The Restaurant Business

The Restaurant Business

By on Apr 23, 2017 in Uncategorized | 0 comments


If I hear one more person tell me that they’re going to open a restaurant because it looks like sooooooo much fun, I’m going to commit seppuku. I have worked in many businesses – food service, music, finance, TV, movies, construction and consulting and let me be very clear… the most difficult, painful, and exhausting, was food service. For everyone who wants to own a restaurant please consider the following, and do your due diligence:

If you think the restaurant business looks fun, then everyone in that establishment is doing their job, very well. From the customer’s perspective, it should look fun but that doesn’t mean it really is. The restaurant business is a high cost, low margin business. Labor costs are high, food cost is high, loss is high, and liability costs are even higher. All of the above = super low profit. Forewarned is forearmed.

The majority of restaurants go out of business within the first two years. Meaning – if you don’t have enough money in the bank to sustain you over the first two years you will not make it, period. You are not special.

Understand that you never, I mean never, want to be the “in” restaurant. That will inevitably mean that you’re the “out” restaurant and you will go broke. Your goal should be to become the place that is so good that it’s the “go to place” when no one can make up their mind where else to go. At that point, you will begin to make a profit.

As a restaurant owner, you immediately become a dishwasher, bar back, line cook, floor manager, waitress, sous chef, busboy, bartender, and runner. It’s not very glamorous. Most of the above jobs are minimum wage and when someone doesn’t show up, you get to fill in.

Be very clear about the psychology of restaurant patrons. Where they eat is habitual. If you allow, or force, them to break the habit of eating in your restaurant for any reason, they will not be back. Once the habit is broken, it’s done, and so are you.

Make sure your prices are good, your food is excellent, and your service is superior, and you might be able to put your kids through college.

…and if you’re going into the restaurant business to get rich… do something else. If you’re going into it because you have a passion for great food and creating an awesome customer experience, you just might make it.

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