Venturing In To Restaurant Business, Need Help!

[seanshah]

Hi,
I am a full time engineer, working in Houston Tx. I am considering to buy a low profile Chinese restaurant. This will be my first experience in business. I do not understand the Chinese language, nor have expertise in its cusine.

My worry is, what if I buy the restaurant and the Chinese cook working in there leaves the restaurant. How do we deal with an issue like this.

I would appreciate your thoughts on this topic. Thanks for your time.

cheers

[Logan]

Hi seanshah, welcome aboard

That is an interesting dilemma. I think in the big picture of things, you need to have enough interest in this business that you will build an expertise in the cuisine/product. I'm sure, as with most things there is a learning curve and it will take time. If I were motivated enough to head down that path, but wanted to move forward now I would consider two things. (1) Research the other current employees. Are they chinese, do any have interest in pursuing a career in cooking that you could get support in this area as needed already from within the establishment. (2) If not, or to further calm you concerns, I would do some market research by running a help wanted ad(s) in your area. Run it so it is not associated with the business or you, but they submit to you anonymously. then gauge the response and qualifications you receive to see if you were put in a position if there is a pool of potential qualified people interested. You don't have to hire, if you run an ad ... but you should notify people that the position isn't being filled at this time and you will keep their resume/application on file for future reference. If I didn't receive much response from running an ad, and there wasn't much hope of networking internally within the business to supplement the resources ... I'd think your concern was very legitimate and try to address it some way before starting. Maybe another option is to partner with someone who does have the expertise you desire, but that has its own drawbacks when it comes to business ownership and relationships (business partners are tough to have most times, straight up).

I'm curious, why do you want to own a low profile chinese restaurant?

[seanshah]

Thanks Logan,

I appreciate your suggestions, made a lot of sense. I will do that exercise. By low profile, I meant its not a chain, and to me the place has great food, but I do not see a whole lot of clientele (crowd). I feel like I can pull some crowd there, with few modifications to the place.
Basic dilemma I get into is, in order to diversify, do we need to know the details such as cuisines of the restaurant business. If I venture into a few more activities and spend more time on the details, I may not get enough time. I hope I am clear in expressing the dilemma.

I was thinking more like, may be automatizing the recipes so any chef, who may not even be a Chinese cuisine expert could use it as a guideline. What do you think about it?

Thanks

[Logan]

I think inherent with the purchase would be the recipes, but I'm not sure what you mean by "automatizing the recipes". I think you (or someone in your business) needs this skill to create/change recipes... who knows, maybe the food is great to you but a different mix is part of what is needed to bring in more people, trends change, etc

I hate em, but in big corporations (including restaurants, hotels, etc) some have thick binders of "standard operating procedures". Part of the sale could include documentation of as much helpful information the previous owners can provide.

Basic dilemma I get into is, in order to diversify, do we need to know the details such as cuisines of the restaurant business. If I venture into a few more activities and spend more time on the details, I may not get enough time.

Tough to provide a black and white answer to that. But two things come to mind, one is supplementing your resources with others that do have that expertise/love. The other thing that comes to mind is the basic principles that often are common with successful businesses (1) Do you have an interest/love for the business (2) Do you have experience with the business (3) Are you starting small. If you are answering yes to all of those questions, I believe you have better odds of success than if you are not. That doesn't mean you can't succeed without the above, but my experiences are the odds are less likely.

[seanshah]

Very good answer Logan. I will very carefully think about those 3 questions you suggested. I will keep you posted once I have more thoughts on it, here soon.

cheers

[wallacebrooks]

a restaurant business is really risky... both with regards to manpower and whether or not the business will boom with the customers... but with proper management, it can be done. good luck!

[barbdear]

SeanShah,
I got really nervous when I read you original post. One of the biggest business mistakes I've ever made was buying a business that I didn't understand and had to rely on a manager who turned out to be "less than honest". The worst part was, I sensed these problems before I bought the business, but convinced myself it would all work out. It didn't.

While your situation is a bit different, it sounds like your intuition is causing you to ask some very important questions. As you evaluate this business opportunity, Please don't ignore the things that are making you uncomfortable. Unless you are 110% confident in your abilities to run the business if EVERYONE leaves, you will not truly own the business and will be forced to make decisions that are not in the best interest of the business.

[HomeComputerGam]

I hear the restaurant business is one of the toughest to succeed in.
Since owning a video game store I might argue that

I do know that the economic situation is having a profound effect upon the industry.
I believe I would have to ask:
Why is the business being sold in the first place? Will the current amount of business support the overhead?
As mentioned, do you have a love for the industry?
Do you have the funding to support the business in a down turn?

All recipes and such should go with the business. If not I would pass it by.
As soon as I bought it I would get someone trusted to be mentored by the top chef. This way you have a backup if he falls into the oven or runs off with the waitress.

[torka]

You might want to read Anthony Bourdain's book Kitchen Confidential for an inside look at the restaurant business before you jump in to this.

To say the restaurant business is "risky" is to waaayyy understate the issue. If you don't have any experience in the food service business at all, starting right out with being the owner of a restaurant is extremely risky. This is not so say you can't make a go of it -- miracles do happen -- but frankly the odds are against you.

Running a restaurant is a lot harder work, and a whole lot more work than most people outside the business ever imagine.

I don't mean to be a wet blanket, but I would hate to see you get in over your head and end up in financial distress. Even experienced restauranteurs fail frequently. Inexperienced restauranteurs fail even more often.

My : if you decide to go forward with this idea, don't invest any money in the business that you can't afford to lose.

--Torka

[Neoripley]

As an ex-chef with 12 years experience in the hospitality industry in the UK I would say the first thing to consider would be to make your chef a partner in the business with a profit share incentive (if you think he would be a suitable partner). This could make all the difference to his staying power and his commitment to the ongoing success of the business. If he is this valueable to the business it only makes sense because sooner or later he will realise his value and if he has no incentive to stay may go elsewhere where he will be better remunerated (as so many chefs do).

I make this suggestion for the simple reason that cheffing is a tough job sometimes especially when the kitchen is busy and everyone is under pressure. A chef on a standard wage much prefers quiet nights to busy nights. I'm sure you can figure out the rest...

If you don't think he would be suitable as a partner (even with as little as 10 percent interest) try to determine if the business really does rely on him to any great extent (he might be more expendable than you think) so it might not matter if he does leave. But I would be careful to check that there are other Chinese chefs in the area who occasionally look for work and I would also be careful not to offend (word gets around fast). I would also definately try to maintain some Chinese connections/aquaintance because that is the nature of your business and it will take a long time for a westener with no cooking experience to master even basic Chinese cooking skills.

Also, some general tips: as a guide to pricing try to keep your weekday prices affordable for example a young working family (where both parents work and might need to make use of your service for a weekday meal purely for convenience i.e. around £5 and definately under £10).
Try to cook as fresh as possible and emphasise fresh food on your menu sourcing the best ingredients you can afford without overpricing your menu. The point I'm trying to make is that even though Chinese is fast food as opposed to fine food, it is not exactly a hamburger joint either. Chinese (and many other types of fast/convenience dining) has good potential to be a fresh and healthy offer that is good value for money.

p.s. don't forget to work in thirds (like most restaurants do) i.e. one third cost, one third overhead, one third gross profit. The easiest way to do this is simply work out (to the last lettuce leaf! - I'm not kidding) the cost of each dish and multiply by three - that should have you covered. If you can do better than that great! And good luck, I'm envious of your opportunity.