Recovering money in a bad investment

[Ryaan]

Restaurant business is a risky business to start with, It really depends on your marketing skills and the amounts of sales you generate. Before starting a new business you should do its cost & benefit analysis and its pro cons.

[City Guy997S]

Originally Posted by Ryaan

Restaurant business is a risky business to start with, It really depends on your marketing skills and the amounts of sales you generate. Before starting a new business you should do its cost & benefit analysis and its pro cons.

I love restaurants........that being said it would scare me to death to actually own one!

1. Rent never goes away, 6K a month (rent, cam fee) is $200 a day....so selling $10 pizzas means I have to sell my first 20 pizzas to just cover the rent.....everyday, 365 days a year!
2. Cash is disappearing.....Pizzeria in years past may have been a gold mine but today everyone wants to use a debit card/credit card and the "cash" is disappearing from the register.
3. Food is as expensive as ever and then you have to throw out your inventory when it spoils!
4. Fast food/chains kill your margin. I talked to a buddy that owns a couple pizzerias. One store rocks, the other is marginal. A Little Caesars just opened within view of his marginal store. They sell large pepperoni pizzas for $5.55, ready to go in the hot oven rack. Tough to compete when the competition is giving the product away! He expects to close the marginal store when the lease is up. The rent is too high and there are several pizza stores in the area.


That being said, I heard that a local Dunkin Donuts does $7000 a day in sales in one store before noon! It is surrounded by businesses, on a very busy street and 7K a day must leave plenty of profit since most of the sales is coffee related!

[Ryaan]

Originally Posted by City Guy997S

I love restaurants........that being said it would scare me to death to actually own one!

1. Rent never goes away, 6K a month (rent, cam fee) is $200 a day....so selling $10 pizzas means I have to sell my first 20 pizzas to just cover the rent.....everyday, 365 days a year!
2. Cash is disappearing.....Pizzeria in years past may have been a gold mine but today everyone wants to use a debit card/credit card and the "cash" is disappearing from the register.
3. Food is as expensive as ever and then you have to throw out your inventory when it spoils!
4. Fast food/chains kill your margin. I talked to a buddy that owns a couple pizzerias. One store rocks, the other is marginal. A Little Caesars just opened within view of his marginal store. They sell large pepperoni pizzas for $5.55, ready to go in the hot oven rack. Tough to compete when the competition is giving the product away! He expects to close the marginal store when the lease is up. The rent is too high and there are several pizza stores in the area.


That being said, I heard that a local Dunkin Donuts does $7000 a day in sales in one store before noon! It is surrounded by businesses, on a very busy street and 7K a day must leave plenty of profit since most of the sales is coffee related!

These are exactly the things you need to consider before opening a restaurant. The risk is too high with very little profit going in your pocket. As you mentioned above the start up cost is also too high.