Posted on 03/08/2009 3:44:54 PM PDT by Battle Axe
I'm looking for any Freeper who owns or manages a resturant. I'm considering buying one.
I know one.
What do you want to know? My mother bought a restaurant last year.
I think this FReeper may have owned a restaurant or two:
carlo3b
What areas are you considering?
Don’t buy one Michigan. Denny’s, Olive Garden, Red Robin, Applebees, Lonestar, and even McDonalds, Burger King, KFC, and Wendy’s have boarded up restaurants in my area.
It would be a pizza/type place with artisan breads. What are some of her problems. I think I need to see the negative side.
But Michigan has been on the edge of an economic precipice for 20 years.
Buying a pizza place that is half a block from my building that I can’t seem to sell right now. It seems to have a good cash flow, or at least it did in 2007 and 2008.
Have owned and now consult a restaurant owner buying other restaurants. Very risky if you don’t have experience.
If you’d like a reality check, here’s one - find out what percentage of new independent restaurants fail in your area. Odds are it’s over 50%.
In many areas, there were already more restaurants than the residents could support. Now, with a bad economy, more people will be learning to cook. ;-)
I think unless you have a truly exceptional product AND a great business plan AND plenty of capital to get started, it’s probably a horrible time for a novice to get into the business (which by the way involves really long hours 6-7 days a week). BTW, my wife’s hairdresser who’s been in business over 20 years just closed her shop over fears of 0bama tax hikes. Her costs are already close to her gross income, and business has dropped off. Think about it.
Just my $.02. Sorry.
I don’t, but my grandparents have owned several over the years.
There is very little profit in food, and the work is hard. Its also not uncommon for a new restaurant to have more than half the staff call in sick or just not show up during the grand opening.
That said, some people love it.
And if you're not willing to work 24/7.
First of all, all the furniture and fixtures are worthless, I can tell you that sight unseen (10% resale value). So if the place isn’t currently cashflowing enough to meet expenses plus wages plus your management/ownership fee now, it is DOA.
My job used to involve dealing with a lot of failed businesses including restaurants. I can’t give you any specific advice as to running a restaurant but common problems are:
Not having sufficient capital for the long haul. You will almost certainly lose money for awhile.
Keep on top of records, taxes bills etc.
Good employees are the difference between failing and not.
I do have a couple of suggestion specific to restaurants. Keep it clean and hire good cooks.
[Very risky if you don’t have experience.
And if you’re not willing to work 24/7. ]
And the location is bad.
And if you are a fad.
And if the shopping center loses an anchor.
And if your employees are throwing frozen steaks in the trash (wrapped in a bag)
Oh, the list goes on.
My first advice is watch where you buy. Restaurants that are successful are either in tourist areas (like my mom’s) or in places where there are few choices. Suburbs that are brimming with options are tough.
The two biggest problems my mother has are staffing and food costs. On the staffing front, be prepared for turnover. Be prepared for petty squabbles stressing you out. Be prepared for the “ideal cook” to suddenly turn into a pain in the arse. Let’s face facts: no one is going to get rich in the restaurant business except the owners. That means that your staff will look for greener pastures on a regular basis.
On the cost front, you NEED a good manager/head chef that knows what to order. It’s very easy to over-order and wind up wasting A LOT of food. If you don’t have experienced people doing your ordering, your food costs will skyrocket.
Finally, I’ve heard that *everyone* is having trouble filling seats right now. People are eating out a lot less.
Don’t expect owning a restaurant to be fun or profitable. You know that statistic about new businesses failing? Well restaurants are a BIG part of that number.
How’s that for making it sound like a bad idea?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.