Restaurants (Atlanta: rent, loan, buying) - City-Data Forum

bayarea-girl · 09-02-2008, 04:51 PM

Is it me, or are a lot of restaurants in GA going belly up? I'm trying to open a catering business and noticed (from the people I'm buying my equipment from) that a lot of places are going out of business. What's happening why are so many of restaurants going out of business?

LovinDecatur · 09-02-2008, 05:15 PM

Restaurants have always had a high failure rate relative to other businesses. They usually fail due to undercapitalization.

ZGACK · 09-02-2008, 06:08 PM

It's a tough business. Catering is the smartest route to go in the business: higher markups, less overhead. Good luck to you.

atlantagreg30127 · 09-02-2008, 08:49 PM

Quote:

Originally Posted by bayarea-girl

What's happening why are so many of restaurants going out of business?

I used to work in the restaurant business. In every city I think that the "success" number is very low - something like MAYBE 25% are still open 2 1/2 to 3 years after their initial opening. It's a very unstable business unless you are an exceptional business person and can do something unique.

One thing I noticed about the metro area, especially in the burbs, are the number of people who open restaurants who literally have no clue what they're doing. It's as though they one day wake up and go, "Gee, I think I want to own a restaurant now!", and have never even worked in one.

They get a loan for not nearly enough money to pay themselves for a full year without dipping into restaurant profits, hire unqualified workers, don't keep accurate books, they go out and rent a space in a strip center, buy a copy of "Restaurants for dummies", and try a go at it - and fail... then wonder WHY they failed.

http://bestsmileys.com/freak/3.gif (broken link)

So please - no more "Key West style" hole in the wall places. No more New York wannabes. No more L.A. clones. Come up with something original and real, folks, and you'll do very well and stay in business. Catering yes, does well. But some folks do very well doing a small restaurant that's open maybe 4 days a week PLUS do catering as well. Again - if it's different, it'll fly.

bayarea-girl · 09-02-2008, 10:53 PM

Just thought it was rather unusual that so many places were closing (mainly in the burbs). For a second I thought well maybe people just stopped going to restaurants because of the economy. But I also think that a lot of people couldn't pass the new health regulations. Some of the places I've been into to buy equipment have been really really dirty in the kitchen.

The food in GA is soooooooooo good and I'm really excited about my business. Although, it is costing me a arm in a leg to open (most of the fees are on the several permits). I wish the process here was faster and simplified, it is taking forever.

atlantagreg30127 · 09-02-2008, 11:16 PM

Quote:

Originally Posted by bayarea-girl

The food in GA is soooooooooo good and I'm really excited about my business. Although, it is costing me a arm in a leg to open (most of the fees are on the several permits). I wish the process here was faster and simplified, it is taking forever.

Just don't make the mistake many do by not having enough money via a loan to float yourself comfortably for at least one full year without dipping into your business income. That's the general rule of thumb for restaurants (or related) that succeed. If someone opens one on a shoestring budget and are nearly broke by the time they get the thing open, it's almost doomed to fail.

As far as suburban closings - you are partially right. I know that several places in Paulding County have closed recently, and it is partially due to the economy. That particular area is very blue collar, and people are on budgets which may not include eating out as much. I've seen a noticeable slowdown in the number of people who eat out (especially on weekdays) in that area.

spacelord75 · 09-03-2008, 06:45 AM

If I had to guess, I would say that this is not solely an Atlanta phenomenon...the recession is really making it tough to own a restaurant. Food prices are sky high and people are tightening their grip on their pocketbooks to try to save money.

ramblinwreck17 · 09-03-2008, 06:57 AM

Exactly. I would think the price of food is the straw that is breaking the camels back and what's really killing some of these establishments.

CHEFTRACY40 · 09-03-2008, 10:43 AM

Quote:

Originally Posted by bayarea-girl

Just thought it was rather unusual that so many places were closing (mainly in the burbs). For a second I thought well maybe people just stopped going to restaurants because of the economy. But I also think that a lot of people couldn't pass the new health regulations. Some of the places I've been into to buy equipment have been really really dirty in the kitchen.

The food in GA is soooooooooo good and I'm really excited about my business. Although, it is costing me a arm in a leg to open (most of the fees are on the several permits). I wish the process here was faster and simplified, it is taking forever.

I know what you mean! I'm getting my catering business off the ground right now too! Just running into problems trying to find a commercial kitchen to use for some of my jobs! What types of foods do you prepare?Good Luck to you!