4 Reasons Why You Should Never Open a Restaurant

If you ask most people who enjoy entertaining and cooking if they have ever thought about opening a restaurant you will get a resounding yes; however, few people actually take the plunge. While there are many reasons people choose not to, here are the top reasons you should think twice before taking on the challenge.

The Hours

Whether you’re a night owl or an early bird, a party animal or a home body, there is no denying that the hours you will spend at your restaurant will take a toll on your sanity. This is especially true when trying to get your baby up and running. But don’t forget to take off the rose colored glasses because you will soon learn that even after all the permitting headaches, build out delays, and other unexpected problems you will run into are over the hard work has only just begun. You will soon realize how much goes into running a successful restaurant and how much of it requires your input, your decisions and your time.

Margins are Razor Thin

If you want to open your own business it should be something you love, but also something that will allow you to support the lifestyle that you want to live. While it is true that some Restaurateurs become wealthy, many others struggle to make ends meet. According to the Houston Chronicle the average profit margin in 2010 for restaurants was between 3% and 4%. While the market has improved in recent years based on information from Forbes, you can still only expect to make a net profit between 5% and 6%.
To put those numbers in perspective, a restaurant with an average net profit of 5-6% that does $1,000,000 a year in sales is going to net between $50,000 and $60,000. If you don’t control costs or have lower sales, you could end up with far less.

You Clean Up The Poop

While the idea of owning your own restaurant may seem glamorous, the reality is that it is not. You are ultimately the one people will complain to, whether they are your employees or your customers, food critics or Yelpers. When things go wrong the buck stops with you, and believe me it can be exhausting. No matter how bad it gets, the example you set will be the guide for the kitchen and the wait staff. With that said, you’ve got to keep your cool under pressure and always stay professional no matter how hard it may be. If you’re not willing to deal with cleaning up the poop (and sometimes it really is poop) with a smile on your face, then you may not be cut out for this job.

The Odds are Against You

According to the National Restaurant Association 30% of restaurants fail in the first year, and of the ones that survive, another 30% close in the next two years. While that is far lower than the rumored “90% of all restaurants fail”, the numbers are not encouraging. Based on our own data analysis, Restaurants in Texas fair better than they do nationally. Check out our research on Texas Restaurant & Bar success/failure rates.
If you still think you can stomach opening a restaurant check out 5 Things Every Restaurateur Should Know Before Starting Out.

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