Some questions for restaurant owners on the board?

Do you have any experience working a restaurant?

That is the threshhold question, not saying you have to answer yes in order to proceed, but its a good place to start.

The problem with a small eatery is you just dont make enough money to cover your overhead. So you'd need to be there all the time (and add on about 5 hours before you open and 3-4 post close for prep, repairing things, invoices, accounting, etc...) in order to avoid hiring someone else to work for you.

Wise man once told me "never open a restaurant with a $13 check average, when you can open the same restaurant with a $20 average."

Not sure where you live, but alcohol sales are really what moves a restaurant's bottom line.

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My thinking was I could either open a place with a small menu with limited hours, like a taco place open from 11 am to 3 pm, just enough to serve most people lunch.

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Most likely wouldn't make enough money to have that be your sole source of income.

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Or I could do catering, which may reduce my start/overhead cost, but appeals to me much less, because you're not controlling what you cook, you'd have to take jobs you didn't want to make money.

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Get ready to employ a lot of people.

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BlackenedOut

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What he said.

Honestly, I can tell by your post that you probably don't have significant restaurant experience.

Even a food truck requires a tremendous investment of time and money.

It means a restaurant, no matter what type - high end, casual shack, has a similar set of fixed costs. Rent, insurance, licensing fees, inventory, tables, chairs, plates, etc... all cost about the same not matter the restaurant, in general.

So if you are only making $13 a person in revenue at your little spot and my restaurant is getting $20 a person, I have $7 more dollars per person to make my margin, prepare for unexpected expenses, hire additional labor, etc...

Its not meant to dissuade you from opening a small little spot, but unless you are in a thriving downtown scene, you will not make enough money to only be open 4 hours a day. The numbers just wont work.

Ah. That makes sense.

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Its not meant to dissuade you

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Don't worry about that. I need to learn as much as I can before I make a decision like this, which would probably be 10 years down the road or so.

From my experiences with owning/running a restaurant for only 1.5 years, I would recommend starting off small and working your way up. Maybe cooking at festivals and see how that goes. From there maybe a food truck which will give you a little more freedom on hours worked than a brick and mortar restaurant.

The biggest issue is going to be funding. Not sure how your funding situation is but it will cost you a ton just to rent a place and get it up and running. Probably $100,000+ to buy equipment, inventory, chairs, tables, redesign the place, etc. Then before you can even open it, you will have to pay rent and utilities for several months before you can get everything in place and approved by the fire department/health department. To buy a restaurant would be way more obviously.

On running a restaurant- From everything I heard from lots of restaurant owners, it takes years to turn a profit and get a consistent enough customer base so you can make a profit. Most restaurants lose money their first few years. And the hours can be crazy. I worked 70+ hours a week and it is even harder if you are trying to save money when it is slow because you let employees go home so you don't have to pay them. But it creates more work for you.

It was rewarding when I did it but I would not do it again unless I had enough funding. Unfortunately I did not have enough funding (mostly my personal money and personal credit cards and a loan from my parents) and banks do not like to loan money for startup restaurants. I couldn't even get a small ($10,000 or less) inventory/working capital loan after open for over a year. I also ran into issues with the oil spill which didn't help. My business was just about 95%+ seafood based sales (cooked foods, retail and wholesale). It was a seafood market and deli where I served new orleans style poboys and seafood platters along with plate lunches and miscellaneous cooked foods. I also did live and boiled seafood. Just to give you an idea.

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Maybe all the people that say "BR doesn't have enough Mom and Pop local places" should read this thread.

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paging Mike to the F&D...paging Mike to the F&D

i hope you would serve your avocado drizzle sauce