Well, I’m almost through the final cleanup. Closing a restaurant that I bankrolled for my brother, a great chef, with his dream to run a family restaurant. Another week and it will be history hopefully. I financed the endeavor for his sake, a gift of unselfishness and love and did whatever it took to try and make it work. There were many factors unaccounted for but nonetheless, I have gained important insight that I would have rather learned without spending a fortune. I do know much more than when I started if that is any consultation. Would you like to know what I’ve learned? Well do you have a choice? Here they are my top lessons for anyone of attempting to become a successful restaurateur :

Don’t move quickly. Always take your time when contracting work, buying things, and retaining services. The best looking deal is much like a Las Vegas gorgeous blonde. Shallow, and never there unless they are taking money out of your pocket. Many scammers and their best intentions cost you plenty with nothing to show.

Don’t expect your friends to understand that they have to pay for their meals. They usually don’t and get offended you are not footing the bill. Most of my friends understood and wanted to pay, but I know of another person who lost everything and went bankrupt due directly to this scenario.

Don’t expect any support from people you know, no matter how many you know. The strangers you meet are much more loyal and they don’t expect
any thing #2.

Get the best lawyer to include all those things that you would never expect, like termination procedures and the business failures. The “out’s” of the deal are just as important as the “in’s.”

You will not get much empathy for failure. When I announced the closing, here is a quote from one of my nieces in an email back to me: “Sorry! That’s so sad to hear Do you think I can have a mug for a Christmas present?”

Your new found friends will provide you with the most sympathy than anyone else. Don’t ask me why, I can’t figure that one out, unless as the old saying goes “familiarity breeds contempt.” Maybe that extends into failure breeds apathy. I do cherish the people that took the time to express real caring and write or call and want to offer their help if needed. They are few in number but great in deeds and have special places in my heart.

People don’t like to tip and will find any excuse to not do so, regardless of the level of income bracket they are in. If you want to make money in the restaurant business, then open a fast food joint with plastic chairs and walk-up service. That’s what the bulk of America wants, much like the movie, “Demolition Man” and the predictive eventuality of Taco Bell’s dominance for the future of all restaurants.

Don’t make the restaurant look like a million bucks because people want to see plastic chairs and spartan decor to percieve that feel of inexpensiveness of what they want to perceive when entering a place they have never been before. If you make it look like an expensive restaurant, even if you give the food away, people will get so nervous they will not even be able to read the menu or prices and then get up and tell you there wasn’t anything on the menu they wanted, no matter how expansive your menu may be. They are headed for the door, just get out of their way. Too many people have been burned by other restaurants that deliver sub-par food and service and it is a Pavlovian response to great looking decor.

When you issue coupons use the following disclaimers: Dine-In only, No cash value, Cannot be combined with any other offer, Expiration Date, Must purchase one beverage per person (or they won’t buy one and you will lose money on the promotion) Not good on Sundays or Holidays (you don’t need them to come on those days), No third party sharing on 2 for 1′s (yes they will do that to you!) No reproductions or copies allowed, One coupon per couple, Must be presented to the waitstaff before ordering in order to be validated, and lastly, state the hours they can use the coupon or they will come in for breakfast at dinner time and make sure this verbage is on the entire coupon they must clip so you can identify it when they try to give you one that is expired or from another restaurant. All of this I have learned from people who have tried to or have, scammed us.

When it is all said and done, don’t sign a long term lease (I didn’t) unless it is tied to a corporation that is a separate entity (keep all personal business out of the corporate structure) and do not sign personal guarantees for anything including the food bill. If you borrow money you will need protection if you do go belly-up and you don’t want to lose your personal assets. The best way is to put your personal assets in a trust if you have substantial ones, BEFORE you start the corporation to insulate yourself. Be sure to keep the corporate business segregated from your personal or you might lose a lawsuit that claims the corporate entity was a part of your day to day personal business and therefore you may be liable for the corporate debt.

Here’s an important tidbit before laying out your cash or loan money. You can setup a spreadsheet with expenses vs income easily if you use this formula.

At $10 per cover you need (fill in) # of covers x’s days per week x’s 4.2 weeks a month or just times the amount of days open per month. To achieve those covers assume that each cover will visit your place once a month and now you see how many different people you need in your “base” numbers to make the place break even. For example out of 3,000 people or covers at $10 per person, you would have 100 covers per day for 30 days. You don’t want to break even, you don’t want olive oil and garlic all over your hands and your fingernails gritted with spice rub for nothing. You want to make money, so go back and plug in how much you want to make and see how many covers you need and then do the math to see how many different people you must have in your base covers. This is very important. For example, if you need 120 covers a day ($1200) to break even and can’t see how to get that many people in your restaurant, how can you expect to make money? If you are off the beaten path, that is not good. It is all about accessiblity, competition with supermarkets, fast food chains, like-minded outlets, and drive-by count…that is how the big boys do it. Are you still game? Use the math, not the heart to determine that answer and you will be able to assess your chances fairly. These lessons I have learned and/or knew and protected me from fatal damage. The mental damage is another thing and one must have the attitude that money is just money, not health, not happiness. As long as you can still live and love that is the most important thing. If you have made the money in the past, you must be positive about yourself so that you can make it in the future. The future is for certain, the past is past, so be good to yourself and don’t sulk and be bitter. Your feet are still planted on the ground and not in it! I just have to keep telling myself that until it sinks in.