Are You Ready for Restaurant Ownership?

He didn’t say it. He didn’t need to. His expression betrayed what was going through his mind. He thought we were crazy. The accountant sitting across from us removed his reading glasses, and leaned forward to speak. “Are you sure you want to start a restaurant?”
Absolutely. I had over ten years experience in the hospitality industry. I’d done it all; fine dining, bistros, pubs and night clubs. I’d managed, served, and tended bar. I’d spent many, many hours in the dish-pit when a restaurant had been left short-staffed.
My husband had spent the last year apprenticing at a friend’s sushi restaurant in Tokyo. He had business experience and loved to cook. We arrived in a small city on Canada’s West Coast with our recipes and dreams. We would bring traditional Japanese cuisine to the wild Canadian West.
We went ahead and opened Sanbiki. We recently celebrated our tenth anniversary with more than 100 of our best customers and staff. What a ride it’s been! What an education. Dining room dreams dancing in your head? Here are a few thing you must never forget.
Cooking is an Art. A Restaurant is a Business.
You have a dream, but do you have a financial plan? It may be the least enjoyable part of the process, but it is the most critical. How will you finance this project? Where are you looking to set up the restaurant, and who do you expect to sell to? What are you planning to serve, and who will you be competing against?
Run the numbers, and then run them again. Then add 10% to what your projected start-up costs will be, and anticipate a two week delay in opening (and thus a subsequent additional two weeks without income) Would you survive? Always have an emergency fund.
The only thing that is certain with a restaurant start-up is that it will take longer, and cost more than even the most conservative projection. Expect the unexpected.
Less Is More. Small Start-Ups are Successful Start-Ups.
Think DIY, dream DIY, and live DIY. Do your own planning, research, and recipe ideas. You can do your own painting, cleaning, and basic renovations. That shiny new 6-burner Viking Range you found on line? Forget about it. Second-hand is the way to start. You can always grow and add more seats, hire more staff, and upgrade your equipment. Downsizing is considerably less fun, and you will lose money.
Knowledge is Power. Get on the Grapevine.
Don’t feel you have to go at it alone. Formers instructors, classmates, friends and family can offer advice and suggestions. Is there a neighbourhood that really needs a great little cafe? A local restaurant owner looking to retire and sell the business? Ask around. Someone with a food truck looking for a partner? It may be a good place to start.
The only thing better than professional financial advice, is free professional advice. Obtaining financing for a restaurant start-up is virtually impossible unless you have considerable collateral. Think a house with no mortgage, or a suitcase full of T-bills. Basically, if you can prove to a bank you don’t really need the loan, then they may consider extending you one.
When we started out, we were turned down by every major bank and credit union in the city. Even the government programs aimed at supporting small business start-ups wouldn’t touch us.
That said, it never hurts to make an appointment with financial advisers at banks and credit unions. Ask them what they want to see on a loan application, and the terms that you could expect if you did manage financing. How much might they loan you and how fast would they want it back?
Also, ask them what they think makes a restaurant successful. What’s their favourite spot for lunch?
There may be government financing for small businesses in your community. Take advantage of them, and the staff that administer the programs. They may have less stringent lending policies than the commercial banks. However, they often charge you more interest. Pick their brains. How do they decide who gets financing and who doesn’t? Take notes.
Never Give Up. Ever.
I’ve saved the best for last. Don’t be discouraged when the banks reject your loan applications, and your best recipe ideas are ridiculed. Always be flexible and accept criticism graciously. Be willing to adapt to a constantly changing economic environment. Above all, work hard and be a compulsive miser when it comes to spending money on your restaurant start-up. When you have a set-back (and you will), never see it as failure. It’s a lesson learned, and you’ll be the smarter and stronger for it.
BIO
Heather McDonald has been co-owner of Sanbiki Japanese restaurant in Kamloops, B.C. for ten years. Previously, she lived and worked in Southeast Asia, Europe, Africa and India. She writes on a freelance basis.

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