If you’re thinking about open a restaurant, you might want to reconsider. The current climate is not conducive to success in the restaurant industry. Rising costs, competition, and changing consumer habits are just a few of the challenges facing restaurateurs today. Know top reasons why you should not open a restaurant.
It Is Expensive.
Opening a restaurant can be extremely costly, especially if you want it to be successful. Between the cost of renting or buying a space, designing and equipping the kitchen and dining area, and hiring staff, you could easily spend hundreds of thousands of dollars. I don't know how many times I have seen people lose everything with the CRAZY idea that they can operate a successful restaurant. How hard can it be, right? You cook some food, put it on a plate and deliver it, payday, right? I wish it was that simple. It makes as much sense as going to a plumber for heart surgery...lol.
The Hours Are Long.
If you’re looking for a job with regular hours, owning a restaurant is not the right career for you. Restaurant owners typically work long hours, often seven days a week. It is a lot of hard work so you should make sure that if you want a restaurant then be ready or struggle. Opening a restaurant is like buying a job, a really hard job with a small paycheck. Imagine laying out 1 million dollars to open a 50 seat medium scale restaurant with projected sales of $500,000 per year. The average net profit for sales at this volume is 5%, or $25,000. That's less than minimum wage to own a restaurant working over 70 hours a week...sorry no overtime pay.
The Competition is Fierce.
As mentioned earlier, countless restaurants are competing for customers’ attention these days. If your restaurant doesn’t offer something unique or special, it may struggle to make a profit. And even if you have a unique concept, you are still competing with the BIG BRANDS, no names here, least I get sued...lol. It's difficult to be unique in a world of pizza, burgers and charcuterie platters.
It’s Hard to Find Good Employees.
Good employees are essential for any restaurant, but they can be hard to find and even harder to keep. Restaurant jobs are often demanding and low-paying, so it can be tough to attract and retain quality staff members. Hard is an understatement in this economy. Finding quality employees at the entry level or senior level is next to impossible, be prepared to work very hard, or pay well above scale.
The Profits are Inconsistent.
Unlike some other businesses, the profits of a restaurant can be quite inconsistent. One month you may make a lot of money, while the next month you could see a loss. This can make it difficult to plan for the future and maintain financial stability.
The Supply Chain is F***ED
Food is expensive and often limited at the grocery store, right? Same for restaurants. That just means you will be charging more for the same thing. Customers don't understand this, so they elect for cheaper alternatives, like cooking at home. Or if they dine out, it will be at unique establishments, with a solid concept and reputation....on special occasions.
There are solutions to all of this, but they aren't that obvious. It requires a very different mind set. What worked in the past won't work in this new economy. I personally wouldn't even think about opening a restaurant until at least 2024/25. However if you are, and don't have a solid foundation in the foodservice industry...get some help. At the very least hire a qualified chef with a good financial management track record. Not sure what that means? Maybe contact us at Dinner Thyme, we have 25 years of successful restaurant and hotel consulting.
Comments