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Q: Is this a bad time to start up a new restaurant with a slow economy?
Written by: Brandon O'DellArticle Overview: I field a lot of questions from new and soon-to-be new restaurant owners. Here's one of those questions regarding concerns about opening a business during a slow economic period.
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Q: Is this a bad time to start up a new restaurant with a slow economy?
Slow economies have traditionally been very good for quick service restaurants. Eating out is usually the last part of the budget that a family sacrifices on. They do however change where they are eating out. Restaurants that offer exceptional value benefit from the increased consideration of value in the decision making process of a family or individual.
More important to the potential success of a restaurant than the national economy, is your local economy. While the national news bombards us with doom and gloom messages of recession and job loss, the unemployment rate is still relatively low, and particular cities have economies that are thriving. An example would be my city, Wichita, KS. Our economy is driven by the aircraft manufacturing industry. Local aircraft manufacturers have booming business right now, and it radiates through our economy, which is very strong.
Regardless of the general economic picture in our country, there is opportunity to make money out there in the restaurant business. The industry will grow this year, as it always does.
There are restaurants that won't make it through the year. There always are. They will blame the economy, cheap customers, thieving employees, greedy vendors, gas prices, and everything else you can imagine, except themselves. You can't base your opportunity on the experience of others. We all have our own individual challenges within our businesses. You have to evaluate your situation seperate from anyone else and determine if there is still opporunity there for you, and whether or not the risk is worth it.
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Related Forum Posts
Re: Ways to Maintain Profits in a Slow Economy
- Hi Gt,
You have hit the home run with this post. I agree with you on all the points. Let me add this, you should also get high quality product to market to wealthy people. I read it in a magazines that the wealthy people buying habits are never slow down in any economy. They buy whether the econoy is slow or fast
Re: Kevin's Case Study #10 - When to become an entrepreneur?
- If you just lost your job or took a serious pay cut due to the current state of the US economy... would now be a bad time to start a small business?
Or would that just depend on the industry you're looking to get into?
Thanks
Re: HELP! Forum member with ability to analyze log files needed!
- Hi Evan,
As I'm typing this, the forum is loading very, very slow. At one point it wouldn't load at all except for the main banner. Over on the left there was a timeout warning that said there were too many connections. I'm guessing this has to do with this rogue agent. After refreshing the page it loads, but rather slow.
**Update**
The site is loading quicker now, but still a little slow.
Service Or Product?
- I'm doing an interview with CBC news this weekend about starting a business in a down economy. One of my recommendations will be to start a service based business instead of a product. My philosophy is to get to cash flow positive as soon as possible and running a service helps you keep your costs low (no production costs and very little overhead required).
What do you think? What other advice would you give to someone who is just starting up in this economy?
What are some Pros & Cons of restaurant ownership?
- Aside from the obvious such as lots of competition in the restaurant industry and the cost of food rising, what do you think (or have experienced) are some of the pros and cons of owning a restaurant?
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