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View Full Version : Open a restaurant or no? THAT is the question


MariettaSmoker
09-06-2010, 04:06 PM
Ive got some friends who are begging me to open a place for my Q. I will admit that I am very interested in doing this as I have always wanted to own a restaurant. The problem is, I have no clue what it would take to do this or even where to start.

Anyone here done this? What kind of capitol would I need to get something like this started? Small at first, but growing as it needs to. Any advice on this?

MilitantSquatter
09-06-2010, 04:12 PM
make sure you have a lot of expendable $$$ & a fallback plan... the restaurant business is tough and demanding once you get past idea of it being all fun.

US Small Business Administration is a good place to start for planning

http://www.sba.gov/

BBQ Grail
09-06-2010, 04:14 PM
Are these friends who are attempting to talk you into this venture willing to put up some money?

Restaurants are almost a sure fire fail. Yes, some succeed, but 23% fail within the first year. In some areas of the country it's as high as 60%.

drbbq
09-06-2010, 05:28 PM
I'd say go work at one for a while to see if you like it. It's really not like most people think.

MariettaSmoker
09-06-2010, 05:28 PM
Not willing to invest, but I had been thinking about it before this anyway. I just dont know what I need or how much it would cost me up front.

Uncle Buds BBQ
09-06-2010, 05:52 PM
I would suggest the "Starting a business" course at KSU. Here is the link http://www.sbdc.uga.edu/newsite/index.aspx?cart=df0944c7-a4b4-49fd-b71f-9e0cb1c2c101&page_name=view_classes&city=Kennesaw

While the course does not address opening a restaurant...it was very informative. I took the whole series last fall.

MilitantSquatter
09-06-2010, 06:42 PM
Not willing to invest, but I had been thinking about it before this anyway. I just dont know what I need or how much it would cost me up front.

I never owned my own business but I often speak and work with many small to large businesses and it's amazing to me to see the variances between poorly run and well run businesses and why some are barely hanging on and others flourish.

You need patience,the ability& desire to put in long hours (nights/weekends) a bona-fide plan, a great location, a solid customer base, good marketing skills, great food at fair prices, the ability to manage a team etc. and $$$$ and with a little luck.

as far as up front costs - that all depends on what you want the initial product to look like...

I strongly suggest talking to other business owners, not necessarily even in the restaurant business to get a better idea of what owning a business entails.

Uncle Bud's suggested class looks worthwhile to pursue..

drbbq
09-06-2010, 07:16 PM
This is all good advice. The reason restaurants fail so often isn't because the owner doesn't know how to cook. It's because he can't run a restaurant and often he can't run a business.

What do you know about POS systems? Serve-Safe? FOH? Holding equipment and procedures? Hiring and maintaining employees? Fixing toilets? Long term leases? Workman's Comp? Fixing the roof? Fixing the refrigerator?

In most cases the first thing you should do is hire a chef so you can be available to run the business and that's a surprise to most.

Spydermike72
09-06-2010, 07:53 PM
I was thinking the same thing a year or so ago, then I talked to an owner and did some observation, it is a lot of work (nights,mornings,weekends), I mean a lot of work. I think the good Doctor hits the nail on the head above...

rbsnwngs
09-06-2010, 07:56 PM
PM sent

jbrink01
09-06-2010, 08:00 PM
We've resisted the urge. We've run the numbers a bunch. Our catering business thrives, while I keep my real job with all the benefits. Biggest reason we don't? Im not willing to work 80 hours a week at it, risk several hundred thousand dollars, or try and make a $12000 a MONTH nut before direct food costs.

We just bought our 3rd pit / trailer and 2nd tow / catering vehicle. We paid cash for it, and choose to grow slowly and commensutrately with our efforts.

Sledneck
09-06-2010, 08:41 PM
owning a business is like having a second wife that you spend 20-24 hours a day with. when people used to ask me how many kids I had i would respond 52 (2 who were actually mine)

JiveTurkey
09-07-2010, 11:37 AM
Check out BBQ central radio podcast archives. There are two I would suggest listening to:

Oct 27, 2009 - Moe's Original BBQ
Mike Fernandez from Moe's Original BBQ came on to talk about the benefits of franchising a bbq restaurant vs. buying your own facility and doing it from scratch. Mike talked about how he got in to bbq, how Moe's came to be and how you can find out how to get your own Moe's franchise. Visit http://www.moesoriginalbbq.com for all the information.

March 2, 2010 - Steve Forman
During the 2nd segment I will be joined by owner of Cow N Sow 2 WOW BBQ restaurant and catering company Steve Forman. If you recall, all the way back in October of last year, we talked to Mike Fernandez of Moe's BBQ about bbq franchises. Tonight we look at the other side of the coin...going it alone! Steve has competed in bbq competitions in the past, and when his career told him to go pound salt, he turned his passion in to his day job! This should be a very insightful interview.

HawgNationBBQ
09-07-2010, 11:54 AM
There are a number of the same comments below but I would reiterate a few:


Most start-up businesses fail within the first 18 months. The restaurant business is one of the toughest business and almost sure to fail - its like getting married;
If you have never run a business before, then donít do it;
Go work for a BBQ business for at least a year before you do this venture;
Donít get into business with your friends or family;
Be prepared to spend 3x what you budgeted for;
Be prepared to spend 80+ hours a week working.

Save yourself the aggravation and start off with some catering on the side. This way you can control your over-head, get a feel for profitability, and you are not locked into a single business immediately. Wait until you have to start to manage employees. You go from Chef to Psychiatrist.

armor
09-07-2010, 02:46 PM
I have some friends who come from a restaurant background and have opened 3 "wing joints" in the past 3 years. All are booming but they are looking to sell because of the hours and they knew what they were getting into. Looks like they have found a buyer. All of the above posts offer great advice. Would the area you live in support a carry-out only type business?

smooookin
09-08-2010, 07:39 PM
The only advise I can offer is this. Start small and grow from there. A large set down place is more than likely going to be big overhead. Under capitalization is the biggest reason for failure. I have been self employed for 20 years, have run crews from 2 or 3 to 25 or 30, it is like running a daycare.

My plan over the next year or two is to gather the equipment I need and find a location for a lunch time only grab and go. If that works out then maybe I will go for a place with chairs. The hours dont bother me but I am going in realizing I am looking at probable 12 hr days,(remember, lunch only) that is fine with me as I am used to that
anyway. I will say I have zero restaurant experience but I do have a contact that is willing to help out and help me succeed.

Like many have said. Failure is a very real possibility but with that in mind, show me a successful person that has never failed and I will show you a lucky SOB.

Do your homework, have a plan, have an "ideal" budget and a back up budget and have an escape plan in place. I have eaten at enough lousy BBQ joints to know if you turn out a good product and offer real customer service you are ahead of the game.

Bigdog
09-08-2010, 08:20 PM
My advice to you is to give it up. If you're not willing or able to pile, and yes, I said pile your own money into it, they how the heck can you ask others to put in their money? I'm not trying to be mean here, just realistic. As a former business owner, when it's your own dime on the line, you are much more motivated to go the extra mile.

And one more thing, restaurant work is some of the longest hours, most stressful and hardest work you can find. Nothing like cooking in your backyard for friends.

Hope this helps.

CivilWarBBQ
09-08-2010, 10:31 PM
You're getting good advice from folks above.

My cooking partner owns a BBQ restaurant. And yes, as mentioned it consumes 98% of his life. If he is not there, he is on the phone with the staff. Cooking competitions is the only real rest he gets, if you can believe that. Oh, and did I mention he had a heart attack? Cardiac Doc says: "Do you have a high stress job?" YA THINK???

You're just down the road, so if you think you want a restaurant, come talk to us. Or to Jeff at Smokin J's. If you still want to go ahead with it, pay someone experienced like Johnny to help you set it up. It will cost you, but less than the mistakes you'll make learning by trial and error.

Bigmista
09-09-2010, 01:22 AM
I have been doing catering and working Farmers markets for almost 3 years now. I have a customer base and experience (ok my wife has experience) running the business and only now are we even considering getting a spot. I love what I do but it is a lot more work and money than you could imagine. Start slow. Sell some dinners to the people at your job. Everyone like your food when it's free. Get out there and sell some food first. And remember business isn't cooking, business is selling.

Smiter Q
09-09-2010, 03:19 AM
Some good advice in the thread. Here is some RESTAURANT specific information.
I worked for 5 years in a restaurant, and sold restaurant equipment for a mega vendor for another 2.

1) 50% of restaurants close their doors and fail for good within the first year
2) 90% of all restaurants close and fail by the 5th year
3) It is a cash business, some employees will scam and steal because of such
4) There are many many many expenses that people do not see up front
5) Your number one job for your financial success is NOT your cooking or food.
It will be your ability to promote, do public relations, and brand your business in the local eye.
Yes food is important, but you must be a marketer/entrepreneur first and a cook second.
6) Do not make any decision by emotion. A balance sheet and facts should guide you 100% of the time.
7) Most restaurants are open 7 days a week and have employees in them for a minimal of 12 hours.
That is a minimal of 84 hours of operation that either you or someone you EXPLICITLY trust has to be there.
This schedule is hellish on personal life and family.
Most of your sales comes from weekends and nights, which the owner MUST be there for most of the time to have successes.
Can your personal life handle this schedule?
8 ) If you are not open for business 7 days a week with looong opened hours, people will not remember when you are open or closed.
They will choose to go elsewhere even when you are open as opposed to taking a chance "IF" you are open.
9) Start small and remain small for a good while. Add changes to your business slowly.
Sales WILL cycle and may be seasonal. It will take you at least a few years to be able to predict how this works for your restaurant specifically.
10) If you never worked extensively in a restaurant, I advise strongly to work in one that has had success.

NOW A BAR-B-Q specific thought. Your fires have to be started hours before you are ready to serve food.
This would not be a chain operation where most food is cooked in 10 minutes from order.
To have fresh brisket and pulled pork ready for lunch, what time would you have to start the fire and get meat on by?
Then if you are serving dinner, and close by 9 pm... how long from the first lit match in the morning, to the last mop of the floor be? I see 18 hour plus days there.

For more financial advice, speak to a CPA that has handled restaurant accounts. He will set you up with proper expectations.

Not trying to scare or discourage you, but as I mentioned above... FACTS and a BALANCE SHEET need to be what guides your decisions, not feelings and emotions,
"pat on the backs" or "atta boys" from friends and families.

With all the above stated, I am a firm believer in the sole proprietor ownership model. I would gladly support and pray for your business, if this is the road you decide to go.

HawgNationBBQ
09-09-2010, 07:07 AM
FACTS and a BALANCE SHEET need to be what guides your decisions, not feelings and emotions,
"pat on the backs" or "atta boys" from friends and families.



Well said^^^^

jbrink01
09-09-2010, 08:33 AM
Great point all. As I said earlier, we cater and vend a bunch. In order to vend 2 days, 6 hours each, we have 30 hours invested.

Haltech
09-11-2010, 06:34 PM
Always start small. Even people i know with successful catering businesses have crashed and burned with a sit and eat place. Someone has to be there in the morning to accept deliveries. You have to gauge how much you will sell each day and during what time of day those sales will happen, so having your products ready to serve is important.

Ive done a few catering gigs, but the way im looking at it is, im starting small with a joint. No place to sit in eat. Just grab the food and be gone. I can then prepare if a actual sit down place will work or not. In these economic times, its almost suicidal to start your own rest. But as pointed out above, if you are not prepared to dump your own money and time into it, it will never work. Time, time and a lot of time. Insurance, building leases, will you be required to have a smoke filteration unit? Employees, prep areas, coolers, freezers, holding stations, etc.. My head is spinning. lol

drbbq
09-11-2010, 07:30 PM
I don't agree with the "Start small" or the "Grab and go" strategy. You need to do what the customers want, not what you want. IMO people won't take you seriously if you have short hours, no tables, and a limited menu. If I was going to start a business I'd be looking to make a lot of money. You can't do that with a small, carry out only, limited hours joint.

Yes I know there are exceptions. Good luck with that.

Smiter Q
09-11-2010, 10:38 PM
I don't agree with the "Start small" or the "Grab and go" strategy. You need to do what the customers want, not what you want. IMO people won't take you seriously if you have short hours, no tables, and a limited menu. If I was going to start a business I'd be looking to make a lot of money. You can't do that with a small, carry out only, limited hours joint.

Yes I know there are exceptions. Good luck with that.


Just as a counter point, some of the best new BBQ joints in Austin are operated out of a trailer. A local paper did an expose on them this past year. In brief, they cook a set amount of food for the lunch crowd. One of them, "Franklin's" has people lining up a full half hour before he opens the window. He smokes a certain amount of pounds of product, sells it at a trailer that is parked in parking lot of a local business, and closes the window when all the food is gone. AND... it is ALWAYS GONE! People wait in line for 30 minutes too for the food, reminder now... this is waiting in near 100 degree TEXAS heat! He is looking now for a small brick and mortar, but he wanted to try his entry this way to see if he would have success. I personally think an operation like this is an ideal set up. There is a PROFIT every day, RISK are MINIMAL, and he is GROWING his business at a SMART pace. Not everyone has the funds or financing ability to start with a committed industrial lease and other aspects for expenses of a larger operation. Numbers speak for themselves, regardless of what one "may" want, vs. what one "can" have.

Dr_KY
09-12-2010, 02:18 AM
I get offers all the time to run kitchens in local pubs and although I want my own place in a bad kinda way I refuse the offers. I would love to be one of those rags to riches story's that started up during a recession but the truth is it aint gonna happen.

Most of these pubs are 'out of the way' and in need of business so their solution it to re-open the kitchen to increase trade. Not a bad move on the landlords part but I would be the one stuck out of pocket even with no rent. The issue is that a pint of beer is around 3.00 yet people moan when you charge them 2.00 for a pork roll including apple sauce and stuffing.

Nahh I'll stick to catering, that's hard enough as it is.

drbbq
09-12-2010, 07:26 AM
Just as a counter point, some of the best new BBQ joints in Austin are operated out of a trailer. A local paper did an expose on them this past year. In brief, they cook a set amount of food for the lunch crowd. One of them, "Franklin's" has people lining up a full half hour before he opens the window. He smokes a certain amount of pounds of product, sells it at a trailer that is parked in parking lot of a local business, and closes the window when all the food is gone. AND... it is ALWAYS GONE! People wait in line for 30 minutes too for the food, reminder now... this is waiting in near 100 degree TEXAS heat! He is looking now for a small brick and mortar, but he wanted to try his entry this way to see if he would have success. I personally think an operation like this is an ideal set up. There is a PROFIT every day, RISK are MINIMAL, and he is GROWING his business at a SMART pace. Not everyone has the funds or financing ability to start with a committed industrial lease and other aspects for expenses of a larger operation. Numbers speak for themselves, regardless of what one "may" want, vs. what one "can" have.

Like I said there are exceptions, and I'm sure these new guys are doing very well. But I'd bet there are a few trailer guys out there who never got the attention of the local media and went away too. I was one.
There's also a lot of attention to "Food Trucks" these days but I wonder how that will all shake out five years from now.

I think many want to start small because they really don't know anything about running a restaurant. But IMO if you don't know anything about running a restaurant you shouldn't open one.

I've been through this many times on the net. All I can tell you is I personally left a lot of blood, sweat, and money on the ground one time trying this but nobody wants to believe it. It's gonna be different for them.
We hear many stories of start-ups doing well, but then many of them disappear. They never come back to tell the story of closing and paying the debt after they're done.

Smiter Q
09-12-2010, 10:25 AM
Like I said there are exceptions, and I'm sure these new guys are doing very well. But I'd bet there are a few trailer guys out there who never got the attention of the local media and went away too. I was one.
There's also a lot of attention to "Food Trucks" these days but I wonder how that will all shake out five years from now.

I think many want to start small because they really don't know anything about running a restaurant. But IMO if you don't know anything about running a restaurant you shouldn't open one.

I've been through this many times on the net. All I can tell you is I personally left a lot of blood, sweat, and money on the ground one time trying this but nobody wants to believe it. It's gonna be different for them.
We hear many stories of start-ups doing well, but then many of them disappear. They never come back to tell the story of closing and paying the debt after they're done.

Very very true, thank you for sharing the personal insight. All good info! :thumb:

Smiter Q
09-12-2010, 10:30 AM
@Marietta SMoker...
Here is a newish post from another Brethren. He just started selling Q one day a week at his sign business.
It is a quick and good little read!

http://www.bbq-brethren.com/forum/showthread.php?t=91006

CivilWarBBQ
09-12-2010, 02:30 PM
Think about this: a good typical net profit for a restaurant is 10%, NOT including any compensation to the owner. Do the math and you'll get an idea how many meals you'll have to serve to make the income you need to live on. And of course figure on working 12 hours a day, every day.

jbrink01
09-12-2010, 09:01 PM
Like I said there are exceptions, and I'm sure these new guys are doing very well. But I'd bet there are a few trailer guys out there who never got the attention of the local media and went away too. I was one.
There's also a lot of attention to "Food Trucks" these days but I wonder how that will all shake out five years from now.

I think many want to start small because they really don't know anything about running a restaurant. But IMO if you don't know anything about running a restaurant you shouldn't open one.

I've been through this many times on the net. All I can tell you is I personally left a lot of blood, sweat, and money on the ground one time trying this but nobody wants to believe it. It's gonna be different for them.
We hear many stories of start-ups doing well, but then many of them disappear. They never come back to tell the story of closing and paying the debt after they're done.

Ray,
Sing it brother. I am a trailer guy that has been blessed with success, but we work our @sses off for it!! The first few years, we kept nothing for ourselves and worked LOOOOONG days with an offset. People lose sight of that when they see a $100,00 catering shop, 2 FEC 500's, coolers, charbroilers, offset pit and the TONS of servingware. They also dont think about the check we write to the bank every month for the payment, or the $1500 we paid in labor - in one day, for a big event.

I grew up farming, and we thought that dairy farmers were nuts due to the hours. Turns out catering is much the same!

chachahut
09-13-2010, 01:29 PM
I don't agree with the "Start small" or the "Grab and go" strategy. You need to do what the customers want, not what you want. IMO people won't take you seriously if you have short hours, no tables, and a limited menu. If I was going to start a business I'd be looking to make a lot of money. You can't do that with a small, carry out only, limited hours joint.

I've been reading & thinking about this thread (& others here with similar tone) for a bit so this may be a little long winded. Just want to share my personal experience in running a small grub & go joint in upstate NY.

I'm guessing Ray borrowed a shed load of cash so he could open a big sit down place with a large staff & a menu not focused solely on BBQ. I'm also guessing his overhead & debt load made it impossible for his place to succeed.

Perhaps had he set out to make a living instead of "a lot of money" he might have seen the wisdom in starting small, keeping the menu tight & focusing take out.

Low overhead & the possibility of capitalization without having to borrow.

I opened Cha Cha Hut BBQ in Roxbury, NY in January 2010 with an initial investment of around 30k. That's right - a Q joint in upstate NY opening in the middle of winter. Kept it small & simple - take out with 10 seats for any one wanting to stay & eat. No staff - me & the wife with a local kid on busy weekends. Wednesday - Sunday 11am - 8pm. My kitchen consisted of a few commercial fridges, a small freezer, stainless prep tables, 3 bin stainless sink, stainless prep sink, hand sink, wire storage racks, a commercial stove with oven & a couple of heated holding units. Two Backwoods Smokers in a shed out back. I basically designed the joint like a mobile rig in a building. I rented the building so anything like roof issues were taken care of by the landlord. (If the landlord is not covering major structural issues in your lease - you need a better lease. Always have a lawyer review before signing.)

My menu?

Pulled pork, beef brisket, smoked turkey, pork spare ribs, pig wings (rib tips), smoked mac & cheese, bbq beans, a couple of slaws, a soup of the moment, a side of the moment & a dessert of the moment. Sweet tea, lemonade & water for drinks.

We did everything Ray says destines us for failure. I guess we were the exception.

We started beating the sales projections in the first week. By the end of the first month, we completely re-tooled the business plan as we discovered folks in this area wanted:

1 Good BBQ (we're the only joint in about a 50 mile radius)
2. Inexpensive grub (our prices start a $6 for a pork sandwich)
3. Take out

Yes - people ACTUALLY want take out. (Hence the reason take out/fast food is still doing well even in the recession.) They will also pay attention to when you're open if you advertise, set clear hours & serve great food. Spent a bit on newspaper ads, but word of mouth & the internet became our best marketing source. We were doing about 35 - 40% net profit rolling into the summer (the area's biggest season).

Then - the Tuesday before Memorial Day - we had an electrical fire. Lost everything. Lesson learned: you never have enough insurance. Also - make sure to continue to update your insurance as new equipment is added. We did not do that - though to be honest we were only up for 4 months.

We've spent the summer doing Saturday gigs out of our front yard (a couple of tents & some picnic tables - take out about 80%) while working to open in a new location. (Unfortunately, the landlord of the original location has chosen not to rebuild. So, we're moving the joint to a new town about 20 minutes down the road.) We've continued to do steady business & have actually increased our clientele. Mailing list increased 30% & the Facebook page doubled in fans & traffic. Most week's found calls starting on Wednesday (when the newspaper ad came out) to pre-order food. We encourage folks to reserve food (especially ribs) as we cook a limited supply.

Our new space is rented in the back area of a local general store & my lease covers utilities & building maintenance. The kitchen & smokers will have the same basic set up as the first Hut. Yes - there are a few more tables if someone wants to take their food & sit plus a lunch counter with stools, but take out will still be 80% of my business. I am counter service only - order here/pick up here. The whole joint s around 800 square feet & will be run by myself, my wife & the occasional weekend kid. Thursday - Sunday noon until 9 or 10pm. Same laser focused menu. Nothing but BBQ.

The cost for re-opening? Essentially covered by the insurance.

I've invested about as much money as someone looking to put together a vending rig. My menu sticks with a limited amount of items to keep food & equipment costs down. If it's not BBQ or BBQ related it is not going on the menu. Burgers, hot dogs, fries & chicken tenders have NOTHING to do with BBQ. Their exclusion also remove the costs associated with a fryer & grill. Trying to be everything to everyone is precisely the reason so many restaurants fail. Trying to do what the customer wants is a losing battle. Every customer wants something different. Stick to what you do best - & if you're opening a Q joint that had better be BBQ - and you'll never disappoint any customer stopping in to get BBQ.

After all - if they did not want BBQ, why the hell did they come to Q joint?

expatpig
09-13-2010, 02:16 PM
Amen chachahut, well said!

JiveTurkey
09-13-2010, 02:35 PM
I had a chance to attend an event with a local bbq restaurant owner this past weekend, it was one hour worth it's weight in gold to get the chance to sit down and chat 1:1. He stressed the amount of hours to get started, dealing with hiring/firing of people, being able to trust employees when you're not there not because they steal directly but what he called "stolen productivity". He's finding that the younger generation of kids don't have much work ethic and waste a lot of time texting and only doing things if they're told to do them.

Yet after all of that the #1 stressor of the job above everything else was keeping equipment up and running. Something he said he never thought of before opening. Yet when a stove goes out or your freezer dies in the middle of the night and ruins all of your meat it can make for a long day.

Godspeed to anybody with the courage to go for it! You have my support!

HawgNationBBQ
09-13-2010, 02:53 PM
Great points Cha-Cha. Curious, is this your first business venture or have you run a business prior?

chachahut
09-13-2010, 03:07 PM
Very true JT. Even worse is a power failure. Had bar & restaurant friends in Brooklyn during the 2003 Blackout who basically had to grab Weber grills & cook everything in the fridges.

Insurance will cover losses on food due to fire & failures as long as you've had your agent put it into the policy, but you'd better have GREAT records or it will be an extreme pain to collect. Took us several weeks to assemble the appropriate invoices after the fire.

Of course, had we put the receipts in a fire proof box...

Yep - another lesson learned. Put fire proof safe on top of list & put all pertinent records in fire proof safe. Oh & disconnect backup thumb drive from computer & take it with you or put in fire proof safe. Leaving it on computer when office burns will do you absolutely no good when it comes to an insurance claim.

Bamabuzzard
09-13-2010, 03:16 PM
Excellent advice and spot on. Starting out small and growing as needed is the best way to go. Risk is at a minimum and its a situation that the owner can keep control over rather than having the situation take control of them.

Many of your staple restaurants started off exactly as described below.


Just as a counter point, some of the best new BBQ joints in Austin are operated out of a trailer. A local paper did an expose on them this past year. In brief, they cook a set amount of food for the lunch crowd. One of them, "Franklin's" has people lining up a full half hour before he opens the window. He smokes a certain amount of pounds of product, sells it at a trailer that is parked in parking lot of a local business, and closes the window when all the food is gone. AND... it is ALWAYS GONE! People wait in line for 30 minutes too for the food, reminder now... this is waiting in near 100 degree TEXAS heat! He is looking now for a small brick and mortar, but he wanted to try his entry this way to see if he would have success. I personally think an operation like this is an ideal set up. There is a PROFIT every day, RISK are MINIMAL, and he is GROWING his business at a SMART pace. Not everyone has the funds or financing ability to start with a committed industrial lease and other aspects for expenses of a larger operation. Numbers speak for themselves, regardless of what one "may" want, vs. what one "can" have.

chachahut
09-13-2010, 03:50 PM
Great points Cha-Cha. Curious, is this your first business venture or have you run a business prior?

First self-owned food service though I've been a cook for several years. Prior to this, we had a fairly successful web design shop for a decade. Both the wife & I are IT/web/design geeks. My life prior to starting my own web shop was 20 years in the music biz. My wife worked for several Fortune 500 companies as a tech guru.

Stoke&Smoke
09-13-2010, 04:23 PM
Really interesting thread! Thanks to all for your input!

drbbq
09-13-2010, 10:07 PM
I've been reading & thinking about this thread (& others here with similar tone) for a bit so this may be a little long winded. Just want to share my personal experience in running a small grub & go joint in upstate NY.

I'm guessing Ray borrowed a shed load of cash so he could open a big sit down place with a large staff & a menu not focused solely on BBQ. I'm also guessing his overhead & debt load made it impossible for his place to succeed.

Perhaps had he set out to make a living instead of "a lot of money" he might have seen the wisdom in starting small, keeping the menu tight & focusing take out.

Low overhead & the possibility of capitalization without having to borrow.

I opened Cha Cha Hut BBQ in Roxbury, NY in January 2010 with an initial investment of around 30k. That's right - a Q joint in upstate NY opening in the middle of winter. Kept it small & simple - take out with 10 seats for any one wanting to stay & eat. No staff - me & the wife with a local kid on busy weekends. Wednesday - Sunday 11am - 8pm. My kitchen consisted of a few commercial fridges, a small freezer, stainless prep tables, 3 bin stainless sink, stainless prep sink, hand sink, wire storage racks, a commercial stove with oven & a couple of heated holding units. Two Backwoods Smokers in a shed out back. I basically designed the joint like a mobile rig in a building. I rented the building so anything like roof issues were taken care of by the landlord. (If the landlord is not covering major structural issues in your lease - you need a better lease. Always have a lawyer review before signing.)

My menu?

Pulled pork, beef brisket, smoked turkey, pork spare ribs, pig wings (rib tips), smoked mac & cheese, bbq beans, a couple of slaws, a soup of the moment, a side of the moment & a dessert of the moment. Sweet tea, lemonade & water for drinks.

We did everything Ray says destines us for failure. I guess we were the exception.

We started beating the sales projections in the first week. By the end of the first month, we completely re-tooled the business plan as we discovered folks in this area wanted:

1 Good BBQ (we're the only joint in about a 50 mile radius)
2. Inexpensive grub (our prices start a $6 for a pork sandwich)
3. Take out

Yes - people ACTUALLY want take out. (Hence the reason take out/fast food is still doing well even in the recession.) They will also pay attention to when you're open if you advertise, set clear hours & serve great food. Spent a bit on newspaper ads, but word of mouth & the internet became our best marketing source. We were doing about 35 - 40% net profit rolling into the summer (the area's biggest season).

Then - the Tuesday before Memorial Day - we had an electrical fire. Lost everything. Lesson learned: you never have enough insurance. Also - make sure to continue to update your insurance as new equipment is added. We did not do that - though to be honest we were only up for 4 months.

We've spent the summer doing Saturday gigs out of our front yard (a couple of tents & some picnic tables - take out about 80%) while working to open in a new location. (Unfortunately, the landlord of the original location has chosen not to rebuild. So, we're moving the joint to a new town about 20 minutes down the road.) We've continued to do steady business & have actually increased our clientele. Mailing list increased 30% & the Facebook page doubled in fans & traffic. Most week's found calls starting on Wednesday (when the newspaper ad came out) to pre-order food. We encourage folks to reserve food (especially ribs) as we cook a limited supply.

Our new space is rented in the back area of a local general store & my lease covers utilities & building maintenance. The kitchen & smokers will have the same basic set up as the first Hut. Yes - there are a few more tables if someone wants to take their food & sit plus a lunch counter with stools, but take out will still be 80% of my business. I am counter service only - order here/pick up here. The whole joint s around 800 square feet & will be run by myself, my wife & the occasional weekend kid. Thursday - Sunday noon until 9 or 10pm. Same laser focused menu. Nothing but BBQ.

The cost for re-opening? Essentially covered by the insurance.

I've invested about as much money as someone looking to put together a vending rig. My menu sticks with a limited amount of items to keep food & equipment costs down. If it's not BBQ or BBQ related it is not going on the menu. Burgers, hot dogs, fries & chicken tenders have NOTHING to do with BBQ. Their exclusion also remove the costs associated with a fryer & grill. Trying to be everything to everyone is precisely the reason so many restaurants fail. Trying to do what the customer wants is a losing battle. Every customer wants something different. Stick to what you do best - & if you're opening a Q joint that had better be BBQ - and you'll never disappoint any customer stopping in to get BBQ.

After all - if they did not want BBQ, why the hell did they come to Q joint?

So are you paying your house payment, car payment, health insurance, putting a little in a 401k, buying the wife a little something now and then, and putting a little spending money in your pocket all from this business? If so I say congratulations! You've beaten the odds.

bam
09-13-2010, 10:37 PM
Alcohol!! Restaurants that serve alcohol have a better chance of making it.

bbquzz
09-13-2010, 11:15 PM
As many have said "Listen To The Dr." If you don't believe Dr. BBQ, make a list with two columns, one with people from this post who said to get in business and one the people who said "DON'T DO IT," that should answer the original question.

chachahut
09-14-2010, 05:43 AM
Yes Ray - we are paying our bills & saving a bit. Thanks to the state of health care in this country, I have not had health insurance since I left the corporate world 15 years ago. As we spend pretty much all our time at the joint - we find it less necessary to have "spending" money but yes- we do have that as well.

Point is Ray - we're making a living on our own terms with our own business with very little debt. That - to us - is far more important than making a lot of money or even "buying the wife a little something". She'd probably gut you with a carving knife for that incredibly sexist statement.

Actually Bam - alcohol IS a great margin point but adds about 1000 times more headaches & money sucks to the business. Major among them is the insurance costs. You carry a MUCH greater insurance load with alcohol than with a simple Q joint. You also need a larger place - & staff - to serve alcohol which then gets back to why so many restaurants fail.

Buzz - sorry but I have to disagree. The Dr. has not offered anything other than HE failed ONCE & the absolutely absurd advice: "You have to start big & rack up a huge debt. You can't start small using your own capital & grow as your business grows." I know of no credible business adviser who would tell anyone they should not start small & manageable. As such, I can't put much weight into anything he has to say about opening a Q joint. Though perhaps he is right when it comes to opening a restaurant.

Bamabuzzard
09-14-2010, 09:20 AM
I've never owned a restaurant but I've been accountant my entire life and currently am the controller for a pump specialists company in Louisiana. I also do contract accounting for small businesses on the side to have a little "BBQ play money". :becky: :clap2:

One thing that is a fundamental element of business is to not leverage the company in so much debt (especially in the beginning stages) that the business has been set up to fail from the get go. It is always better to pay for things with "cash" rather than financing them. Realistically we all know this isn't always feasible. But when it is then it should be done over financing. "The borrower is a slave to the lender". Isn't that the old saying? Debt can be useful when it is strategically used and only intended to be used for a short term.

A friend mine's brother in law owns one of the most successful bbq joints in Shreveport/Bossier, LA. It began just as you've recommended to do. They started small, conservative and grew at a methodical steady pace and over the years they have now built a solid business that isn't sitting on the edge of the cliff with debt.


Yes Ray - we are paying our bills & saving a bit. Thanks to the state of health care in this country, I have not had health insurance since I left the corporate world 15 years ago. As we spend pretty much all our time at the joint - we find it less necessary to have "spending" money but yes- we do have that as well.

Point is Ray - we're making a living on our own terms with our own business with very little debt. That - to us - is far more important than making a lot of money or even "buying the wife a little something". She'd probably gut you with a carving knife for that incredibly sexist statement.

Actually Bam - alcohol IS a great margin point but adds about 1000 times more headaches & money sucks to the business. Major among them is the insurance costs. You carry a MUCH greater insurance load with alcohol than with a simple Q joint. You also need a larger place - & staff - to serve alcohol which then gets back to why so many restaurants fail.

Buzz - sorry but I have to disagree. The Dr. has not offered anything other than HE failed ONCE & the absolutely absurd advice: "You have to start big & rack up a huge debt. You can't start small using your own capital & grow as your business grows." I know of no credible business adviser who would tell anyone they should not start small & manageable. As such, I can't put much weight into anything he has to say about opening a Q joint. Though perhaps he is right when it comes to opening a restaurant.

drbbq
09-14-2010, 10:55 AM
Yes Ray - we are paying our bills & saving a bit. Thanks to the state of health care in this country, I have not had health insurance since I left the corporate world 15 years ago. As we spend pretty much all our time at the joint - we find it less necessary to have "spending" money but yes- we do have that as well.

Point is Ray - we're making a living on our own terms with our own business with very little debt. That - to us - is far more important than making a lot of money or even "buying the wife a little something". She'd probably gut you with a carving knife for that incredibly sexist statement.

Actually Bam - alcohol IS a great margin point but adds about 1000 times more headaches & money sucks to the business. Major among them is the insurance costs. You carry a MUCH greater insurance load with alcohol than with a simple Q joint. You also need a larger place - & staff - to serve alcohol which then gets back to why so many restaurants fail.

Buzz - sorry but I have to disagree. The Dr. has not offered anything other than HE failed ONCE & the absolutely absurd advice: "You have to start big & rack up a huge debt. You can't start small using your own capital & grow as your business grows." I know of no credible business adviser who would tell anyone they should not start small & manageable. As such, I can't put much weight into anything he has to say about opening a Q joint. Though perhaps he is right when it comes to opening a restaurant.

How can you put this in quotes and attribute it to me? "You have to start big & rack up a huge debt. You can't start small using your own capital & grow as your business grows."

I never said that. It's your spin. Your credibility is gone.

I've been self employed and successful for 35 years, except the BBQ trailer venture. I can't tell it any other way. Yeah we had good weeks, months, and even a season. But then we had to move and the business didn't come with. Then there was a hepatitis scare that had nothing to do with us but business dried up anyway. Then some days it rains. then some days it's hot. then some days Sonny's has an all you can eat rib special. Then some days they sell slabs in front of Publix for $10. I could go on.
But I'm sure it's different for you.

Now tell me again how many successful years your BBQ business has had?

C Rocke
09-14-2010, 11:12 AM
Yes Ray - we are paying our bills & saving a bit. Thanks to the state of health care in this country, I have not had health insurance since I left the corporate world 15 years ago. As we spend pretty much all our time at the joint - we find it less necessary to have "spending" money but yes- we do have that as well.

Point is Ray - we're making a living on our own terms with our own business with very little debt. That - to us - is far more important than making a lot of money or even "buying the wife a little something". She'd probably gut you with a carving knife for that incredibly sexist statement.

Actually Bam - alcohol IS a great margin point but adds about 1000 times more headaches & money sucks to the business. Major among them is the insurance costs. You carry a MUCH greater insurance load with alcohol than with a simple Q joint. You also need a larger place - & staff - to serve alcohol which then gets back to why so many restaurants fail.

Buzz - sorry but I have to disagree. The Dr. has not offered anything other than HE failed ONCE & the absolutely absurd advice: "You have to start big & rack up a huge debt. You can't start small using your own capital & grow as your business grows." I know of no credible business adviser who would tell anyone they should not start small & manageable. As such, I can't put much weight into anything he has to say about opening a Q joint. Though perhaps he is right when it comes to opening a restaurant.



Whoa - Free and open exchange of ideas, so no need to sling any mud here brother. Advice and comments are like belly buttons, everyone has one - But there is no standard for excellence in either an "innie" or an "outie".

Smiter Q
09-14-2010, 11:24 AM
@chachahut
I think you are wise for many parts of your statements, and for your business acumen.
I also think that there are plenty who have read your statements and agree in full heartedness with you and your decisions.

The Dr. writes from his experience from another angle of successes, which is probably more elusive for most folks.
Although I do not agree with all of his statements, his success is unquestionable.

In the end, success speaks for itself, and myself and all th Brethren should be happy for you both. Which I am. :-D

JiveTurkey
09-14-2010, 11:45 AM
As many have said "Listen To The Dr."


Not. All "the Dr." seems to be doing is spewing negativity towards a BBQ business owner for following a different business model than he did and that is so far working (and paraphrasing his words with quotes ohhh ahhhhh lame). From the outside it sounds like jealousy. How many years has he been open, who cares. He's giving advice on how to start. Maybe if he's lucky to be open in 10 years he'll be here to tell us how to stay in business. If he fails then at least he tried and we can learn from that too instead of saying don't do it. Until then I've enjoyed reading how he got started. He's got the cajones I only wish I had. And someday might, which is why I'm following this thread so closely.

Sorry Dr BBQ I've always enjoyed watching you on TV but to attack someone who came here to offer advice on how to open a q joint seems a little petty. But I don't have any credibility either, I'm a nobody, just a guy on the outside looking in.

To ChaChahut, good luck to you. Sucks to hear that you can't even buy your wife a present without it being a sexist issue. I thought only political correctness was out here on the left coast.

HawgNationBBQ
09-14-2010, 11:55 AM
Hey Cha Cha,

I think there is a lot of good information for you in this thread. Personally, I would print it out and look through each comment and make notes of the good things and bad. That should give you a good basis on which to develop a plan or strategy for your new venture. Good luck.

Smiter Q
09-14-2010, 12:09 PM
Hey Cha Cha,

I think there is a lot of good information for you in this thread. Personally, I would print it out and look through each comment and make notes of the good things and bad. That should give you a good basis on which to develop a plan or strategy for your new venture. Good luck.


:idea:Hawgs, I think you meant to post that towards Marietta SMoker.
Cha Cha already has a business up and running.
MS was the original poster.
But still.. it is GOOD ADVICE. :-D

drbbq
09-14-2010, 12:17 PM
Sorry Dr BBQ I've always enjoyed watching you on TV but to attack someone who came here to offer advice on how to open a q joint seems a little petty.

Attack?
He made up a nasty quote and attributed it to me!

Bamabuzzard
09-14-2010, 12:46 PM
Many times what you're trying to convey isn't received in the same manner. To be honest, and I don't have a dawg in this fight, what you said came across with a condenscending tone and glazed with a bit of arrogance. I'm not saying you intended that but when I read it that's how it come across to me. It came across as if it ticked you off that someone skinned a cat in a way that you said failed more times than it worked.

Regarding him "misquoting you". Though you didn't say that explicitly. By you saying the bolded text below by default you were saying exactly what he called you out on. I mean, read what you typed. If you dont' agree with going small, and limiting your menu in order to keep cost down then by default what are you agreeing to or saying is the right way to do it?

I don't agree with the "Start small" or the "Grab and go" strategy. You need to do what the customers want, not what you want. IMO people won't take you seriously if you have short hours, no tables, and a limited menu. If I was going to start a business I'd be looking to make a lot of money. You can't do that with a small, carry out only, limited hours joint.

Yes I know there are exceptions. Good luck with that.

JiveTurkey
09-14-2010, 01:05 PM
Yea attack was probably the wrong word. My bad. It just seemed to border on a dislike for the guy just because he's not doing it the way you envision. chaChaHut seems to be working well for the owners and customers, sounds like a success story to me. Especially in this economic environment were in. Again sorry for the poor choice of words. Attack is what happens when you buy your wife a little sumthin. haha.

HawgNationBBQ
09-14-2010, 01:07 PM
:idea:Hawgs, I think you meant to post that towards Marietta SMoker.
Cha Cha already has a business up and running.
MS was the original poster.
But still.. it is GOOD ADVICE. :-D

sorry my bad. disregard.

Dr_KY
09-14-2010, 01:23 PM
Advice and comments are like belly buttons, everyone has one - But there is no standard for excellence in either an "innie" or an "outie".
My baby girl hasn't got one but but I don't argue with her either as she always wins for some reason. :wink:

drbbq
09-14-2010, 01:24 PM
Many times what you're trying to convey isn't received in the same manner. To be honest, and I don't have a dawg in this fight, what you said came across with a condenscending tone and glazed with a bit of arrogance. I'm not saying you intended that but when I read it that's how it come across to me. It came across as if it ticked you off that someone skinned a cat in a way that you said failed more times than it worked.

Regarding him "misquoting you". Though you didn't say that explicitly. By you saying the bolded text below by default you were saying exactly what he called you out on. I mean, read what you typed. If you dont' agree with going small, and limiting your menu in order to keep cost down then by default what are you agreeing to or saying is the right way to do it?

Do you realize that your tone is that of a mother scolding a child?

HawgNationBBQ
09-14-2010, 01:25 PM
Hey Dr. BBQ

I like the hot girls in your picture.

drbbq
09-14-2010, 01:38 PM
Cooper Tire Babes!

Dr_KY
09-14-2010, 01:44 PM
I need a set of those!!!!!!

Bamabuzzard
09-14-2010, 01:48 PM
You seemed to not understand why you were getting the reaction you were getting. So rather than bickering like a bunch of teenagers I'd thought I point out that maybe the message you intended to convey was received in a different manner than you intended. But the more this plays out it seems you knew exactly the tone you wanted to communicate but don't like getting called out on it.


Do you realize that your tone is that of a mother scolding a child?

chachahut
09-14-2010, 02:02 PM
My apologies, Ray. No attack was intended & I apologize for the misunderstanding. When I read your posts, it appeared to me you were advising against starting out with a small manageable business with low debt & overhead.

That's what I got when I read the following:

I don't agree with the "Start small" or the "Grab and go" strategy. You need to do what the customers want, not what you want. IMO people won't take you seriously if you have short hours, no tables, and a limited menu. If I was going to start a business I'd be looking to make a lot of money. You can't do that with a small, carry out only, limited hours joint.

I think many want to start small because they really don't know anything about running a restaurant. But IMO if you don't know anything about running a restaurant you shouldn't open one.

All I can tell you is I personally left a lot of blood, sweat, and money on the ground one time trying this but nobody wants to believe it.

Of course, how one could not interpret the above to mean essentially one is completely clueless when it comes to the food service business if they choose to start small, keep the menu tight & focus on the low overhead of take out - especially when that person is actually running such a business - is beyond me.

Perhaps instead of a series of negative "NOPE DON'T DO IT" posts you could provide some real tangible constructive advice to the original poster in this thread. Share that 35 years of experience & knowledge to help him avoid the pitfalls. Encourage & help someone to start their own successful business - not smack'em down for trying. Way too often threads like this are dominated by negativity like yours. I say it's high time - especially in this economy - we actually try to HELP folks find some way to make a new business work.

I'll work up a post on the things I did to start my small, carry out only, limited menu, limited hours joint. I challenge the Dr. & any other business owner reading this to come up with some positive advice to help MariettaSmoker.

Any takers?

Bamabuzzard
09-14-2010, 02:31 PM
HERE! HERE! I'd love to read what you did. I'm not up for a career change at the moment. I love doing what I do but I always love learning something new. Can't wait to read your post. :thumb:

I'll work up a post on the things I did to start my small, carry out only, limited menu, limited hours joint. I challenge the Dr. & any other business owner reading this to come up with some positive advice to help MariettaSmoker.

Any takers?

Smiter Q
09-14-2010, 02:32 PM
Cooper Tire Babes!


Funny... when I bought my GF 4 Cooper tires this year, I did not get the babes like you did! :becky::cool::becky:

Smiter Q
09-14-2010, 02:38 PM
I'll work up a post on the things I did to start my small, carry out only, limited menu, limited hours joint. I challenge the Dr. & any other business owner reading this to come up with some positive advice to help MariettaSmoker.

Any takers?

Hey Cha cha.. I personally am really looking forward to your thread.. when you get the time. As I know time is limited for you. I really admire what you and your wife have accomplished. It is no small feat, on any size of scale. I personally tip my hat to all the small mom and pops for their drive and doing it their way. For good or bad, America is filled and keeps up with the large restaurant chains. If you were near me, I be visiting your place.. when I am too tired to do my own food that is!

Though don't forget.. there is a good deal of positive advice already in the thread too, a good part being yours :clap2::clap2:

I think Marietta Smoker's thread here has been helpful and appreciated my many people. Thanks MS for the original idea to ask this question!!!

drbbq
09-14-2010, 02:46 PM
My apologies, Ray. No attack was intended & I apologize for the misunderstanding. When I read your posts, it appeared to me you were advising against starting out with a small manageable business with low debt & overhead.

That's what I got when I read the following:





Of course, how one could not interpret the above to mean essentially one is completely clueless when it comes to the food service business if they choose to start small, keep the menu tight & focus on the low overhead of take out - especially when that person is actually running such a business - is beyond me.

Perhaps instead of a series of negative "NOPE DON'T DO IT" posts you could provide some real tangible constructive advice to the original poster in this thread. Share that 35 years of experience & knowledge to help him avoid the pitfalls. Encourage & help someone to start their own successful business - not smack'em down for trying. Way too often threads like this are dominated by negativity like yours. I say it's high time - especially in this economy - we actually try to HELP folks find some way to make a new business work.

I'll work up a post on the things I did to start my small, carry out only, limited menu, limited hours joint. I challenge the Dr. & any other business owner reading this to come up with some positive advice to help MariettaSmoker.

Any takers?

My problem is with the quotes around a spun version of what I said.

I don't have time to detail all of this. I'm telling the truth as I know it but once again everybody thinks I did something wrong and it will be different for them. I wish you all lots of luck.

I'll be looking for all the success stories to answer your challenge though.

ique
09-14-2010, 03:36 PM
Think about this: a good typical net profit for a restaurant is 10%, NOT including any compensation to the owner. Do the math and you'll get an idea how many meals you'll have to serve to make the income you need to live on. And of course figure on working 12 hours a day, every day.

Yes backing into the sales you need to do is a smart way of thinking about it.

The restaurant I opened about 15 years ago is still running because the financial structure combined with a conservative estimate on the number of nightly covers was enough to cover the nut and drop a reasonable amount of money to the owner/operator. I said no to 4 or 5 scenarios before going with one.

I'm looking at some other restaurant ideas right now. I like to start with the P&L Proforma where I simply chart out low, medium, peak number of covers and check average the restaurant could reasonably support. Extend and calculate to estimate yearly sales. Apply 10% Net Income.... long look in the mirror:

1. Can I hit those cover/check average numbers?
2. Will the net income cover my financial needs and my debt service?

Strong Yes's and move onto to Cash Flow analysis.

If you are not great with numbers hire a financial consultant to develop a plan. You can operate perfectly but if you have a financial boulder on your back you will fail.

Bamabuzzard
09-14-2010, 03:47 PM
One thing that I ensure to tell my clients is "cash is king". I don't care what a P&L looks like if that balance sheet is filled with debt that has to be serviced every month with large amounts of cash then they need to cut cost, slow down spending and get more aggressive at collecting receivables. I know receivables aren't a big part of the restaurant business but cash flow is.

Most people that venture into opening their own businesses aren't "financial" minded people. They have no clue how to read a set of financials. Yet these same people don't think it is important to spend the money for a financial advisor and never figure out before it's too late as to "where did all the money go?"


Yes backing into the sales you need to do is a smart way of thinking about it.

The restaurant I opened about 15 years ago is still running because the financial structure combined with a conservative estimate on the number of nightly covers was enough to cover the nut and drop a reasonable amount of money to the owner/operator. I said no to 4 or 5 scenarios before going with one.

I'm looking at some other restaurant ideas right now. I like to start with the P&L Proforma where I simply chart out low, medium, peak number of covers and check average the restaurant could reasonably support. Extend and calculate to estimate yearly sales. Apply 10% Net Income.... long look in the mirror:

1. Can I hit those cover/check average numbers?
2. Will the net income cover my financial needs and my debt service?

Strong Yes's and move onto to Cash Flow analysis.

If you are not great with numbers hire a financial consultant to develop a plan. You can operate perfectly but if you have a financial boulder on your back you will fail.

chachahut
09-14-2010, 03:48 PM
I don't have time to detail all of this. I'm telling the truth as I know it but once again everybody thinks I did something wrong and it will be different for them. I wish you all lots of luck.

No time to detail what went wrong & perhaps teach someone what to avoid, but plenty of time to sling a bit of negativity & dump on people's dreams, eh? Nice - very nice.

I'll be looking for all the success stories to answer your challenge though.

Dripping sarcasm duly noted & typical of the tone you've displayed throughout this thread.

Personally I'M hoping to hear from folks with the time to detail why they believe their business failed. One learns much more from failure than from success. Perhaps the "truth as you know it" might help me or anyone else reading this thread from hitting the same issues you did.

ique
09-14-2010, 03:55 PM
One thing that I ensure to tell my clients is "cash is king". I don't care what a P&L looks like if that balance sheet is filled with debt that has to be serviced every month with large amounts of cash then they need to cut cost, slow down spending and get more aggressive at collecting receivables. I know receivables aren't a big part of the restaurant business but cash flow is.

Most people that venture into opening their own businesses aren't "financial" minded people. They have no clue how to read a set of financials. Yet these same people don't think it is important to spend the money for a financial advisor and never figure out before it's too late as to "where did all the money go?"

1. The P&L is valuable as a gauge on what the monthly numbers would look like and whether I can cover that balance sheet filled with debt (and the 100 grand I want to pay myself :-D ). As I said the important next step is CASH FLOW

2. I was suggesting to spend money on a financial advisor BEFORE doing a deal, not after.

Dr_KY
09-14-2010, 04:13 PM
No time to detail what went wrong & perhaps teach someone what to avoid, but plenty of time to sling a bit of negativity & dump on people's dreams, eh? Nice - very nice.

Dripping sarcasm duly noted & typical of the tone you've displayed throughout this thread.



Dude slow down a bit perhaps he has no time for detail 'at this point in time'. Don't read so much into things straight away. No one is here to hurt anyone... this place doesn't and never will work like that.

A fair number of things can go away from the original plan in this sort of business and I as one can tell you if I were to sit and run through them all you would either get very board or the forum would time out on me.lol

I am working with very little money, bad weather as normal, bad economy, home made cookers, a busted gazebo,people that think carbonized sausage is BBQ, borrowed tables, and people that smile and lie to your face and those are only a 1/4 of the top crust just wait till I get to the filling. lol

Bamabuzzard
09-14-2010, 04:22 PM
I'm not disagreeing with anything you're saying I was giving examples that I see with many of the clients I deal with. They don't understand that gauging cash flow is most important with deciding on whether or not you're going to take out a loan to buy something. I do contract accounting for several small businesses so I'm not there on a day to day basis when they decide to make financia decisions. So I try to educate them as much as I can when it comes time for me to visit them so during the interim they don't go do something that could be fatal to their business.


1. The P&L is valuable as a gauge on what the monthly numbers would look like and whether I can cover that balance sheet filled with debt (and the 100 grand I want to pay myself :-D ). As I said the important next step is CASH FLOW

2. I was suggesting to spend money on a financial advisor BEFORE doing a deal, not after.

Bamabuzzard
09-14-2010, 04:26 PM
I think the issue is the obvious sarcastic, condescending tone the good doctor has been using. It doesn't come across as someone wanting to help but rather to tear down. :boink:

Dude slow down a bit perhaps he has no time for detail 'at this point in time'. Don't read so much into things straight away. No one is here to hurt anyone... this place doesn't and never will work like that.

A fair number of things can go away from the original plan in this sort of business and I as one can tell you if I were to sit and run through them all you would either get very board or the forum would time out on me.lol

I am working with very little money, bad weather as normal, bad economy, home made cookers, a busted gazebo,people that think carbonized sausage is BBQ, borrowed tables, and people that smile and lie to your face and those are only a 1/4 of the top crust just wait till I get to the filling. lol

C Rocke
09-14-2010, 04:28 PM
Mods - Little help here...

drbbq
09-14-2010, 04:37 PM
No time to detail what went wrong & perhaps teach someone what to avoid, but plenty of time to sling a bit of negativity & dump on people's dreams, eh? Nice - very nice.



Dripping sarcasm duly noted & typical of the tone you've displayed throughout this thread.

Personally I'M hoping to hear from folks with the time to detail why they believe their business failed. One learns much more from failure than from success. Perhaps the "truth as you know it" might help me or anyone else reading this thread from hitting the same issues you did.

I'm trying to let it go man. You should try too.

drbbq
09-14-2010, 04:40 PM
I think the issue is the obvious sarcastic, condescending tone the good doctor has been using. It doesn't come across as someone wanting to help but rather to tear down. :boink:

I've never been much for looking through rose color glasses.

Bamabuzzard
09-14-2010, 04:45 PM
Okay. :thumb:

I've never been much for looking through rose color glasses.

bam
09-14-2010, 05:18 PM
If I can have a shot and a beer while waiting seems like a good thing to me.I say go for it do your home work.

Ron_L
09-14-2010, 07:41 PM
Mod Note:

Please keep this civil. if you can't, either refrain from posting or we'll scrub this thread and lock it.

If you need a reminder, please re-read this post...

http://www.bbq-brethren.com/forum/showthread.php?t=81360

Specifically...

NO personal attacks. NO attacks of any kind. Recognizing that everyone has, and is entitled to an opinion, if your opinion comes across as antagonistic, bad karma, insulting or hurtful, keep it to yourself. Any meaningless post that is nothing more than a negative comment of any kind towards a member, or the membership, or is strictly there to antagonize, will be edited or deleted. In other words, you are NOT allowed to be a jerk just to piss people off. Moderators do not have time to be putting out flame wars.

BBQ VT
09-14-2010, 10:07 PM
Besides the feuding this has been a great thread thanks to all!

Ford
09-15-2010, 07:56 AM
Wow. Miss a couple of days reading and miss lots. OK so I do cook and vend BBQ for a living now. At least I hope I'll break even this year maybe. And that doesn't mean paying the bills at home. But I am turning the corner. It's hard work, there are huge ups and downs but it beats the corporate grind for me.

But if you want to open a restaurant and have never run a small business before and never cooked in a restaurant and never dealt with employees and issues with attendance, etc. then maybe you need to do a lot more research than here.

Step 1 - talk with an accountant you trust. Most everybody has a friend that is in the accounting business. Let them quote you the facts on what it costs, how you lose or break even the first year or 2, how so many go under.

Yes it can be a great life and yes you can make money but believe me you will be in the minority. Just think about all the restaurant buildings in your area that have changed hands or sat vacant for months. I know some that change hands every couple of years and a newby says I can make a go when others can't.

Bamabuzzard
09-15-2010, 10:03 AM
:clap2: Great advice Ford.


Wow. Miss a couple of days reading and miss lots. OK so I do cook and vend BBQ for a living now. At least I hope I'll break even this year maybe. And that doesn't mean paying the bills at home. But I am turning the corner. It's hard work, there are huge ups and downs but it beats the corporate grind for me.

But if you want to open a restaurant and have never run a small business before and never cooked in a restaurant and never dealt with employees and issues with attendance, etc. then maybe you need to do a lot more research than here.

Step 1 - talk with an accountant you trust. Most everybody has a friend that is in the accounting business. Let them quote you the facts on what it costs, how you lose or break even the first year or 2, how so many go under.

Yes it can be a great life and yes you can make money but believe me you will be in the minority. Just think about all the restaurant buildings in your area that have changed hands or sat vacant for months. I know some that change hands every couple of years and a newby says I can make a go when others can't.

Utahslo-smoke
09-16-2010, 10:49 AM
We've resisted the urge. We've run the numbers a bunch. Our catering business thrives, while I keep my real job with all the benefits. Biggest reason we don't? Im not willing to work 80 hours a week at it, risk several hundred thousand dollars, or try and make a $12000 a MONTH nut before direct food costs.

We just bought our 3rd pit / trailer and 2nd tow / catering vehicle. We paid cash for it, and choose to grow slowly and commensutrately with our efforts.

This is the way I have chosen to do things as well. Cash = less risk. I would suggest looking into catering. If you can do that for a year or so and still feel like you should open up a sit down shop have at. This takes a few less hours and you get way more days off, and allows for a LOT more mistakes.

boogiesnap
09-16-2010, 07:32 PM
very interesting read.
something i was considering was roadside. strictly legal of course. there is ALOT of trucking business in a very condensed area where i live. i was thinking there would be a good steady customer base there, plus a strong word of mouth exposure opportunity. pork ribs only. maybe a brisket or pork sandwich special now and then.

i then did some quick math.
WSM 22.5 can safely cook well @ 8 racks of st. louis ribs per 4 hours.
say 8 bucks per rack(estimate from RD case prices, i forget exactly)
say 10 bucks in charcoal(again RD RO lump)per cook.
say 10 bucks in sauce and rub ingredients per 8 racks(this might be high, but still) my recipes use some HQ spices, etc.
say 5 bucks serving supplies.
thats $90 per cook for 8 racks. over $11 dollars a rack cost.
sell for $16 per rack. might be low, but this is would be a guy on the side of the road.
that's $32 net.
obviously the number could increase somewhat with a larger cooker but still, the numbers are clear.
you gotta sell ALOT of food.
i'd say 80 racks a day minimum to be successful.

but, i am still contemplating...clearly need hard, not soft, numbers.

i love to cook barbeque.

txschutte
09-16-2010, 09:22 PM
TIME-The one thing you can't buy with all the money you make in a successful BBQ outing.

I cater part time and had a very successful roadside gig. However, long hours, no vacation and dragging my hobby into a drudgery are the reasons I uit doing roadside for now. I know I can do it again, but time with my family was a price I pad the first time.

If you are lucky enough to be able to get help, or have an open schedule, I say go for it. You will never know unless you try, just don't lose sight of things that really matter.

Good Luck.