So if one was to own a neighborhood (small/medium sized) type of restaurant/bar...would they make a decent amount of $$$...like six figures plus?
First you have to figure out a way to not go bankrupt. Someone will have the exact figure, but the vast majority of these kinds of businesses fail in their first 18 months.
Yeah that was kind of the origination of my question. I work in the downtown area and every year several restaurants and nightspots open up and within a year or so they close up shop...not enough traffic seems to be the main reason they weren't making money.
It all depends on the location. You need to figure out also what kind of joint you want. A classy place that will cost alot to run, but make very good money(also very volatile) or a hole in the wall place that is low cost but maybe not as trendy or popular, but can still pay the bills. What keeps most of these restaurants and bars around besides location is the relationship with the surrounding community. Also if you get the mafia involve it will make it easier, but then you have to hide bodies in the meat freezer.
Words cannot express how important this point is. My restaurant has been in the same location for over 35 years. We are far and away the longest lasting establishment on the street - bar/restaurant or other. We know the people of the neighborhood, and more importantly, they know us. We cater to their needs because they keep us in business. Though other places come and go with higher prices and cleaner, more update facilities, we remain the only one still in business because of our lower prices and consistant service. They may make more money on one year than I'll make in two, but in the long run, I keep people coming back. When it's time for updates, we do it gradually. A radical overhaul is a risky investment. It will always generate more business short-time, but you have to ask yourself if it is worth the long-term investment. Ergo, to buy a restaurant, put you and your family's life savings' into it, and figure your costs based on minimum sales is a dangerous game. Start slow. Expect the worst, and smile through it all. Now don't get me wrong, change is good, but only in moderation. Listen to your customers and they will reward you. I don't make a ton of money to answer your question, but I do keep in business. In this world, your restaurant can only be as lucrative as time you are willing to put into it. I could easily put 80 hours a week into my place, but the fact is, I'd burn myself out and lose interest. I do enough to keep everyone happy - including myself. If you're willing to work your tail off every hour of every day, you can be rich. But if being rich is your goal, then getting into the restaurant industry may not be the best idea if you aren't loaded already. To start from scratch, you need a heart for what you're doing, an ear for your customers, and a whole lot of patience for years to come.
I heard somewhere that something like 75% of all small businesses go out of business within the first year. For restaurants it's closer to 90%. To make it in the restaurant biz, you need lots of courage, lots of repeat customers, and lots of luck.
It helps to have lots of money, too. The number one mistake that most people make when opening a restaurant is thinking they have a novel idea and are dead-set on making a living at doing it. They forget the most important things like finding the right space in the right neighborhood. The most novel restaurant in the world may have all the makings of drawing people from all over the city, but if their's no parking nearby, you can count city-wide traffic out. Conversely, places that are loacted in strip malls or free standing in the suburbs isn't going to pick up the foot traffic of a place downtown or near a college. If you're starting a small eatery or bar, you live on that foot traffic. If you rely on a high-end clientele, lots of foot traffic can be a turn-off to the customers. People need to match their ideas with the space. If you can't find that connection, hold off. It's not worth your life savings to start a business that is simply the right idea in the wrong place.
I've heard the same figures - 90% failure in the first year for restaurants. I think that was from a franchising magazine.
Before you even think about opening a restaurant or bar think about this, how good at business are you? You don't have to be a genius but you need to have some business sense. If you can't balance your check book don't open a ************ing food service establishment and expect to prosper. Have a great idea for menu? Want to serve the classiest selection of mid priced wines? Want to open the all soccer theme pub? Do you have any idea how much money you need to do any of these? No? Pick another profession. Ever waited tables? Worked on the line in a kitchen? Bussed tables? Bartended? Kicked a drunk Teamster out of a bar? If you're going to run a place (not counting a joint bankrolled by millionaires) you better know how to do all this ************ and plenty more. BTW you need to read "Kitchen Confidential" by Anthony Bourdain before you take one more step. He puts paid to the "Everyone says I throw great parties/cook good food/make a mean magarita maybe I should open my own place" myth. All of this said, the serving of food and drink (especially drink) to people is amongst the holiest of professions.
Also consider what expences you will have: rent, nsurance, local, county, state, or fedral taxes, electricity, phone, etc. Additionally, how much research have you done so you don't over stock or understock?
In HS I worked in a deli that made money, only the owner used it all to buy cocaine. True story. Thing was (a la the famous ad in the elevator) he needed it since he opened every morning at 5:30 am and closed at 10pm. He would usually go home around 2-3pm, sleep, get back to work at 6 and work until close. It was manic. But the coke got him through the day. Until he went to re-hab anyway. Use more coke, so I can work more, so I can earn more, so I can buy more coke... So, yeah, be careful throwing your life into something like that. I think Nevada's makes money. Not so sure about Hale's.
I have two very good friends who own restaurants, awhile back I asked the same question. Though both are very sucessful, they both claim the amount of hard work and long hours, don't leave much time to enjoy life. Neither one suggested it would be a good idea to get into that business.
Well, it's a give and take thing. If I spent 24 hours a day at my restaurant doing everything in my power to make as much money as possible, I would definately be a great deal richer. However, I love spending time with AFLette and being able to go on vacation whenever I want and take as much time off during the day as I feel like. For those freedoms, I pay in terms of profitabillity of the business. However, if I went all-out all the time, I'd hate my job and burn out very quickly. Ergo, I chose a middle ground of making myself a comfortable income, while not breaking my back doing so. There is an inbetween there. Well, I think that that's a piss-poor attitude. I would never suggest someone not go into the restaurant business if that's what they want to do. However, One simply MUST be very much so accustomed to how they work from top to bottom before actually doing so. To go out an buy a restaurant and expect to learn things as you go is just foolish.
bar rage, now that's what I'm talking about. BTW afl, one of these days I'm going to sup some brew at your establishment. What'dya got on draft?
Not much. Bud, Miller Lite, Guinness, Bass, Harp, and Blue Moon. You're more than welcome anytime you're in town, man.
What do you guys think about a food establishment at an airport? I have some 'insider' information ei monthy sales records of establishments already there, I know the people who decide who gets in, I know rent figures in advance, and I speak with current establishment owners. All indicate to profitibility. I haven't done extensive enough research but I think I know of a food type that isn't being served yet and could do well. I wouldn't need to worry about generating traffic because the traffic is already there, wouldn't need to worry about security or being robbed, wouldn't need to work excessively late. But I haven't really worked in this industry except for a couple of years in high school that I worked at a fast food place. I could probably come up with the money if I really wanted to (home equity) but I wonder if I have the balls to take that risk. given some of this knowledge I have, what do you guys think I should do?