Aspiring restaurant owners often have starry visions of the restaurant industry. Running a restaurant seems like an exciting way to create a career for yourself. After all, you love to cook, you have killer recipes, and you enjoy the thought of being your own boss. While it is true that many restaurant concepts are well-planned and lucrative, the prevailing reality of the restaurant business is that it is very hard work, and there is a greater chance of failure than there is of success. In fact, more than one quarter of all startup restaurants fail within the first year of business.
It is essential that you educate yourself about the industry and understand every aspect of restaurant ownership and operation before getting in too deep. Take time to talk to those who have made it in the industry, and take notice of the things that seem to work for other restaurants, and ask yourself a few simple questions to determine if the restaurant business is right for you.
Are You a Good Financial Manager?
One of the most important things to consider when opening a new restaurant is financial preparation. Many prospective owners take out loans or join up with partners to help fund their enterprises, but just as many individuals pull a chunk of the required start-up capital from their personal funds. It is vitally important to have your personal finances under control before jumping into such a risky enterprise. Things to consider include:
Start-up capital. Opening a new restaurant takes a significant amount of money. Make sure you either have the start-up funding or are able to acquire enough of it to turn your idea into a business. Â» Learn More
Credit card debt. You are not ready to open a restaurant if you are up to your ears in credit card debt. Lots of debt may point to lack of responsibility or insufficient back-up funds to open a restaurant. This problem is only amplified if you have had late payments or repossessions in the past.
Money in the bank. A restaurantâ€™s first years are usually not profitable ones. Due to the unstable income of the first few years in the restaurant business, you may not receive a salary for a year or more. Make sure you have enough funds secured in the bank to pay for your personal expenses such as food, rent and bills, as well as any incidental costs that occur in your business.
Personal affairs. Evaluate and manage your personal financial affairs before thinking about starting a restaurant. Also, be aware that many independent restaurant owners do not receive benefits like insurance or a 401K from their jobs and must purchase their own. Hence, responsibilities like caring for a family, maintaining payments on a mortgage and managing medical issues may present a financial challenge. You need to plan ahead, pay off previous debt and have enough to care for emergency situations, especially those threatening you or your familyâ€™s health.
Do You Have Good Business Sense?
Running a successful restaurant requires responsible management. Although restaurant owners and operators often act as their own bosses, they still have to answer to their guests. Bringing in sales requires an acute attention to detail, unwavering commitment to quality and responsibility for every aspect of the business. Although there are other important factors that go into making a restaurant successful, your restaurant is more likely to flourish when these factors are present.
Can You Deal With Long Hours?
Be prepared to devote your timeâ€”all of itâ€”to your new business endeavor. You must be mentally and physically prepared to work during the early mornings, afternoons, and even late into the night, regardless of the hours your restaurant holds. Weekends and holidays will shrink if not disappear completely. Your customers will be dining out during nights, weekends and on holidays and special occasion nights, and you need to accommodate them to bring in the most sales. New owners will all but live in their restaurants in order to put in the time and effort required for a successful venture.
Can You Balance Business Stress with Your Personal Life?
If you open a restaurant, prepare to get involved with every aspect of the business, both before and after it opens. Most prospective restaurant owners set out with a true passion for the business or the industry, which is one of the best ways to remain motivated. You must evaluate your ability to deal with the stress and keep hold of your passion. This goes for the times when your business is slow as well. Many owners attempt to alter their concepts or run unwise specials in an attempt to gain business early on. Keep your cool and stay true to your business plan. Successful restauranteurs do not get discouraged or abandon the business plan because of minor setbacks.
Additionally, you need to have your personal life in line before committing to opening a restaurant. If you are recovering from a nasty divorce or caring for an ill family member, opening a restaurant may not be the best choice at this time. You may need to commit more time to your business than to your personal life. Just keep in mind that the demands of the restaurant industry are intense and your personal life may often come second to your business life.
You must ask yourself if you can meet the demands of restaurant ownership and management. Be sure that you are opening a restaurant because you have the business know-how, the passion for the work and the money to make it happen. Plenty of people can cook and plenty of people enjoy being their own boss, but plenty of people try every year and fail. Talk to others in the industry, educate yourself and assess your willingness to devote yourself to the work. This will help you determine if you have what it takes to succeed in the restaurant industry.