Pier 3 Condo

There is more to starting a new restaurant than just having a love of cooking. Before you commit your time and resources, there are a few hard questions that you need to ask yourself in order to make your business a success:

-What kind of skills are you bringing with you into ownership? For example, do you have any experience with running a restaurant at all? Or even cooking on more than a hobby basis in the first place? Maybe you’re the one who has the management skills necessary to effectively handle employees, including hiring, firing and workplace issues like employee morale. Perhaps you’re the one who has the necessary capital to start up, but no real experience in any other areas. Now is the time for you to sit down and make a very critical assessment of the skills and strengths that you bring to the table.

-Do you have enough financial resources to keep you going both at home and at work for the first two years that you operate? Experts estimate that over three quarters of all restaurants fail due to lack of adequate and realistic planning, and for two years is how long you can realistically expect to operate until your restaurant will see enough profits before you, as the owner, can begin to draw a salary against them.

Some of the expenses you need to take into consideration include adequate property and liability insurance (including fire, accident and mandated worker’s compensation) to cover your first two years of operation, retainer fees for your lawyer, accountant, etc., wages for any employees you may have to hire, possible utility costs, including phone and cooking/refrigeration fuels. Other expenses would be a small budget for advertising, and a cushion of about 20% over what you have calculated to be your monthly food cost budget to cover any market fluctuations due to shortages, and so on.

-Are you and your loved ones prepared for the large amount of time you’re going to have to devote to making your business a success? As the restaurant’s owner, YOU are going to be the one who has to be the first there and the last to leave, giving you nearly no free time for days off, family time, or vacations during your first two years of operation. You are also going to have to be the one to fill in if you have a staffing crisis, need to handle emergencies like produce that doesn’t arrive, equipment malfunctions, and so on.

The time away from your loved ones can be stressful for you and them if they are not entirely behind your vision or do not have a realistic expectation or understanding of just how much of your time and attention is going to be required of you when you first start out.

These questions are not a way to say that you should abandon any dreams you have, but you need to have a realistic understanding of the kinds of skills you’re going to need to compliment your own strengths and the scope of expenses you might face in order to know how to run a restaurant and make your endeavor a success.