AustinCountyAg said:
If it is going to be a legit, full time restaurant/bar type of place be prepared now to spend 26 hours a day there and kiss your weekends and free time goodbye. Like the other poster said you have to be about the life or it will fail. It's a tough business, and you have to be all in and really enjoy the lifestyle. Did I say be prepared to work 26 hours a day and to spend every minute of your time there??
100%, but it's not just this. It's WHEN those hours are that disrupts most people who haven't worked in the industry. Your busiest hours where you're needed the most on-site are when everyone else is off work.
I had a cousin go through this, and I helped him do the business plan and get funded. He did almost everything on my list at the bottom of this post and still was close to being undercapitalized, he was down to one month of opex in the bank by the time his traffic picked up and he stayed in the black. He sold it all a few years later for a decent profit cause the stress took its toll. He loved beer when he opened, but it was no longer fun by the end.
If you have any hobbies outside of the business, kiss them goodbye for the first few years. Anything you tend to do on Saturdays or Sundays is gone. Aggie Football? Not for a few years. Even little things like mowing the yard becomes a real pain in the ass. Cause you have to fit it into a tiny window or pay someone to do it when your cash flow just took a hit.
- Training for a marathon or some other serious fitness event? Better be able to do it on 4 hours sleep after closing at 9 and not leaving until 11 the night before and having to be back at the restaurant by 8-9 for an 11 opening.
- Want to remodel a room in the house DIY? Try again in a few years.
- Health Insurance is about to get more expensive. Like A LOT.
- Like to golf? Well that's only going to happen on a day you keep the restaurant closed (PS - someone will likely still need to go up there for deliveries on that day). And then you're balancing it vs all the back office stuff you didn't get done because you had to tend bar or run expo cause you had a "no call, no show" the night before.
Now, since this is a "little town you visit", I assume you may be looking for less of a management stake and more investment... in that case, run and run now. This industry requires quit your job and spend all your free time on it type of focus for the first two years, sometimes longer, especially in a small town where you aren't going to get great (or even very experienced) help.
But if you are definitely all in for this and ready to live that life... here is some restaurant advice to add to what others have said as you draw up a business plan:
- Calculate cost of all remaining renovations, including potential foundation upgrades and all equipment. Then add 20%. Don't forget to account for maintenance and that $400 emergency fee for someone to come fix the vent hood that shorted out.
- Design a simple food menu with overlapping ingredients and test, test, test before you launch. Want to have a beet salad with goat cheese on the menu for something light? Better also have a roasted beet soup or beet fries and use goat cheese on a burger or something. Maybe that salad could also be in pizza form and be cheaper to make. Food goes bad and you eat every cent of the loss. Don't need to go too niche too quickly here. KISS and stay on theme.
- Know your food costs and ratios in each recipe and keep them simple. Sure, maybe 4T of butter makes that dish James Beard-worthy, but 2T tastes 98% as good, is indiscernible to most people, and you can literally make twice as many for the same butter cost.
- Take all your estimated food prices on the menu you create and add 10% (minimum). Gross margins on most items probably need to be 70-75% to clear your overhead. If that price point doesn't work for the town, maybe reconsider.
- Find your "thing" quickly to change that menu to adapt to customer base. You'll figure out real quick if the town sees you as a "come have a meal and maybe some good beer" or as "come drink a beer after work or to watch the games and grab some appetizers". Your external marketing has less to do with this than you think. Your actual ambiance and experience definitely matters, but what often matters just as much is which of those is underserved in this town.
- Know those per seat and per ticket sales numbers like the back of your hand. Don't be afraid to re-do your seating arrangement to maximize total sales based on that.
- Don't understaff or undertrain. Not even considering the brewing portion, you probably need one BOH staff for every FOH staff. Maybe 3:4 BOH:FOH depending on your model. Do your best to find a very competent and experienced GM who has run a restaurant before. Sounds like you know more on the beer side than the food side, so this is critical.
- Start with a full six months opex float in the bank account on opening day. This may just be the scars from watching my cousin go through this talking, but you're going to burn through that savings early on. Start with at least six and build up your reserve back to six before you start taking any kind of cash or salary back out.
