I’m was reading this quote from you and thought you could offer some insigiht into the contributing factors to your restaurant’s success. I am in the throws of opening a fine dining restaurant and would like some insight into maximizing my profits. Any help would be most appreciated.
First off, I think you need to figure out what your return on investment would be, as best as you (and some qualified financial help) can. That is, if you took the 150K and put it in a good index fund, and assumed that you could get 8% or 10% or whatever, with NO WORK, and surely with more security than you would have investing in a candy store, and your time would still be your own to put to profitable use (or play golf) would you still want to take the risk?
My attitude is that you have to be totally crazy to open a small business, especially a small food business.
Of course, I’m now on my fourth.
But seriously, here are my concerns:
1. I raised two boys. Took them to lots of parties. Can you deal with day after day of screaming, squealing kids throwing ice cream cones against your newly-painted walls?
2. Be SURE to find out what the insurance will cost. Get the most you can. Having a bunch of kids, amped-up on sugar, running around will doubtless lead to some bumps and bruises, and one of the kids will no doubt be the offspring of some miserable s.o.b. negligence lawyer.
3. I don’t know what kind of markup you have on candy and icecream. Nor what the average sale might be. But these are the big questions, after the ROI issue.
4. You’re in Colorado? To what extent is this a seasonal business, especially up there in the Rockies with the long winters.
5. You gonna run it yourself? All the time? Or are you gonna let some low-salaried employee have his fingers in the till, in a business where inventory controls must be a bitch?
That’s all I can think of now, on my first cup of coffee. And I always seem to be branded a negativist and a misery around these boards. But if you haven’t run a small business, you have no idea.
Of course, you don’t have to answer to anyone else, and the profits, should there be any, are yours alone, and you might just make a lot of friends and have a great time and feel fulfilled and become a fixture in the community and sponsor a Little League team (an excellent move for a kid-oriented biz)and improve the quality of your life and did I mention not having to answer to anyone else?
You know the line from "The American President", where Michael Douglas says, (referring to America, in this case), "You’ve gotta want it bad, cause it’s gonna put up a fight."? That’s small business. But if it’s your dream, and you don’t need to sleep much, and you’ve done your homework, then go for it.
Ok I need honest advice.
I want to open a candy store in Colorado.
I was thinking about throwing in some ice cream, and possibly making it somewhat interactive for children.
We have about $150,000 to start it up.
I can handle the truth, am I dreaming?
Thanks for your help!
You can just call me Batty, otherwise would I be this nuts?
Get yourself a good knowledgeable kitchen equipment guy. The most expensive part of your start up will be outfitting the kitchen and doing the plumbing electrical etc. If there is a kitchen there you still need to run it by someone with real experience to make sure you have what you need and it works!!! A good first starting point is also to find a local accountant who has a few restaurants as customers. If you’re lookimg for generaal rules and info the accountant will have it from the other places he represents. It costs money to have an accountant but an experienced one can be an invaluable asset! Good luck!
Now, now, Sarge. Let’s not discourage the nice man.
Back in my early days in restaurants I worked in Maxwell’s Plum and Tavern on the Green, both owned by the late, great, inimitable Warner Leroy. He once told me that in his first area of enterprise, producing plays, he’d run an $8 million inheritance into a $3million inheritance in a mere couple of years. Of course, he recouped this many many times over in the two restaurants.
Funny. Now that I think about it, I remember how $8 mil sounded like a fortune back then. Now all you have to do is be a utility infielder.
Bill, thinking about going out and buying some lottery tix ($204 million in Friday’s drawing. Now imagine how smart I’d be if I won that.)
Want to make a small fortune in the restruant business? Start with a large one.
I’ve opened 5 restaurants, never as the owner, but as the chef. Opening any eating establishment is not easy. We sank a million into the last restaurant to get it open. But location is EVERYTHING and as we had no competition nearby and were in a very white-collar bedroom neighborhood, the restaurant took right off and in the second year we did 3.4 million in sales (fine dining). We then opened a second restaurant on the ocean with an outdoor deck and bar and then did 8.2 million in sales a year, between the two restaurants. Choose your location very carefully!
I used a three month rule when I bought my business. I investigated my total costs to buy the business, rent, inventory, wages, first order and to get all utilities turned on. Then I made sure I had enough to keep me going if I never made a buck during the first three months.
Never being an "owner" or involved in a start up (yet), the following is information I’ve read in the trades… Contact your utility companies and check up what, if any deposit they may charge you. Being a food service start up, and then the large failure rates, your business will probably be classified as high risk. I’ve heard this has discouraged a few from starting up due to the upfront cost they never expected.. Same with the insurance guy… Make sure also you have plenty of operating capital saved up that will keep you going for the few months until you establish yourself…
I’ve owned and built two Nathan’s Famous. One of the pitfalls that I fell into was making the restaurant too fancy for what it is. I spent way to much money in the asthetics. Keep the place fun and down home looking.
Location, hardwork, location, hardwork, location, hard work not to mention a healthy bank account. I think the biggest mistake people make when starting a new business is underestimating the amount of work involved. "I’m just selling hotdogs!" sounds easy don’t it? But theres taxes, licensing, bookkeeping,stc. For every eight-ten hours your open theres a couple hrs of paperwork, add employees and it multiplys expotentionaly. If you’ve scouted out the area and recognized a need for a minimalistic hotdog only eatary, hitch up your pants and grab for the brass ring… Good Luck…
I am currently working on my business plan to start up my own hot dog place (an actual building not a cart). I’m looking for information from those of you that may own a place. What I’m looking for is approximate start up costs and any pitfalls or advice. Any information or advice you can give would be appreciated. Please feel free to email me. Thanks
Start up costs
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