Restaurateurs...?
Discussion
I have been given the opportunity to invest in a fairly new restaurant. It is at the higher end of the market, in a good location with great food and service. Everything sounds perfect...maybe a little too perfect. However, I have very limited experience in the F & B industry (waiter & bar management at Uni) and it has only been open for 3 months. Does anyone here have experience?
My main issue is what questions should I be asking and what pitfalls should I be looking for? It is not a huge investment in the grand scheme of things but it is still a lot a money to part with. Incidentally I am based in Hungary, so I know there will be some differences but are there general things you should be aware of.
Thanks,
Ministry
My main issue is what questions should I be asking and what pitfalls should I be looking for? It is not a huge investment in the grand scheme of things but it is still a lot a money to part with. Incidentally I am based in Hungary, so I know there will be some differences but are there general things you should be aware of.
Thanks,
Ministry
I have a little experience, but a customer of mine runs www.fnbshop.com and they might be able to be of more help. have a look and let me know if you need an intro..
Cheers
Dan
Cheers
Dan
Forty years in the pub/restaurant business run side-by-side with farming business has proved that the are 9,999 easier ways to make a living.
The profit margins on food are much higher than those on drinks if, and only if, a restaurant is successful. Success depends on a host of variables, but surprisingly the golden rules are dead simple. Give the customer a good deal and give your staff an even better deal. Long hours and hard work are tough on everybody, but happy staff make for happy customers.
The vital element is obviously the chef(s) and they can be very sensitive. Lose a good chef and your business is at risk. You must give a chef, and everyone else, a sense of pride, and therefore the fabric of the restaurant is as vital as the atmosphere within it.
Fabric is a broad term, but every bit of it matters, from the building to the cutlery. Cleanliness is a must, obviously, and everything must be kept as near immaculate as possible. Catchment area is another obvious factor. You must be where likely customers can see you and want to use you. And be committed to loving your customers, and show it no matter how badly things are going!
There are no shortcuts to quality of product and service, and the most difficult part of the whole struggle is continuity. Fashionable places with lousy food last a few months - good reliable places with a high reputation go on forever - but you have to accept the permanent nervous breakdown that goes hand-in-hand with the industry.
Don't, unless you can't resist the challenge!
The profit margins on food are much higher than those on drinks if, and only if, a restaurant is successful. Success depends on a host of variables, but surprisingly the golden rules are dead simple. Give the customer a good deal and give your staff an even better deal. Long hours and hard work are tough on everybody, but happy staff make for happy customers.
The vital element is obviously the chef(s) and they can be very sensitive. Lose a good chef and your business is at risk. You must give a chef, and everyone else, a sense of pride, and therefore the fabric of the restaurant is as vital as the atmosphere within it.
Fabric is a broad term, but every bit of it matters, from the building to the cutlery. Cleanliness is a must, obviously, and everything must be kept as near immaculate as possible. Catchment area is another obvious factor. You must be where likely customers can see you and want to use you. And be committed to loving your customers, and show it no matter how badly things are going!
There are no shortcuts to quality of product and service, and the most difficult part of the whole struggle is continuity. Fashionable places with lousy food last a few months - good reliable places with a high reputation go on forever - but you have to accept the permanent nervous breakdown that goes hand-in-hand with the industry.
Don't, unless you can't resist the challenge!
Thanks for the advice McNab...I had a feeling somebody was going to tell me what I kind of hoped they wouldn't 
. As I said before, the restaurant has been set up and is running already. Difficult to tell at the moment how it will do as it is the summer and loads of people are away. Actually all the key points you mentioned are covered by the owner. It is a beautiful restaurant, the level of service is amazing (took the owner 4 months to get 3 waiters), the 2 chefs are superb and the place has a great atmosphere. Hence why I said earlier it sounds too good to be true!
Initially it would not be fulltime and will continue working in my current position. He was more interested in my contacts over here and the fact that he is setting up two other restaurants in the next 2 years and would like somebody to hand over to. It would be really kind if you had some suggestions to questions I could grill the owner on to try to understand his business better, in an attempt to prevent him 'pulling the wool over my eyes'. He has about 20 years experience so I am sure he could if he wanted to...
. As I said before, the restaurant has been set up and is running already. Difficult to tell at the moment how it will do as it is the summer and loads of people are away. Actually all the key points you mentioned are covered by the owner. It is a beautiful restaurant, the level of service is amazing (took the owner 4 months to get 3 waiters), the 2 chefs are superb and the place has a great atmosphere. Hence why I said earlier it sounds too good to be true! Initially it would not be fulltime and will continue working in my current position. He was more interested in my contacts over here and the fact that he is setting up two other restaurants in the next 2 years and would like somebody to hand over to. It would be really kind if you had some suggestions to questions I could grill the owner on to try to understand his business better, in an attempt to prevent him 'pulling the wool over my eyes'. He has about 20 years experience so I am sure he could if he wanted to...
Ok, but you can pay for your flights and accomodation from the UK . Oh and just incase you're coming over for the Grand Prix (probably not as everyone is pi55 bored of it by now) it's fully booked...but any other time .mark, you are more than welcome.
>> Edited by Ministry on Friday 2nd August 14:17
. Oh and just incase you're coming over for the Grand Prix (probably not as everyone is pi55 bored of it by now) it's fully booked...but any other time .mark, you are more than welcome. >> Edited by Ministry on Friday 2nd August 14:17
Can you set up some kind of question to ask people leaving or phone them a day or two after , explain the situation and ask for their opinion of the place?
A mate of mine had a chance to open a wine bar near Oxford – I suggested he carry out some kind of simple survey in the town centre to ascertain the need for this kind of establishment as the place is VERY heavily populated by pubs already.
He didn't do this, in fact did no kind of customer research AT ALL – opened the place after having sold his house and invested a lot of money. This place did food and drink. They were forecasting weekly takings of about 6-8k – tey actually levelled out at under 2k. Needless to say, the place has now been sold and he has lost what money he put in.
If an offer sounds too good to be true, it probably is.
It is the food on which people make the money nowadays, well, outside the major city centres anyway. People have had to diversify in to the food market as we can't all eat takeaways all week – it's nice to go out and sit down in a proper restaurant.
City centre places charge the earth for alcopops and the like and this is where they make their money. Country pubs cannot afford to charge that much. There;ss a nice thatched place near us in another village. ten years ago when I was single, we'd go there and drink a bit but soon that fad passed. I took my wife there for the first time about three months ago. Wouldn't have recognised the place. Saloon bar gone, all open plan, beautiful food and wonderful, hekpful, happy staff who wanted to work there – a big difference. Doing about 80/90% food now. Packed out EVERY might apparently.
So a lot depends on where this place is, city or country.
>> Edited by MikeyT on Friday 2nd August 14:25
A mate of mine had a chance to open a wine bar near Oxford – I suggested he carry out some kind of simple survey in the town centre to ascertain the need for this kind of establishment as the place is VERY heavily populated by pubs already.
He didn't do this, in fact did no kind of customer research AT ALL – opened the place after having sold his house and invested a lot of money. This place did food and drink. They were forecasting weekly takings of about 6-8k – tey actually levelled out at under 2k. Needless to say, the place has now been sold and he has lost what money he put in.
If an offer sounds too good to be true, it probably is.
It is the food on which people make the money nowadays, well, outside the major city centres anyway. People have had to diversify in to the food market as we can't all eat takeaways all week – it's nice to go out and sit down in a proper restaurant.
City centre places charge the earth for alcopops and the like and this is where they make their money. Country pubs cannot afford to charge that much. There;ss a nice thatched place near us in another village. ten years ago when I was single, we'd go there and drink a bit but soon that fad passed. I took my wife there for the first time about three months ago. Wouldn't have recognised the place. Saloon bar gone, all open plan, beautiful food and wonderful, hekpful, happy staff who wanted to work there – a big difference. Doing about 80/90% food now. Packed out EVERY might apparently.
So a lot depends on where this place is, city or country.
>> Edited by MikeyT on Friday 2nd August 14:25
Oh Well !!
He sounds experienced, so where have his other ventures been and do they still exist? Worth a visit to other places he has run - ask the staff some not too obvious questions.
Has he let you see any sort of management accounts and projections, and do they ring true? He must keep a record of his weekly turnover - is it improving or flat as a Dodo? If lots of people in the district are away on holiday it will be hard to guess the future - are there other establishments nearby? Allowing for the fact that they will put the knife in (!) try to talk to some of their staff and customers. Check on the ratio of his wage bill to turnover (per week) and beware of anything above 30%.
The district matters - is it about to be demolished - or more seriously are there any restrictions looming? Is the building shared with potentially troublesome neighbours/businesses? Is it faced with major repairs or the need for any other heavy expenditure?
There are 100 questions you should ask, but it looks as if intuition is your only guide. It hasn't been in operation long enough for even half-year accounts to exist - nothing audited, so nothing guaranteed. One of the easiest barometers is the town/city council - in most countries they keep a closish eye on places of this sort - as do the police strangely enough.
Why is he so keen to get out after such a short time? That might worry me. I have seen too much of this type of business to trust people - maybe unjust of me, but I do advise caution. Your very best bet is to talk to people in the district - talk, talk, talk. You can learn more that way than any other. Go and see a local bank manager (not his!). They can sometimes be most indiscreet. If you go with a hefty borrowing proposition the reaction will tell you a lot.
I am afraid you need a crystal ball - there are so many unknowns in a foreign country.
He sounds experienced, so where have his other ventures been and do they still exist? Worth a visit to other places he has run - ask the staff some not too obvious questions.
Has he let you see any sort of management accounts and projections, and do they ring true? He must keep a record of his weekly turnover - is it improving or flat as a Dodo? If lots of people in the district are away on holiday it will be hard to guess the future - are there other establishments nearby? Allowing for the fact that they will put the knife in (!) try to talk to some of their staff and customers. Check on the ratio of his wage bill to turnover (per week) and beware of anything above 30%.
The district matters - is it about to be demolished - or more seriously are there any restrictions looming? Is the building shared with potentially troublesome neighbours/businesses? Is it faced with major repairs or the need for any other heavy expenditure?
There are 100 questions you should ask, but it looks as if intuition is your only guide. It hasn't been in operation long enough for even half-year accounts to exist - nothing audited, so nothing guaranteed. One of the easiest barometers is the town/city council - in most countries they keep a closish eye on places of this sort - as do the police strangely enough.
Why is he so keen to get out after such a short time? That might worry me. I have seen too much of this type of business to trust people - maybe unjust of me, but I do advise caution. Your very best bet is to talk to people in the district - talk, talk, talk. You can learn more that way than any other. Go and see a local bank manager (not his!). They can sometimes be most indiscreet. If you go with a hefty borrowing proposition the reaction will tell you a lot.
I am afraid you need a crystal ball - there are so many unknowns in a foreign country.
Thanks McNab, that was very helpful. I agree it does seem to me like we need a crystal ball. If you want to do this then I guess you have to take the leap at somepoint...'nothing ventured nothing gained' and all that.
We have to make a decision by Friday so will let you know what we decide. Thanks again for the advice.
We have to make a decision by Friday so will let you know what we decide. Thanks again for the advice.
quote
"There;ss a nice thatched place near us in another village. ten years ago when I was single, we'd go there and drink a bit but soon that fad passed. I took my wife there for the first time about three months ago. Wouldn't have recognised the place. Saloon bar gone, all open plan, beautiful food and wonderful, hekpful, happy staff who wanted to work there – a big difference. Doing about 80/90% food now. Packed out EVERY might apparently."
Mikey, wheres this?, I can think of a few places this could be.
"There;ss a nice thatched place near us in another village. ten years ago when I was single, we'd go there and drink a bit but soon that fad passed. I took my wife there for the first time about three months ago. Wouldn't have recognised the place. Saloon bar gone, all open plan, beautiful food and wonderful, hekpful, happy staff who wanted to work there – a big difference. Doing about 80/90% food now. Packed out EVERY might apparently."
Mikey, wheres this?, I can think of a few places this could be.
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