I want to open a decent steak house something similar to the Capital Grille. the place holds about 120 people. what do I need to consider, how much would it cost to start something like this?
I will be opening it in a downtown area of a city with 30k people in it.
1. Unless there are a lot more people around in neighboring cities, 30k people isn't great for an upscale restaurant.
2. Startup costs would probably be between 200k-400k, depending on whether you go cheap or moderate
3. Make sure you have a PILE of cash to cover the first years expenses.
4. Make sure to advertise the grand opening. I would go as far as to tell you to hire a professional company to handle the grand opening advertising.
5. Make sure to base your prices on the food/paper/labor costs, and not some random number you think works.
6. Expect to work 100 hours per week for the first few years.
On the basis of this question alone, it's fair to say you have no idea what the fuck you're doing. So, compared to anyone else, it will cost you the most, and to the tune of what you'll never afford.
Don't let that stop you though. You can still learn a lot by failing.
DO NOT FUCKING DO IT
For one, you don't know shit about food or the industry. "A steak house or something" is not what you want. Here are some things to consider
>most restaurants fail because of incompetent managers and owners like you
>you have to hire a chef. Chefs and cooks are almost always addicted to something and no chef worth his salt will accept a job where his boss - you - knows nothing of business or food
>cooks and servers are very hot headed and will fuck each other constantly. Also expect a lot of drugs moving through the kitchen.
Just don't subject yourself to it. Even if you can get it off the ground (which will take years and a good dice roll) you will be constantly stressed out and hate life.
I have already written a business plan, I've worked 8 years in restaurants, went from dishwasher to FOH Manager, I do know what I'm talking about, But I have never opened my own restaurant. I have been a manager for an opening of a restaurant, but it was a seasonal place. I planned it out and first year costs will be about $600k just for the first year, I have a Degree in business law also. Just probing for ideas and suggestions. Sorry if I sounded like a retard.
Go work in a restaurant for a few months before you make this collosal mistake.
My friend just sold his restaurant. He was working 6 days a week, and I think after everything he made like $40k.
shit AINT worth it bro.
Pretty much this. I'm only 20 but have been working closely with a 45 year old starting his second business. I only work about 40 hours a week and put no money into it, just get a wage, but I help him with a lot of accounting and stuff so I know a lot about the back end of the business. He works 18 hours a day 7 days a week and has done so for the last year and a half and has nothing to show got it because we're in a very expensive storefront plus out fridge keeps blowing up cause it's a piece of shit.
Basically from what I've seen, you'll work long hours and spend a lot of money which you'll not get much back for a while unless your a very successful shop
Post your business plan. In your first post, it sounded like you have nothing down whatsoever (literally or even conceptually). But hey, you've got it written up with a cost model so post it and we'll give you tips.
I can't think of an excuse as to why you won't post it but feel free to offer some.
let me sterilize it to keep me and my partners identity confidential. but I'd be happy to, give me an hour or so.
I'm no restaurant owner, but even I can tell you have no clue what you're doing.
You'll need to determine where your meat is coming from, and the quality of the steaks coming in. Buying a steak from Denny's is much different than a steak from the Keg. You have no negotiating leverage when trying to get the best quality cuts from wholesalers, so you gotta pay a premium price for your meat.
Then you have to figure out your overhead cost to run your business. Calculate all your costs, make some assumptions on the hourly capacity of your restaurant (you may have 100+ seats, but you will be mostly empty between lunch and dinner hours)....along with your estimated food prices.
Assuming the average customer stays 90 minutes, and you're at 70% capacity during lunch and dinner hours, combined with an average spend of $60/customer...etc... figure out whether you would actually make any money.
Good businesses succeed because their business plan lays out all the risks before even starting the business. They know they'll be successful because the prices, wages, and costs are all carefully planned. People who think it's a matter of renting a venue and selling food will always fail.
I am the writer of >>1053851
Just by way of background...
I spend around 27 years in the restaurant industry.
Worked as an employee, then a manager, then an area manager.
Then I moved up. Was an internal auditor, head of loss prevention, head of IT.
Finally started a consulting business, providing financial analysis for a 300-unit fast food company
So in other words... I probably know more about the restaurant business than most people.
Here are my take-aways...
1. There are 2 main reasons why restaurants fail (and I've seen spectacular successes and spectacular failures)....
2. Under-capitalization. People think they can throw in 100 grand and then they will suddenly have customers to pay the overhead. It is VERY common for non-branded restaurants to have no more customers at the end of their first year than they had at the beginning. Starting a non-branded restaurant from scratch is a very difficult thing.
3. Over-paying the owners. This is most common with larger operations. For example, I know a company that started with a $20 million loan, but collapsed because the owners decided to pay themselves what they 'deserved'.
4. If OP is talking about a tourist town (30k up to 100k in summer), they better plan for a restaurant that can be shut down for 6 months a year, and figure out how they're going to carry their overhead for 1/2 a year at a time.
5. Aside from food cost and labor cost, there are other things people don't consider... the double taxation on labor, R&M costs, licensing fees, utilities (expensive), grease trap costs (expensive)
5. If you have the cash, a franchise with a well known name is still the best way to avoid failure.
6. DO NOT buy an existing restaurant that has already failed. If failed for a reason.
7. If you DO buy an existing failing restaurant, make it an equipment-only purchase, not a business purchase. That way, you aren't also buying the company debt.