Restaurant business advice

That's mean

I can do real work we have a cleaning business that we manage too that actually motivates me to work because the profits are really good.

Not so much restaurant for some reason.

Restaurants trade at 2x discretionary for a reason. They are inherently risky, which also exposes you to a lot of upside.

Do you own the real estate? If not what are the lease terms.

I think what you need to do is differentiate the descretionary cash flow from the EBITDA. Meaning how much, if any, of the cash flow is actual profit. At that point you need to weight your options. If you basically just own a job then you might be inclined to liquidate and look into other investments.

Source: restaurant owner.

Ordering, inventory, cash flow, credit lines, compliance issues, ad buys, promotional offers, etc. Your front end guy should probably do both. Most owner/managers do both.

I'm not in the restaurant business, but I know they usually go out of business because they can't pay suppliers. It's an inventory and menu issue.

Real estate is not owned, lease right now month to month but can do 5 year agreement at anytime. business has been established for 8 years and we are on good terms with landlord.

Its pretty obvious a very small amount is profit but then again the restaurant comes with a certain kind of lifestyle.
Daily meals, parties, social gatherings, etc are all done with ease. Thats really the only thing i would miss. But other then that yes its like you said its basically like owning a 40K a year job.

But we have other things to focus on for income that are more profitable just the restaurant eats up everyones time.

Personally, a month to month lease would keep me up at night. Although on the other hand it could be a liability, will you have to sign personally on the 5 year?

I would imagine your inventory + FF&E doesn't amount to much, and the bulk of the business value being "good will". Ergo, (without a lease) if the landlord has a change of heart for any reason you're fucked.

I think you're right about it being a lifestyle decision.

There is definitely a value to being the HNIC. Status, freedom, etc.

Let me ask you this, if you got sick for a couple weeks could the place run itself? If not it might be time to dump it.

Could you hire a replacement for 30k a year and pocket 10k?

>They usually go out of business because they can't pay suppliers

Don't pay you employees no one will show up. Default on your lease and the landlord will change the locks.

Suppliers will generally extend some kind of credit, so a struggling restaurant will constantly be trying to use this to avoid insolvency.

>cash flow 125k

>like owning a 40k/yr job

So 85k is profit?

Profit gets swallowed up because cash flow is improperly managed basically we are always breaking even.
For example we will be busy during the summer and be living lavish but when winter comes around we are barely scrape by there is no cushion.
But we have no major debts its a clear title.

>profit gets swallowed up because cash flow is improperly managed

What does this even mean? You're either profitable or your not(for the year).

>live lavishly in summer and scrape by in the winter.

Stop comingling funds and acting nigger rich. Problem solved.

So again are you profitable or not?

You could consider some kind of a line of credit for the winter months but if you're not responsible you could find yourself up shits creek.

>Could you hire a replacement for 30k a year and pocket 10k?
Managing a restaurant is like a 70hr a week job. There's no way you could find anyone competent at that wage.

You have the wrong idea.

They don't even gross half a mil and OP is apparently doing it for 40k.

He's doing it for 40k because it's a family obligation. That's why he started this thread about maybe selling it.

I've worked for several family owned restaurants and I know they are hard work. Even if you hire someone to manage them, there is still a lot of work you have to do to make sure they stay profitable.

>He's doing it for $40k because it's a family obligation.

So you're implying market rate for his position is >$40k, right? If that's the case his labor is subsidizing the business.

>Could you hire a replacement for 30k a year and pocket 10k?
>So you're implying market rate for his position is >$40k, right? If that's the case his labor is subsidizing the business.

You sound like an economics student. Like, you know a bit of what you are talking about, but have very little practical experience with anything.

To answer your question the intersection of competent general managers and people willing to work for 30k is exactly zero. Depending on location, he's looking at 55k+ if he really expects the GM to do everything.

>Profit gets swallowed up because cash flow is improperly managed basically we are always breaking even.
Is that an euphemism for stealing?

Restaurant is a thankless job, the only good reason to own a restaurant is if your first generation American with no other skill set or to gather your mafia friends to plot schemes and launder money, other than that only if you inherited an iconic business netting millones a year is not worth it.

You'll have to spend the same amount of time in the kitchen weather your pulling Gordon Ramsey levels of praise or your nothing but a hole in the wall

>you're full of shit

Restaurant owner here. No school actually. I've have partnerships with people who liked to operate like this, I'm speaking directly from experience.

I'm posting from a different ID.

How fucking stupid are you? I was not implying market rate for his position was 40k. He gets paid that as a family member working for a family business. To actually pay someone to competently take over all the duties of running a restaurant and finding new ways to grow business would be much I higher I imagine. I'm no expert on the going rates, but I sure wouldn't take on that stress for 40k, let alone 30k

And you, as an experienced business owner, have asked if he can find a full time gm, that's expected to essentially run the entire business with zero involvement from the owner for 30k?

You two really have the wrong idea.

This is not a high volume place at all. He's grossing $373k. Do you guys have any perspective of what that actually is?

I'm not saying zero involvement. But someone that could help him run it at an arms distance.

Me again different ID, on cell phone.

Again, its hard to say because we all live off of the restaurant.
In the end i suppose the answer is yes because the profits are enough to support a family of 5.

Yes but thats not really something i want to do. I dont want to enter that type of grind.
When things get tough i tell suppliers to wait on depositing cheques and i start delaying a few payments and when things pick up i catch up pretty quick.
Im able to get by like that.

But thats not how i personally want to live my life. I want to do other things.