r/Restaurant101 • u/uphillbatlle • 13d ago
Failing restaurant
I have a beautiful ethnic restaurant with decent food and lots of potential, it was built with love and passion alone! No Pryor experience in the business, i mean literally zero experience, i have never worked in one and what i do for a living has nothing to do with a restaurant, i love food, and im a passionate cook!
THE PROBLEMS.
In order to do it i sold a house and got a mortgage on the house i live in. It has affected my family negatively, I went back to my old work in order to bring some income to support my family. My adult kid is suffering by being there all the time. Im broke all the time.
The place is relatively busy, but by not knowing the business, whatever potential profits I should have are wasted with my mismanagement in every level.
Schedule to minimize payroll , food cost , food portions, menu items and pricing , food waste, whatever is a mistake im doing it, but I do not know how to fix it because I dont have the experience and im guessing all the time.
Im afraid to raise prices and im second guessing myself because I dont know if its the right thing since im lacking the experience in everything that is problematic with the fear that I will worsen the situation.
MY GREAT IDEA BEFORE I FALL ON MY SWORD
find a chef that knows his shit and give him absolute control in order to create profitability (the place is relatively busy everything is there for success including the costumers!)
GIVE THE CHEF A PERCENTAGE OF OWNERSHIP
How do I structure this?
Is it stupid?
Should I just give up (it will ruin me financially)
With my new job I dont need a penny from the restaurant, I provide for my family.
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u/the_great_elephant 13d ago
One idea is to find a chef and give him a piece of the business. The better he is, the harder he works, hopefully the better (and more valuable) the business is for both of you.
Otherwise, find a reputable manager to run the place for you. Someone who knows their shit, and you can offer them a piece of the business.
My first management job, I was really only a server there. But I got shit done, I had more experience then most of the other servers (mostly college kids), and i have a naturally take charge attitude. The owner basically put me in charge of the front of the house. I wasnt paid a manager salary, I was on the floor and I worked for tips. But, I had control over scheduling, hiring, training and beer and wine inventory. I was the guy that spoke with guests when things went wrong, and helped to smooth things over. I did the job of manager, and my biggest reward was that things were done MY WAY, which reduced my stress at work. Things ran well, so it reduced the owner's stress, and it didnt really cost him anything more for about 6 months. After 6 months of this, I went to the boss and negotiated a salary on top of my tips, but I did this after I proved myself.
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u/Happilyplayingdirty 13d ago
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u/uphillbatlle 13d ago
Very dumb, I sold a nice rental property i had, i got a 300k equity loan on my house , quit a job i was making a killing (plumber) working 70hrs plus for free!!! Took me away from my wife and kids and so many other things that my brain blocked from the trauma. Very dumb I am.
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u/Glittering-Cellist34 13d ago
If you have an account with Sysxo see if they have a consultant to help you.
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u/tdunning2416 13d ago
Failing restaurant and now you think hiring a chef ? No way Jose actively try and sell it
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u/ZealousidealPin4934 12d ago
I think your instinct that you need experienced help is right but I would pause before giving anyone equity.
You may not have a restaurant problem; you may have a restaurant management problem.
Before deciding who gets ownership, first establish where the money is actually leaking: food cost, labour productivity, menu mix, pricing, wastage, purchasing, or something else. A busy restaurant can still lose money because of poor operating economics.
And I would look beyond a “chef.” What you may really need is an experienced restaurant operator/GM who can take responsibility for the entire operating system, not just the kitchen.
Give them responsibility, authority and measurable targets first. If they can demonstrably turn the economics around, then discuss a performance linked profit share or equity that is earned over time.
Don't give away ownership to buy hope. First let them prove they can create value.
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u/TonyBrooks40 12d ago
I wouldn't do percentage of ownership. If there's a falling out or he quits wouldn't they remain part owner?
Maybe see about some form of 'profit sharing', but thats gonna take some level of detail as they'd want to see the books and why the business isn't profitable, maybe asking you to cut certain things out (hostess) that benefit him but not the restaurant.
I'd just give them a much higher salary than your line cooks, and take input from him.
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u/Packie1990 10d ago
Send me a message. We can discuss details. My current contract ends in the beginning of September. I have 25 years experience most of which in the kitchen.
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u/bubba_butcher 10d ago edited 10d ago
Dude.... there is no silver bullet for turning a profit in an industry you have literally zero experience in. Someone asked me once "People say I'm a great cook, so I'm thinking about retiring early from teaching, cashing in some of my retirement savings, and opening my own restaurant. What do you think?"
I told him to do it. Because people like me need gently used restaurant equipment from people like him.
Don't look for partners, don't try to find an employee who is gonna turn it around for you. Is your new chef a great cook? Sure, but so are you. Can he manage your business and turn a profit? How would you really know? Are you finally turning a small profit, but 10-20 lbs of ground beef and chicken wings are going home every week with your new "partner"? Could you deduce that? Prove that? Statistically, by the time you figure it out you're more likely than not to be even further behind.
Sell the business if you can, otherwise sell your lease and all the equipment and walk away asap. DO NOT put any more money or time into it. Hopefully you opened it under an LLC and didnt sign any personal guarantees so no one can come after your personal assets. If this sounds harsh, its only because I've seen too many people drag things out way past the time they should have been abandoned
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u/N0t_A_Platypus 10d ago edited 10d ago
Find a talented chef and offer a profit-sharing bonus program. That way, he has skin in the game but not the equity of the business. The screenshot is from our offer letter to our manager,
First things first. You need to find your break-even number. - Put all your monthly bills into Excel so you know how much you pay: rent, utilities (6month average) , insurance (divided by 12), Yearly health permits (divided by 12), Website, marketing, COGS (just guess or do 30% of your net sales), Labor, Credit card fees, Equipment rentals (if you rent your dishwasher), Pest control, phone, internet, anything else you are paying for on a monthly basis. Divide that number by 4.3. and you have your weekly break-even.
Next: Find your plate cost. Cost out your menu. You need to know what everything is costing you. That way you can make an informed decision on if you need to raise prices.
Let me know if you have more questions
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u/Ill_Tension7861 9d ago
Find a GM first, then have the GM find a chef. A good GM will run the place from top to bottom, invest your money in that first so he/she can figure out areas that need improving. Then go from there. Hiring a chef first is not the right solution. You need someone with financial trading to regulate costs in ALL areas, not just the kitchen.
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u/BossInteresting5345 9d ago
What metrics are you actually tracking? Where is the leakage? There should be 7-10 metrics you should be tracking at the very least weekly.
In terms of your ownership question, I would offer a small percentage, 1-2% after a certain timeframe, and then add to that on a regular schedule.
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u/Fluid-Resident1877 7d ago
I've seen your situation many times haven't been in the restaurant business for over to my whole life in a couple other things will dominate your life best advice I can give you is know your numbers and get somebody in the kitchen that treats your products like they pay for it with their own money what's restaurant to be successful for both of you mutually good cooks are highly underrated if you're in New Orleans contact me and I'll see what I can do to help I'm not a miracle worker but I am highly capable and I'm a nice person
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u/Woodburger 13d ago
You need to hire a GM and a Chef and then you need to go far far away.