December 19, 2018 10 Pros and Cons of Owning a Restaurant (and 4 Myths…Busted)
Thinking about starting a restaurant? Before making the leap, get the facts. Start by reviewing these 10 pros and cons of owning a restaurant. Then, be prepared to hear everyone say “9 in 10 restaurants fail.” But guess what? That’s not true, and it’s just one of the 4 most common myths we busted for you.
The 10 Pros and Cons of Owning a Restaurant
PRO: Restaurants are in High Demand
Everyone eats. Most eat 3 times a day. And as of 2017, Americans now eat out more often than they eat at home according to the USDA. That’s a definite plus to kick off this list of pros and cons of owning a restaurant.
CON: Keeping Up with Competition is Tough
Other restaurants aren’t the only thing you’ll be up against. Retail giants like Walmart and local grocers are offering convenient services, like curbside pick-up and home delivery that fall on the “con” side of the pros and cons of owning a restaurant.
Third-party food delivery systems like Uber Eats can sit on either side of the pros and cons of owning a restaurant. If you use a delivery service for your restaurant, you may gain more customers and increase sales. However, many of these 3rd party apps charge hefty commission fees. In general, it’s a good idea to go forth and offer delivery.
CON: The Struggle is Real
Dish guy didn’t show up? Get scrubbing. Server overslept? Start taking orders. Bartender calls in sick? Time to sling some drinks. In the early days of starting a restaurant, be ready to dive in and get your hands dirty (or pay a manager big bucks to do it for you). When considering the pros and cons of owning a restaurant, realize that a work-life balance will be nearly impossible to achieve during the first year.
PRO: No Day is Ever Dull
If a 9 to 5 desk job isn’t your thing, then the restaurant industry could be for you. Every day is different, presenting fresh challenges with each new customer, daily special, or shift change. Depending on how you feel, spontaneity could fit in both the pros and cons of owning a restaurant.
CON: Lack of Profitability in the First Year
When you’re launching a new restaurant, you may not be profitable right away, even with the best planning. That’s why it’s critical to secure loans and start saving ASAP – as in right now – while you weigh the pros and cons of owning a restaurant.
PRO: Giving Back is Easier
One definite benefit in looking at the pros and cons of owning a restaurant is the opportunity to do more for your community. Some owners will sponsor a little league team, donate food to a local shelter, or host regular fundraisers. And your charitable behavior could score more than just a little goodwill. According to a recent CSR study, 87% of consumers would buy from a business that advocated for an issue they cared about.
PRO: Tech Can Take More Off Your Plate
It’s clear that a big workload is a “con” when reviewing the pros and cons of owning a restaurant. However, selecting the right tech can save you valuable time and money. From choosing a mobile POS system to using handy inventory apps, check out the 11 best ways to go digital at your restaurant.
PRO: You Call the Shots
Getting to be your own boss is a huge plus in the pros and cons of owning a restaurant. You get to decide everything: from the menu to the décor. For many, this is so gratifying – all those extra hours aren’t even an issue.
CON: Talented, Loyal Employees Are Hard to Find
Now it’s time for a double whammy of “cons” in this list of pros and cons of owning a restaurant. Yes, it’s time to talk about staffing.
Good workers are out there. Your job is to catch them and keep them (just like that dating book). However, over 60% of restaurant owners say recruitment and retention are their biggest challenge to success.
So how can you address staffing-related pros and cons of owning a restaurant? Start with these 6 resources for finding top restaurant talent.
CON: …And Even Harder to Keep!
The restaurant industry has a notoriously high turnover rate. Chances are, you’re going to lose a lot of star players as you figure out the pros and cons of owning a restaurant.
Many owners will overpay staff in an effort to keep ‘em happy, but don’t rely on this strategy! If money is the only thing keeping an employee, they’ll eventually leave. Focus on creating a positive work environment. Explore non-monetary benefits, like flexible hours for students or professional culinary training for line cooks.
The Golden Book ofUpselling Secrets
The ultimate guide for owners & managers.
4 Common Myths of Owning a Restaurant
“I Can’t Afford Healthcare”
The risk of losing healthcare benefits is a serious possibility to consider when weighing the pros and cons of owning a restaurant. However, the National Restaurant Association recently partnered with UnitedHealth to create comprehensive and affordable healthcare options for both you and your staff.
“9 in 10 Restaurants Fail in the First Year”
Only around 17% of restaurants close their doors within the first year, meaning that the majority will make it past 12 months. That provides a much more positive outlook when considering the pros and cons of owning a restaurant.
“Grandma’s Legendary Lasagna Will Be My Meal Ticket”
Already started a list of pros and cons of owning a restaurant? You may have put family recipes in the “pros” column. However, most family recipes, no matter how delicious, are meant for small groups. Even if your friends claim you could sell that dish and make a fortune, do a reality check. Does that family recipe require intricate prep work and pricey ingredients? Can it be made in large quantities? After adding up the ingredient and labor costs to make the dish, run the food cost formula. Would you pay that much for lasagna? When weighing the pros and cons of owning a restaurant, it’s important to think with your head, and not get too sentimental about those family recipes.
“I Worked as a Bartender or Server. I Got This”
You’ve worked in a restaurant for years as a bartender or server. That’s the ultimate “pro” in the pros and cons of owning a restaurant…right? Not exactly. Many front-of-house staff aren’t familiar with what goes on behind the scenes of running a restaurant. You’ll need to manage payroll, budget, inventory, legal issues, health and safety, and much more.
Now that you know the 10 pros and cons of owning a restaurant – and the truth behind those 4 rumors – the next step is to answer this question: Are you up for the challenge of opening a restaurant? If you just said “yes” out loud, cheers! Welcome to the biz…