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    2 Replies Latest reply on Oct 23, 2009 11:40 PM by babybearcub48

    starting a resturant

    babybearcub48 Newbie
      I was wondering if anyone could offer any kind of help. My husband and I live in a small town in Minnesota. We are in Hoyt Lakes and every town around us for 30 + miles closes down by 8pm. we wanted to open a 24 hour resturant. I have talked to a few of the business owners in town and they a feel this would be a great ascet to town. This has been a dream of ours and we just don't know whare to start with the funding. niether of us have very good credit, but this has been a huge dream. I have looked at a couple buildings but none where resturants and they would need a lot of work to become one. I was thinking about building from scratch. I would like to know how to go about doing this, and what all I need. the only thing we have done is we made a mock menu. I am not sure what a loan place would need from me, if anyone can help it would be great. I am just not sure what else to do. I know that there are grants for first time business owners, but I am not sure whare to look for them or how to apply. I do not know what would be good place to try to get a loan from. I have looked at the appliances and furnishings, and they are going to be very expensive, but I need help on know what to do. any suggestions? I know that I will advertise in the local paper once we are ready to open, but I am not sure what else I can do.
      Just so everyone knows we are not going to have anything frozen. everything is going to be made daily. I am not even going to purchase frozen mozzerella sticks, those will be made homemade too. I think that this is a huge factor on the fact that this is going to be very sucsessful, plus it is going to be as cheep as we can and still make a profit. I know for a family of five to go out to eat around here it cost 65-75$ and I am planning on offering a huge meal with many choices for a family of five to be able to eat for 35-40$. this is a huge differance. I know I would go to a cheap but very good resturant over a very pricey one. I want people to want to come back and for them to tell everyone that they know because the food is so good they want to let everyone know whare to go. I think that this is going to be a great opertunity. I just need help on knowing whare to start.

      I appriciate all comments and I will take any kind of help I can.

      thank you

      shirley
        • Re: starting a resturant
          Tracker

          babybearcub48:

           


          I recently sold a restaurant that I owned and operated for a number of years, plus worked in the industry prior.

           


          First, you will need to determine a theme / focus for your restaurant - aka your unique value proposition (UVP), basically what sets you apart from the competition. Be aware that offering the lowest prices and the best quality is the hardest to accomplish. Sounds like you may already have some ideas and putting together a sample menu is a good start.

           


          Second, you will need to develop a business plan based around your UVP. Here's a link to a free page on my site that gives a breakdown of the necessary elements for a business plan:

           


          http://thesologuide.com/planning/

           


          Since you are seeking funding from a lending institution or investors, they will want to see a business plan. Some may only ask to see your Executive Summary and Financials, while others will want to see the complete plan. Regardless, you should create a complete plan because it will force you to research your idea and determine if it can truly work.

           


          I am concerned about a couple items regarding your concept. Please don't take this as a personal attack, only concern from someone who has owned and operated a restaurant and knows how the business works.

           


          You mentioned that you would like to hit a total bill price of $35 - $40 for a family of 5. Are you planning to operate a fast food establishment? You are targeting $7 - $8 per person. These are fast food prices. There is a reason why other restaurants aren't hitting these prices for a complete meal - because they can't.

           


          Most restaurants operate in the range of 26% - 35% food costs depending on the type of establishment. You will want to target towards the low end of the range. If you have food costs of say 28%, your $7 per person price means that you have to make something of quality from food costing you $1.96. The corporate giants fast food restaurants are able to hit these prices based upon corporate contracts with food suppliers based upon mass volume. You, as an independent, won't get the same pricing.

           


          The cost to build a restaurant from scratch is huge. There are a number of restaurants that are failing right now - either up for sale or recently closed. This creates an opportunity for you to buy an existing restaurant with all the necessary equipment and a built in method and customer base at a discounted rate. You can always alter the hours, menu, concept, etc... after you buy it. Or you can negotiate aggressively with a landlord who recently had his restaurant tenet close. It is harder for landlords of restaurant properties to find tenets. I recommend that you target finding a property that was / is a restaurant instead of building from scratch.

           


          Since many restaurants are failing, there is an opportunity to buy used restaurant equipment cheap. There are some businesses that specialize in this. Your other option is to speak with business brokers that may be selling restaurants in your area to see if any of their customers have equipment for sale.

           


          Are there any other 24-hour restaurants in your area? If not, it may be because there isn't a need for one or enough business to make it profitable. There are roughly 45,000 people in my town and there isn't a 24-hour restaurant because it becomes a ghost town usually around 9 PM. There are a few places that stay open later, but none that are open 24 hours.

           


          Do you have any previous restaurant experience? This will be important for a lender. They will want to see that you have experience running this type of business. If you don't, I recommend that you get some experience now while you continue to work on your plan.

           


          Are you ready to work nights, weekends and holidays - and long hours?

           


          I recommend that you seek out a community member here that goes by the name of "phanio". He has excellent insight into what you will need to attract an investor and sources for those funds.

           


          Hope this helps.

           


          Doug Dolan

           

          The Solopreneur's Guide

           

          http://thesologuide.com/
            • Re: starting a resturant
              babybearcub48 Newbie
              thank you so much for all of your thoughts. yes I am willing to work my tail off to do this. I am not looking to open a fast food resturant, and I do not want to make a huge profit from doing this, I want to make good food at very good prices. there is nothing in this area that is open 24 hours, But there is tons of people that would love to have a place they could go to at night. I have asked around and put up suggestion boxes in town and I have had nothing but good things placed in them. I think from the sounds of it, people want to have somewhare to go and eat at 2 am but there just isnt anywhare for them to go. this would help them have somewhare to go.
              Thank you for talking about used quiptment, I have actually been looking into that. I did find a building but it will take to much to fix it up. and there are no resturants in this town or the next five that are for sale. so it is eather going to have to be new or a busniess that is fixed up. I do not have experiance in the resturant business, but my manger has owned many different business in her time. so I have someone to show me the ropes.

              thank you and I am going to go and look at your web site. thankx