Starting your own restaurant?

I have been a caterer for many years and notice that many people have tried to start their own catering business. Either by opening a restaurant or doing home catering business, most come a way disappointed, disillusioned and a couple (thousands) of dollars poorer.

Why? The reason many get into the business is because it is a so called cash business and they probably know how to cook a couple of things. But they fail to see other aspects of this business. This is invariably a business. Not just the ability to cook but rather the ability to manage a business.

A business needs planning, marketing, financing and a major of other “stuff”. So how do we go about it?

Most businesses fail due to the fact that it does not have sufficient capital. Similarly in the catering business it is the same. Supposing if you have, say, fifty thousand in your bank account. You could purchase a existing restaurant for thirty or so. Now you are the proud owner of a restaurant, but have you considered the fact the you would need sufficient capital to manage the restaurant. Ah, you would probably say, well we will have daily cash sales to sustain the operation. Well true, but how much? It is enough to purchase your daily stocks, would you have enough to have to pay for you employees and finally to pay for your rental and utilities?

Then like most people I have come across, I could borrow from the bank. Well, the bank will firstly need to see how your profit and loss is like, say three years. Do you have? Heavens NO! It is a new operation you say. Then do you have any property that you can pledge to the bank? This is a tricky one. This mean you are personally guaranteeing your entire life to the bank. Should anything happen there you go….down the drain.

So what I have been trying to say is to run a restaurant is not an easy venture. I have personally seen many open ventures only to see it closed the very next. However not all is loss. Out of 10 restaurants that open probably one will survive.

Till the next time Bon Appetitie