant, it became an institution, she herself ran a small bistro-wine bar and did well, later our family operated a restaurant-bar for many years, I owned a bistro.
It is true, a well-run operation requires that you are there 6 days a week for 10 to 12 hours. Every successful restaurateur will tell you that. A good team is essential.

If you choose a distinct neighborhood or a great location in a small town you have a chance - if you have an engaging personality, become a fixture in the community and are diplomatic regarding local politics while keeping a relentless eye on the bottom line. 
New restaurants have an incredibly high failure rate - I knew that and opened one anyway, I loved it, didn't mind the long hours or the work. We became a popular lunch place, it was a good location with a small menu, but an ever-changing daily special, including rotating vegetarian dishes on the main menu. I always thought vegetarian dishes were a no-brainer, they are a great option for people on a diet, the vegetarians were glad to have at least a couple of good choices and we could charge the same as for a dish with meat. 
We did well, but in the end, I lost the business due to circumstances beyond my control.

It wasn't the food that brought in the money, it was the alcohol, the bar and special events. It is a tough business, but I think restaurants succeed if you have one person running the show, a good team, and a viable, flexible but solid business plan.
There has to be enough money going in, shoestring operations are not a good candidate for surviving more than a couple years. Riding the wave of a fad is not a good idea either because it does not last - but continually introducing new dishes, while keeping old favorites on the menu works well.

I can relate to your talking about the decor, it was important to me too:) I knew I would be there all the time so I designed an inviting space and we did a lot of the work ourselves. It wasn't too hard to find used restaurant furniture and equipment. 

Now, a food truck operation is a totally different thing, so is a hot dog stand - definitely not my thing. Since your thread headline reads "Talk me out of opening a restaurant" - my answer would be, do your research, decide how much money you can afford to lose, have a contingency plan for all sorts of mishaps going in - then make a plan and see if the SBA would give you a loan based on your plan and credentials.
SBA is an excellent source, but be assured that in the end the buck stops with you - what if you get sick, what if your manager walks out, what are your strengths, do you want to stay in the kitchen? - fine, but you must fully understand the business anyway and be a strong decisive leader.
Do you have that fire in the belly to make it happen against all odds?

What will you do when the business fails?... walk away - start another? What impact will this have on your life and family? Can you live with the consequences of failure?
Working at a successful restaurant in whatever capacity that suits you is a hell of a lot easier and worry free - when your shift is done - you go home.

Consider your health and your energy levels and know exactly how you would like to run your business, but be smart enough and humble enough to eat crow if things don't work out as planned - adjust your plans, change the menu, no problem, what counts is your success, make it happen!
Dream up events, be involved in your community, but do it all on your own terms.

The opening day party with all my family and friends in attendance was an indescribable feeling and when it all ended with a fire on the premises it was devastating. I was lucky it was not arson and I was double lucky it was contained before it damaged the ice cream parlor next door or the adjacent Italian restaurant. Calls at 1:30 in the morning are never a good thing. There went my life as I knew it.

Enough of a deterrent?:) Oh, and if you take over an existing location, don't believe a thing the owner tells you - check and double check and talk to all the vendors, the business next door etc. If you are taking over refrigerated units have them checked out ...
Visit at different times throughout the day and the week to see what traffic they are getting, check out your nearby competition too...

mozar

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Re: Talk me out of opening a restaurant
« Reply #49 on: February 19, 2018, 02:43:21 PM »
Quote
Enough of a deterrent?

I go back and forth about it :-) but I really appreciate all the info from restaurateurs.
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