Would you start a F&B business?

[yiayiak]

I’m interested in starting a F&B business but at the same time am worried about walking away from a steady corporate job.

Is this the current dilemma that some face?
Get paid well enough from a 9-5 corporate job that it becomes too risky to quit to start your own business?

For those who own F&B businesses, can you please shed some light on the reality of running a F&B store.

I love bringing joy to others through food and have never really enjoyed the politics of the corporate world. But at the same time the numbers don’t quit add up.

 

[ericph]

@yiayiak Don’t do it.

I’ve run a business for 8 years that services F&B businesses, and I’ve got about 3000 customers in Aus.

It’s always the same story; corporate dude wants out and likes cooking and cafe culture.

Pours 20k of their savings into a business.

Struggles for 3 years and burns through savings.

Returns to corporate job.

Some make it, but it’s rare. Honestly, there are better businesses to run.

If you really really want to do it, quit your job and work at a restaurant for 6 months first.

 

[chibu]

@ericph Pours 20K in? More like 100K.

But yes, good summary.

 

[najallo]

@chibu Only 100k in the franchise sector would be remarkable. I watched the RFG lot lose their houses left and right.

 

[im911]

@najallo They're real shit humans who ran RFG

 

[najallo]

@im911 It's almost impressive RFG has survived to this day. Unless you know, then it's so wrong that is has.

 

[ram54col]

@yiayiak As someone who spent 20 years in hospo these threads always make me smirk

People work for decades under smart operators and fail when they go out on their own

Its sheer arrogance or ignorance to think you can just pop into the industry and make a decent living

 

[gkmasterson]

@yiayiak I've never owned one, but I live in a tourism location with lots of F&B trade, and a lot of them (including visibly busy ones) wind up on the market for the cost of stock and fitout, and they often sit on the market for a long time. If it is bought and taken over in the same form, the first thing the new owner does is raise the menu prices, presumably to what it really needs to turn a profit, and it's rarely prices people are prepared to pay, otherwise the previous owner would have done it themselves.

 

[najallo]

@gkmasterson That's a classic. The few I've seen really succeed buy the shop for nothing off Gumtree and really slum it out pumping out good food on the cheap. They really wreck themselves in the process though. Often you see them sell up too, although they walk away with a tidy profit. Ironically they usually sell it to some office worker with too much equity and not enough sense.

 

[polygon]

@gkmasterson Has to be something really good for premium prices

Demography plays a role too

 

[resjudicata]

@yiayiak My advice would be to work in this kind of business for a little while, before jumping straight into ownership.

The owners of these businesses inevitably work a lot more hours per week than they were expecting - there's heaps of 'outside business hours' work that has to be done.

The hourly earning rate can then be a bit depressing. (Not always, but often.)

Some people find a niche and can do very well. A lot don't. But even if you do end up making good money - I can promise you that you'll be working harder/longer than you'd think.

Staffing can be a killer. Getting them, keeping them. Hopefully you'd be able to start small enough to not need to rely on a large number of staff.

Certainly avoid paying large sums of money for new fitout. Try to take over an existing venue if you can, or keep it light. Spending big on fitout can occur for your 2nd venue - if the first one works out OK / once you know what you're doing

 

[gagamil]

@yiayiak $10 - $200k hole in the wall coffee places or food vans in high volume or tourist areas do well in generating a low semi part time wage (think $40-80k a year). If your options are work in retail/hospo or do this, it's probably the better option. Sometimes these places are in a golden spot and can really make some decent money.

200k - $1m+ places - this is where middle class dreams go to die. 100 hour weeks to still make minimum wage. Competing at both ends of the spectrum against the idle wealthy who aren't looking to generate any return on investment and are happy to burn whatever it costs a year to keep their hobby business open, migrants whose entire families will work for nothing in a losing business because they need to own a few places to qualify for investment visa's and private equity players operating 60 venues with orders of magnitude better processes and scale, ready to snipe any good ideas you've got or staff you've trained.