I just talked to someone who kept going on about how business owners take risks. I don't know why tipping culture didn't pop up in my mind. Businesses create so many BS ways to screw everyone and benefit themselves, fuck the risk involved. Pay your fucking workers a living wage. And if you can't, then you're running your business wrong or something in your lifestyle is gonna have to change.
Even for business owners, restaurants are still one of the worst ways to make money- huge overhead costs, long hours, and the broken tipping culture of the US means wait staff will be a revolving door.
And the competition is brutal. Opening a new restaurant is still the number one way to fail at starting a new business. The odds of failure is something like 95%.
"Don't worry kid, sometime after your 5th restaurant you have a really good shot at success..."
Yeah, the fattest country in the world really likes it's comfort /fast food...
I talked to a small restaurant owner that started a couple of years back and he said in the time he is open there were a dozen other restaurants that opened and closed. The difference with him is he buys stuff when he has money. So he didn't get a big loan and it might take longer to get everything new and pretty but there is no loan payment.
Used to work delivering restaurant equipment (frig, fryers, etc)
One of our repeat customers (especially for used stuff) just waited for a location to go out of business multiple times/owners, then bought it up dirt cheap.
The first 5 guys ate all the depreciation, then he comes in when it has a chance to be profitable
They’re also the first thought EVERYONE has when they wanna start a business. Nobody ever considers whether they have experience in the field and know how to navigate the common pitfalls - they just jump right in. Then of course it makes no money, then fails entirely, and then they can keep repeating the line about thin margins and failure rates.
They themslves cause it then they turn around and act like it’s everyone else’s fault…
They do no market research, they do no pricing research, they do no research into the legal aspect or how to handle inspections/licensing.
Like... you want to make a walk up, pizza by the slice spot. Cool. The most you are gonna be able to charge is $5. You'll get 6 slices out of a pizza, so that's $30 you will bring in each. A pizza takes 6 minutes to prep and 12 minutes to cook, so one person can produce about three pizzas every 18 minutes, lets call that 10 pizzas an hour. That's $300 of income. Lets say you are open for 3.5 hours a day through lunch (10:30 to 2), and you are open 5 days a week because weekends have no foot traffic. That's 17.5 hours a week of being open, you are bringing in a gross of $5240 a week, at the outside. That is assuming no waste and that you sell every slice you make, which is HIGHLY unlikely.
There is a good chance you won't cover expenses with that. So you sell drinks. Soda is so cheap to sell that it's almost pure profit. Especially if you partner with one of the manufacturers. In which case, your business model is making pizzas at cost to sell as much soda as possible so you can stay afloat. Your dream is no longer about making the best pizzas or even good pizzas, it's about making tolerable pizzas so people come to YOUR place to buy soda instead of going to someone else's place to buy soda. The real winner, of course, is the company making the soda.
This is also why, if you are willing to cook for yourself at home, you can have a better quality product.
I love pizza. I mean, I'm from the 1990s, I am contractually obligated to love pizza. That's just how it is. So we will go with that again.
I can buy a 5# bag of AP flour for $2.70, a can of Cento San Marzano tomatoes for $5.50, and I have spices/seasonings, onion, garlic, whatever. That can of tomatoes is good for about 3 pizzas and the flour is good for 7.5 pizzas. I'll top the pizza with one meat and two veg, usually just whatever I have but if I buy some Italian sausage and fry it up it'll be $5 a lb and I am going to use about a quarter pound per pizza. Then the good mozzarella is $9 for a log, and that's enough for 4 pizzas. So a pizza for 2 costs about $5.75 (I fudged the numbers a little to account for seasonings and onion/garlic, and the little bit of olive oil, packet of yeast, and water).
Now, I could go pay $14.00 for a pizza. But the cheese and tomatoes would be lower quality, they probably would be using dried herbs instead of fresh from the garden like I am, they are probably using garlic powder instead of crushed garlic, they are going to use very cheap olive oil if they use olive oil at all... and I could do all those things too and get MY price per person under $1, but $5.75, which is about as "elevated" as I'd care to go for pizza, is still the better price. I suppose I could use a more expensive meat.
Oh so you mean opening a restaurant, buying an oversized SUV/Pickup truck that costs $60-70k+ "for the business", then buying shitty used equipment(that you pay more for because of repairs), having a way over complicated menu with a lot of uncommon ingredients (meaning not used in multiple dishes), and opening the business and then expecting someone else to run it every day while you now live the luxurious life as a business/restaurant owner who occasionally drops in to "see how the place is doing" isn't the correct way of opening a restaurant?
I mean it failed for everyone else, but "I'm going to do it the right way and make it work"
If there's one thing Shark Tank taught me, it's that the money is in things that have a patent. Stuff that's easy to copy or make a knock off, are much tougher businesses to be in. Now, if only I was any good at inventing things...
That's partially because it is one of the few industries where a business owner needs to hire a full staff immediately in order to operate. Most SMBs can get by initially with long hours and skeleton crews. That doesn't work in a restaurant. It's an awful business to start if the owner doesn't have deep pockets that can deal with carrying massive debt and running at a loss for likely multiple years.
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u/[deleted] Aug 28 '24
Yup, it is expected the customer pays the employers employee's wages in the service industry.
Pretty good gig to be a boss.
Go to the bank for a loan to open a cafe/restaurant.
"How will you pay your employee's?"
You what mate?