DinosaursAreAwesome Posted March 25, 2008 Share Posted March 25, 2008 My parents, having made a few quid on a 'property ladder' project, decided to invest the money they made in a restaurant. The business plan- this is pretty much verbatim- was 'how hard can it be?'. As clear a case of self selection bias, or cognitive dissonance, or whatever you call it when rational people BS themselves into a very poor decision- as you will ever see. Now, I trained as a chef briefly after school, and six months was enough to know that a.) Restaurants are really hard and b.) I wouldn't want even a successfull one in my life. After two years the business closed having lost alot of money- forutnately Dad is a high earner and can kind of afford it. What surprised me is whats happening with the sale of the building, which is very nice. I was expecting a chef, or maybe a chain to buy it off him. In fact the only offers he's had so far have come from a BTL looking to do a straight swap for a portfolio of Cardiff flats (luckily he isn't THAT stupid), and a consortium of middle class locals who want to punt their mortgage equity on a business they have just seen fail, obviously thinking they can do better somehow. WTF is up with these people? Why not a taxi compnay or a shop something? Now, it crosses my mind that there have been quite a few programmes recently that seem to promote restaurant ownership as an attractive alternative to the rat race kind of like property porn, and to the untrained eye a dinner service may look like a big dinner party- my question to you all is this: How many of you know untrained amatuers that suddenly think catering is they way to go? Is this an emerging trend or an isolated group of Taffy nutjobs? Quote Link to comment Share on other sites More sharing options...
Mr Yogi Posted March 25, 2008 Share Posted March 25, 2008 Its not just restaurants. A mate of mine runs a busy pub - he's had it for years and it's pretty successful. However, he works bloody hard - 12-14 hour days with only a couple of nights off a week. He says the worst bit is having to be pally with his 'regulars' - boring b@stards to a man who insist on having the same conversation 365 days a year. It really makes him chuckle when somebody says to him 'When I retire, I fancy getting a pub'... People just have no idea! Quote Link to comment Share on other sites More sharing options...
Paddles Posted March 25, 2008 Share Posted March 25, 2008 (edited) Mrs. Paddles had this idea a while back that "when we retire or semi-retire we should open a small restaurant, very tiny gourmet menu, only open a couple of days a week, you could do the cooking; you love cooking, etc. etc.". Yes, sure dear. And on the days we don't open, I could pop into the bank and ask them to flush some more cash down the toilet for me, to save me the time. I admire anyone who makes a profit from a restaurant, it looks like extremely hard work for very little return. [edit; in fact, I've often thought that they must be excellent money-laundering vehicles. Anyone know if my hunch is correct?] Edited March 25, 2008 by Paddles Quote Link to comment Share on other sites More sharing options...
chichi Posted March 25, 2008 Share Posted March 25, 2008 [edit; in fact, I've often thought that they must be excellent money-laundering vehicles. Anyone know if my hunch is correct?] Rumours go that this is what keeps vaste swathes of takeaways open in south manchester Quote Link to comment Share on other sites More sharing options...
mitchbux Posted March 25, 2008 Share Posted March 25, 2008 It really makes him chuckle when somebody says to him 'When I retire, I fancy getting a pub'...People just have no idea! Another favourite, retire early, sell the family home and buy a B&B at the seaside. Then you can get out of bed at the crack of dawn 7 days a week during the summer, flog yourself to death in the kitchen churning out cooked breakfasts and then have to strip and remake every bed, clean the bathrooms etc. No social life because at least one of you has to be in for the guests, and no chance to enjoy any spells of good weather. Then comes the winter season where you have few guests, hardly any income, spend your time spring cleaning, and getting repairs done. You have more time to go out, but then you realise you left behind all your friends when you moved. Still you get to see the winter storms lashing the sea defences. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted March 25, 2008 Share Posted March 25, 2008 (edited) My parents, having made a few quid on a 'property ladder' project, decided to invest the money they made in a restaurant. The business plan- this is pretty much verbatim- was 'how hard can it be?'. As clear a case of self selection bias, or cognitive dissonance, or whatever you call it when rational people BS themselves into a very poor decision- as you will ever see. Now, I trained as a chef briefly after school, and six months was enough to know that a.) Restaurants are really hard and b.) I wouldn't want even a successfull one in my life. After two years the business closed having lost alot of money- forutnately Dad is a high earner and can kind of afford it. What surprised me is whats happening with the sale of the building, which is very nice. I was expecting a chef, or maybe a chain to buy it off him.In fact the only offers he's had so far have come from a BTL looking to do a straight swap for a portfolio of Cardiff flats (luckily he isn't THAT stupid), and a consortium of middle class locals who want to punt their mortgage equity on a business they have just seen fail, obviously thinking they can do better somehow. WTF is up with these people? Why not a taxi compnay or a shop something? Now, it crosses my mind that there have been quite a few programmes recently that seem to promote restaurant ownership as an attractive alternative to the rat race kind of like property porn, and to the untrained eye a dinner service may look like a big dinner party- my question to you all is this: How many of you know untrained amatuers that suddenly think catering is they way to go? Is this an emerging trend or an isolated group of Taffy nutjobs? A sure way to lose money - open a restaurant. Just been working with one owned by a couple - lost 60k last year alone! Edited March 25, 2008 by gruffydd Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted March 25, 2008 Share Posted March 25, 2008 Rumours go that this is what keeps vaste swathes of takeaways open in south manchester My better half inspects them and other eateries for a living. The drugs outlets are obvious as the owners often put loads of money into the structure - to please the authorities but give the game away by employing complete morons. Anyway - turnover of all food businesses fast - too many people think they can make money from food. Quote Link to comment Share on other sites More sharing options...
CviewUK Posted March 25, 2008 Share Posted March 25, 2008 Brighton's Momma Cherri's goes into administration(03 January 2008 12:00) The Brighton restaurant hailed as Gordon Ramsay’s biggest Kitchen Nightmares success story has gone into administration. Momma Cherri’s, which featured on Ramsay’s Channel 4 show three years ago, has gone under with debts of £200,000. http://www.caterersearch.com/Articles/2008...nistration.html Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted March 25, 2008 Share Posted March 25, 2008 http://www.caterersearch.com/Articles/2008...nistration.html I remember a Ramsey type telling Mrs. Barlow that the only way to make money in catering was volumes - ie Burger King Franchise Quote Link to comment Share on other sites More sharing options...
repetitive bleats Posted March 25, 2008 Share Posted March 25, 2008 http://www.caterersearch.com/Articles/2008...nistration.html quite rightly. it was shite before he got there. was passable just after he left it but shite again soon enough after. Quote Link to comment Share on other sites More sharing options...
DinosaursAreAwesome Posted March 26, 2008 Author Share Posted March 26, 2008 (edited) I remember a Ramsey type telling Mrs. Barlow that the only way to make money in catering was volumes - ie Burger King Franchise Unless you personally are sh*t hot at restaurants, with years of training and experience, he's right IMO. Although I can understand that some people might want to romanticise them- especially if thats where you go to have a good time. What gets me is that this place- a beatiful little 30-40 cover bistro, that would be just perfect for a young chef and his Mrs to make a go of, is only attracting the BTL crowd, who, like my old man, expect it to make money like a house :angry: I suppose I'm rambling now: but does anyone remember the 'changing rooms' makeover type of show that was the forerunner of property porn? the emphasis was on utility rather than profit- it wasn't until the boom got really sick in 03 that we began to see the 'property ladder' type show that focused on investment returns. Well it seems to me that a similar thing has happened to food telivision- instead of a chef demonstrating recipes for you to try at home, there seem to be more shows about amatuers doing actual catering. For example "the restaurant" with raymond blanc, or that show on bbc in the late afternoon- even Masterchef now sets 'real' catering challenges and the poor sods on it all want to be pro chefs, rather than just good cooks. I can't help but think that the perceptions my parents- and now a group of people basically just like them- have are based on misconceptions about the industry propagated by this programming. I'm not sure if there's a point here as such- except that we can all maybe expect to be eating out in poorly managed establishments in the future! Edited March 26, 2008 by Laughing Man Quote Link to comment Share on other sites More sharing options...
waitingandsaving Posted March 26, 2008 Share Posted March 26, 2008 I admire anyone who makes a profit from a restaurant, it looks like extremely hard work for very little return.[edit; in fact, I've often thought that they must be excellent money-laundering vehicles. Anyone know if my hunch is correct?] As a teenager I had an evening job at the local chinese takeaway. They worked very hard, and yes, they turned a profit - and, as it was in the days before MEWing etc, it would appear they turned a good profit. Now I'm pretty sure I wouldn't go so far as to say they were money laundering, but I it took me a while as an innocent teen as to why there were 2 order pads on the go at any one time... All the takeaway delivery drivers rotated round as they got bored/pissed off with the owners of each place in turn - so I heard some fairly interesting stories while I was there - if I had to choose one, based on the info, I'd guess at the kebab shop being most likely. Besides, the chinese was obviously on tax evasion, and the indian takeaway were busy being caught for benefit fraud (the indian delivery drivers uncle was photographed carrying a sack of onions on his back, when he was claiming disability benefits for having a bad back...) Besides all that, I've always thought a tea rooms would be the easiest option - you don't have to work all the hours under the sun, it seems that you can charge a fortune for a slice of cake, even though it might only have cost a couple of quid to make a whole one, muffins and scones cost pennies to make, and only take 5 minutes to prepare before putting in the oven, freshly made sandwiches are easy and cheap enough, and tea, coffee, and hot chocolate aren't exactly expensive either. You should also have fairly steady turnover throughout the day, rather than 2 "sittings" when if things go wrong, the domino effect of it means you've stuffed up with a whole load of customers. Quote Link to comment Share on other sites More sharing options...
wsn03 Posted March 26, 2008 Share Posted March 26, 2008 A retaurant owner I know said the restaurant business apparently has the 2nd highest probability of failure, the 1st is apparently builder. Not sure on the builder part, apparently its down to not being paid on time (or at all) makes it statistically prone to failure. I do see the restaurant business being a guaranteed way to lose cash - its the first thing people give up when cash is tight, there's loads of competition, you've got to be a mind reader to know how much food to bring in, and it has to be fresh if you want to keep your customers, margins are crap, hours are long........ I live in a small village with 5 surrounding restaurants; every one has changed hands in the 2.5 years I've been there. Quote Link to comment Share on other sites More sharing options...
tigsrenting Posted March 26, 2008 Share Posted March 26, 2008 There are quite a few restaurants for sale in Brighton and Hove. Thanks to Markinspain for the link. http://uk.businessesforsale.com/uk/Busines...Eastbourne.aspx Quote Link to comment Share on other sites More sharing options...
chichi Posted March 26, 2008 Share Posted March 26, 2008 There was a couple who kirsty and phil helped moved to the isle of wight for a pub/food life so they "could spend more quality time together" - they didn't last long in the pub. Quote Link to comment Share on other sites More sharing options...
Gurgle Posted March 26, 2008 Share Posted March 26, 2008 There was a couple who kirsty and phil helped moved to the isle of wight for a pub/food life so they "could spend more quality time together" - they didn't last long in the pub. You're right, they became property developers... and I'm not joking either Quote Link to comment Share on other sites More sharing options...
Tim Miller Posted March 27, 2008 Share Posted March 27, 2008 There was a couple who kirsty and phil helped moved to the isle of wight for a pub/food life so they "could spend more quality time together" - they didn't last long in the pub. I remember seeing a documentary on restaurants and pubs at least 5 years ago. The failure rate was 50% after a year and 95% after 5 years. It high lighted a few common mistakes, not ever being in the business before and leaving couples exhausted and not seeing each other for any quality time. It also showed one couple who visited a restaurant for sale in the lake district, the market town was busy in the day with coach loads stopping off. They however spent little money. The new buyers thought they would offer up market food in the evenings, sadly there was no one there in the evenings, it was all day time visitors. The catchment area was just not filled with enough chimney pots. I feel in these hard times and it will get even harder, being self employed is not a good option. Quote Link to comment Share on other sites More sharing options...
kingsgate Posted April 2, 2008 Share Posted April 2, 2008 I don't think running restaurants and pubs is "the new BTL". It has ALWAYS been hard, and along with "B & Bs" is one of those things that couples think of (stupidly) as a semi-retirement job. BTL has always made sense if you do the maths right, and only buy somewhere at a price such that you make a nice chunk of profit every month in terms of rental income over mortgage payment, allowing a margin for rate rises, empty periods and repairs. BTL only got silly when prices got so high that people couldn't ever make money month on month, and were instead relying on prices continuing to rise forever. You wouldn't catch me buying a restaurant or pub. Or a BTL newbuild flat where I have to subsidise the mortgage payment every month. Quote Link to comment Share on other sites More sharing options...
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