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Don't open a restaurant if you think...


  • 09/11/2020
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  • Secret of opening a restaurant, why open, keys to open a restaurant

Anyone who thinks that running a restaurant would be a great gig – and they are not a graduate of the Culinary Institute of America or have years of professional kitchen experience under their belt – should take a minute if they also think they should drop what could end up being the hundreds of thousands of dollars necessary to open that dream restaurant.

Reality TV is packed with people who opened an eatery based on their ability to put together a great barbecue or were told by friends and family that they were such a great cook, they should open a restaurant, and found themselves quickly sinking into an abyss of debt and despair. Chefs Robert Irvine and Gordon Ramsey have both stepped in to attempt to rescue some of these downward spiraling establishments, but in many cases, the accumulated debt and lack of experience made it a difficult place for the inexperienced to climb out.

Absolutely, working for yourself is a great way to go, if you can make it a success. But for every Alex Guarnaschelli, a Food Network star and executive chef at New York City’s successful Butter restaurant, there are restaurants that land a single star and a dreadful review from a Yelper like the popular Jim U., who has compiled a list of the worst restaurants in the U.S. (Many of these have received better reviews from other diners, but Jim has plenty of Yelp followers, and has traveled from coast to coast to find new restaurants to malign.)

But if you think that you can hire a chef and a wait staff along with a host or hostess to manage the front of the house and simply stop by to rake in the cash, you’re looking at this time-consuming business in all the wrong ways.

If you’re wondering why, consider this:

·         Restaurants generally don’t generate a high profit. It can take years for a restaurant to become established in a neighborhood, and on average, profits can range from just 3 to 5 percent, according to the website Upserve.com. 1 That means that you’ll have to have an excellent handle on expenses in order to turn a profit. Going in blind will be your downfall, thanks to all the overhead costs.

·         You may not be able to trust your staff. The average food cost at a fine dining restaurant is about 35 percent, and there is plenty of room for error. A few plates returned to the kitchen every night along with the potential pilfering of food and/or alcohol (Jax Taylor stocked his apartment with items he’d taken from SUR on the reality show “Vanderpump Rules”) can cause food costs to quickly cut into your profits, which could eventually force you to close your doors.

·         Labor costs are lower when you spend more time working. On average, you’ll spend 20 to 30 percent of your revenue on labor costs, which is no small expense. If you aren’t around much, they won’t have much respect for you, and you’ll likely have higher turnover, which adds to those costs due to expenses associated with training new employees. If you are on the work schedule, that’s one less employee on your payroll.

Reasons to say no to a restaurant

It may seem glamorous to be on Top Chef, creating meals that make Padma Lakshmi swoon, but those slots are hard-won, and the work that goes into running a restaurant would run many a hard worker down.

According to one restauranteur, 18-hour days are common – the best restaurants require chefs or chef/owners to shop for ingredients, prep, and cook, three meals a day. That means you’ll rarely see your family, unless they, too, work at your restaurant, and we’ve seen families implode on TV due to the stress of operating a restaurant on the verge of collapse.

·         Your social life will screech to a halt. “I find many people want to open a restaurant because they want to be everything, to everybody. But it's hardly fun and games in the social arena. If you are not prepared to never see your family, never have a holiday, never play golf, then you are not prepared to be in the restaurant business. You have to have a clear vision of your brand, and come hell or high water, you have to stick to it despite losing almost every ounce of your social life,” said Louisiana-based chef Cory Bahr, whose culinary honors include being named Food & Wine’s People’s Best New Chef in America and taking home the top prize on an episode of the Food Network show “Chopped.” He currently operates Restaurant Cotton and previously ran Nonna, now closed, both in his hometown of Monroe, LA. 2

·         Running a restaurant is physically demanding. If you are a chef/owner, you are on your feet all day in a hot kitchen, and no matter how exhausted you are, if a g