How to Start and Manage A Restaurant

Jonas Luster has a good article on what it takes to run a restaurant. By the end of the article, it made me squirm.  It’s very informative, and suggested reading.

What are the main components? There are the usual constants of running any business: leadership, vision, management, planning, etc.

Here was his tidbit on food:

Next it takes great food. Great food doesn’t have to be fancy or expensive. Great food is what people want to eat. Great food comes from great suppliers and is made by a great team. Once the first two, leadership and team, are in place, food is just a simple extension of those things. A chef with a vision, a restaurateur with enough trust but good oversight, and service that compliments and enhances the food, that’s the baseline for this particular aspect. It doesn’t matter if you sell wraps from the counter or fancy prix fixe in muted light.

And he had an interesting part on the financials of starting a restaurant:

Money. No one wants to talk about it. But a restaurant needs it. More than most other businesses. If you are selling computer games and don’t come through with your payments someone will come and repossess the games. Sell cars and the same thing will happen. Food items are lost the second they leave the warehouse, so your purveyors will ask for money up front and/or a solid history of buying and paying. The better one’s financial backing, the better purveyors one can approach. Cheap places will deliver cheap food at higher risks to the seller. Good places won’t.

It doesn’t end there. Money makes kitchens happen. A good kitchen can push a good team into great food. A bad kitchen can still turn out excellent items but the cost, in human capital and long term costs, is much higher. Money also makes service happen. Better glasses, better plates, better linens, faster service, less returns, all that can be bought with money and becomes more and more an issue the less money there is.

I’d be curious to know specifics about the latter points. My roundball estimate would be the typical avant garde restaurant needs about $500,000 in upfront capital to get itself off the ground.

Most of the restaurant owners I know of work 60+ hour weeks. And most of the new restaurants I see go out of business in 2 years.

To me this begs the question, why on earth would someone want to run a restaurant?

You must have a zany passion for food, (and perhaps a few mental instabilities) to want to do it.

The amount of time/risk/effort it takes to do it successfully almost certainly have higher payoffs elsewhere for someone talented enough to make it work.

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