So, I don’t have any assets other than my financed car and a decent savings. I’ve worked in the restaurant industry for over 20 years and went to school for it a long time ago now. Over the years I’ve tried to obtain a different career but nothing has ever stuck. It seems I keep working in food because I’m either a masochist or I actually must like it. I’ve been working FOH for a while, because BOH in a restaurant (even management) doesn’t pay enough or offer any sort of quality of life.
I want to go back to the kitchen though, but I don’t want to take orders from anybody. I want my own business. I’ve worked really hard for the little bit I have, I don’t even have a house…Is it possible I open a small food business on loan (got great credit) and open an LLC and NOT lose the little bit of savings I do have to my name? I don’t have a rich uncle to borrow from if I completely lose my shirt…failures not really an option but…just in case…would the LLC completely protect me, say if I borrowed 100k or so to open a food truck or food cart or whatever??
While I appreciate your entrepreneurial spirit, you may have to sit down and decide if going into a business that usually has less than 5% profit margins worth the risk or no. You may end up opening a business that buys you a minimum wage job with a big risk. In my experience (have owned restaurants and cafes) you need a somewhat significant cash flow to survive the first couple of months, if not years. From what I’ve seen and read, about 90-95% of food businesses fail to even reach the break-even point before giving up.
That aside, this has to become your whole life, 7 days a week. Don’t let this bring you down, I just want you to understand that risks of the business you’re going into, you may be way better off starting a service based company which imo has a-lot less risk. Wish you the best of luck in your endeavours
No but you can try calculating the risk. Try researching and applying your experience as much as possible so that you can mitigate common pitfalls and make sure you execute in the best way possible. That’s the other angle of not loosing your money. Also reflect on how you feel, it’s all about how confident you are that you’ll be able to pull it off.
I’d vote to go for it, but with a plan. I’m talking about a realistic, studied plan. You only live once.
Having said that pick a place that was built for a restaurant prior. Make it yours. Family friendly offerings.
Any bank is going to want you to sign a personal guarantee, in addition to that - most suppliers who give you credit will as well.
The LLC will only protect you from debts that don’t have a personal guarantee.
If you don’t have the assets to satisfy a personal guarantee, the bank probably won’t do the loan - even an SBA loan.
I’d suggest looking for an investor if you have a solid concept. Other than that - there’s not really a way to start a business and not have financial risk.
Before you start, read the book Profit First for Restaurants.
Any new business venture involves the risk of capital loss (even all of it).
If you want to be in food business (i.e. restaurant, food truck), my advice is to become a professional chef.
Part of learning how to become a good chef (talent) is also learning the restaurant business (operations).
This is can be a way to help mitigate the risk of starting up a food business.
If you don’t like BOH because of the quality of life, then owning a restaurant and being responsible for the staffing, end product quality, and success of what the BOH creates is 100 times the work of just working the BOH. It doesn’t work to only like the FOH and assume the rest will work out just fine. Just something to consider before even doing the work on the financing issue.
Oh, you are so confused. When you own a restaurant, you take orders from way more people than when you were a worker. Every customer is a demanding, entitled jerk off with Yelp open and ready to go. You’ll realize very quickly that you are a little bitch at the mercy of the customer. On top of that, you’ll almost certainly lose all of your money through a painful, emotionally challenging year or two of desperately watching the door hoping and praying that these highly critical assholes will come in just so you might be able to stay open a week longer.
Everyone romanticizes owning a restaurant. Everyone thinks they can cook better and run it better than the next guy.
I’m extremely talented in business. And man, that was an awful 2 years of my life that thankfully I was able to come out slightly ahead. The business has since gone through several more owners who all failed miserably.
Best of luck to ya!
lol…fair enough.
Thanks for talking me out of it again…surely it’s better than running somebody elses restaurant for less money and control though. I just gotta get out food.
Maybe. Not everyone fails! If you do it, go as small and low cost as possible to start out.
As for being better. Depends. Most restaurants fail. Which means the manager usually makes more money than the owner and has none of the financial trauma.
Think about the fact that even established, busy restaurants always seem to go out of business eventually. Few last 10-20 years or more.
Being self employed doesn’t mean your not taking orders from anyone.
Honestly for the first several years it’s even more controlling than having a traditional job.
You’re letting your landlord tell you what they expect
You’re left the bank tell you what they expect
You’re letting the insurance company tell you what they expect
You’re letting the city, federal agencies (IRS etc), and every regulator tell you what they expect
Don’t approach a business idea that an LLC will save your butt, if you have an exit plan make sure it’s not one that won’t trash your life after. If your not worried about your credit because it’s already bad then don’t expect getting a loan.
Also, most small business loans require a lot down so you are invested and can’t just walk away.
en·tre·pre·neur /ˈäntrəprəˌno͝or,ˈäntrəprəˌnər/ noun a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
You start a business your risking money.
You start a restaurant your GAMBLING money.
Would you gamble all your investment on a 15% chance you succeed? Probably not.