Yes, you are all right about UNDER-CAPITALIZED !!! You need enough dough to carry you in shallow times, which could be 2-6 months……
I also don’t believe it takes 5-years to make a profit. Yes, it sometimes takes 5-years to see if a certain type of business will make it or not, but if it didn’t turn a profit in 2-years or less, then in my opinion, get the hell out and do something else.
I am in Sarasota and Maine in the summer, and 6 weeks ago, here in Sarasota a 5-GUYS HAMBURGER FRANCHISE OPENED. There has been a line out the door since opening. They have earned profit from week one.
Whats the secret ? Many reasons, but most important:
–the owner is in the store
–the quality is very good and must be maintained
–do not–I repeat–do not be overstaffed
–employees must be trained and maintained with being friendly, clean,
neat appearing, hard working, and reliable.
–don’t change a recipe unless it begins to fail
–don’t overcharge…. Undercharge if anything to get started.
–sell a product in demand which seems to be food.
I could go on and on, but I am sure you get the drift……
Don’t open a pizza shop unless you have the best in town, at a fair price.
Hope I helped, great success to all, Irwin