Smartest startup food business

Discussion in 'Professional Catering' started by chefsguy, Nov 22, 2004.

  1. chefsguy

    chefsguy

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    I cook, but my wife is the passionate one about food. And after many years in another profession, she is sick of that and wants to do what she loves (so the money will follow). The question du jour is: Which is the best route to go, a restaurant (buy the building, lease it, buy equipment, lease it, what?) or do something less capital intensive, such as catering? At the moment, she's very strongly leaning toward buying a building. I'm not so sure about the thin ice of an unproven business with an unproven owner taking on that much load. I'm a bit biased, yes, but she is a great cook (but with limited restaurant experience), and good contacts in the industry, who have been eager to help her think through the minefield. We're doing all the appropriate front-end planning, but a little voice inside says, Maybe she should think about a catering business instead of buying and trying to run a restaurant (when what she REALLY loves is cooking). Wisdom from the experienced? Thanks, in advance.
     
  2. deltadoc

    deltadoc

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    I was advised by the Exec. Chef and owner of a very exclusive restaurant in Minnesota that most people who start a restaurant do so with other people's money. A business plan would be the order of the day to go that route.

    doc
     
  3. onehsancare

    onehsancare

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    I'm a bankruptcy lawyer, and I've filed I-don't-know-how-many bankruptcies for restaurants. Some were started by people with previous successes. Most were started by people with restaurant experience, but that was experience in the kitchen, not in the office.

    I've observed that, in general, the most successful restaurants are run by the third owner. The first one buys the building and the equipment, then goes under. The second one buys from the bank, but isn't adequately capitalized (because, after all, they are getting a bargain!) and then goes under. I think the third incarnations are most likely to succeed because they've learned from their predecessors.

    I wish I could be more optimistic.
     
  4. prepgirl

    prepgirl

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    What type of biz was your wife in? What type of food contacts?
    And what is a bankruptcy lawyer doing on the boards - just a foodie, or as an investor? Or did I misread?

    I am asking because I have a startup cooking related biz that I would be interested in talking to any of you 3 about for some ideas, feedback or ?.
    I'm in Minnesota too.
    THanks.... prepgirl
     
  5. onehsancare

    onehsancare

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    I'm not sure I'd be much help (beyond the usual dash of cold water!), but I'd be happy to talk with you about your plans.
     
  6. prepgirl

    prepgirl

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    Lawyers are like that - you pay them lots of money to dash your dreams!! Just kidding, though I actually have a lengthy lawyer story that doesn't belong here so won't go into it - just switched patent attorneys though, and received the papers in the mail today to sign. I would prefer to talk off board so will send you a message, though I will say every 'dash of cold water' seems to make me more head strong!
    I am doing all the work and madness of opening a restaurant, though has far greater potential and less risk. Part of that reason is fewer direct employees, as you know from the restaurant biz, that can make or break things. I do think your advice above is very appropriate, and the passion for cooking is not enough. I did at one time check out all it would take to do a wedding cake biz, have done a couple dozen on the side, too much work and risk for me. I have a web site name and brochure for sale though if anyone wants it! Thanks.
     
  7. kuan

    kuan Moderator Staff Member

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    I know of one restaurant in Minneapolis right now which has found itself a third owner. :) He might be the lucky one.

    The trick to purchasing a dead restaurant space is in identifying why it's dead. Then you have to change it and wait to see if you were right. There's lots of restaurant startup myths up there waiting for you to bust.
     
  8. cheflayne

    cheflayne

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    My advice since your experience is limited is to work in a restaurant for a year. Totally immerse yourself for a year. After a year you will have a better idea of whether it is something you want to do or not. The inside view is a lot different than the outside view. I opened a restaurant after 20 years in the business and was still suprised by what I didn't know, but at least I had a good insight into the lifestyle of restaurateur and chef. I love the business but would always recommend testing the depth of the water with both feet before proceeding.
     
  9. panini

    panini

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    No risk-no reward
    The two most integral parts of my 13yr old business is a good CPA and a good Attorney.
    Wedding cake business not bad, 28% labor but a 12% food cost.
    Rember, always build your business for acquisition.
    good luck :D
    I just signed a 10yr with a 5 opt. But I'm also dinging 2 large franchises in the area. If they walk in with a big enough check I will give them my shop and car keys.
     
  10. shroomgirl

    shroomgirl

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    Catering is schlepping.....how much stuff can you load in your van/car and unload and setup for an event that probably will not be anywhere near a functional kitchen....so you schlepp that too or invest in a whole lotta cambros.
    Restaurants....I've seen a bunch from the insider's outside.....the most professional come in and start a buzz, they network, run some benefits prior too and then do a friends/family critic night. The ones I'm familiar with have fit into all those categories. I've seen a dear friend tank in 2 restaurants within as many years....he had a success story, over expanded and trusted friends that cook to run his businesses.
    I've seen others not pay the "talent" that works 90-100 hour weeks with award winning food and watch them fall from the top.
    Under financing is an ugly thing. I've seen another dear friend go from a top of the line CC chef to owning his own and after a couple of years totally disappearring in the middle of the night with creditors following.
    I still have thoughts of opening a place and then remember why I do not want a restaurant.....too many hours in one space.
    So, catering gives me more creative leaway and I actually love the mental stimulation of running a huge event. :bounce:
     
  11. kthull

    kthull

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    Have you thought about personal cheffing? You create menus for your clients and then once a week/every other week/once a month you buy the groceries for your cheffing day, make 5-7 full meals in the client's kitchen, then cool and package for them to heat and eat in the days to come. Less schlepping than a catering gig, and a lot less cost than opening a restaurant! I just joined a pro association and hope to start cheffing within about 6 months.

    Good luck!
     
  12. mr_sligo

    mr_sligo

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    Restaraunt start ups can be rough. I have been in the business for 20 years. (did I just type 20?) 5 months ago I went into catering with my Mom as my partner. The great thing about starting catering is that you can by your gear as you go. If you start right away in a commercial building, all you have to outfit is the back of the house. You expand as you client list does. We found a Department store outlet that had plates on sale, and started with 15, I am up to 60 now. Buying them a few at a time. My thought process was that we do this for 3 years, paying cash as we go and putting the extra in the bank. When we are ready we have a proven business if we need a loan, and not to mention a built in client list that knows and loves our food and service. No nervous first six months waiting for guests. After 5 months we owe nothing and have some cash. All by word of mouth.
    So I would advise catering for a start up, your wife can be more creative writing new menus for each job which would give her lots of practice to figure out what style and foods she and your guests enjoyed.
    Is that too much info? Let me know if you'd like to know more...
     
  13. nowiamone

    nowiamone

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    I started a restaurant with no prior experiance, after years of being closet martha/mario,etc. (husband and I were in construction, his health changed so we shut down) I thought I should work for a few years, but needed a lot of day time hours to settle old business and didn't want husband home by self all day. Local tavern/roadhouse had kitchen, made deal with bachlor/owner to cook his dinner every night, and pay for propane. We are a success, but it would not have worked if we had a convential debt stucture. Bar revenue is up 5000.00+ month for owner. Here's some considerations for your wife: downtown establishment is big bucks to start, a neighborhood cliental maybe the means to survive, but they want meals that don't break the bank, and border on creative comfort food (but not to creative, just a small twist) and they know what they want when they come through the door. We also have a customers that are "out for dinner" as a celebration, but you only get so many of those. A big disappointment for me.......... 80% of my folks want the same thing, cooked the same way. What I thought I could do in the kitchen, with the equipment, for the enviroment was a constant evolution; and we had some real stumnbing blocks. It's hard on your feet work, it took two years for my body to adjust, (I'm in early 50's) I went 18 months without a day off. It's very hard to be in kitchen all the time and manage the dining room. One bad waitress/waiter can do an unbeleiveable amount of damage in a very short time, it takes a lot of time to undo. I now beleive I have to act a lot faster in this area, if I don't like what I see. My girls usually make over 20% in tips, if they are getting 10% I have a problem. I've ironed out a lot of problems in 3 years, but would have paid thousands and thousands for the learning curve in a conventional situation and may not have made it. I am enjoying giving cooking classes at a kitchen store, it feeds my creative side a lot more than the restaurant.