# Biggest Problems For Inexperienced Restaurant Owner



## raibeaux (Dec 21, 2012)

When a restaurant is opened by a completely inexperienced (in the restaurant business) person, what do you folks think are the main problems they have in running a place?  In my area, several have opened and closed within a year and am just curious as to what their main problems may have been, since they were experienced in running other businesses.....just decided they wanted to open a restaurant.

Thanks.


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## cheflayne (Aug 21, 2004)

insufficient initial operating capital


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## foodpump (Oct 10, 2005)

Cheflayne beat me to it!

That,s the #1reason. Others are:

. No supervisory skills regarding staff(If you hire a bartender you better know 101 ways to cheat, cause the bartender knows 99)

.Ignorance of municipal bylaws- parking, liquor, plumbing, electrical, and especially hvac


And at a close #3...
.Sh*tty landlords and/or being stupid enough not to get a lawyer to read the lease before signing it.


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## pete (Oct 7, 2001)

Also understanding that the profit margin for the restaurant business tends to be very, very slim.  Without their proper oversight, or hiring someone experienced, that they trust, that profit margin will very quickly dwindle away. Theft, overproduction, comps, bartenders and servers giving away free drinks, waste, they all add up, and without an eye out for those details that profit will go away very quickly.


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## chefwriter (Oct 31, 2012)

I'll add "general cluelessness". This includes gambling or drug addiction, comping meals for friends and family, using the restaurant supplies as personal grocery store, keeping unprofitable hours, treating the cash register as an ATM while neglecting basics such as sales tax and quite a few others. Previous business experience doesn't mean anything was learned, just that they were in business.

     I have been familiar with more people than I can recall who wanted to think of themselves as business like but refused to alter personal behavior that was having a directly negative effect on their business.


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## cheflayne (Aug 21, 2004)

Pete said:


> Also understanding that the profit margin for the restaurant business tends to be very, very slim. Without their proper oversight, or hiring someone experienced, that they trust, that profit margin will very quickly dwindle away. Theft, overproduction, comps, bartenders and servers giving away free drinks, waste, they all add up, and without an eye out for those details that profit will go away very quickly.


Ditto this big time. Consider a restaurant with sales of $1m and a profit of 3%, one meal at $27.00 a day unaccounted for and suddenly your profit is around 2%.

Another thread that dovetails with this one pretty nicely is
[thread="84654"]New Here Took On A Kitchen Nightmare Restaurant Impossible Job Need Help [/thread]


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## chefedb (Apr 3, 2010)

Inexperience,lack of proper funding,not enough plain business savay,not knowing how to purchase correctly, wrong location, wrong concept, bad food and service.  People think its show biz, they don't realize the work and commitment involved the boss of the restaurant is the front door.


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## phaedrus (Dec 23, 2004)

Undercapitalization is the biggie, followed by lack of understanding of the business.  Location is also a huge issue; there's one restaurant in my city that actually was owned by seven different owners and was seven different businesses in ten years!  After every one of them failed it was eventually bought by city govt for use as a public building.  The location was simply unworkable as a restaurant due to the location.


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## frankie007 (Jan 17, 2015)

Hi there,

I agree with the previous posts, let me just give you my 2 pennies worth as I had a restaurant that failed in it's first year. First of all it is not just about opening the door. You will have to have a good cushion, lets say enough money to run it 6 months to a year at a loss. People don't know you, it will take them weeks if not months to come in for the first time. This is what made me close my place, people just started coming back but I couldn't keep up with the rent and the bills. The type of restaurant you want to open can make huge difference too. Fine dinning will require a set of skilled people that do not come cheap. A large menu and not enough costumers will result in a lot of waste. I have been to an Argentinian restaurant the other day that really impressed me, a simple operation they specialize in meat one chef on the grill one dressing up the plates/washing up. Two of them doing 50 - 60 covers no problem.

As people said before me it is a cash business which makes it vulnerable to people with sticky fingers. I live in London and this problem has prompted a few places NOT to take cash any more, cards ONLY but the jury is out on this I haven heard yet how they are doing....If you thinking of opening the place and then handing it to a manager to run it forget about it, *you* need to keep everything tight, *every day. *Majority of people in the industry will tell you that this is terrible business to be in, and it is true, rewards are very small for the effort and money you put in. I don't want to be discouraging but it is better if you go in it with your eyes wide open. I have worked for a few people with what I call Casablanca syndrome, they think they are Humfrey Bogart running this fictional place and all they do is go around and tell waiters "Champagne for table 8 on the house", if only the real thing was like that....Soon they were out of cash and I without the job. So a few thing to consider, on the other hand when it works it is a beautiful thing...

Good luck!


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## hookedcook (Feb 8, 2015)

Seriously getting to understand this topic really well.  First off it helps if an owner at one point has seriously worked in a restaurant.  If they did, they would go buy a boat.  At least when you buy a boat you can get some enjoyment out of it before you lose all of your money!  Kind of a joke but not really.  Since food network and the whole chef thing started blossoming around the late 90's you have people that come into a little bit of money and say" I like to cook"  and  " I throw b.b.q.s and everybody loves my food.  I should open a restaurant, it will be FUN!  The reality is there is probably no harder business to make money in with so many variables thrown at you on a daily basis.  Your staff is usually young, on drugs, hung over, or still drunk.  Got to watch people stealing, mostly bartenders and waiters but have seen my share of line cooks throwing a Sunday keg party with a whole tenderloin and I know they didn't go to the store that morning.  Been working in the Caribbean and had to deal with some unusual things.  U.S marshals came in during lunch time and took my dishwasher away to extradite him on attempted murder and armed robbery charges, one of my guy line cooks poured mineral oil into a (girl) lead line cooks soda because he was jealous that she got prompted.  Anyways a server saw it and reported it because nobody new what he was pouring in her drink, police got involved for assault by poisoning someone.  Worked in a really fine dining high end restaurant, everybody including the managers did coke, not me(serious got enough problems with rum to mess with that)  any ways at the beginning of the shift the head waiter would walk around getting money from whoever in the staff wanted coke that night.  Anyways they caught the sous chef making crack in dry storage with it.  So does he get fired???  No, the front of the house manager yells at him and say's why don't you just sniff it like the rest of us!!!  He didn't get fired.  Left soon after that.  Got my first job after I moved to St. Thomas and the exec and sous brought a pound of weed in and started using the kitchen scales to divide it up.  Then asked me if I want to smoke,  I just moved from the states so I wasn't sure what the right answer was.  I did, it worked out.  Got the safe stolen out of one of the restaurants I worked in Florida and I was a line cook opening up the place and didn't notice.  Got interrogated by the police thinking I masterminded the whole thing, luckily I had cool owners that trusted me and new I would never do any thing like that.  So new job now, 2 weeks ago my sole produce supplier gets murdered by the Chinese mafia and I have to drive around to little stores and fruit stands buying produce for the last 2 weeks wondering if they are going to open up again.  These are just a few memorable stories off the top of my head.  This is the real restaurant business and owners need to realize it is like no other business and odds are stacked against you.  I understand being a chef/owner if you have the passion and want to do your own thing and you understand what your up against.  As for someone that wants to say  " I own a restaurant to their friends" ??  Why and why again.  If you want better odds buy a bar that serves food, not a restaurant that serves drinks.  Or just buy a sailboat and sail around the Caribbean for a year.  At least you will have some memories and pictures when all your money is gone.  Cheers


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## pete (Oct 7, 2001)

You what they say about the restaurant business: the best way to make a small fortune in the restaurant business is to start with a large fortune.


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