Starting a small business with wife in the food industry. Small market type of a place. Any good books or podcasts involving small businesses/startup? Want to start immersing my self in the market prior to opening.

Full-time or on the side? Have any personal experience in the space? How much experience?

Most startup stuff I've seen is more focused on tech/less on retail and on being a good manager. I'm sure things like Lean Startup can still provide some good lessons. But I'm sure someone else has some good recommendations for you. Hard to give advice without some idea of the type of concept.

For a new small business in this type of space it's simple.

- Just wake up and start getting **** done every day. No idle time and no vacation days. ESPECIALLY in the restaurant/retail space.
- Make sure you have enough initial capital to allow yourself time to get sales volume flowing and not sign personal guarantees with vendors.
- Get your pricing locked in early.
- Location, location, location. Your location and demographics of your customer base has to mesh with your business model and what you're looking to do and the service levels and speed of delivery you are offering.
- Make sure you have enough capital.
- Once you start hiring… Find people you can trust, but always verify and monitor, because people in service industries are notoriously unreliable and like to steal. Theft in retail and restaurants is rampant. And know that one day you'll have half your staff no call, no show and you have to go do stuff yourself.
- Make sure you have enough capital.
- Sure "culture" and all that is going to be important if you grow, but if you stay a small business, it's just about grinding for a few years to get established and take your licks and survive. Culture comes naturally if you care for your employees, empower them, and reward good ones. It's easiest to do this from the start and not have to recover from a bad culture, but culture doesn't mean no accountability.
- Let other experts handle transactional things if you can afford it (legal, tax, bookkeeping, payroll, etc.) - you'll have enough to focus on with people, operations, and customers/marketing.
- HAVE ENOUGH STARTUP CAPITAL. 6+ months of working capital at a minimum and operating expenses to give it a real shot of working. Understand the likelihood of losing it all as well.

Did I mention having enough capital enough? If you start having to play games to meet payroll or pay vendors, you'll shut down in a hurry.

Will be on the side for us. People is most important. Have a budget for a Really good manager…

I've been wondering about the amount of working capital..we should have 6 mos covered

Too late. Trains moving

saysomethin said:

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Will be on the side for us. People is most important. Have a budget for a Really good manager…

I've been wondering about the amount of working capital..we should have 6 mos covered

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6 months is the absolute minimum and is when to pull the plug if you're not getting traction. Be prepared to lose that amount of money plus your initial outlay for equipment, etc. that 6 months will likely whittle down to a month or two quickly and have to replaced by volume. You'll struggle to break even and keep that balance for the next 18-24 months. And if you're successful and established at that point, it can finally start to pay dividends.

Not having a firm grasp on the ins and outs of the business, not having a manager already identified, or financial model built tells me it is NOT too late to reconsider. You should be able to express your concept and value prop in 1 quick sentence. Your numbers should pencil out with room to spare and this will be a money-losing idea a few years.

How are you going to find that really good manager? How are you going to monitor them? Do you have a back-up plan when they quit or get rolled up on a random warrant? (I'm not kidding if you haven't worked in the industry - one of my customers had his GM get walked out on a warrant sweep.)

Are you expecting them to handle marketing/social? You need to have the person identified before you start paying for stuff or committing to leases if this is going to be part-time.

Again, is this closer to a local food and grocery with some prepared foods or closer to an eat-in market concept? QSR? You've been vague.

The fun stuff like menu building, decorating, etc. is simple and takes next to no time in reality. The rest of being an operator is a ***** and isn't a side gig.

Local market with some prepared foods/casseroles and small meat section, beer, wine. Nothing dine in.

Something like 50% of restaurants fail in the first year.

Friends started something in 2019, made it through Covid, have 50%+ capacity at lunch everyday and shut the doors in 2023. They also had very little competition in the area.

It is tough to make money and I thought their prices were high the times I ate lunch there. According to them, they rarely made any money.

$15 burger and fries
$20 Chicken Fried Steak for lunch
$13 lunch steak salad

Cash flow is the #1 killer of small business and something I didnt fully understand when I started my company

Were they highly leveraged? Franchise expenses? I assume you can now pay your employees like crap now that every order-at-a-counter-bus-yourself restaurant asks for a 18%-25% tip.

OP asked for something to read or podcasts.

I'm on the 8th business I've started. 3 have worked, 4 haven't and the 8th is TBD.

Read this:
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It: Gerber, Michael E.: 9780887307287: Amazon.com: Books

Good Luck! You will get A LOT of unsolicited advice from people in your life. You have to decide who/what you listen to. I'd find a mentor in the space (know any restaurant owners outside your geography?) if you can.

Bag said:

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Cash flow is the #1 killer of small business and something I didnt fully understand when I started my company

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The very first case in finance at HBS's MBA program for several decades was Butler Lumber. The question at the end of the case was basically "Is this a good business?" The primary takeaway was even though they were profitable on the P&L, it was so working capital intensive (inventory and A/R) they kept running out of cash.

I agree with you. Many small businesses just run out of cash/time. Maybe not in B2C but in B2B all your customers want credit terms from you and none of your vendors will give you credit terms (because you are new) so it sucks up a lot of cash.

topher06 said:

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Were they highly leveraged? Franchise expenses? I assume you can now pay your employees like crap now that every order-at-a-counter-bus-yourself restaurant asks for a 18%-25% tip.

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No clue. It was a semi-retirement deal investment in a building and started restaurant for kids to run who were in the food biz. Not a franchise.

The had a revolving door on staff and went through 3-5 managers in the 4 years they were open.

Never asked them why they ultimately shutdown, but assume it was just a money pit.
Last I heard was 2 years in and they were in the hole, but that was still partially during Cv19.

I think they didn't understand their market and the location didn't scream upper end, but the pricing was higher than most of the places we eat on a regular basis with similar or better food / ambiance.