I receive about 12 calls each month from people wanting my help in finding a restaurant to buy, thanks to my 15 years of experience in the food and beverage industry. But I don’t just want to make a sale for the commission. I believe in meeting with potential buyers to ensure they’re ready for the commitment, both in skills and in balancing work with life. After all, many small businesses don’t make it past two years. In my opinion, it’s crucial to properly guide and inform both buyers and sellers for the best chance of success in their new venture.

Many individuals dream of opening their own restaurants. The idea of serving delicious dishes, creating a cozy ambiance, and building a loyal clientele is an appealing fantasy for many. But is running a restaurant truly the ideal business venture? Let’s dive deeper.


The Allure of the Restaurant Business

  1. Passion for Food: For many, the love of food and cooking is a driving factor. Serving dishes that are praised and relished is deeply satisfying.
  2. Creativity: Running a restaurant allows for a lot of creativity, from designing a menu to crafting a unique dining atmosphere.
  3. Social Interaction: Engaging with customers and being a central figure in a community can be very fulfilling.

Pros and Cons of Owning a Restaurant


  1. Rewarding: Seeing satisfied customers can be very rewarding.
  2. Potential for Profit: Successful restaurants can be highly profitable.
  3. Community Engagement: Restaurants often become community landmarks.


  1. High Initial Costs: From renting a space to buying equipment, the initial investment can be hefty.
  2. Unpredictable Hours: This is not a 9-5 job. Restaurant owners often work long and irregular hours.
  3. Risk of Failure: The restaurant business is competitive, with a significant rate of failure.

Technical Skills Required

  1. Culinary Expertise: While you don’t have to be a chef, understanding food is essential.
  2. Accounting and Finance: Tracking expenses, understanding profit margins, and pricing are crucial.
  3. Management Skills: From managing staff to overseeing daily operations, good management is key.
  4. Marketing: In a competitive market, effective promotion is a must.

Hidden Costs in the Restaurant Business

  1. Licenses and Permits: This can include liquor licenses, health department permits, and more.
  2. Waste: Spoiled ingredients and daily waste can add up.
  3. Maintenance: Regular maintenance of equipment can be costly.
  4. Employee Turnover: Training new employees can be a significant expense.

Understanding Food Costs

  • Cost Percentage: This is the cost of food inventory divided by the total food sales. Keeping this percentage in check is crucial to ensure profitability.
  • Regular Inventory Checks: Regularly assessing what’s in stock helps reduce waste and unnecessary purchases.
  • Vendor Analysis: Regularly review and negotiate terms with vendors to get the best prices.

Creating Action Plans and Procurement

  1. Regular Review: Regularly review your menu and sales to determine which dishes are popular and profitable.
  2. Supplier Relations: Building good relationships with suppliers can lead to discounts and better terms.
  3. Seasonal Adjustments: Adjust your menu based on seasonality to procure ingredients at the best prices.
  4. Loss of Goods and Supplies: Unpaid meals, damaged/broken plates, glassware, missing small wares, service ware list goes on and on.

Labor Costs

Labor is one of the most significant expenses in the restaurant business. Managing schedules, ensuring productivity, and minimizing overtime can help control these costs. Also, investing in training can reduce mistakes, leading to better efficiency and customer satisfaction.


While running a restaurant can be a dream come true for many, it’s essential to understand the complexities of the business. With passion, technical know-how, and careful planning, it’s possible to make a restaurant venture both enjoyable and profitable.

Next topic: Difference between a franchised business vs. an Independent Restaurant 

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