Advice needed: Planning on starting a restaurant

[Vic Cardenas]

So, I've been thinking about having my own restaurant for years. Recently me and the wife have discussed it a lot and I've come up with a concept and seriously considering pulling the trigger.

I know there are quite a few of you that have owned restaurants or just have general knowledge of starting a new business. What advice can you give me?

My background is... I've cooked in various types of restaurants for 10 years. I've been in everything from fast food to upscale french cuisine and everything in between. I've held many supervisor positions but never have been a "manager" but I know the ins and outs of managing a restaurant. I am kind of like a manager now at my cafe (because I run the place alone). I do not have any culinary or management degrees.

My concept is... A small cafe that sells grilled and hot subs. Mostly focusing on philly cheesesteaks and homemade meatball subs and various other hot subs and sandwiches. This will be nothing like a quizno's or subway. In my area, there are very few sandwich shops like this.

What advice can you more experienced restaurant or business guys give me?

 

[DocL]

I don't know anything about resturants, however I know a lot about running a small business with a lot of competition. I say do not do it, especially in this ecconomy. Maybe you can start off small by preparing lunch food and selling it door to door at business complexes. You can test the waters without a huge investment, and if your clients like the offerings, then you can open a small shop and worry about rent, electrcity, telephone, water, taxes, etc. Remember to get all the appropriate insurance and licenses before you start up as the penalties are harsh and people will want to see that you are licensed anyway.

Good luck.

 

[drtruong]

I would not do it at this time. We have a very high unemployment rate at this time and no one would want to eat out. Timing is everything when you start out a business.

 

[Vic Cardenas]

I don't know anything about resturants, however I know a lot about running a small business with a lot of competition. I say do not do it, especially in this ecconomy. Maybe you can start off small by preparing lunch food and selling it door to door at business complexes. You can test the waters without a huge investment, and if your clients like the offerings, then you can open a small shop and worry about rent, electrcity, telephone, water, taxes, etc. Remember to get all the appropriate insurance and licenses before you start up as the penalties are harsh and people will want to see that you are licensed anyway.

Good luck.

I said that there is not much competition. Some would consider quiznos or subway competition but I don't. There are a few other shops like this but nothing in the area I am planning. I know my product sells because I sell it now. I have a niche following already. I work at a golf course and have worked at ski resorts with this type of food. The two sandwich shops that would be my competition are usually very busy. Moochies and DP Cheesesteaks for those who want to look it up. The current trends in eating out seem to be that people are patronizing these "quick service" or "fast casual" restaurants more.

I would not do it at this time. We have a very high unemployment rate at this time and no one would want to eat out. Timing is everything when you start out a business.

I wouldn't be opening this restaurant right away. I was planning on saving a lot more money before I started this cafe to cover overhead and start up costs. In a year or two probably.

 

[Vega$ NSX]

I'll echo what everyone else is saying and say that I would not recommend starting a restaurant business now. I helped manage my aunt's restaurant when she got it off the ground (back in '95). We could barely make ends meet and it was when the market was average. But we also had a tourist group and were guaranteed a certain number of patrons.

Unless you have some sort of arrangement for guaranteed business (catering deal etc.) or a lot of money to weather 3 years of zero income, then I wouldn' recommend starting a restaurant up. We had a couple of sub/sandwhich shops pop up recently near my work. I stop by and usually ask them how business is. They said it's ok and it's actually increasing, but after a year they are still in the red.

 

[Vic Cardenas]

I'll echo what everyone else is saying and say that I would not recommend starting a restaurant business now. I helped manage my aunt's restaurant when she got it off the ground (back in '95). We could barely make ends meet and it was when the market was average. But we also had a tourist group and were guaranteed a certain number of patrons.

Unless you have some sort of arrangement for guaranteed business (catering deal etc.) or a lot of money to weather 3 years of zero income, then I wouldn' recommend starting a restaurant up. We had a couple of sub/sandwhich shops pop up recently near my work. I stop by and usually ask them how business is. They said it's ok and it's actually increasing, but after a year they are still in the red.

I'll ask how these other shops are doing now. I'll see what type of information I can pull out of them about revenues and what not.

I will be doing catering out of the restaurant and have a potential pool of customers now. I'm hoping that location will play a big role in traffic for the restaurant.

 

[White92]

Moochies is a few blocks from me. What place do you work for now? If you do start your own place, I'd happily come by and give it a shot. :smile:

 

[HTN]

My family has always been in the restaurant biz. Either owning it or working in one. We were adviced not to do it. Parents went for it anyways. Long story short. Don't do it.
Long hrs, lots of stress, and no time for family.
Doc has a good idea. Start small. See how you would like it before putting all eggs in one basket.

 

[Vic Cardenas]

Moochies is a few blocks from me. What place do you work for now? If you do start your own place, I'd happily come by and give it a shot. :smile:

See, I've got at least one guaranteed customer already. :biggrin:

PM sent

Long hrs, lots of stress, and no time for family.

Story of my life.

 

[Mike-san]

I really don't know jack s**t about running a business, but I will say that the OP is talking about a sandwich business. In spite of the crappy economy, I still see people zipping around on their lunch breaks to buy something simple. One thing you don't want to have is regret. If you're ready to pull the trigger and follow your heart, then go for it !!! If your business dies by the roadside, then so be it.... at least you'll know you gave it a shot. If this restaurant thing is something you REALLY want to do, then don't waste your life doing something you DON'T want to do.:smile:

 

[omega2]

I inspect a lot of businesses (including restaurants) in LA county and the most important thing is location--especially for restaurants. Many people get restaurants that may have low rent or initial cost, but what they fail to realize is the complete lack of foot traffic and whether the people in the area actually buy food at local restaurants. Basically, you get what you pay for. Many county and government complexes in Los Angeles are often surrounded by small strip malls with restaurant food courts since the hundreds of employees pour out of the buildings at lunch time. Of course if you operate a sandwich shop in an airport like LAX you can charge $12 for a sandwich to hungry travelers that don't have an option.

Another thing is the ethnicity/social makeup of the people at the location relative to the type of food you are selling. Selling Japanese food in a predominately low income Latino neighborhood may not be a good idea. That being said, selling Mexican food in a predominately low income Latino neighborhood can also be tough. Again it comes down to location.

A noticeable sign is also a must. I have seen too many local restaurants go out of business because they don't invest in a good sign. Small banners can't be seen when people are driving past.

Get familiar with any local ordinances and codes regarding restaurants. That may include building requirements, environmental requirements, health dept requirements, zoning, fire, blah blah blah. Many people are completely clueless when they start and it typically costs more to fix the problem after the fact. For example, there is no sense in starting a business at a location that doesn't meet the zoning departments parking requirements. If they can't find parking, then they can't buy lunch.

Anyway, good luck!

 

[Vic Cardenas]

the OP is talking about a sandwich business. In spite of the crappy economy, I still see people zipping around on their lunch breaks to buy something simple.

That's what I'm talking about. Lot's of people would much rather spend a few bucks more (or similar priced) and get something that's not fast food but fast casual.

 

[Vic Cardenas]

I inspect a lot of businesses (including restaurants) in LA county and the most important thing is location--especially for restaurants. Many people get restaurants that may have low rent or initial cost, but what they fail to realize is the complete lack of foot traffic and whether the people in the area actually buy food at local restaurants. Basically, you get what you pay for. Many county and government complexes in Los Angeles are often surrounded by small strip malls with restaurant food courts since the hundreds of employees pour out of the buildings at lunch time. Of course if you operate a sandwich shop in an airport like LAX you can charge $12 for a sandwich to hungry travelers that don't have an option.

Another thing is the ethnicity/social makeup of the people at the location relative to the type of food you are selling. Selling Japanese food in a predominately low income Latino neighborhood may not be a good idea. That being said, selling Mexican food in a predominately low income Latino neighborhood can also be tough. Again it comes down to location.

A noticeable sign is also a must. I have seen too many local restaurants go out of business because they don't invest in a good sign. Small banners can't be seen when people are driving past.

Get familiar with any local ordinances and codes regarding restaurants. That may include building requirements, environmental requirements, health dept requirements, zoning, fire, blah blah blah. Many people are completely clueless when they start and it typically costs more to fix the problem after the fact. For example, there is no sense in starting a business at a location that doesn't meet the zoning departments parking requirements. If they can't find parking, then they can't buy lunch.

Anyway, good luck!

This is very good advice! I agree completely and will take all things into consideration. I've been trying to find the perfect location for this type of thing and have considered the market for this food. I think I know several great areas that this will work well.

In the past I had considered opening a Peruvian restaurant but have come to realize what a niche market this is and I'd have to have my business very far from where I live.

 

[Dtrigg]

This is very good advice! I agree completely and will take all things into consideration. I've been trying to find the perfect location for this type of thing and have considered the market for this food. I think I know several great areas that this will work well.

In the past I had considered opening a Peruvian restaurant but have come to realize what a niche market this is and I'd have to have my business very far from where I live.

Don't "think" you know some good location. Like the previous posted mentioned, location is extremely important. Ever notice where there is a McDonalds there is often a Burger King across the street. McDonalds spends millions and millions of dollars doing location research. Burger King just builds across the street from them. Go to your city hall and get traffic pattern maps. They will show the number of vehicals on specific roads at differenet times. You want hight traffic patterns. Also look at city development maps. That will show how your location is growing and perhaps give you inside information as where the development will be in the future. For example you might find that a huge shopping center or major office complex is slated to be developed in the next year or so and where it will be located.

Good luck.

 

[Vic Cardenas]

Don't "think" you know some good location. Like the previous posted mentioned, location is extremely important. Ever notice where there is a McDonalds there is often a Burger King across the street. McDonalds spends millions and millions of dollars doing location research. Burger King just builds across the street from them. Go to your city hall and get traffic pattern maps. They will show the number of vehicals on specific roads at differenet times. You want hight traffic patterns. Also look at city development maps. That will show how your location is growing and perhaps give you inside information as where the development will be in the future. For example you might find that a huge shopping center or major office complex is slated to be developed in the next year or so and where it will be located.

Good luck.

You're absolutely right. I need to do my research on each location. The areas I have been looking at are developed areas with high traffic. But you are right that I should look into developing areas.

 

[Mike-san]

Y'know, If you're going to open a business, you might as well invest in some people skills too. The only reason I posted was because you shared your dream and basically everyone was discouraging it...I felt compelled to put in a few good words of encouragement and other posters invested the time to also offer support and you really didn't acknowledge it....basically you offerered your agreement w/ out the thanks....I don't know ? Maybe I'm just being too sensitive or I expect too much from people.....Good luck anyway

 

[Vic Cardenas]

Y'know, If you're going to open a business, you might as well invest in some people skills too. The only reason I posted was because you shared your dream and basically everyone was discouraging it...I felt compelled to put in a few good words of encouragement and other posters invested the time to also offer support and you really didn't acknowledge it....basically you offerered your agreement w/ out the thanks....I don't know ? Maybe I'm just being too sensitive or I expect too much from people.....Good luck anyway

Sorry, I know I quoted only part of what you said in your last post. Your post was really the only optimistic post and I'm sorry I didn't quote the rest. Really, most everybody is saying "don't do it" and you said "go for it" and I really appreciate it. Don't be so hard on yourself, I just didn't know what to say about the rest of your post. Thanks for being optimistic, that's what I need more of.

 

[steveny]

Everyone I know in the restaurant business will tell you this, DON'T DO IT!

 

[Mike-san]

Sorry, I know I quoted only part of what you said in your last post. Your post was really the only optimistic post and I'm sorry I didn't quote the rest. Really, most everybody is saying "don't do it" and you said "go for it" and I really appreciate it. Don't be so hard on yourself, I just didn't know what to say about the rest of your post. Thanks for being optimistic, that's what I need more of.

No problem and don't worry.....In life we really only get one shot to get it right. If you're really passionate about something, and you're willing to do the extra work to make it a success, then you will have success.

 

[Vic Cardenas]

Everyone I know in the restaurant business will tell you this, DON'T DO IT!

LOL, I know. I've only had one person I know in real life tell me to do it.

No problem and don't worry.....In life we really only get one shot to get it right. If you're really passionate about something, and you're willing to do the extra work to make it a success, then you will have success.

Yeah, I worry about it failing all the time. I figure if anybody can make a successful restaurant, it's me. I just wish more people could tell me the same.

 

[Stephen@NCAutoUSA]

If it's just sandwiches and other small more lunch items go for it. I don't know what your concept will be but figure out somethings.

1. What crowd you catering too.
2. Hours "goes along with crowd, maybe business lunch, maybe general public, maybe after hours".
3. Alcohol license?
4. Sit down service with tables, chairs? What about a waitstaff?
5. Price point. Depending on the crowd I guess and where you're located.
6. Decor, big thing. Again depending on where, and whom you're catering too.
7. Other things I'm forgetting

Here's something I thought interesting and that I thought was a great idea. I just came back from Indy. They had this restaurant called "Taste". I think over there "I'm from Philadelphia area", people go to lunch and brunch more often than dinner. This place had like the coolest concept I think. It looked almost like a starbucks but not. Pretty clean, pretty modern, and good food. I kinda forget what I had. Think it was a roast pork sandwich, pickled peppers, prov cheese, mixed greens, with some sauce I forget, was on a multigrain roll and cost about $10. I kinda forget because I wasn't paying, and I was so hungry I saw the sandwich and then looked at my plate and it was gone. The sandwiches also came with no accompaniments so fries and such were extra. I got a side of truffled fries which were almost like Mcdonalds fries tossed with I think grated mozz, and had a truffle aioli on the side. That was I think 4 or 5.

There were no servers. We went up to the counter to order, and then they told us to take this plastic number stand to our table so whomever running our food could know. It was very casual and it was a damn good sandwich. Then a random bus person cleaned our table.

Hope this helps. It may not.

Stephen

 

[Jetpilot3]

Write up a Business Plan.

This will determine if you can pull it all off.

 

[jond]

If I were going to do it, I would buy someone elses business. That way you can see the books, you can have an accountant help you, and verify how much money he clears every year, etc. I would take it a step further and ONLY look at businesses that have been open for over 10 years. And then I would look at the area and see if I think it's changed, or changing. I also wouldn't be tied to one idea. If everyone in the business told me it wasn't good, I would take their advise. Basically, if it were me, I would put in more hours researching before I started than most people spend running their first shop from open to OOB.

 

[DocL]

One last thing, just because you are going to build it, doesn't mean that they (customers) will come. Make sure you have a marketing plan and advertise in a good local newspaper. Offer a coupon for a free fountian soda or something that has little overhead. Do your research by purchasing every newspaper in the area that you are interested in for a week. Look through the papers for where other businesses like yours advertise and what they offer. There is a reason why businesses advertise in the sections that they do. Trust me, I advertise heavily in my market and my business has been going strong in this recession/depression.

Those of us who are saying be cautious are only trying to help. Your friends and family will ultimately tell you what you want to hear because they are emotionally invested in you. Small business owners like us on Prime will tell you the truth. It's not easy and you will not take home an income for the first year. Make sure you can get a line of credit and start building a good relationship with a local small bank.

Good luck.

 

[Danny]

Ok I'll chime in having 6 yrs of ownership experience in a Seafood restaurant. I own it, I don't work in it. If I had to actually work in it I wouldn't do it. Hiring other people to do the work makes my life simple. I'm not going to tell you not to do it as I have had the BEST year in 2009 in 6 years with double digit growth almost every month this year.

Ok....Here's my 2 cents:

1. Location is HUGE! I am on the central roadway in the Florida Panhandle, so anyone passing through has to pass by my restaurant. This is like free advertising.
2. Having worked at American Express many years back they beat us silly with "BRAND RECOGNITION". One of my first tasks was to hire a graphics designer to design a really cool Crab logo and a bunch of sea characters. We use them on everything from marketing materials, menus, shirts, mugs, hats and a great big sign on the roadway. I want everyone who sees my Happy Crab to remember my restaurant. I sell a TON of merchandise because it looks cool and tourists gouble it up, again FREE advertising walking around.
3. As stated above BUSINESS PLAN. If you've never done one this is key and unbelievably time consuming. Don't half ass it. Google restaurant business plans and for each section of the plan do your due diligence. Really research location, competition (including the hours your competition is open - you especially need this to help with figuring out staffing costs), staff requirement, financing, cash requirments, food costing, labor costing - Food and Labor costs are what will make you sink or swim. Having a solid business plan is the ONLY way to reduce risk and have a chance for success.
4. Be willing to adjust to the market. Follow what big chains do - last year big chains offered $25 gift certificates for $20, we followed and it was very successful. This year it's the 2 for $20, so we developed special items to market and follow their lead. They do millions of dollars in research on their advertising so pay attention to what they are doing.
5. If you are going to advertise, make it a measurable advertising. (IE - if you have an ad in a newspaper or other means, make it a coupon they have to cut out and bring in, that way you can measure the effectiveness. If you only get 10 coupons back then it ain't working and you need to try something else.) The best advertising we did was free, we are in the local school's coupon books that they sell each year. At first I wasn't going to do it but I figured it wasn't costig me anything, I get tons of these coupons each month redeemed.
6. Understand CLEARLY ALL EXPENSES on your P&L so that you can have a solid pro forma, this should be included in your business plan above.

The world needs restaurants to survive, so if you think you have what it takes and your willing to do the due diligence I say go for it. The type of restaurant you are describing should work well even in a bad economy as it's not on the "high end" side of things. If your idea takes off than I would look for ways to hire people to run it for you to free more of your time off so you can look at franchising it and making your idea bigger. Start small but think big....don't go into it with the thought that 10yrs from now you'll be standing behind the counter, go in with the idea you'll be in an office with 10-100 locations running themselves for you - think like a Papa Johns :biggrin:

Best of luck
Danny