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Tipsy and others will have much better advice as I just cook for a hobby.
This is good advice. When you first start out, you can expect to work every holiday or weekend if you are in the restaurant or country club business. I did this for over 25 years. It takes a toll on you physically and emotionally. Good luck trying to maintain a relationship. This part of the business usually attracts heavier drinkers and partiers in general. There are other sectors that can be less demanding while still being rewarding. Business & Industry, senior living or health care offer more reasonable schedules and the jobs are typically less demanding. You may have to give up some creativity though. A lot of up scale senior living places cater to the wealthy and these positions tend to allow for more creativity.
Thanks @Jedi Knight Can you elaborate on specifically what you see as downsides and how one might avoid them? If they're avoidable? Thanks.
I’ve “only” got 25 years in but don’t disagree one bit. Restaurant biz is as tough as it gets and is unrelenting.
Hi Joe,Joe Bryant said:
You are absolutely correct. Out of all the restaurants I've run, I could get about a 24% food cost in a pizza shop, whereas BBQ and Seafood were the highest at about 30-33% However, the labor percent in BBQ is much lower than pizza. Believe it or not, Sandwich shops also run a high food cost. If you want to make money, the key is volume. And to make the big bucks- you will work your tail off.
Amazingly comprehensive post. Especially spot-on regarding the employees. The most frustrating thing I see Mr krista dealing with every day is trying to maintain a staff that is consistent and reliable. I think it might be actually impossible in this industry. As the boss he has to fill in so many shifts where people don’t show up or walk out literally in the middle of a shift, which leads to the consistent 60+-hour weeks you noted. In addition to everything you’ve mentioned, there’s also fairly prevalent drug use, which adds to the challenge.
So true. The dreaded good ole clopen. Was the GM of a 25,000 square foot, 7mil restaurant and nightclub for 15 years in downtown San Diego. So many nights there til 3:30/4am and back at 8am that I can’t even begin to count how many of these I’ve done. After that decided to open my own restaurant and my 70 hr work weeks turned into 90+ hr. Restaurants are a flat no joke meat grinder.
Pizzas are great. My restaurant was centered around a big woodfired brick oven and focused on pizzas. But the bottom line is food cost in general, if run right, aren’t really the driving factors in the overall profitability. Labor, workers comp, health insurance, rent, etc. are far more of the determining factor on your profitability
This is absolutely correct but also not completely true. Margin needs to be factored in as well. High-end steakhouses run 40+ percent food cost but the margin is high because they can charge more. So food cost in a vacuum is not a great tool to determine profitability. A 25% food cost on a $10 item nets you 7.50 in profit, but a 50% food cost on a $30 steak nets you 15.
No doubt. Also I will add there has been a generational shift with the millennial’s and the overall work ethic. I know that’s said about every generation but having done this for so long I’ve seen progressions within the generations and the millennials absolutely have a different view of what is good work. The running joke with my colleagues and myself is that they expect a raise after showing up to work three of the last five days on time. They are also far quicker to hop jobs than previous so the no-show rate and overall turn over now in days is significantly higher
You are right. It's all in how you balance your budget. The biggest two expenses are always food and labor, but there are other factors such as rent/mortgage, equipment costs, electricity, credit card usage fees, etc. And labor is not just what you pay in hourly wages, it also includes benefits, unemployment insurance, holiday pay. Any way you cut it, the total profit margin is pretty thin and mis-managing any of them can ruin you really quick.
Thanks as well @dkp993 and @krista4
There’s no question that is true but the question becomes where is the zero sum return and who are the people you pay higher wages to. Servers, bartenders, bussers etc. are typically tipped employees are really just working for the tips, the hourly wage that you can pay them extra to “get better people” makes no difference at the end of the day. Now at the GM level, Chef level, mid managers in both front and back of the house yes paying more can make difference. A top-tier GM who truly understands the business is worth their weight in gold. As Jedi mentioned the margins are razor thin so someone who can manage those margins can absolutely make the difference between a -3% EBITDA and a 7% EBITDA, which honestly is the difference between keeping your doors open or not.
Joe, it's not all about the money. It's also very much about the manager. You could pay me $100, but if you are a bad manager- I'll walk in a heartbeat. I have no doubt that I would work for you without question- even if you paid me less than another restaurant. For these reasons:
Thank you, you're kind. I'd love to keep this conversation going and I so very much appreciate your insights and experience. Thanks for sharing.
I do think you'd have a leg up in the people management portion. So many people want to own restaurants that many get into it without the proper tools, including knowing how to handle employees. The owner of Mr. krista's current place was in process improvement for a living. No restaurant experience, and no people management. She seems like a nice woman but no management skill paired with no restaurant experience (not to mention not being naturally a leader) is tough, and I think contributes to the people issues somewhat. With the experience you have running a business with a bunch of employees, at least you'd have that advantage.
Very well said!!
I heard a quote the other day on this. Feed the rich and you'll be poor, but feed the poor and you'll get rich.
Not sure I follow. I was talking about some food types are more profitable than others. Did you mean that or are you talking more in a charitable / giving thing?
No, it's about the restaurant business. The guy I heard the quote from, albeit he was quoting someone else, worked under Emeril when he got out of culinary school. He now owns a bunch of BBQ restaurants and is making a boatload from them. Opening a fine dining restaurant is a quick way to go broke. But feeding the masses...
Thanks. I do think it's an interesting discussion on margins.
Having talked to other BBQ restauranteurs, the real key is the pulled pork. It's almost pure profit. Only a tiny bit of it goes to waste.
Can you elaborate on how you know this and more detail on what kind of restaurants you saw it with?
That's super interesting. Would love to hear more details.
Just think of it this way. How much does that butt cost and how many sandwiches does it make? If you're selling a sandwich for say, $5 (that's a low number), how many do you need to sell to pay for the butt? All the rest are pure profit.
That's not really the case. You have the labor, utilities, rent, workers comp, taxes, supplies and equipment, wood to fire the ovens, etc etc etc. all that needs to get paid from these "profits". Now there is an argument to be made that once you've done enough sales to cover your baseline cost that then yes this is true but it's a long road to get there.
This is where the discussion on opening a restaurant always needs to start. In part because this discussion also includes the demographics of the surrounding area and projected foot traffic. Those 2 things along with the margins dictate pricing. A great (and honest/realistic) proforma needs to be put together to understand the challenges, this or of course a big bank roll to withstand the first year plus of losses as you adjust to the marketplace.
All of this is certainly true and I won't even attempt to dispute it as it would be futile. But I will add that great leadership can mitigate the affects of almost all of this on the business.
I’ve been in the game all my life. I’ve opened restaurants, including my sister’s in the Virgin Islands. Ran the most expensive catering company in Los Angeles, been at the $100+ per person price point for 20 years or so.
