Should I get into this business?

Most people I mention it to, tell me I'm crazy. I own a small buiding (formally a diner for 50+ years) that has been closed for several years. It's located very close to Battleship Cove, a fairly busy waterfront tourist attraction in MA. There is not much else around for food. I keep telling myself that a burger/hotdog/fry place would do great there. I operate several other businesses, but have never been involved in food. Just about everybody I speak with tells me to forget it. "The food business is too difficult". I guess my questions are this:

I hear over and over again the pitfalls of the restaurant business. But does this whole "negative, stay away from it" attitude apply to just a simple burger shack?

Assuming the location is great, the product is proven (burgers/dogs/fries/soda), is it really that difficult to make a profit in this business?

No, I would not be operating it myself on a day-to-day basis. But I do have a few key people in my other busines that would all share in the management, and making sure things are done right.

I spent countless hours walking the aisles of Costco, BJ's, Sam's, Natco, and more. I've been going to restaurant industry trade shows for the past couple years trying to learn as much as I can, and deciding whether to pull the trigger (or not). Everything I've learned tells me it should be a winner. Everybody I speak with tells me I'm gonna blow my brains out.

Serve a talk worthy burger, quality dog, reasonable prices, you should have no problem...
Create one of your items as 'signature'.. For example, fresh grind your burger every day.. Give people something to talk about and put ya on the map. Or maybe craft your own dogs or sausages.. Make it unique.

You might get some feedback on reading former posts on this subject. I think there are a "few"

It honestly depends on what you want out of it. If you are just going to do it for the possible profit, I'd say no, stay out of it. If you really want to do it at least partially for the fun of it and the chance to run a small restaurant, I'd say go for it.

Another factor is what you would have to spend to get the joint up and running. I wouldn't count on using most of the old diner's fixtures, with the exception of maybe the flat top grill and the range. You'll need new fryolators. You'll probably need new sinks. You will have to replace all the overhead stuff and possibly do some fireproofing around the fixtures. That kind of stuff. If you can afford it, I would definitely go for a char-broiler. That is a cache item in itself as nothing can replace that flavor on burgers and dogs.

Lastly, if you were putting all your eggsd in one basket, it would be worrisome. But you are not. You have the other small businesses rolling, so cashflow might not be as much of a problem as it would for someone else, and you could write off much of your losses for the first couple years and even if you decided to close down.

You have a cushion that a lot of folks starting out don't have. Follow Uncle Vic's sound advice, deliver a superb product, and your chances are good. It sounds like fun, actually.

Finally some positive feedback. I really like the idea of fresh grinding the burger every day as a way to "put us on the map". I think I really want to do this for the "fun" aspect. Yeah, I can't afford it to be a cash drain, but I'm not looking for it to be the big bread winner either. I think I'd be happy if it covered itself and had a few bucks leftover every month for me. You ever just want to do something so bad, that it drives you crazy? Well this burger joint is doing that to me. I have no idea why. I've had this property "for rent" for almost 2 years and I just about scare every potential renter away, because I know I want to keep it for myself. Sound logic tells me to collect the rent and do nothing. So why do I have this uncontrollable urge to run a burger joint? The place is absolutely stripped except for the "hood" which I recently had checked and was told that it is in good shape and will pass the code. I need to put in new HVAC, get the plumbing up to code for the Board of Health, and than put in the fixtures. Anybody have any recommendations what I would need and a ballpark cost for cooking equipment to serve char-broiled hamburgers, grilled hotdogs, french fries, and maybe clam-cakes?

With the building closed for years, get a total inspection. Many go into a building with little funds only to find the electric is not up to standard. The walls are rotting, the foundation has problems and the roof leaks. You are thinking of spending for a food business only to find all of your funds used up on the building. RJF

Hey, if you can afford to try it, I say go for it. I'm in business with my two brother and not everything we do is based on what is the most financially sound choice. Sometimes you just want want to try something out and see what happens. And boy did we just get done with doozy of flop ...we're taking a break.

I'd like to try a little drive through joint that served pulled pork sandwiches and homemade fries.

You answered the biggest question. You really want to do it just to do it. You're there, man. Clamcakes sound great. The equipment varies vastly, depending on whether you buy new or used. Used is generally a great bargain because a lot of that stuff is truly built to last.

You will need the help of an kitchen pro, maybe even an architect. You gotta make sure everything you want to use fits under the hood, and so on and so forth. Anyway, don't try to spec this putting the joint back together yourself. Good luck!

The building itself is in good shape as I've always maintained it. New roof, electrical up to code, etc. etc. I'm figuring I'll need to put about $10k into a new HVAC. Another $10k into plumbing/electrical. Maybe $15k into cosmetic for the restaurant. I got a price of $2800 for a new ansul system. And I have no idea for cooking equipment.

quote:

Assuming the location is great, the product is proven (burgers/dogs/fries/soda), is it really that difficult to make a profit in this business?

Hi, Bob. I've posted this before:

Before you spend a dime, do a business plan. Take a look at the free sources that are out there. Here are a few to get you started:

http://www.entrepreneur.com/businessplan/index.html
http://www.toolkit.com/small_business_guide/index.aspx#abrn01
http://www.sba.gov/smallbusinessplanner/plan/index.html
http://www133.americanexpress.com/osbn/tool/biz_plan/index.asp

For me, I used the process of constructing a business plan to determine whether or not I would proceed forward with the decision to open my store. It took me about a year, and made me delve into aspects of being a business owner that I didn't even know that I was clueless about. Writing the business plan helped tremendously in clarifying what I needed to do in order to strengthen my weaknesses. It gave me the clarity of knowing what I needed to do in order to get my business off the ground.

A business plan will force you to know:

1. Where your customers are.

2. What your customers want and need.

3. How much it will cost you to produce the product you want to sell. The cost of goods is not just about how much you pay for the food to make your product.

4. How you plan to attract customers and enlarge your customer base. Just how many new customers will it take per day in order to make the money you need to cover costs and profit? A good business will keep customers coming back; those are your Regulars. However, most of your Regulars will only eat out once in a while, not every day. Sure, you will have some that may come in a couple of times a week, but not everyone will. Most won't. And even your regulars may want something to eat, periodically, other than your bbq. They simply won't show up each day.

You need to have a plan to continually grow your customer base. If you plan on just "word of mouth", then I hope you have a fat wad of cash sitting in your reserve account.

Marketing is not just advertising; advertising is only one tool that you use to market your product. Marketing is about letting folks know what your business is and why they need your product. Marketing can be as simple as visiting surrounding businesses with a sample of your product and a stack of business cards. Or it can be as elaborate as a high-powered marketing firm can make it. A good business plan will incorporate a marketing plan. Marketing can be inexpensive and still be incredibly effective; call it guerilla marketing.

What good marketing needs, however, is something that is always in short supply when you run your own business: time. And without taking the time you need for marketing, you cripple your chances of success from the get-go. A good business plan will help you understand how you are going to fit marketing into the whole of your business.

5. What you want your operation to look like. For instance, my business plan helped me to figure out that I didn't want to deal with front of the house staff and scheduling ie waitresses. So I focused on how to make customer counter service a smooth, pleasant, and efficient experience for the guest.

6. What equipment do you need to get up and running? This includes hard equipment like sinks, dishwashers, pits & smokers, prep tables, prep equipment, cold storage, hot holding and cold holding, etc. It also includes consumables like paper towels, cups, take-out containers, straws, food-handling gloves, etc. The plan will make you understand your inventory needs, plans for maintaining equipment, and all the nit-picky details that can bust a budget.

7. Who are the wholesale suppliers that you will want to deal with to get the best prices on your inventory items.

8. What amount of start-up funds do you need? A business plan will make you honestly think through, evaluate, and intimately understand several types of budgeting processes that you need to know. It will force you to account for every nickle that you will need to spend, and give you the tools you need to keep you from blindly throwing money into the wind. Without that kind of disciplined approach, you can run out of money before you are even half-way through opening up your business.

You need to know what your line item budget is for your equipment, for your remodeling or construction, for your initial inventory, for your monthly expenditures, and for the OTHER STUFF: government fees, permit charges, inspection costs, taxes, surcharges, attorneys, bookeepers, software, pencils, calculators, file cabinets, advertising, phone bill, utilities, and on and on.

A business plan, done properly, is a lot of work; but it is not wasted work, nor is it useless make-work. A business plan is the only way to answer the question "should I go pro?"

In my mind, if someone is unwilling to put in the work to plan and think things through in a disciplined and thoughtful manner the way a business plan forces one to do, then they should forget about opening their own business. The dedication to succeed simply isn't there.

I thought I would hate doing my plan; but I actually enjoyed it. And it answered my question about whether or not I should open my own business.

I made good use of the Small Business Administration's website. I also used Entrepreneur Magazine's website. Both have a lot of resources for planning and running a small business. They also have information on how to do a business plan.

I used Business Plan Pro to help me get started doing my business plan. I found that it helped me format the plan and progress with its writing in a logical way. You don't need to buy software to do a business plan, but it is something to consider if you are stuck on how to get started. I'm sure there are any number of programs out there.

If you have access to a college, they may have a small business counseling program. There are also numerous government resources for small business which provide wonderful programs to get you going with counseling and outstanding resource materials. Please check with the Small Business Administration.

Good luck with your decision, I wish you the best.

Dave
www.davebbq.com

Let me know if you ever get this off the ground... I'm not far at all from Battleship Cove (1/2 hr drive). I'd like to see how it comes out Good luck!