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Our family restaurant, Gold Star, was my father and uncles’ version of the American Dream, and I spent my childhood working multiple jobs in this Cincinnati-style chili parlor. Eventually, I left the business to venture out on my own — to learn more about myself and the industry. I later returned, and added the Tom & Chee brand to bring our portfolio to a combined 75-plus restaurants. So, I can say with some authority that launching a new restaurant can quickly turn from dream to nightmare if you don’t start out on the right foot. Thankfully, there’s no shortage of advice on how to begin: Google turns up about 2.48 billion “start a restaurant” search results. But when I was recently asked about the process, my mind turned to some of the things that can get lost in the shuffle, yet are critical to consider.
1. Ask questions early to prevent trouble later
“How do I create meaningful differentiation?”
“How long am I prepared to be in the operating trenches?”
“Have I worked in all facets of the restaurant before, so that I truly can develop a crew?”
This industry is a notoriously crowded space, and consumers are choosy, so differentiation is key. Building that includes a great deal of creative work, of course, as well as effectively training and managing people, accepting the prospect of forgoing a paycheck, and determining how long you realistically want to be in an 80-hours-per-week mode. Be utterly honest with yourself and any business partners about your capacity.
Related: How to Start a Restaurant
2. Know a business before putting money on the line
I started at Gold Star as a teenager washing dishes, then spent countless hours preparing orders, followed by working in our commissary making small batches of our family recipe chili. I went on to lead local store marketing before moving on other restaurant and non-restaurant positions. That combined experience is what brought me to where I am; without it, I doubt I would have earned the confidence of the board (my family, who is loving but tough and fiercely protective of the company) to lead GSR Brands.
Working in a restaurant before starting your own gives you the opportunity to develop management skills and other first-hand experience, not least a grasp of cost of goods, labor and other considerations that factor into a pricing structure and profitability. It’s also vital to consider what technology is available to increase operational efficiencies, and whether each tech cost is worth it. Finally, it’s handy to know how to trademark a business name, steward a brand identity and protect it in all its facets.
And there’s another benefit of working in the industry before making the leap into startup mode: a study of the competition. Experience in the front of house, back of house and the corporate office is also a chance to study present and future competitors. You can learn from category leaders what they’re doing right, as well as where you think they’re missing the mark, and in the process formulate a potential challenger brand.
Related: How to Successfully Turn Your Business Into a Franchise
3. Look close to home for capital
Securing startup funds begins with a solid business plan, whether creating your own restaurant or buying into a franchise model. Most people turn to banks to find them, but it’s also worth looking to your biggest supporters, friends and family, as a source. This may be contrary to some advisors’ opinions, but I’ve seen time and again that it can work. My father and uncles pooled resources to purchase their first restaurant, and that tradition has carried on many times in our family operation.
Those closest to you are much more likely to be vested in your idea, and forgiving of hiccups along the way. And of course, traditional loans can be challenging to come by and require additional documentation like proof of collateral, lease agreements and personal guarantees. This isn’t to suggest doing handshake deals with personal connections: Document every agreement, to save you and your investors from problems in the short and long term.
Related: How to Keep Family and Friends Loans Strictly Business
4. Put in the work
There are a lot of people in this industry willing to help a first timer; it’s one of the beautiful things about the restaurant field. If you’re willing to learn, someone will be willing to teach you. But make no mistake about it: there will be tough times and you’ve got to grind them out. Pivot when you need to pivot, be open to new ideas and do the work.
In today’s world, wealth isn’t measured just by how much money you make; it also means being a master of your own time. Opening a restaurant requires dedication to ensuring the vitality of the business. Once that’s been secured, you can then hire people to execute your vision and provide a degree of owner flexibility.
