Why do so many people open new restaurants, Veeky Forums?

Sir_Gallonhead
Sir_Gallonhead

Why do so many people open new restaurants, Veeky Forums?

It seems like a very bad decision, objectively. The vast majority of new restaurants fail, and the vast majority of those which do not actually go bankrupt or otherwise end up closing seem to just scrape by without generating any significant return for their owners.

There are so many restaurants in any even mid-sized city that competition is inevitably cut-throat; and all of the profits are competed away. People think of cut-throat competition as this incredibly capitalistic thing, but it isn't capitalistic at all in the sense that it makes it extremely challenging - bordering on impossible - to actually generate capital.

You end up with a situation in which people are working very hard to just to keep their restaurants solvent, just to keep paying the rent and making payroll, but almost nobody is actually making a profit. Even if you're very good, it's virtually impossible to make money in the restaurant business. For a new entrant, the chance of real success (i.e. genuine and significant long-term profitability) is close to zero.

Given that there are many industries that one can enter with considerably less initial capital, which are considerably less stressful, in which the chances of success are considerably greater and where, if you work very hard and you make offer a compelling product or service you can make many orders of magnitude more money than you could ever hope to make in the restaurant business, why do so many people fall for the 'I'll open the 738th Italian restaurant in London and it'll be a great success!' meme?

cum2soon
cum2soon

Barriers to entry are low

idontknow
idontknow

It feels like the natural choice for the vast numbers of people who can cook a few specialised dishes.

Ordinary people, especially women, daydream about it all the time, because it's a business everyone can understand and appreciate, and which is easy to pretend would be pleasant and rewarding.

likme
likme

@cum2soon
And lots of people think of it is a defensive market because
muh people wil always eat food
Not realising that restaurant is one of the first expense cut from a financially struggling household

Gigastrength
Gigastrength

Money laundering,how do you think all those restaurants that are always empty are still open?

5mileys
5mileys

@idontknow
and which is easy to pretend would be pleasant and rewarding.

This seams like the best answer

They just have no idea their shit is going to get kicked in OP

takes2long
takes2long

@Sir_Gallonhead
The "I just read Peter Thiel's zero to one for the first time and now I'm a contrarian" meme
topkek

likme
likme

@Gigastrength
This more or less.

But around here there is one place that's been open for a few years and they do extremely well for themselves. The place is PACKED at lunch and dinner and on the weekend you have to wait 20-30 min just to get your food. They seem to be trucking along just fine.

It's a lot of work for them I'm sure, though. It's a married couple and they had their kids working for them at one time but they were able to expand and hire a few normies. I'd say they're pulling at least 10k in profits every month.. but they work 10-14 hours a day 6 days a week. Eventually they'll hire a glorified manager and take retirement while getting an easy check every month, or just sell it off.

VisualMaster
VisualMaster

Try to start any other kind of business and you'll see why a restaurant looks easier. Get any other kind of business off the ground and you'll see why a restaurant is tough to keep afloat.

Fuzzy_Logic
Fuzzy_Logic

Its because a restaurant is the only business normies can wrap their head around.

whereismyname
whereismyname

@likme

$10,000 in profit per month is not worth getting out of bed for, let alone working 84 hours a week for.

King_Martha
King_Martha

People want to do what they love and opening a restaurant makes you an entrepeneur doing what you like. The problem is, as you say, restaurants are extremely risky. More than half fail in their first three years (it's not actually 90-95% bad).

I know a guy who opened a barbecue place a couple years ago and the food is fantastic. But the place is very small and he can't afford to employ more people. He wakes up at two am to get the briskett going and about hourly so he has properly cooked moist briskett throughout the day. It's a labor of love.

The only person I know who runs a restaurant (personally) owns two because his dad is fucking loaded (family net wealth is insane, either 8 or 9 digits US dollars) and just bought him and dropped him in two restaurants. I'm sure that the restaurants are probably being subsidized further beyond purchase price (e.g. operational costs) by his father).

Spazyfool
Spazyfool

@whereismyname
does not want to get out of bed for anything less than $120k

askme
askme

@Sir_Gallonhead

The vast majority of people do it because they like cooking, and think owning a restaurant will be fun.

One of my best friends, who had never worked in a restaurant, opened a restaraunt.

Best case scenario you ONLY work 50hrs a week and you make $50k - $60k a year.

Unless your restaurant is a smash success, AND you can hire a good GM to run the place, then owning a resaurant sucks.

RavySnake
RavySnake

@Spazyfool

No, I didn't say that.

I wouldn't get out of bed for less than much, much more than $120k.

If a business venture cannot reasonably be expected to be worth many billions of dollars ten years after founding, it is not worth founding.

DeathDog
DeathDog

@RavySnake
A business venture that can eventually be managed by a subordinate and turned into a passive income source is definitely worth founding. You're either baiting me or you're just retarded.

AwesomeTucker
AwesomeTucker

@RavySnake
Sure, but you have to start somewhere.
Profit is profit, full stop.

Stark_Naked
Stark_Naked

@DeathDog

If all you need to do in life to experience lasting and justified satisfaction with life as a whole is live in moderate comfort, go ahead and chase a few thousand dollars a month of 'passive income'.

If, however, you will find nothing less than fundamentally altering the future for the better to be tolerable, you must do more.

Nude_Bikergirl
Nude_Bikergirl

Restaurants are in pretty high demand so it's fairly easy to get one started, keeping one afloat might be a little more difficult, but getting one up comparatively isnt that bad. The skill necessary to have a restaurant is also low, just know how to make a few dishes (just tweak ones you find on the internet, you dont have to be a culinary artiste) and youre set.

The people you hire to work for you are also going to be plentiful and inexpensive (they work for tips). I honestly think if we got rid of the minimum wage youd see a lot more people trying to open up businesses that aren't restaurants.

Also, owning a restaurant just seems fun to a lot of people.

Sir_Gallonhead
Sir_Gallonhead

@Stark_Naked
So what are you doing? What gets you out of bed, Mr. Disrupt everything?

Seriously tired of people judging other people when they won't/can't be assed to even "get out of bed", as you put it.

SniperWish
SniperWish

@Sir_Gallonhead
I know the restaurant biz is shitty, but unless you live in the few nice areas, the city lacks options. It's pretty much chain restaurant after chain restaurant (maybe for good reason). I wouldn't open it as my first business though.

DeathDog
DeathDog

@SniperWish
the city = my city
My city sucks.

CouchChiller
CouchChiller

Only industry monopolies won't crush average people
Only industry immigrants have an advantage over an American
Low barrier to entry
Fairly easy to understand
Fairly deregulated

The American dream is becoming a parasite that overcharges for a calzone. Mamma Mia!

New_Cliche
New_Cliche

@RavySnake
Warren Buffet's first business was a newspaper delivery business when he was a kid. Mark Cuban only made $2 million from selling his first successful business. Donald Trump's first real estate deal only made him several hundreds of thousands of dollars. Elon Musk first sold video game code in South Africa for a couple hundred dollars. Bill Gates' first business was some small computer related stuff he did before college.

You will never be successful with your current attitude.

VisualMaster
VisualMaster

@RavySnake
Well hello there Mr. Hotshot, how many billions you worth now?

CodeBuns
CodeBuns

@RavySnake
holy shit get a load of this faggot

Stark_Naked
Stark_Naked

@New_Cliche
You will never be successful with a different attitude either because it's statisically impossible for the overwhelming majority.

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