Opening A Restaurant Is Not Something To Be Undertaken By The Feint Hearted
Opening a restaurant is the classic armchair entrepreneurial fantasy. It is a great business for someone who loves food and enjoys cooking, but should not be undertaken by the feint hearted. Being a restaurant owner is like having another child in many ways. It is certainly not as easy as it may seem to be. Before you sign on the dotted line there are a number of important things you should consider.
If you do not own the building where you plan to open your business, you will have to enter into a lease arrangement with the landlord. Typically these leases require a long term commitment, which means that you had better investigate thoroughly the feasibility of that location. If you select a bad location and try to get out early, you could be faced with law suits or stiff penalties.
The initial capital expenditures for building lease, leasehold improvements, outfitting the kitchen, seating, lighting, flooring and all other pre-opening costs can easily reach $200,000 or more. And if you pour all your money into the wrong location, that money is as good as gone. You cant take the leasehold improvements with you. On the other hand, the owner of a mobile food business has a substantially lower initial investment with a much smaller risk factor. If things do not work out at one location, he can hook up his concession trailer and bring his business to customers at a different location. And take his entire investment along with him.
In the initial 6-12 months or longer, be prepared to spend long hours and weekends away from your friends and family. If you are fortunate enough to make it, it will be due to a combination of hard work and dumb luck. If, on the other hand, your efforts prove futile, be prepared for the inevitable, specifically, you ending up as another statistic in the food industry, without friends, family or savings to fall back on.
Staffing a restaurant and keeping it staffed will be one of the most difficult and time consuming tasks the new restaurant owner will face. Unless you have a large family and friends to tap from, you will be constantly hiring, training and firing both full-time and part-time employees.
The restaurant business is notorious for staff turnovers. Pay is relatively low due to the low margins of the business. Many restaurant jobs are usually entry positions filled with people in their late teens and early 20s who usually leave for better positions or to continue their studies. Restaurant owners in areas with low unemployment and few students find it difficult to fill positions.
In order to achieve the status of an excellent restaurant, the new owner must wear many hats. He must learn everything he can about his business. He must be able to perform every job and he must be prepared to devote countless hours to his new career.
As you might have gathered by now, opening a restaurant is a ton of hard work. It can be a long road full of potholes. Opening a restaurant is a challenge in any economic climate. Even in a booming economy it can be a bold and risky business venture. You would be well advised to do your homework, investigate every aspect very thoroughly before signing the lease.
Michael Stadneck lost his white collar job due to corporate downsizing and out of necessity became a hot dog cart vendor in New York City. He later bought a mobile food concession trailer and now travels the northeast setting up business at local fairs and at special events. He currently enjoys his life, makes a decent living, all without the stress.
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