Great info guys. I wasn't really thinking of opening up a 5 start restaurant with a chef and waiters. More along the lines of a small cafe, maybe something like Demetries or Flavours, but not as big. Maybe even add in some Sheesha. Big money there.
Opening a Cafe or Restaurant
- Thread starter [ALIMEISTER]
- Start date
Restaurants are for people who have a passion for food and not for money(it's an act of love) b/c the restaurant biz is so risky, you can be the best chef and average $300 per person and still lose money.
You go into the restaurant biz b/c you love dealing with people and love food
You go into the restaurant biz b/c you love dealing with people and love food
With all due respect, $10K is petty cash in a start-up business, whether you open it yourself or buy an existing operation or get a franchise. You can have the best idea in the world, but if you are not properly funded, it will die on the vine.[ALIMEISTER] said:
Take your most realistic estimate of sales and cut it in half. Take your anticipated expenses (both capital and operations) and double them. Now, if you still make money (on paper at least), look for an investor who can bankroll your business. No one says you should pass up your dream, but go into it with full knowledge of what you are likely to encounter in your first year.
Yeah 10K does seem little. Then again, i'm 22 and i've managed to save up this amount during the past 8 months. It's not like i'm going to be jumping into this business overnight, i'm obviously going to explore other options but I was curious as to how it would be like to have your own business.
[ALIMEISTER] said:
Start by finding out how much the fees for licenses are. Check out the rents for the square footage you figure you need. Check with the Department of Labor and see how much you need to match. Check out Liability, Comp and fire insurence costs. Check with the local sales tax agency and see if you need to pay that in advance. Check with local vendors and find out what the charges are on 15 and 30 days net. Check out the local suppiers and see how much it is to buy fair quality tables, chairs counters, display cases, refridgeration. Also permits for buildout and fees for contractors for it. 10k is seed money. Figure 75 to 100k for startup cash.
A lot of good things have been said.
The allure of owning a restaurant is quiet tempting. However very few people know and understand the business well enough to make it.
It is definately NOT something you can do "on the side". If you start small there is not enough money to be made to hire a full time manager. Plus the good ones will cost you an arm and a leg.
There are a lot of "wannabe's" in the business. I think one of the main reason why 1 out of 10 restaurants fail is, that the pro's are smart enough not to do it.
people don't realize how much work is involved. 15 qnd 16 hour days 7 days a week are not uncommon. Aside from the opening hours, you need to allow time for cleanup, prep and books as well.
Unless you manage to distinguish yourself from everybody else, it will be very hard for you to make it. You have to be very good or have to offer something nobody else offers.
The old real estate rule "Location, Location,Location" certainly apllies here as well.
If you are really "gung ho" in wanting to be a restaurateur consider a well established franchise. Unfortunately your $10000 will not go very far.
Buy some stocks, bonds or real estate from that money and let it grow. You are much better off in the long run.
The allure of owning a restaurant is quiet tempting. However very few people know and understand the business well enough to make it.
It is definately NOT something you can do "on the side". If you start small there is not enough money to be made to hire a full time manager. Plus the good ones will cost you an arm and a leg.
There are a lot of "wannabe's" in the business. I think one of the main reason why 1 out of 10 restaurants fail is, that the pro's are smart enough not to do it.
people don't realize how much work is involved. 15 qnd 16 hour days 7 days a week are not uncommon. Aside from the opening hours, you need to allow time for cleanup, prep and books as well.
Unless you manage to distinguish yourself from everybody else, it will be very hard for you to make it. You have to be very good or have to offer something nobody else offers.
The old real estate rule "Location, Location,Location" certainly apllies here as well.
If you are really "gung ho" in wanting to be a restaurateur consider a well established franchise. Unfortunately your $10000 will not go very far.
Buy some stocks, bonds or real estate from that money and let it grow. You are much better off in the long run.
Ali if you want to see some sample business plans look here:
http://www.rbcroyalbank.com/sme/bigidea/index.html
There is a lot of information on the RBC site. I am sure this is true of the other bank sites as well.
gypsy
http://www.rbcroyalbank.com/sme/bigidea/index.html
There is a lot of information on the RBC site. I am sure this is true of the other bank sites as well.
gypsy
[ALIMEISTER] said:
Well you're already ahead of alot of people your age. Most are dealing with school loans, etc. I think it's good to have ambition. You're on the right track with asking questions, just make sure you really research an idea and don't jump into anything. Keep saving your money and keep your options open and I'm sure you'll be ready when the right opportunity comes along. Good luck.
...hey Ali...
...keep searching for ideas..talk to restaurnat managers...listen to their stories...
You absolutely will need a business plan - no matter what venture you decide to follow; it lays out your CASH FLOW. This is CRITICAL since you will need to know how much CASH you will have on hand either now or down the road. It also helps you to figure out your BREAKEVEN point.
Ten (or 20) K is not nearly enough to be realistic for even a cafe here in Toronto. Rent, permits, inventory, software, payroll,... Toronto is VERY competitive in this industry.
One of my sports hangouts is a Milestones restaurant and so I've gotten to know the Management. I now know all their startup costs as this location is also used to train Managers. The cost of the alcohol on display at the bar unreal.
Keep looking for something that matches your capital!
...keep searching for ideas..talk to restaurnat managers...listen to their stories...
You absolutely will need a business plan - no matter what venture you decide to follow; it lays out your CASH FLOW. This is CRITICAL since you will need to know how much CASH you will have on hand either now or down the road. It also helps you to figure out your BREAKEVEN point.
Ten (or 20) K is not nearly enough to be realistic for even a cafe here in Toronto. Rent, permits, inventory, software, payroll,... Toronto is VERY competitive in this industry.
One of my sports hangouts is a Milestones restaurant and so I've gotten to know the Management. I now know all their startup costs as this location is also used to train Managers. The cost of the alcohol on display at the bar unreal.
Keep looking for something that matches your capital!
I would also recommend a business plan. To not have one reeks of failure-waiting-to-happen. If someone can't get it together enough to put a plan down on paper, can you be surprised when their venture crashes and burns?
4 years ago me and my friends had the idea of opening up a bubble tea place close to U of T, we did our homework and even started to experiment with flavors and whatnot. Anyways fast forward 4 years later, now there are a number of bubble tea places round U of T but sadly none of them is owned by me or my friends.
Seriously 10K is not enough to open anything with a store front, I mean rent at a place that has a decent location will be atleast 5k a month. If you had an athome business or some consulting/design business then 10k would be decent startup capital.
I too am hoping to find a decent business to diversify my income. Actually one of my ideas is to market a line of handcrafted/custom designed MP3 players, I can do all the hardware design but would need some creative person who can work with various materials to create them.
Seriously 10K is not enough to open anything with a store front, I mean rent at a place that has a decent location will be atleast 5k a month. If you had an athome business or some consulting/design business then 10k would be decent startup capital.
I too am hoping to find a decent business to diversify my income. Actually one of my ideas is to market a line of handcrafted/custom designed MP3 players, I can do all the hardware design but would need some creative person who can work with various materials to create them.
brewery
I was watching a coverage of small breweries in Alberta. This team ( brother n sister ) with 10k ( I think wach put 5k) open a beer brewering. A year later they use a warehouse to store/transport the beer they make for their province. I think they want to go national.
I wouldn't go into wine, to risky, and dependent of the weather. I workd for a farmer who was starting that business and I think it took him 6 - 10 years. With the help of the three brothers.
I was watching a coverage of small breweries in Alberta. This team ( brother n sister ) with 10k ( I think wach put 5k) open a beer brewering. A year later they use a warehouse to store/transport the beer they make for their province. I think they want to go national.
I wouldn't go into wine, to risky, and dependent of the weather. I workd for a farmer who was starting that business and I think it took him 6 - 10 years. With the help of the three brothers.
If you have the right concept, and of course some luck, anything can happen. Check out this review of Burrito Boyz, a very small, mostly takeout, but successful restaurant in downtown restaurant.
http://www.toronto.com/feature/13095/
http://www.toronto.com/feature/13095/
I guess I'm the only one reading this thinking, WTF? If you're asking these kinds of questions (in this place of all places), you have no clue about business and I'd suggest you part with your money some other way. No bank would lend you money.[ALIMEISTER] said:
Are you saying that people on this board have no business sense? Are we just a bunch of horny old men thinking with their dicks?rama putri said:
I beg to differ.There are quiet a few people on this board that have their own businesses and are very smart.
I don't think it is dumb to ask this question here. Hey you are here!! By your comments i can tell, that you are a smart man. Maybe you could oint him in the right direction.
BTW I am horny and old(some might say), but sometimes I use my other head to think too.
[ALIMEISTER] said:
I understand fully where you are coming from it's been my ambition also.
However why not consider buying a piece of land or if you don't own a house now buy one in a new development live in it for 8 months and sell for about $ 60k profit
Don't give up. I started my first business for less than 5k and it did very well until the recession hit in the late 80s. Build your assets and credibility over time so that you have more options in the future.
But if you think investing 10k is going to make you rich quickly, don't bother. It's an investment of your time and effort. If you're not going to put 110% into this, you're not going to succeed.
Look around hard and talk to EVERYBODY. If you don't have much money, look for a failing business that has lots of room for improvement. Sometimes you can pick up these business for next to nothing. But you gotta be able to see why things are not going well and have ideas on how to fix things. Bad food, poor customer service, unclean store and unprofessionalism are a few things to look for that you can improve on.
Here is a success story.
Down on Queen Street there was a coffee shop that had very little competition. The service was bad, the shop was grimy from floor to the ceiling and the coffee was really bad. A friend of mine had some info that the owner had trouble paying the rent and still had a few years left on the lease. The owner was very close to walking away from the business despite the penalties that he may have to pay on the remaining lease. My friend made the owner a small offer and he jumped at the chance. He took the time to clean up the store by buffing and waxing the floors, scrubbing the walls and replacing a few tiles on the ceiling as well as cleaning up a few tables and chairs. He changed the way they served coffee by tossing the left over coffee every hour and made a few half decent sandwiches, salads and soups. He went to Duff pastries and added a few more items to the menu. He is a very personable guy and eventually made friends with most of the neighborhood people, many of them were office workers that went to his shop on a daily basis. Sales increase steadily over the year and he did a major renovation to the store at the time of his lease renewal. The renovation brought the store sales through the roof. After only 3 years at the location, he sold the cafe to one of his customers. The original purchase price for the cafe was $7k and he ended up selling for $170k.
I guess what I am trying to say is that it's not impossible. If you look hard enough you will find what you are looking for.
Also, you have to be ready to live like a bum for the next few years. Not everybody makes money from the beginning. Give yourself a few years before any you expect any real revenue. It's usually like this with a new venture and it's a good idea to be mentally ready.
I wish you good luck.
But if you think investing 10k is going to make you rich quickly, don't bother. It's an investment of your time and effort. If you're not going to put 110% into this, you're not going to succeed.
Look around hard and talk to EVERYBODY. If you don't have much money, look for a failing business that has lots of room for improvement. Sometimes you can pick up these business for next to nothing. But you gotta be able to see why things are not going well and have ideas on how to fix things. Bad food, poor customer service, unclean store and unprofessionalism are a few things to look for that you can improve on.
Here is a success story.
Down on Queen Street there was a coffee shop that had very little competition. The service was bad, the shop was grimy from floor to the ceiling and the coffee was really bad. A friend of mine had some info that the owner had trouble paying the rent and still had a few years left on the lease. The owner was very close to walking away from the business despite the penalties that he may have to pay on the remaining lease. My friend made the owner a small offer and he jumped at the chance. He took the time to clean up the store by buffing and waxing the floors, scrubbing the walls and replacing a few tiles on the ceiling as well as cleaning up a few tables and chairs. He changed the way they served coffee by tossing the left over coffee every hour and made a few half decent sandwiches, salads and soups. He went to Duff pastries and added a few more items to the menu. He is a very personable guy and eventually made friends with most of the neighborhood people, many of them were office workers that went to his shop on a daily basis. Sales increase steadily over the year and he did a major renovation to the store at the time of his lease renewal. The renovation brought the store sales through the roof. After only 3 years at the location, he sold the cafe to one of his customers. The original purchase price for the cafe was $7k and he ended up selling for $170k.
I guess what I am trying to say is that it's not impossible. If you look hard enough you will find what you are looking for.
Also, you have to be ready to live like a bum for the next few years. Not everybody makes money from the beginning. Give yourself a few years before any you expect any real revenue. It's usually like this with a new venture and it's a good idea to be mentally ready.
I wish you good luck.
