Do you dream of opening a restaurant? Many people working in catering (and many who don't) think that they would love to open their own restaurant. They love the thought of welcoming people into their lovely restaurant. But as with any business, it's vital to do your homework and be realistic. Here are some important points to consider if you dream of opening a restaurant …
Opening a restaurant isn't a simple matter, and neither is running one. Do you have any experience of working in a restaurant, and ample knowledge of what is involved in both the catering and business side? If you don't, then it's time to start accumulating experience. Get a job in a restaurant - you will soon realise that there is a LOT of work involved.
2. Failure Rate
The failure rate of new businesses is high, and restaurants even more so (source: forbes.com). In the first 2 years, 50% of restaurants will close. That's a massive percentage, and makes opening a restaurant business very chancy. Of course, there is a chance of making your business a success, but it's important to be aware of the risks involved.
3. Hard Work
Running a restaurant will involve very long hours. There will be preparation before opening, cleaning afterwards, and paperwork. You'll be lucky to get a day off; if you do manage to take time off you may have to go in anyway to attend to problems. Plus you'll have to deal with being a boss, finding staff, and training them.
4. Money to Invest
Do you have money to invest in your restaurant or can you secure funding? Because of the high failure rate of restaurants it will be difficult to obtain a loan for this type of business. Even if you have your own money you will be putting it at risk - this is far from a safe investment.
5. Being a Boss
Are you prepared for the stress of being an employer? You will have to be fully aware of your legal obligations as an employer, deal with staff if they're not doing their job properly and handle all the paperwork involved in running a payroll. You may have to find cover staff at short notice if your regular staff are sick or quit their job.
There is an enormous amount of bureaucracy involved in running a restaurant before you even open the doors. You have to obtain permits. You have to comply with city ordinances and national legislation. You'll have to handle financial matters such as payroll and bills.
7. Kitchen Nightmares!
Perhaps the biggest problem of all is that you might end up on Gordon Ramsay's Kitchen Nightmares! But even if this program is exaggerated and edited, it still shows clearly how difficult running a restaurant is. It may cost you relationships if it all goes wrong, as well as a lot of money.
Clearly some people do manage to run successful restaurants, so if that is your dream you shouldn't necessarily abandon the idea. But you should be realistic, consider your options very carefully indeed, and make sure that you have thoroughly looked into finance and legal issues. And always find out what it's like working in the trade by getting direct experience. What would your dream business be?