[QUOTE=ivylass]
Then don’t do this. You are nowhere near prepared, nice personality aside. Sure, it looks like fun from the outside. It’s a hell of a lot different on the inside.
[/quote]
Actually, it didn’t look the least bit fun. I got the part abou long hours, annoyances from staff constantly, having to guess in and out about what to order. What it looked like was lucrative. I think this restaurant has a real chance to chain away.
I can think of at least two restaurants here in Decatur–one a fast food outlet, one a sit-down grill–that apparently have installed a revolving door for owners. The old owners depart, the storefront is shuttered for a period of time, the new owners come in, change the name, put an announcement in the Business News in the Herald & Review–and two to six months later it goes tits up (I love that, BTW 
), and the cycle starts all over again.
And I suppose that each set of owners thought it looked lucrative, too–but it must be harder than it looks to run a restaurant, or else the Oakland Grill and That Little Taco Place On Eldorado And VanDyke wouldn’t be going through a new reincarnation every six months.
And I can’t even begin to name the other non-chain restaurants that have been and gone, just in the 20 years we’ve been living in Decatur, places like Big Daddy’s BBQ, and the Family Spaghetti House, which is now a Garcia’s Pizza, and the Olde Country Buffet, which couldn’t handle the competion from the Hometown Buffet that opened up by the mall.
And of course now that an Olive Garden has opened up, there is an even greater market shakeout underway. It’s not a happy time to be running a mom-and-pop eatery of any caliber in Decatur. Your proposed small ethnic eatery would last about two months here.
But hey, I don’t wanna join in the pileon raining on your parade. Go for it. Seriously. You only get one chance in life, and all other things being equal, I say why the hell not. If nothing else, you can get a book out of it. Seriously. People do.
But…use your own money, so if it does go tits up, nobody gets hurt except you, and have some in reserve so you won’t starve while you figure out what you’re going to do next.
[QUOTE=smiling bandit]
While I’d like to do this, and bet I could get a bank to lend to me,
[/QUOTE]
I know nothing about running a restaurant (though I’ve eaten in lots!).
However I do understand business plans and why you should ask a bank to lend you the money.
If the bank won’t lend you the money, your business plan is too risky (or flawed).
Don’t ‘bet’ a bank will lend you the money - ask them to.
Sorry to put such a grim outlook on it, but plan to be out of business within three years.
From RestraurantOwner.com, 50% of new restaurants will not survive three years, and 27% will not survive the first year.
Bizjournals puts it as 26% fail in the first year and 56% bag it in three.
And that’s national averages - your local market may be less forgiving. It’s a brutal, vicious business. It’s going to eat you alive, run you ragged and wreck your family relationships - if you’re not at the restaurant 18 hours a day, you’re probably not devoting enough time to it.
[QUOTE=smiling bandit]
What it looked like was lucrative.
[/QUOTE]
It may be, in highly experienced hands. Unfortunately, it does not appear that those hands belong to you.
You can be VERY successful with a restaurant-and you can (indeed) lose your shirt! The secret is: KNOW your market, and watch your pennies. learn what works and what doesn’t-and followtis advice: give the customer what he wants and NOTHING more. For example; many restauranteurs stay open for lunch-which is often a losing proposition. Others forget that you are renting out space-and you had better turn the tables as fast as possible. Most places fail because of inerperience and bad planning. If you want to serve the masses, serve inexpensive foods. if you are catering to rich people, you can serve $20 steaks.
But (as has been said) there are easier ways to earn a living!
[QUOTE=Joey P]
…
**I know that’s a low ball figure, but I wouldn’t expect to do much more then that the first few years.
[/QUOTE]
Expect to lose money for the first 3-5 years, minimum.
Can you afford to pay out tens of thousands of dollars per year in the hope that you’ll make it back 10 years later?
Most franchises will want you to prove you have $300,000.00 to a million dollars liquid before they even talk to you. Thers’s a reason for that.
[QUOTE=BMalion]
Most franchises will want you to prove you have $300,000.00 to a million dollars liquid before they even talk to you. Thers’s a reason for that.
[/QUOTE]
Panera wants you to have $3 million liquid and $7.5 million net worth.
This from a store that probably costs about $1-1.5 million to go from picking an empty lot to turning on the Open sign for the first time.
PS according to their website, you also must have a passion for fresh bread, I wonder if that counts towards the $7.5 mil.
I worked in a startup restaurant from 9th grade through college (all at the same place, which is still open and doing very well).
The owner spent nearly every waking hour there, did all the repairs and maintenance himself to keep costs down, had his father (who had run the place years before but closed it due to health) for expert advice, and, in short had every advantage. Yes, the business is a success, but I’ve never known anyone to work so hard in my life. I’m not talking about 10 hour days, I’m talking 18 to 20 hour days for several years.
[QUOTE=glee]
I know nothing about running a restaurant (though I’ve eaten in lots!).
However I do understand business plans and why you should ask a bank to lend you the money.
If the bank won’t lend you the money, your business plan is too risky (or flawed).
Don’t ‘bet’ a bank will lend you the money - ask them to.
[/QUOTE]
Ditto. Go into a bank, tell the loan officer I have no experience in restaurants, and I want a loan to open a restaurant. See what he or she says.
I have no restaurant experience, I do however have 10+ years experience in a Bank doing Business Lending to SME’s.
My advice - Don’t do it.
Small Business in general is difficult - the failure rate is around the 50-60% mark inside 2 years, the restaurant trade is worse than that!!! :eek: In business banking the food trade is notorious for being a bad risk.
With you having no experence in the industry no prudent lender will give you money to start a restaurant. And non-prudent lenders will price your loan for the risk, I wouldn’t be surprised at rates of 25%+ if you could actually find someone to lend to you.
If it is something you want to do, like others have recommended you are going to need to work in the industry, and get experience. Even then it is not guaruanteed you will make a success.
If I may relate a little anecdote, I was at one time the banker for both the regional office and some of the Franchisee’s of a world wide burger chain (you know the one 
). One of the franchisee’s had come through their system of working in the stores, he had done their management path, been over to the Head Office in the states, been the regional liason for franchisee’s, basically knew the system inside out. When he finally took the step and bought a franchise store himself, he tanked, the company bought him out within 18 months. Hands On running the store was a lot different than the theory!
I remember reading a similar thread some time ago, and while I can’t seem to find that thread, there was a link to an interesting thread (on another MB), which I bookmarked at the time. It’s not about a franchise restaurant, but interesting to read nevertheless.
So here it is Starting a restaurant in Philly - all the difficulties, the hang-ups, the obstacles, and finally, the “nay” verdict.
There’s a building in my town that had a Hardee’s restaurant for several years. Then it closed down, and the building was vacant for a couple years. Pretty much everyone in town kept saying how it was a great spot for a restaurant and if they could just scrape up the money, they’d get something going.
It WAS a great spot too. Building already there, ample parking, on the main road through town, the first restaurant you’d encounter if you took the main exit for my town off the interstate.
So a 27-location chain restaurant decides to give it a shot. This company has restaurants in five states, and in cities like Chicago, Indianapolis, Columbus Ohio and Madison Wisconsin. They know how to run a business. Note, this is not a franchise thing…these are the owners who have experience opening this place.
They closed after eight months, said it was the first restaurant in their chain they’d ever had to close.
But that’s not all. After they closed, two LOCAL restaurant owners got together. They operate a total of three very successful restaurants in town – one that has been around for longer than I can remember, and two that have been around for about five years and are packed every night. They decided to give the location a shot too.
Closed after eight months.