“Babe lets sell the house, move out of the city and open a restaurant.”
My husband made this statement five years ago and without hesitation I agreed. Some said we were mad, others envied our willingness to take such a risk, few said we were making the right choice.
Five years on and my business mentor recently summarised our experience perfectly “Jill, what you are experiencing is an MBA on the run”. You see we didn’t just open one restaurant; we opened three in three years. We have succeeded and we have failed. We have had the elation of winning awards and being on television, to financial strain, debt and staff shortages. It’s fair to say it’s been a roller coaster ride but still we love it.
Recently, I struck up a conversation with a customer and she shared that she was thinking about buying a café. She asked my opinion and would I recommend it. I didn’t answer immediately but instead asked her a series of questions. In the end she answered her own question, and decided that it wasn’t the right choice. She is not the first to ask me that question. I reflected on our conversation for some time afterwards and it made me think about what I wish I had known before I opened my first restaurant. So on the anniversary of our decision, five years ago, here are the top five things I wish I had known
I once read that revenue is ego, profit is sanity but cash is life. I agree with this statement one hundred percent. For the first few years we focused on our profit and loss statements without really understanding or managing our cash flow. We got into financial trouble and lost control of our cash. My advice, manage your cash from the beginning and don’t lose sight of it. Know your numbers and make it your priority.
Hidden set up costs.
I really didn’t do my homework here. I was unaware of what costs were involved with things like council contracts, music licensing, payroll tax and many more. I thought we needed a liquor license a health inspection and off we go. Little did I know! My advice, know all the costs involved and have the right working capital put aside before you start.