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dream come true or a mistake???

post #1 of 21
Thread Starter 

Ok, I have come across my dream or at least so I think...I have plenty of experience and know what it takes to run/own a restaurant.  There is a 28-30 seat restaurant that can be had for pretty cheap...It' s in a high end town and I'm curious....with myself doing 75% of the work, paying a dishwasher or 2, another line cook part time and servers/bus/hostess....if this set up could pull in 350k-400k would it be worth it??

 

The menu would range from 1st course- $8-17$ 2nd course from $24-$38 and desserts at about 7-8...everything made from scratch, farm to fork concept, calling it relaxed fine dining atmosphere....

 

thoughts?

post #2 of 21

What are you basing the "pulling in 350k-400k" off of?

 

Do you know what the lease entails? Are you willing to bust your hump until it's raw, and then do it some more? With "75%" of the work load, are you ready to divorce what family you have, and get re-married to the restaurant? You ask if this set up could pull in 350k-400k would it be worth it??", it could be, but are you planning on being in the black the first year(I wouldn't count on it). Does the property management group cover certain things? Are there things in place, already included in the space(is it turn key), or do you have to provide everything(coolers, equipment, reach ins, walk-in, bar equipment, dish machine, etc etc etc).

 

What is the history of the location? Why is it available? If it is a great spot, but closed, any chance of talking to the previous tenant to find out the low down? can you find them, and see if they would be willing to go over average P&L? See if you an find reviews of the place on Yelp. If the reviews are positive, and they are closed, there is something going on, maybe on their part, maybe because even though it is in the "right " part of town, the business just isn't there.

 

I'm not saying DON'T do it, I opened my first place with a buddy, and some help at 20 years old. I had ALL THE FIRE IN THE WORLD, I lived, ate, slept that place. . . opened another 2 years later. . .after that, personally, I was pooped. I pissed off to the EU for a long while and had to decompress

 

What experience do you have overall, especially in regards to the numbers aspect of it? If you have enough experience to be questioning the though of opening a place, I am SURE you must know the 24/7, 365 day mentality, and marriage you have to devote. Being able to wash dishes on a Friday night, because your guy no calls/no shows. In addition to the lease, it's power, gas, buying a POS, Soda stream, licenses,   assuming you want beer and wine, that can be a HELL of a process in its' self, gas, sewage, linen, grease traps, dish machine rental/purchase. . .the list goes on, and on, and on. . .The lines of credit for a vendor(booze, produce, dry goods, beef/seafood/game) or the developed relationships with the local farmers who you want to showcase on your tables? I know out here, a lot of it is pay up front, very few of the farms offer lines of credit, like a SYSCO(ewww), or PFG, or USFS, you get the picture.

 

Are you married, have family? If so, it is IMPERATIVE that they support you, 110%, because it will become the core of their life too, whether they want it to, or not.

 

There is a LOT to think about, but best of luck to you if you decide to take it on.

~If you are what you eat, I am cheap, fast, and easy.

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~If you are what you eat, I am cheap, fast, and easy.

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post #3 of 21

If as you say "you have plenty of experience,'' you would not ask a question like this, you should know. To learn on the job after making a huge investment of your own money  is not the way to go. 

     First the outcome of what you make depends on an awful lot of factors. Top of heap being what kind of volume will it do, what type clientel and how much they are willing to pay.  Your pricing and what you are paying for products. Your overhead both fixed and non-fixed.This is only the beginning.   I am not trying to sway you, just trying to  educate and inform  you  Good Luck

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #4 of 21

Yeah do it.  Five day week, dinner only, $3-400k a year revenue?  Beer and wine license?  Pay yourself $40k to start?

 

If you don't I will.  :D

 

But rent is probably pretty high.

post #5 of 21

I am not going to bother with the financial aspects, your background and experience, your...etc. etc. Advice is an exercise in futility because a wise man doesn't need it and a foolish man won't take it, but I will share a little of my related experience.

 

I don't believe in a life of regrets. I opened a restaurant that is close to your scenario in a lot of ways. Did I get rich? No. Did I pay the bills and survive? Yes for 12 years. Did i have a chef's dream with a weekly changing menu and an additional offering of a 5 course pre fixe wine dinner? Yes

 

I have no regrets over opening and owning a restaurant. I would have regrets if I hadn't. My tombstone will not read "woulda, shoulda, coulda".

 

Why do I no longer own the restaurant? The 2 happiest days in a restaurant owner's life are when he opens his restaurant and when he closes his restaurant.

 

The  way to get rich in the restaurant business is the day you sell a successful restaurant.

Wisdom comes with age, but sometimes age comes alone.
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Wisdom comes with age, but sometimes age comes alone.
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post #6 of 21
Thread Starter 

Thanks to those who say "if you know what your doing you wouldn't have to ask this question"....first class response...

 

I did a rough sketch of financials etc etc...the restaurant is  true turn key...needs nothing, I would change the paintg scheme and plateware/silver ware...but that stuff wouldn't need to be done...

 

The rent is relatively low for the area...and of course that was taken into account as well as fixed costs and non fixed costs....

 

I know all about having to be all in...I'm very passionate about the profession take it very seriously and know many come into it with the wrong idea in their heads...

 

I'm basically asking if anyone has owned a 30 seater...etc etc...what are your thoughts?  IF....I can pull the numbers I'm saying...IF all that goes as planned....is it worth the hours put in?

 

I know it comes down to me and what I think but just looking for some outside insight

post #7 of 21
Quote:
Originally Posted by necigrad02 View Post

....is it worth the hours put in?

 

I know it comes down to me...

You would get out of it what you put INTO it. 

 

That is all that REALLY maters. If it is YOUR DREAM, and YOUR DESIRE, then it falls fully on your shoulders.

 

If you don't mind working just to pay the bills/payroll, and maybe cut yourself a check every now and again, or paying your utility worker more than yourself, and busting ass for the first year JUST to hopefully, if EVERYTHING goes right, make a profit, go for it. 

 

If you are already in the mindset of "is it worth the hours put it", that kind of turns me off. You say you are willing to be all in, and all in means ALL HOURS(which you would be, you are never "off"), so asking if it's worth the hours to put in is a moot point.

 

There is a LOT of fun to be had, a lot of great experience to be gained, and if you are a Chef who likes to cook for your ego, than there are few things finer than your name above the door, and guests in the seats. There is a LOT of freedom when it is YOUR gig, and you can run what you want, when you want, and how you want. It can be one of the BEST FEELINGS IN THE WORLD to know "I did this". With a 30 seat place, to turn a profit though, I hope that you would be prepared to do breakfast(at least on the weekends, so Brunch too), lunch service, and of course, dinner service. . .now, if you have been in the bizz, and know what's up, that is a lot of work. If you are down for it, go for it. you are going to have to focus on volume, and turning tables!

 

If you are a 30 seat place, and plan on dinner only, you need to do some serious number crunching and see what your average ticket per head will have to spend in order to break even. . .whether it is a Prix Fixe Menu at X amount a head, or a la cart, then you need to look realistically if the area supports that type of dining, will it be a full house every night doing what you will be doing, or will it just become a "special occasion" type place.

 

If I were to ever do it again(partner/own/operate my own place), it would be a fun, laid back place with glorified regional bar type/comfort food, a wide selection of draft beers, excellent happy hour specials, and put ego on the back burner(or use the blackboard for specials), and just have a more realistic go of it. I wouldn't get back into a White Table cloth scenario again, or maybe I would, but someone else would be cutting the check. I have learned to LOVE having a steady salary, no late nights, and no weekends to go back to the line. But, that's just me.

 

 

You said IF a lot in your post, and that's ultimately it: You will never know IF you can make it, unless you do it. There is a big difference between knowing and thinking though. Just study the numbers, try to change that "IF the numbers line up" to, "I can project X amount of $$$, every month", but even then, it's the nature of the beast, no one is going to be forced to walk in your place, so it goes back to IF they patronize your business. . . SO many IF's lol, only one way to find out, and there is NOTHING any of us can do for you(besides write rambling, long, posts like this, lol).

~If you are what you eat, I am cheap, fast, and easy.

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~If you are what you eat, I am cheap, fast, and easy.

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post #8 of 21

Remember marketing.

post #9 of 21

If it is a turnkey, Why did it close?  Is it AM to PM?  30 seats Pm, then what will rate of turnover be  ?

  How much labor required to operate?  Are you ready to spend 7 days min 14 hours a day at it for at least 1 year? If you went out and worked the same 98 hours what could you earn. Don't forget this is 2  40 hour jobs  plus 18 hours overtime.  Will it really be worth all of his? Only you can decide this.Also don't forget startup  Licences, Permits, Opening inventory. Insurance, trash removal, electric and gas co. deposits. Plus all in a bad economy.Even the wealthy in Palm Beach are cutting back because their$ is earning so little interest.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #10 of 21
Quote:
Originally Posted by cheflayne View Post

Why do I no longer own the restaurant? The 2 happiest days in a restaurant owner's life are when he opens his restaurant and when he closes his restaurant.

 

The  way to get rich in the restaurant business is the day you sell a successful restaurant.

 

This blows my mind. I never even looked at it that way!

post #11 of 21
Quote:
Originally Posted by ChipsAhoy View Post

Remember marketing.

No.  Forget marketing.  A tiny chef run restaurant needs good food, not marketing,  Marketing is when you need to appeal to people's other needs other than good food.

post #12 of 21

Working 5 nights a week you would need 2k in sales a night to pull 400k. IF and its a big if you went black the first year you're looking at less than 12k profit. In order for you to pull those numbers you would need 2 turns a night and you would need to keep each seat at an average of $34. to stay at 30% labor you have 120k for 4 servers a dish guy a line cook and yourself. So I think what it comes down to is can you convince 60 people that your food is worth $34 every night?

post #13 of 21
Quote:
Originally Posted by kingfarvito View Post

. to stay at 30% labor you have 120k for 4 servers a dish guy a line cook and yourself.

Actually yourself can't be included in the 120K because you cannot write a paycheck to yourself. As owner, your reimbursement for all the hard work for the year would be the 12K profit.

Wisdom comes with age, but sometimes age comes alone.
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Wisdom comes with age, but sometimes age comes alone.
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post #14 of 21
Quote:
Originally Posted by cheflayne View Post

Actually yourself can't be included in the 120K because you cannot write a paycheck to yourself. As owner, your reimbursement for all the hard work for the year would be the 12K profit.

If you are going to be working in the restaurant, then you do have to include yourself in your labor budget at whatever wage you would otherwise have to pay a general manager if you were not working in the restaurant. Also, you can and should be paying yourself as an employee, but only at the rate you would otherwise pay a general manager. Anything left over after that is the profit. If you are working in your own restaurant, not calculating in your own salary into the budget, and still budgeting 30% for labor, you will be well over what you should be in labor and not budgeting to run your restaurant very efficiently.

 

Now, whether or not you actually get to pay yourself the same thing as you would a general manager will depend on how well you did in designing, marketing and operating your restaurant. Most restaurants do not make a profit their first year according to the National Restaurant Association, and most of those owners don't get to cash their own paychecks because there is not enough money in the bank to cover it. 59% of restaurants even fail in their first year according to a study done by Cornell and Ohio State, with the number speculated to be as high as 75% within the first 3 years of operation.

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

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Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply
post #15 of 21
Quote:
Originally Posted by kuan View Post

No.  Forget marketing.  A tiny chef run restaurant needs good food, not marketing,  Marketing is when you need to appeal to people's other needs other than good food.

Forget marketing? Marketing is the most important job any restaurant owner does. It doesn't matter how good your food is, if no one knows, no one is going to eat at your restaurant. There is no such thing as "If I build it, they will come" in the restaurant world. You don't build any business without marketing, whether that means spending money on advertising, a great location, or just knowing and communicating with lots and lots of people.

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply
post #16 of 21
Quote:
Originally Posted by Brandon ODell View Post

 Also, you can and should be paying yourself as an employee, but only at the rate you would otherwise pay a general manager.

 

If you are a sole proprietor the IRS will not let you put yourself on the payroll or consider your self an employee.

Wisdom comes with age, but sometimes age comes alone.
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Wisdom comes with age, but sometimes age comes alone.
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post #17 of 21
Quote:
 you are a sole proprietor the IRS will not let you put yourself on the payroll or consider your self an employee.

 

You're right you can't "put yourself on the payroll", but you have to figure yourself into the payroll for budgeting purposes to see if you can make the numbers work.  If you can't pay yourself at the end of the day you're not going to stay in business long because you won't be able to afford it.  When writing up the budget for the place you need to figure out what the bare minimum is that you need to survive (not want to make but have to make for yourself).  If you create your budget that way at least you know if you can survive.

http://www.onceachef.com/ is my personal blog where I share many recipes, my passion for cooking, and all things food.
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http://www.onceachef.com/ is my personal blog where I share many recipes, my passion for cooking, and all things food.
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post #18 of 21
Quote:
Originally Posted by cheflayne View Post

If you are a sole proprietor the IRS will not let you put yourself on the payroll or consider your self an employee.

I don't believe he said he was planning on operating as a sole proprietor, even at that you're only 50% right. The IRS has no control whether or not you put yourself on the payroll. You certainly can put yourself on the payroll and cut yourself a check (technically called a "draw" and not a "paycheck", deducting taxes, paying social security and other payroll taxes. I know because I do it. The difference is, you are not considered "an employee" of yourself if you operate as a sole proprietor like you would be if you were organized as an LLC (electing to report as a corporation) or a corporation. You are not protected by employment laws, etc, and your wages are not deductible as a business expense as employee's wages are as a sole proprietor. As far as the IRS is concerned, you are not an "employee" and your wages are earned income. Your taxes you withhold on yourself as simply prepayments of your self-employment tax, which doesn't qualify you for the reduction in social security taxes given to employees in the last stimulus bill. For a sole proprietor, putting yourself on the payroll is a matter of convenience and enabling yourself to budget and meet your financial plan, but it's not illegal, though your accountant would probably prefer you take a more traditional approach simply taking draws and filing a SE tax pre-payment form every quarter to make it easy on them.

 

Regardless, the status of your employment as an owner has nothing to do with the budgeting when you look at the basic intent of Kingfarvito's statement of "at 30% labor you have 120k for 4 servers a dish guy a line cook and yourself". He's correct. Your pay as an owner, up to whatever you would otherwise have to pay a manager, whether you are considered an "employee" or not, has to be included in that 30% if that is your labor budget. If it isn't, your labor budget will be way off and you probably won't be turning a profit because you'll be way over on labor.


Edited by Brandon ODell - 9/30/12 at 10:39pm

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply
post #19 of 21

Whenever i owned a place or went partners, we formed a corporation and we became employees of said corporation and drew a check weekly.

Whatever remained at end of year we reinvested in company  or once in a while drew a bonus.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

Reply

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

Reply
post #20 of 21
Quote:
Originally Posted by chefedb View Post

Whenever i owned a place or went partners, we formed a corporation and we became employees of said corporation and drew a check weekly.

Whatever remained at end of year we reinvested in company  or once in a while drew a bonus.

Exactly. 110% Correct.

~If you are what you eat, I am cheap, fast, and easy.

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~If you are what you eat, I am cheap, fast, and easy.

Reply
post #21 of 21
Quote:
Originally Posted by Brandon ODell View Post

Forget marketing? Marketing is the most important job any restaurant owner does. It doesn't matter how good your food is, if no one knows, no one is going to eat at your restaurant. There is no such thing as "If I build it, they will come" in the restaurant world. You don't build any business without marketing, whether that means spending money on advertising, a great location, or just knowing and communicating with lots and lots of people.

Yes there is.  I see it happen all the time.

 

But to your point, a bit of marketing doesn't hurt, but it'd be more like advertising.

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