Small Business Owners

[dubwise]

Hello fellow small business owners! Currently I own a small business in the field of construction support (labor, logistics, etc..) and I am interested in buying a small cafe/general store. I understand that there will be a lot of hours involved in restaurant work, but would like to hear from anyone who has/had ever operated a restaurant or catering service. What are some often over looked things that I should be aware of? Any tips or tricks of the trade that you'd be willing to share would be really great.
Thanks!

 

[el Dream Reader]

I'd recommend watching Gordon Ramsays kitchen nightmares, he's got the restaurant bizz down to a science. Cleanliness and penny pinching is the way to go, a simple menu and fast service with as much homemade items as possible. It's a tough bizz that takes up every day of your life, when I was a restaurant manager at a new store opening, I was there opening and closing seven days a week for six months strait. Getting quality people that care about working hard and a passion for food is a necessity if you don't want it to consume your life.
Good luck

 

[SuperSizeMe]

Having come from a family owned/operated food-industry background, I can assure you the hours involved will overwhelm you.

It's not like owning/running any other type of business...you are physically married to the location.

Having tried to scare you away from it with those comments , it can also be very rewarding in it's own right.As far as the advice/tip giving, you'd have to share a little bit more of what your plans are(not sure it's the best idea) before giving any applicable help.

Franchise, leasing the location, start-up capital borrowed or saved.

Be prepared to put every penny that comes in, back into the business for a mininum of 18-24 months(if you make it that far).You'll also need to have sufficient funds saved to cover personal expenses(rent/mortgage,sustinance etc.) for almost all of that time period as well.


Best of luck

 

[dubwise]

Thank you!

 

[Prof Sublime]

When I was younger I worked at a nice, smaller diner. I was great friends with the owner/ head chef. The only big problem I could see and the main reason he sold the place was that it was hard to know how much food to buy. Like sometimes we would have too much and waste money and sometimes we would have too little and loose sales. Thats all I can really add, hope it helps. And good luck with your endeavors.

 

[dubwise]

thanks prof, that's an excellent point!
If we do it, I'd like to supplement the menu with things that we grow...our chicken, seasonal veggies, etc....

 

[DiiZZii3]

Not tryin to put the idea down but 85 % of small family owned resturants fail within the first 2 years (learned in one of my bussiness classes). The main reason for small business failures are due to underfunding. Im not sayin its a bad idea beacuse obliviously if u already own your own sucessfull business, and are considering opening another, your no dummy. I think if u really put you mind to it u can be one of the 15% thats sucessful. Remember tho something about your business needs to be unique, something that no one else does/has thats important in my opinion. Also as said before u need to be able to cover the costs of expense for a few years atleast, untill the business begins to turn a profit.
Also this is a great way to turn your "drug" money into legit and taxed money. just change the books and say u sold an extra lets say 10 meals a day at $10 a meal thats a $100 per day or around $35,000 a year that you can pay taxes on... and geuss what u can be as flashy as u want with that money beacuse its all "legit" (i learned that in my money laundering 101 class) lol.

 

[flyer]

lol @ diizzii3-
what school provide money laundering 101 class?
i want to update some knowledge.. haha

for being a ex restaurant manager/owner, i can tell you that operating such a thing is hard work. it does require a lot of hours.
from opening to closing, consider it a second home.
dont forget you got to pay your coworker, if you profit any money or not that month.
expect to lose money or even out for the next 2-4 years

you also mention a general store, maybe you can open that and sell grams under table if you need the extra money

 

[dubwise]

great stuff folks. I really appreciate it. I'd love to move weight through the store...and brownies.....wow, my mind is racing.
I'm thinking that to get the whole thing paid off, it will take all earnings after overhead to go right back into the business for four years....and then we can actually see a return on the investment. That is...if it works.
Again, many many thanks guys.

 

[DiiZZii3]

lol "money laundering 101" i wish.

 

[BrainSellz]

Remember tho something about your business needs to be unique, something that no one else does/has thats important in my opinionl.

Def' Yeah som'n like square pancakes (jk) some sort of white chicken chili minus tha chicken would be a real winner for a food option' its not a real common dish either but
There waz a lil chili place family owned in downtown Roanoke VA. atleast there waz ten yearz ago and bro all they sold waz reg chili day and night along with a hamburger with mustard only but tha chili they got known for made that lil place stand out'
Eye guess my point is like DiiZ said goda be unique and a good pot of something that iz delicious will make you unique and give you a pot to piss in for a long time' jus my two'
Best endeavours in what ever you do

 

[Yes4Prop215]

When I was younger I worked at a nice, smaller diner. I was great friends with the owner/ head chef. The only big problem I could see and the main reason he sold the place was that it was hard to know how much food to buy. Like sometimes we would have too much and waste money and sometimes we would have too little and loose sales. Thats all I can really add, hope it helps. And good luck with your endeavors.

yea i hear that....i can barely keep my fridge over or understocked. i cant imagine having a diner with a big menu...some items might not sell then you gotta serve reheated and hurts your reputation. keep the menu simple and have less head ache. in-n-out keeps a super simple menu they probably only stock a dozen different items, while a jacknbox stocks like 50 different random things.

alot of my stoner friends are in the food business...its pretty tough. loong hours for sure...rude customers...rude coworkers due to high stress. my friends who were in the diner business now want to open up a specialty store or cart that has a small menu and specialty, so no need for stocking dozens of diff. stuff.

ive always wanted to open a munchies spot, that has a reputation for tasty stuff for high folks. desert menu = reesespieces pancakes and ice cream......chocolate chip waffles....ultimate PBJs...medibles........dinner = honey pesto grilled paninis, my moms tonkatsu chicken nuggets with bulldog sauce, brickoven pizza by the slice...bacon wrapped hotdogs...good beer selection on tap.....and maybe a deli/sandwhich section for the day crowd. ..we wanna open one in Chico and hit both the drunk college crowd as well as the stoner group....

 

[john cutter]

watch your labor and food costs. this will make or break you. you labor and food cost needs to add up to less than 50% of sales(obviously) to break even, then you can dial it down to where you are profiting.

I use excel sheets that give me real time data throughout the day on my labor costs, and I watch portioning like a hawk. You'll need to do inventory weekly and calculate your COG(cost of goods) weekly.

as an independent you have no purchasing power so your food costs from the supplier are not static. Things will be a different price every week so you have to keep portioning/waste under control.

also, 70 hrs is a short week to me. 80 is probably average and 100+ was the norm when I opened.

sorry, rambled a bit. let me know if you have any questions.

 

[dubwise]

The labor should be a bit cheaper because of it's size, there are only 4 staff members, but if we were to increase the occupancy, we would have to employ more people. The current owner told me about portion control and how important it is.
Keep 'em coming guys, I knew you all would be a HUGE help! Thanks!

 

[john cutter]

by labor cost i mean compared to sales... doesnt matter if you only have 1 employee if you dont sell shit.

For example: You decide to go for labor cost at 20% of sales. That means that for every employee on the clock each hour you have to sell 5 times their wage worth of food.

4 people at $7/hr = $35 in sales/hr x 4 people= $140 per hour in sales

If labor is at 20% then sales has to be at <30% just to break even meaning you have to be able to produce $140 worth of food for <$42

Have you thought about a franchise? Might be easy to find a business model you like and have the support system behind you. just another option for ya.

 

[007.]

Have you ever worked in a restaurant before? I can't imagine opening a restaurant if I had never worked in the industry. What makes you want to open a restaurant specifically?

 

[dubwise]

No 007, I've never been in the restaurant business before. I do enjoy cooking for groups of people. I like the feel for the location. It's a very cool, old (~100 year old building) setup that seems challenging and rewarding. Plus....I love food, and it would be pretty cool (for me) to be able to create things that other people would enjoy. I do have experience in business operations as well as ownership responsibilities, so those things shouldn't be very different, just different suppliers. Dollars are still dollars. If the rate of investment (ROI) is not where it should or could be, it's not worth doing it. If I can average 15%-30% ROI, then it would be worth the investment.
It's in a small and up & coming community that could grow in occupancy if the prices remain fair and the service is propper.

 

[bentom187]

good luck man,restraunts suck to work at i personally would pick somthing with less responsabilities,cause your gonna need inspections from the fire department,most places drug test,health inspections, and there WILL be injuries burns ect.. so get good insurence
and that doesnt even go into problems with your staff,you may higher people that are just lazy ass's and slack all the time so you end up waisting tiem w/ them instead of concentraiting on service.
the place i was at went through 3 head chefs within a year,all i hear them bitching about is ordering foods.you need to order ingreadience to make the food on the menu then prep work the day before using them,also your menu should change slightly about every month or so this adds flexability in the ordering proccess you can order somthing cheaper than you had before if your prices go up.
also have some things that will be staples of your restraunt like soups of the day and appitizers.
the convienince store is a bad idea, unless you buy into a big name franchise and go balls to the wall with it.i had a friend lose his ass cause he didnt think things through and bought into a dollar store franchise and all they sold was crap that no one needed.
you'll need to stock things for personal hygene like toothpaste and toiletpaper ect....
thats stuff people need,the stuff that was in his store was like cheap chinese toolsets and figurines lol... he did have neccesities but not enough to stay afloat.
so convienience store are crapshoots.
something to consider might be somthing to service retraunts like the hoods above the stovetops in restraunts in some states need to be cleaned out every year according to the law.
so if you get a hood cleaning buisnuess its guarenteed money.Or since you work in construction you may want to consider installing solar pannels the govt pays for half the cost of all instalations so thats guarenteed money every job. but you get the idea. i dont mean to discourage you just putting things out there to consider.

 

[dubwise]

hey bent- thanks for the thoughts. Let me clear up a little something....the store area, is not so much a convienence type thing...it's a consignment shop, where they currently sell art, antiques and other home furnishings. I'm not sold on keeping that aspect of the business. I do like the idea of expanding the dining side and keeping a few antiques and paintings on board. I plan on doing most of the cooking, and there is a chef on staff that works a few hours a week, she would like to keep that amount of hours. The whole thing is not a HUGE deal, I mean, it is a lot of money and the potential is there to keep it going strong. As far as the fire dept. & health dept. inspections go...I have some good friends in both inspection offices, that will help us out with making sure we don't screw up. We have a very good source for hood maintenance, and his guys do very good work.
We have a lot of our bases covered, but I'm sure there is a lot that I'm not aware of right now. After a lot of reading and talking with others in the industry, there are some things that the current owners are going to have to help us out with, and without those things, this deal wont be done.
Thanks again for the helpful words!

 

[bentom187]

Ok i get what your saying and i hope im not coming off like a jerk,but little buisnues's are all or nothing,the other guy next-store is always looking to expand and take over...compete,the other guy is!!!!!
restraunts are a bad idea but you already have hired staff ect.. so get rid of the antiques pls... unless you have very valuble stuff that can pay a month or more of rent in a single sale... the authenticity could be questionable, and other stuff to consider when taking consignment,maximize the space you have. in the sales buisnuess money is the bottom line my friend. and i know your going to question my experience and i have worked in painting/renovating industry as well as a high end country club, & restraunt and winow industry, clothes factory and public chain restraunts also, my first was a paintball store/field wich today is a bad investment but the best & easiest job i ever had. you sit in a store all week and your BANK at the field wich we usually had private parties on saturday and public play on sunday. any questions you might have id love to give you my ideas.