contact us

Thinking of the Restaurant Business?

If you are thinking of owning a restaurant that does not serve alcohol, you better have five-star food and be across the street from a liquor store.

The restaurant business is tough. The hours are horrendous, employees often steal, and cost control is everything. You also can not make it work if you are only busy on Friday and Saturday nights. You need to be at least somewhat busy four nights per week. Tight cost control means portion control, only letting the employees eat certain dishes for free, minimizing waste, and watching the vendors to ensure that if you ordered 50 steaks, 50 were delivered, not 45. Offering fewer than you are being asked to pay for is always a “mistake”.

Restaurants tend to operate on relatively tight margins. Your food costs will be 25 to 30% of the menu price, or this is at least the goal. Labor costs should be about 35% of gross; once again, this is a goal and not something that is cast in concrete.  Besides work and food, restaurants have all the other costs that any business has:  rent, insurance, utilities, etc.


The trick to opening a successful restaurant is making the pricing, décor, service, location and food all come together. This is what successful restaurant owners excel at; for example, no couple is going to spend $200 on dinner to be waited on by a teenager with greasy hair and zits. Likewise, if your place serves Mexican or Italian food, the décor should suggest that your site is located in Mexico City or Rome.

People have all kinds of motives for opening a restaurant. These include playing big shot for the benefit of clients and customers from their other business, having sex with the wait staff, having an excuse to stay out all night that their spouse will accept, and the idea that there is something romantic about the business. If your motive is just to make money, you might have a chance at success.

Written by Brad Palmer

Edited and Optimized by Geoff Caplan

#RestaurantsForSale #NJRestaurants #NewJerseyBusinessBroker #NJBusiness Broker



Leave a Reply

Your email address will not be published. Required fields are marked *