Restaurant business?

nomak

nomak

agent provocateur
Apr 28, 2010
445
4
0
In the shadows
I'm thinking about expanding into the restaurant / coffee shop business sometime in the future. There is a gap in this space in the market that I'm targetting, I have a space in mind with a very good commercial location, it's in a mall.
Has anyone dipped his toes into this business?
Discuss.
 


nomak said:
inb4 Ray Kroc
Click to expand...

McDonald's is a real estate business that sells Big Macs, not a Big Mac business that happens to own prime real estate. If you can mirror that model, you'll have a major advantage. If not, good luck. Owning/operating a restaurant is very capital-intensive, involves a lot of long hours and hard work, and is seldom profitable.

My family owned a restaurant for many years.
 
JakeStratham said:
McDonald's is a real estate business that sells Big Macs, not a Big Mac business that happens to own prime real estate. If you can mirror that model, you'll have a major advantage. If not, good luck. Owning/operating a restaurant is very capital-intensive, involves a lot of long hours and hard work, and is seldom profitable.

My family owned a restaurant for many years.
Click to expand...

This. I've managed at a few bigger box restaurants and one of them wasn't even profitable.

You have to have a hell of a concept, and a ton of determination to want to do it. If you half ass it you won't make it.
 
I have a lot of experience doing exactly what your talking about doing. If I could give you one piece of advice it would be to forget it and move on to a new project

Malls are a tremendous time suck. 90 % of the year you struggle to make ends meet. During the holiday season most retail stores generate 80% of their yearly revenues, which they use to survive the rest of the year. With a coffee shop its difficult to pull the numbers like a retail store, to float you the rest of the year. Malls will fuck you dry if your not careful with your negotiations.

Will you need to do a buildout? What kind of rent would you have? Breakpoints? What's the annual traffic? What's the food court like? Does the food court draw daily local lunch traffic? If your serious about this feel free to hit me up. I have made all the mistakes already so I might be able to help ease your pain
 
I also want to get into this space in the future... I love food, and I definitely don't want to be watching Matt Cutts' tweets waiting for the next Google update when I'm 50 years old. In fact my plan is to completely give up the IM business at that age, as I think it's unhealthy both mentally and physically for an old guy to be sitting in front of a computer every day. Owning a restaurant will force me to be active and socially involved.

I think the way to succeed in this business is to come up with a totally original idea that doesn't exist in your area. The formula is quite simple: great location + uniquely great food = success. Now of course if you're in a bigger city like New York or Vancouver you will need hardcore marketing as well, but hey... that's our forte!
 
avatar33 said:
I also want to get into this space in the future... I love food, and I definitely don't want to be watching Matt Cutts' tweets waiting for the next Google update when I'm 50 years old. In fact my plan is to completely give up the IM business at that age, as I think it's unhealthy both mentally and physically for an old guy to be sitting in front of a computer every day. Owning a restaurant will force me to be active and socially involved.

I think the way to succeed in this business is to come up with a totally original idea that doesn't exist in your area. The formula is quite simple: great location + uniquely great food = success. Now of course if you're in a bigger city like New York or Vancouver you will need hardcore marketing as well, but hey... that's our forte!
Click to expand...

Have you ever worked in a restaurant? Before you guys go and do something stupid, at least go and work at one for 6 months. Even if you do it part time it will open your eyes, and bring you back to reality
 
nomak said:
I'm thinking about expanding into the restaurant / coffee shop business sometime in the future. There is a gap in this space in the market that I'm targetting, I have a space in mind with a very good commercial location, it's in a mall.
Has anyone dipped his toes into this business?
Discuss.
Click to expand...

Which Sunday are you going to have off each month?

(this is what a friend of mine who spent 15 years in the restaurant business asks anyone who fancies starting a restaurant)

In fairness, there are food business and food businesses.

If you were thinking of opening a coffee shop / sandwich place that's only open during the day to serve people at work, that's probably within the realms of sanity.

If you're thinking of fast food - my friend was an operations director for a major Burger King franchise during his time in the food business. Before that, he was in the military. He says the military was a walk in the park compared to running a fast food joint.

If you're thinking of a people-pay-fifty-bucks-for-dinner place, you need to read Kitchen Confidential, especially the bit about how the entire industry is set up to chew up people who think having a restaurant is a nice idea.

Bear in mind that the most profitable restaurant businesses aren't in the restaurant business, they're in the real estate business. The food income is a handy way to finance the transactions.

Restaurants have:

-unsociable, long hours
-perishable stock
-unreliable casual staff who WILL steal from you
-masses of regulation
-insane levels of competition
-huge working capital requirements
-eternal cashflow problems
-health and safety problems (fires, injuries, food poisoning)
-huge exposure to macro-economic trends (it's one of the first things that gets cut when the newspapers start crying recession)
 
I'm helping a friend get started setting up a mexican restaurant right now. I have heard many smart businessmen say it's the worst industry and I'm sure they know what they're talking about. But like anything else, I think there is money to be made if you are creative, innovative and do it better than others. It's definitely not my first choice for a business for a number of reasons, but if somebody wants to go for it I think they should.

We are actually starting completely out of their own kitchen to avoid any type of overhead. We are also focusing on large business bulk orders in the dozens rather than 1 or 2 items at a time. We are also focusing on only selling 3 main items that taste really, really good. I think if you find a way to provide value in a unique way there are lots of ways to make money. And like anything else, I think it comes down to sales and marketing.

Any business or industry is bad if you do it the way most people do.
 
If this is something you are really interested in, it is definitely doable.

Is is the best use of your time and money? Maybe but probably not.

Are there advantages of opening a restaurant over other types of investments? Absolutely. Once you develop the right system, have the right people in place, you can duplicate your efforts rapidly and you can easily get financed for additional locations.

I haven't gotten into the business myself but I have several friends that are. I almost went in with a friend on a food-truck, but it fell apart.

I will say, don't jump into this just because you see an opportunity. A personal that wants to open a food/beverage b&m business needs to have their bases covered if they want to be successful.

I would suggest going into real estate before going into food/beverage though
 
dmnEPC said:
Have you ever worked in a restaurant? Before you guys go and do something stupid, at least go and work at one for 6 months. Even if you do it part time it will open your eyes, and bring you back to reality
Click to expand...

Yes I did, for a while actually. You think I've been a gay webmaster all my life or what? I also watch the Food Network more than any other channel so I know a lot more about the business than the average gay webmaster.
 
avatar33 said:
Yes I did, for a while actually. You think I've been a gay webmaster all my life or what? I also watch the Food Network more than any other channel so I know a lot more about the business than the average gay webmaster.
Click to expand...

That experience is defiantly invaluable. If you go and do all your research and are good at negotiating terms with all the sharks waiting to fuck you at every turn, by all means go for it.

If you do actually go through with it please do yourself a favor and do not go into it cash poor. You couldn't pay me to start a restaurant with out a minimum of 1 years operating expenses available in reserves. The #1 reason most business's fail especially restaurants is lack of cash flow.

You can study the numbers all you want. I spent a year going over numbers and sales projections before opening my first restaurant. Opened and from day 1 I knew even my worst case projections were way over estimated. The 2nd, 3rd and 4th were much different and didn't have near the problems that first one had. If you don't have that cash cushion you have a 1 in 10 chance to be open in 3 years.
 
^oh for sure! I ain't opening a restaurant unless I have a good amount of dough accumulated from years of IM. I don't even want to borrow from the bank or bring in investors, at least not for my 1st one.

I'm not aiming for something overly fancy either, a small restaurant with a few tables and takeout/delivery service. I just want to provide exceptional food that is up to my own standards...

People forgive bad service. People forgive bad location. People even forgive high prices. People NEVER forgive bad food.
 
You must log in or register to reply here.
Top Bottom
Back