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So, You Wanna Own A Restaurant?


deangold

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I am sure that there are loads of people on the board who will have storied that make this one pale in comparison. This isn't about the 12-top not showing up for their reservation (well calling us at 8:30 to cancel their 8:00pm reservation, or the folk who call the next day canceling a reservation for the night before. This is about what really goes in a restaurant...

Thursday we had a new walk in evaporative cooler installed. In other words, we had no walk in from Tuesday night till Thursday afternoon. Tuesday I spent 4 hours trying to get someone to fix the dang thing. My HVAC guy, the one with $3000 worth of service contracts with me, doesn’t even call me back. I have a new company who has done a little work for me and they tell me they can't even estimate me till tomorrow and then they don't know when they can do the work. Meanwhile my linen company shows up with 4 chefs coats. Finally I have a firm install date of Thursday morning (no estimate but I know when they are going to do the work). Still no chef’s coats!

So Wednesday Morning I was in Largo (where the heck is Largo and why are there all these SUV's there???) picking up a refrigerated truck, hoping that the dry ice I ordered the night before was keeping the cooler cold. I pick up the truck and the cooler on the truck is not working. I point out that fact to the guy checking me out and he says "Just wait a bit". I do. A half hour later and the cooler is still not cooling and I am told there is not a refrigeration mechanic on the lot and there are no refrigerated trucks available short of Philadelphia. I explain my situation and the service manager says he has a guy who can fix anything and he will have him look at it. 3 hours later and I am driving a 16' bed refrigerated truck from Largo to DC.

We get everything on the truck, and we have quite a busy Wednesday night. I finish up the details on our menu with 20 new items and Daniel and I go over sourcing and prep lists etc. I can't get over the fact that my shoulders are still aching from driving the truck even 10 hours later. I am at work that day from 7am in Largo till midnight.

Thursday I am back at 7:30 am to see how the install is going. I also have to reprogram the computer and print the menus, a new wine list as well. My chef is going crazy with the realization that he has 20 new dishes to prep and no refrigeraton closer than 100 feet from his kitchen. Thursday night, my GM is off. Of my early waiters, only one shows up on time and one of my bussers no calls and no shows. Bu the new dishes are pretty damned good! We are slammed. One of my waiters gets ill in the middle of the shift and had to be driven home. I am trying to figure out what the heck is going on her tables and get help from the other waits. One of her tables is upset that she made a mistake taking their order and is yelling at me. Maybe being a lawyer wasn't such a bad idea after all. Finally we are ready to take the truck back to Largo when we discover that someone has blocked it in. It takes an hour for them to move their truck so I can move mine. I am home at 2am.

Friday morning, I sleep in. Till 8am. Then I'm on the computer for a bit (only 2 sudoku games) and then its off to the bank, Ikea (where they don't have those cute cutting boards we need to serve the steak on any more), J&B restaurant supply, Linens and Things (where they do have the cute cutting boards...) and off to the restaurant. My GM Michael comes in at 3 and we have a quick meeting to go over all that has happened on his day off. Then the dishwasher, which is scheduled to be replaced next Thursday, explodes. Well the high pressure suction hose explodes. Didn't know I had a high pressure suction hose. Michael is trying to fix that while I am dealing with a slam early in the evening. In the middle of this, the chef tells me that the walk in is down. I am seating people while I am calling the refrigeration company and the ice company. The tech shows up, the ice shows up, the evaporator was installed wrong and the huge leak is actually not a leak at all.

Now, I am writing this as I wait for the locksmith to repair my emergency door which, I discovered, was wide open for who knows how long. And I don't ahve to be in till 9:30 at the earliest tomorrow!

So you wanna own a restaurant???

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Geri and I popped in for a quick meal on Thursday eve, after seeing the "dog whisperer" at Politics and Prose (a terrific event). So we were witness to some of what Dean describes--despite the chaos, it appeared that things were handled with grace and patience. Our waiter was covering at least two stations, yet she did a yeoman's job of taking care of us. Kudos. (And I sure do love that new tuna appetizer!)

Compared to owning a restaurant, my gig seems very easy. (But surely having access to all that great wine must be at least a little palliative.)

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I am sure that there are loads of people on the board who will have storied that make this one pale in comparison.  This isn't about the 12-top not showing up for their reservation (well calling us at 8:30 to cancel their 8:00pm reservation, or the folk who call the next day canceling a reservation for the night before.  This is about what really goes in a restaurant...

Thursday we had a new walk in evaporative cooler installed.  In other words, we had no walk in from Tuesday night till Thursday afternoon.  Tuesday I spent 4 hours trying to get someone to fix the dang thing.  My HVAC guy, the one with $3000 worth of service contracts with me,  doesn’t even call me back.  I have a new company who has done a little work for me and they tell me they can't even estimate me till tomorrow and then they don't know when they can do the work.  Meanwhile my linen company shows up with 4 chefs coats.  Finally I have a firm install date of Thursday morning (no estimate but I know when they are going to do the work).  Still no chef’s coats!

So Wednesday Morning I was in Largo (where the heck is Largo and why are there all these SUV's there???) picking up a refrigerated truck, hoping that the dry ice I ordered the night before was keeping the cooler cold.  I pick up the truck and the cooler on the truck is not working.  I point out that fact to the guy checking me out and he says "Just wait a bit".  I do.  A half hour later and the cooler is still not cooling and I am told there is not a refrigeration mechanic on the lot and there are no refrigerated trucks available short of Philadelphia.  I explain my situation and the service manager says he has a guy who can fix anything and he will have him look at it.  3 hours later and I am driving a 16' bed refrigerated truck from Largo to DC. 

We get everything on the truck, and we have quite a busy Wednesday night.  I finish up the details on our menu with 20 new items and Daniel and I go over sourcing and prep lists etc.  I can't get over the fact that my shoulders are still aching from driving the truck even 10 hours later.  I am at work that day from 7am in Largo till midnight.

Thursday I am back at 7:30 am to see how the install is going.  I also have to reprogram the computer and print the menus, a new wine list as well.  My chef is going crazy with the realization that he has 20 new dishes to prep and no refrigeraton closer than 100 feet from his kitchen.  Thursday night, my GM is off.  Of my early waiters, only one shows up on time and one of my bussers no calls and no shows.  Bu the new dishes are pretty damned good!  We are slammed.  One of my waiters gets ill in the middle of the shift and had to be driven home.  I am trying to figure out what the heck is going on her tables and get help from the other waits.  One of her tables is upset that she made a mistake taking their order and is yelling at me.  Maybe being a lawyer wasn't such a bad idea after all.  Finally we are ready to take the truck back to Largo when we discover that someone has blocked it in.  It takes an hour for them to move their truck so I can move mine.  I am home at 2am.

Friday morning, I sleep in.  Till 8am.  Then I'm on the computer for a bit (only 2 sudoku games) and then its off to the bank, Ikea (where they don't have those cute cutting boards we need to serve the steak on any more), J&B restaurant supply, Linens and Things (where they do have the cute cutting boards...) and off to the restaurant.  My GM Michael comes in at 3 and we have a quick meeting to go over all that has happened  on his day off.  Then the dishwasher, which is scheduled to be replaced next Thursday, explodes.  Well the high pressure suction hose explodes.  Didn't know I had a high pressure suction hose.  Michael is trying to fix that while I am dealing with a slam early in the evening.  In the middle of this, the chef tells me that the walk in is down.  I am seating people while I am calling the refrigeration company and the ice company.  The tech shows up, the ice shows up, the evaporator was installed wrong and the huge leak is actually not a leak at all. 

Now, I am writing this as I wait for the locksmith to repair my emergency door which, I discovered, was wide open for who knows how long.  And I don't ahve to be in till 9:30 at the earliest tomorrow!

So you wanna own a restaurant???

Welcome to the Club!

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Now, if there was a Health inspection at the height of the refrigeration/dishwashing machine incidents I might be able to sympathize! :)

Restaurant SNAFU 101, be thankful you at least had food! (I see a bottle of Ridge Monte Bello in your future!)

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Now, if there was a Health inspection at the height of the refrigeration/dishwashing machine incidents I might be able to sympathize!  :)

Restaurant SNAFU 101, be thankful you at least had food! (I see a bottle of Ridge Monte Bello in your future!)

Actually we pounded back a gouple of big glasses of a Basilicata Dry Muscat! Did I mention the DCABRA inspection that we did get???

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Another big joy is when you make a mistake that puts you in the weeds.... we wrote a reservation in the book on the wrong night. So we had 12 hungrey people hsow up expecting, of all things, to be fed when they wanted to be fed rather than when we were expecting them. So all night we were two tables down. The kitchen was in a slam from beginning to end. It was one of our busiest nights since we opened and eyt we were scrambling all night long. Just another fun night in this crazy buusiness!!!

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You bet I do! Do you have any Idea how much I hate working for someone else? I prefer being in control of my day. I make the decisions and I take the flack if they are wrong. Sure it can be costly, and sure it can be a pain in the ass sometimes, but if it's worth doing isn't that usually the case? I love the restaurant business and can't wait until I have my shot.

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There was some chatter today on Ask Tom about investing in restaurants. For a someday curious investor, how does one go about this? Is there a way to find out what restaurants are looking for investors and how much they are looking for?

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I'm also really interested in responses to this, curious how the whole system works. If someone like the OP has to ask, it's clearly not a perfect market. Is it difficult for would-be restauranteurs to find investors? One would think that an area like Washington DC, with SO much money floating around and a market that still highly demands new, good quality restaurants (look at the crowds that have flocked to places like Cork from the day they've opened), would be among the easiest to make deals happen.

Also, what does the typical deal look like (or is there even such a thing)? When someone is successful at raising $500k to start a new place, is it usually from 1 source? a handful? Is it ever 20 moderately well off individuals looking to put in $25k or so to "get into" the restaurant biz?

curious minds want to know... ;)

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I've known a couple of folks who have put together investor teams for restaurants. What I provide here is only what I've learned from these friends, not necessarily rules that apply in every case, though they claim this is pretty standard.

Startup costs for a new restaurant are all over the map, but it's not uncommon to hear $2M-$4M for the bottom line. There are usually at least 3 levels of financing. The levels define who gets paid when things go kaboom. First is whatever small business loans, banks, etc. have their hands in the pot. (Tier 1a, after opening, is all of the suppliers). Second is the primary investors - usually only a small number who are putting up large sums. Any of the little guys are part of the tertiary investment pool. These are the last guys to get paid when there's a profit, and the first to get jettisoned when things go sour. Usually $25k or $50k is the minimum to get in the door.

But here's the important part. Because of the incredibly insane risk of restaurant investing, they will usually only take money from investors who can easily afford to lose their entire investment. Because, in a large number of cases, they will. Rule of thumb is that the bottom line needs to be at least $500k in liquid assets and $1M net worth. If you can't show a balance sheet with those numbers, thanks for playing.

Now you can all jump in and tell me how your case was different, or how full of shit I am.

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