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I need some help

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I need some help

Postby CadensDad » Mon Mar 30, 2009 5:40 pm

I need some advice/guidance in a new adventure I am attempting to undertake. And since we have so many people from different walks of life here, I figured you guys could help a bit.

I am wanting to open my own restaurant/eatery. I have found a location in my small town that would be a good solid fit, it’s small, in a safe area, close to my home, and in a growing area. I am wanting to do basic lunch style foods, chicken fingers, hamburgers, hot dogs, homemade potato chip style fries. And when I say chicken fingers I mean 100% whole chicken fingers quality stuff. Angus beef burgers,. I don’t want some cheap crappy food that you can get at McDonalds.

I have a basic menu set up so far, and am needing to know a few things.

1.)What is the best way to go about getting funded for a project like this?
2.)What kind of permits do I need to get?
3.) Would I do better getting new equipment or used?
4.) How do I check to see if my idea for a name is taken?
5.)What kind of fees should I expect from a bookkeeping service?


Any help on this would be great, If there is anything else I need to know please let me know. Thanks a lot guys.
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Re: I need some help

Postby Art Vandelay » Mon Mar 30, 2009 6:24 pm

Not to be a downer, but if you are going to open a business of this nature right now, you better have the capital to withstand some pretty big losses for the first couple of years.
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Re: I need some help

Postby great gretzky » Mon Mar 30, 2009 6:28 pm

Well, I'll step up. I am not an expert by any means, but worked for a very notable wine and food magazine in the day and know a lot of acquaintances in the business, and have read a fair bit on the subject. And what I am about to say is scratching the surface.

Bear in mind that the restaurant industry is the single-most difficult legal business to be successful at, it has the highest failure rate and you absolutely have to bust your hump for a while. Food margins are not that high, booze is where the money is, which is also where you can be stolen from blind. Or screw up and serve a minor, etc. I am not intending to be patronizing, because I can't gauge your level by the post, but Kitchen Confidential is a very eye opening book for this type of thing. i'd also read "The Nasty Bits," read some issues of "Food Arts" and do some other homework. The type of cuisine won't be relevant, but might give you a sense of what you are getting into. Its one business where you can really lose your shirt even if the idea is the best.

How are you going to acquire the real estate? If you lease, what do you do if the owner wants to sell? Can you afford or get backing for the real estate? How realistic is a liquor license for your area? They can be expensive and difficult, but also key in the profits. Does your area aloww BYOB? That can be a pretty sweet thing too. One place where I used to live didn't have a liquor license. BUT, they had BYOB. And one thing they did was make mixed beverages based on what you brought. Bring wine, they can make sangria, tequila - margaritas, they had fun things with beer, etc. Who nominally takes care of trash removal, and who REALLY does? What are water and electricity bills like?

Given the cuisine you want to offer, definitely look into used. Ready the papers for failing business, foreclosures, etc. No need to buy a brand new fryer or pizza oven, griddles, obviously -- huge discounts for not new.

Funding can be very hard. There is a reason why the restaurant business has loads of private investors. Given the track record of fine dining, and the competition of chain restaurants, it can be hard to get bank funding. This is just on my head, so I am probably wrong, but I would imagine that in this climate, banks aren't so inclined to loan money for restaurants at the moment.

Who would your food purveyor be? Do you have a sense of this? How long will they let you buy on credit? You might have to, as not many restaurants come out like gangbusters. Who inspects the quality?

You check to see if the name is taken by the patent and trademark office I believe. And you need to consult a lawyer, because might not matter if its taken, there are other considerations. Otherwise, there would only be one "Mel's Diner."

Bookkeeping services? I don't know. I would bet you would want to take beginning to intermediate lessons yourself, and hire someone as part of staff. I also know there are services that are good at monitoring booze inventory, which is where you really are going to get stuck. You know how many fish, chicken, steaks etc., you ordered, and you have tickets to show that. Harder to steal food. An extra pour, or beer here and there is a gradual killer. I'd get as much inventory control and monitoring you can both on the purveyor to you side, but on the you and employee side as possible. You are more vulnerable to theft etc. by the nature of the restaurant you want, as the waiters, cooks, etc. will be more prone to steal -- as the total orders won't be so big like they would in fancy shmancy places.

I think the type of place you describe can be a license to print money. But you really should consider investigating a restaurant consultant to help you work with location, the real estate negotiation (commerical real estate can be tough), your "out date," finding a purveyor, etc. This is a majorly significant decision that can ruin someone if they aren't careful. Hope I can help, and if I didn't, don't flame me, just trying to help.
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Re: I need some help

Postby CadensDad » Mon Mar 30, 2009 10:56 pm

Gretzy, thanks for the advice. To kind of combine our thoughts here goes.......
I am somewhat experienced in running a restaurant. About 7 years total 4 of which as a manager of a diner style establishment.

I am speaking to 3 different investors right now, and between the 3 of them I hope to be able to afford the funding. Liquor is out of the question right now, one of my investors who is my main person is 100% against it and will pull out and most likely cause one of my others to follow suit.

I am looking into several companies for my food distribution, 1 of which I can buy on credit with b/c one of my possible investors is already using this company and has offered to let me tag my order on, but the big problem is they don’t carry enough of what I need/ what I want. I do plan on being my own quality inspector. I have a very keen sense of quality food and have already found several of the products I am wanting to carry.

The building I am going looking at using is up for rent, he is wanting a 18 month lease on it. It’s already passed inspections from the city to be used for a restaurant, since it was one before. If he wanted to sale the place it would be the biggest thing to overcome. But the owner is one of the biggest business men in town and he owns several buildings, he owns the local flea market, local drag strip, bait shop, storage units, ect. So I’m not very worried about him selling out. (On a side note one of my main financial contributors rents the building which is connected to my place from him.)

I’m not extremely worried about food since I have found what I want. My biggest concern is advertising, and initial funding. I am meeting with a consultant in a few weeks and from what he initially told me from my plans and what I will need to get started I am apex 6 months in the hole. He did state though that he felt my “simple” food line would be a easy way to turn my profit quicker than normal especially in the community we live in.

I really appreciate your reply and will be trying to get those books you speak of. If you have any more advice I’d greatly appreciate it.


Oh and Art thanks for your concern
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