Costs and advice/ talk about opening a food business.

dartboardio

A few years down the line, I've always thought of opening up a small cafe/ restaurant (obviously starting off small)

I want to know how all these other new businesses do it, where do you start basically? Cheapest location in terms of rent, not too many staff at first, finding good quality cheap stock/ ingredients, making sure to match up with all health and safety regulations,

how do small businesses actually get off the ground and start up?

what costs are we thinking that'll definitely need to be paid every week/month and can you get loans to cover this until you start making money back?

please no bashing, just looking for advice here and would help if any small business or any food business owners would comment below.

I was thinking if I got my rent covered or bought a small place.
Though how much roughly to gut a small commercial unit and kit it out with fridges, equipment.. etc.

The Hill Billy

Moved from East to Entrepreneurial & Business Management as you are more likely to get better advice here.

tHB

duploelabs

First piece of advice. Just cause you eat and therefore think you know food, and you know business, doesn't equate to knowing the food business. It's a completely different kettle of fish (if you'll forgive the pun. The only remedy for this is to gain experience. I've seen countless number of people who go in blind and then end up on their ar$e because they didn't have the experience. First thing would be to start working somewhere for a few months from the ground (KP or server) up as you'll need to know every nut and bolt of the operation to be able to jump in/fix it yourself. If, at that stage, when you have the experience, and you still want to do it, look at your business plan/costs/etc then you can truly judge for yourself whether it's a game you want to get in to

dartboardio

duploelabs thank you, yes and you need not worry, as I stated I won't be jumping into anything, like many do thinking it'll be a walk in the park. I started as a kitchen porter aged 16, like most do, have worked and done different days and months here and there all in all about 6 restaurants/cafes in the last 3 years.

Seen things I do and don't like, keeping mental notes of what I would and wouldn't do in my own restaurant please god I ever had one.
I don't claim to know the food business, or anything such like.
Though I do claim to know good service, a little bit about what makes a successful restaurant (though i haven't seen it from all aspects yet) i have yet to manage a restaurant, yet to own a restaurant
obviously I plan to get alot more experienced in the next 5+ years, then maybe, if i feel it's right, open my own.
i think i have the right mindset so far? ... taking it slow, knowing it'll take years to gather lots of experience

though i think i'm going the right way in terms of having been in and out of plenty of restaurants and cafes, picking up tips and tricks on right and wrong in my eyes and so on..

all the front of house stuff i have covered, now I need to move up the ladder and start experiencing practical stuff like suppliers, regulations, licenses, fees... taxes, stuff like this is the more complicated part for me... ?

dartboardio

i suppose what i need to do is weigh up the money you could or couldn't make..would it be worth my while, how much would i be aiming to earn in a day, how much of that would be costs.. most of it probably... need to find the right market.. start off as a cafe and if successful build up to a minor restaurant...etc.

Geuze

If it's any help to you, a well-established pub-restaurant that I know operates with food cost at 25-26% of retail price.

I assume this means:

meal = 10.00
less 9% VAT = 9.17
less food cost 2.50-2.60 = 6.62 gross margin.

That gross margin has to cover wages / overheads and a lot more........

duploelabs

Geuze wrote: »

If it's any help to you, a well-established pub-restaurant that I know operates with food cost at 25-26% of retail price.

I assume this means:

meal = 10.00
less 9% VAT = 9.17
less food cost 2.50-2.60 = 6.62 gross margin.

That gross margin has to cover wages / overheads and a lot more........

Not really, depending on the subsector of the business, the cookie cut rule is 33% on food costs, 33% covers your overheads, and the the remainder 33% is your profit and then you add on your 9% VAT, otherwise you're going to be overpriced or have your chefs trying to make a silk purse out of a sows ear (figuratively) with poor quality produce.

dartboardio

since all this percentage and overhead talk is confusing me, I find it hard to believe every single business/cafe/restaurant/ sandwich bar owner in town has done courses on business, or have they? make life alot easier understanding it or is it something that comes with opening it..

duploelabs

dartboardio wrote: »

since all this percentage and overhead talk is confusing me, I find it hard to believe every single business/cafe/restaurant/ sandwich bar owner in town has done courses on business, or have they? make life alot easier understanding it or is it something that comes with opening it..

If talk of margin, overheads, and percentages confuse you already perhaps it's not the right path for you

zig

duploelabs wrote: »

If talk of margin, overheads, and percentages confuse you already perhaps it's not the right path for you

I know several people in business who run a tight ship and are always confused, frustrated, bored by this side of things.

Sure they've learned them as a result of trying to run a business, but not knowing them starting out certainly doesnt mean its not the right path. Such an extreme statement that could put people off.

OP I think your best bet is call to your local enterprise office and find out the kind of business courses available. If you believe in the idea and you are just lacking the "business" side of it, that CAN be learned.

duploelabs

zig wrote: »

I know several people in business who run a tight ship and are always confused, frustrated, bored by this side of things.

Sure they've learned them as a result of trying to run a business, but not knowing them starting out certainly doesnt mean its not the right path. Such an extreme statement that could put people off.

OP I think your best bet is call to your local enterprise office and find out the kind of business courses available. If you believe in the idea and you are just lacking the "business" side of it, that CAN be learned.

No, you do. The margins in a food business are so tight that you need to have a handle on every aspect. I'm not saying you need to correct your accountant on their figures, or tell your chef to cook something differently, but unless you understand basic concepts such as percentages, margins, or overheads then you'll be dead in the water within months as these concepts need to be at the foundation of every action and decision which you take. And considering the financial outlay needed to even fit out the simplest cafe, in considerable debt

pedroeibar1

dartboardio wrote: »

since all this percentage and overhead talk is confusing me, I find it hard to believe every single business/cafe/restaurant/ sandwich bar owner in town has done courses on business, or have they? make life alot easier understanding it or is it something that comes with opening it..

I agree with that. However, that is the reason why the restaurant business sector has the highest failure rate. Every idiot who thinks she knows about fashion thinks she can run a boutique, every amateur cook thinks s/he could run a restuarant. It does not work like that in real life.

You are 19, you have three years experience at the bottom rung or just up from that, you need considerably more experience in the sector and a large wodge of cash to acquire premises/equipment/tide-over money. You will not get that in a LEO course.

pedroeibar1

duploelabs wrote: »

.....have your chefs trying to make a silk purse out of a sows ear (figuratively) with poor quality produce.

Ever been to Au pied de Cochon in Paris? One of their signature dishes is
"Tentation de Saint-Antoine - Patron des Charcutiers”

(Queue, oreille, museau et pied de cochon panés, sauce Béarnaise.) It's quite good actually, if crustillante.

bizzyb

A few years ago I posed the same question, was made redundant and wanted to start my own cafe, I could have jumped in and nearly did, but looking back I would 100% have failed. Instead I took a step back and decided to educate myself, I'm in year 3 of a culinary arts degree and next year I'll do my level 8 in culinary entrepreneurship, you can't imagine how difficult it is with a wife and 3 kids but hopefully its all worth it. Education is a powerful thing as it has opened up a lot more doors for me other than a café, I'm not saying everyone has the option of the route I took and I'm not saying OP you're going to jump in but for a lot of people in this line of business the problem is the failure rate is so high because they haven't the skills or knowledge to carry it through.

dartboardio

See the kind of comment someone said above about if I don't know anything about margins, overheads and percentages means I should just cross out the idea completely.. is the kind of reply I was expecting from boards.ie and the kind of please 'no bashing' I was on about.. every one starts somewhere and I'm sure people that do own restaurants/cafes weren't born with the knowledge of what these words mean and the importance...

I can learn just like anyone else. Which is why I said it's going to take years, to learn every little nack of running the place, business and physical day to day side..

I'd be willing to do a year or two business in college just to understand all of this so it would come very handy later in life.
It's a dream of mine I'm willing and dedicated to work upto, not just jump into.. if it takes ten years.. whatever it takes is fine by me, which I think alot of people don't think that way..

Like the same way I'm going to be doing culinary arts as my chosen course next year in a higher college than I'm in now, because even though I don't want to be a chef for the rest of my life, if I do open my restaurant it will be a huge advantage being able to operate the kitchen, knowing what's going on behind those closed doors and not having someone doing stuff behind my back the minute I walk out the door.

dartboardio

Can anyone give me a rough figure of how much gutting a premises is? probably what, 20k upwards? 20k max?

Example if you rent/lease a building that has never been for that function before, let's say a small building that was once used as a centre/offices, but you want to turn one part of it into a cafe/restaurant,

Your talking 20k - 50k to gut the whole place and kit it out with the right equipment for said establishment?

Obviously all the rest such as lighting, wiring water etc. But I'm talking about fridges, units, sinks, washers, ovens if needed...stuff like that...?

PARlance

dartboardio wrote: »

Can anyone give me a rough figure of how much gutting a premises is? probably what, 20k upwards? 20k max?

Example if you rent/lease a building that has never been for that function before, let's say a small building that was once used as a centre/offices, but you want to turn one part of it into a cafe/restaurant,

Your talking 20k - 50k to gut the whole place and kit it out with the right equipment for said establishment?

Obviously all the rest such as lighting, wiring water etc. But I'm talking about fridges, units, sinks, washers, ovens if needed...stuff like that...?

If you're set on taking the first step then my advice would be to start figuring things out for yourself because you'll need to do that on a very regular basis in business.

Surely a quick search on the net would answer some of your questions. We don't know what location you have in mind, a restaurant 10 miles outside of Belmullet is going to be a fraction of the cost of one in Ballsbridge. It took me 2 mins to get an idea of the costs of renting a cafe close to me.

dartboardio

I'm not asking about rent, I'm asking about something I actually cannot find online.. but I am asking for a rough idea of how much it cots to gut a place like I described, obviously alot? 20 -50k?

duploelabs

dartboardio wrote: »

See the kind of comment someone said above about if I don't know anything about margins, overheads and percentages means I should just cross out the idea completely.. is the kind of reply I was expecting from boards.ie and the kind of please 'no bashing' I was on about.. every one starts somewhere and I'm sure people that do own restaurants/cafes weren't born with the knowledge of what these words mean and the importance...

I can learn just like anyone else. Which is why I said it's going to take years, to learn every little nack of running the place, business and physical day to day side..

I'd be willing to do a year or two business in college just to understand all of this so it would come very handy later in life.
It's a dream of mine I'm willing and dedicated to work upto, not just jump into.. if it takes ten years.. whatever it takes is fine by me, which I think alot of people don't think that way..

Like the same way I'm going to be doing culinary arts as my chosen course next year in a higher college than I'm in now, because even though I don't want to be a chef for the rest of my life, if I do open my restaurant it will be a huge advantage being able to operate the kitchen, knowing what's going on behind those closed doors and not having someone doing stuff behind my back the minute I walk out the door.

And this is the response you'll get with a poorly thought out question that could be solved by a quick search on this sub as it's one that's asked many many times. For example, you're thinking gutting and fit out will cost you 50k, which is ludicrous. Before you even think about those costs (50k will get you the bare minimum in equipment only), think about what you want to serve and be able to produce yourself in the kitchen as that will hence dictate what equipment you need and somewhere near the initial costs of equipment.

PARlance

dartboardio wrote: »

I'm not asking about rent, I'm asking about something I actually cannot find online.. but I am asking for a rough idea of how much it cots to gut a place like I described, obviously alot? 20 -50k?

€34,414.67

(I obviously haven't a clue what size building needs to be gutted, the condition it's in, the contents that need to be removed, how accessible the building is, the timeframe it's required to be done etc etc)

Bandara

A standard insomnia coffee shop fit out is on average €250,000.

Help!!!!

OP do you have a driving license? Have you thought about mobile catering? Good way to start & start up costs are low

duploelabs

pedroeibar1 wrote: »

Ever been to Au pied de Cochon in Paris? One of their signature dishes is
"Tentation de Saint-Antoine - Patron des Charcutiers”

(Queue, oreille, museau et pied de cochon panés, sauce Béarnaise.) It's quite good actually, if crustillante.

No, but the pig tails in St. Johns were unreal, but then again everything there is

antoinolachtnai

I would suggest to the OP to read *all* of the guides that are out there about how to start a food business. There are loads of them. A lot of them are oriented to the US, but they are still highly relevant. Our versions of how planning, HR, taxes, hygiene and so on work are a bit different from theirs, but a lot of things are very similar.

I think it is also worth reading a book called 'setting the table' by Danny Meyer. It is not a how-to guide, but it might give you an idea how much brains, skill and dedication is needed to run a great food place.

It is great that you are going to learn about food, properly. You should also get a lot of jobs in restaurants, both front and back of house. Try to get involved in all the boring administrative stuff that no one else wants to do. Also, you need to understand the various professions - fire safety, planning, architecture, design, accounting and so on -.

I have to tell you (and I say this with the greatest respect for what you have learned and done) that you are at a disadvantage from not having a few more years of formal education. You will need to work hard to figure out all the book-learning stuff and it is both difficult and essential.

You think that 20-50k sounds like a lot of money. And it is, if you lose it, and especially if you don't have it (which I imagine you don't). But if you are paying for the people and materials you need for a restaurant which has the facilities and promotion needed to attract and turn over a few hundred thousand euros a year of business, it really isn't a lot of money at all. Don't just look at the kitchen or the equipment, you have to take into account the whole picture, including stuff like professional services which are expensive, hard to understand but really essential.

You are taking it the right way by considering whether it is 'worth your while'. You need to get comfortable with how to assess whether a restaurant is worth the investor's while. The reality is, it that a lot of restaurants are not worth their owners' while. The business is extremely difficult. A lot of people are in it to create a job for themselves, not really to run a profitable business. You should obviously avoid this.

One other tip. A restaurant is not a 'senior' version of a cafe. A restaurant and a cafe are conceptually two different things, which make money in different ways. There are certainly crossovers, but the idea that the way to go in the food business is to start off with a cafe and gradually convert it into a restaurant is almost certainly the wrong way to go. You are doing one or another. I am not saying that this does not sometimes happen, and there are overlapping concepts out there, but it is not a 'plan'.