Every time I enter a restaurant I think that it would be an easy business to start. Everyone loves food and everyone needs to eat. After I leave the restaurant I rapidly change my mind. I currently run one company and I am looking to start another location. Below are some of the things I think about before I start.
HOURS: How many hours in a day do you really want to work? Restaurant owners spend long hours every day at their restaurant. Some owners, when they are well established, have managers to take away some of those long hour but restaurants are still high maintenance. There is a high turnover rate of inventory and constant up keep. Before starting a business think about how much time you are willing to give for a business.
MONEY: A new business may or may not start off strong. Either way many businesses will need a lot of start up money. I was dealing with a new animal hospital and I was shocked at all the money needed to start that business. The cost alone for all the medical equipment was shocking. Animal treatment is expensive but not expensive enough to consume the cost any time soon. Most new businesses will need a lot of start up money that might not be paid back for a considerable period.
AREA: Know the area before starting a business. There are certain zoning laws that prevent certain businesses in that area. Before buying equipment or buying a building make sure the business doesn’t break any zoning laws. Also some areas have a higher tax rate then others, make sure the tax rates are included in the business cost. The area is also important for volume of people in the area. Most major business do a demographic study before building in that area. There are websites that show the demographics and population of a town or city.
COMPETITION: Know the competition. More competition typically means that prices will have to be lower. Meaning less over all profit. Restaurants are tough because there is lots of competition and more restaurants always pop up.
NEED: Can the business fill a need. Life is constantly changing and there are new needs everyday, like people being more health conscience and environmentally friendly. We are also in a computer hungry world, think about the business before starting it. It wouldn’t be wise to start a shoe repair shop because no one repairs their shoes anymore.
Starting a new business is not easy and it can put a strain on finances as well as family. Do the research before attempting to start a new business and good luck.