Young Upstarts

All about entrepreneurship, intrapreneurship, ideas, innovation, and small business.

Why The Food Service Business Might Be Just Perfect For You

chef dish

If you’re thumbing through a catalog of restaurant supplies with the idea of starting a food service business, you’re reviewing an idea that dates back through history.

Busy Romans out on the town enjoyed the fare of street vendors. Meanwhile, public cooks gratified affluent Romans in their villas with delicious meals. Later, the catering business expanded into hostelries, monasteries, taverns, and inns for medieval travelers. However, the credit for the restaurant business is attributed to the French Revolution. Interestingly, the idea of catered meals appealed to colonial Americans, who legislated Public Houses.

Still, while food service has a long history, it’s not quite business as usual. The dividing line between the historical food business and the modern food industry is the Industrial Revolution. Today, you have a distinct advantage over your predecessors. Advances in technology make it possible to offer more food to more people at a faster rate. Additionally, you have safer storage and more efficient cooking appliances.

Where to Start?

With history, revolution, and technology working on your behalf, your major challenge today is to figure out the best business model.

Should you:

  • Buy a food truck?
  • Open up a small café, restaurant, or bar?
  • Start a Bed and Breakfast?

Let’s review all three options:

A Food Truck.

Although this is a business that can turn a handsome profit quickly and only requires a small staff and the use of limited equipment, it’s only for tough cookies.

There are many variables involved in calculating ROI. These include what you sell, where you sell it, and when you sell it. You can make a modest $5,000 a month or as much as $65,000 a month.

The challenges mainly come from trying to keep up with different City Hall rules and health code regulations as you drive across county and city lines, as well as working like a demon on steroids to feed hungry, impatient crowds on their lunch or dinner breaks.

A Small Café, Restaurant, or Bar.

Again, not easy, but if you do it right, there’s plenty of money in it.

Your main challenge is not managing your staff, catering to customers, or running a merry establishment; it’s actually keeping track of all your overheads.

Your premise costs will include rent or lease, service charges, business rates, waste management, pest control, and building insurance. While your food and drink costs will be covered by your patrons, you have to avoid overcharging them because you purchased from an expensive vendor. Finally, your other costs include staffing, legal and compliance costs, and refurbishing the front and back of the house and keeping your toilets impeccably clean.

As for revenue, it varies all over the place, from not making any money, to breaking even, to becoming a respected establishment. If your restaurant is not doing well, it’s because you’re drowning in overheads. Conversely, if you do everything right, your restaurant can become wildly successful, bringing in $7,000 a night, $50,000 a week, and $2.5 million to $3 million a year.

Bed and Breakfast.

This business model is remarkably different; while it’s not entirely stress-free, it’s not as hectic as driving around a busy city in a truck or managing a frenetic restaurant business.

A bed and breakfast is a hybrid between a hotel and a home. Like a luxury hotel, you have well-furnished guest rooms, but you may only have from 5 to 10 guest rooms rather than a hotel that has from 50 to 100 rooms. Like a private home, you interact with guests the way you would if visitors came to your home.

Besides giving guests lots of personal attention to make sure that all their hospitality needs are met, you enhance their short stay with delicate little touches like gourmet chocolates on their pillows, turn-down services, and baskets of exquisite bath products next to their Jacuzzi tubs.

While the stress is far lower than the other two business models, the income is also much lower, too. Nancy Sandstorm, an innkeeper in her 6th year and a former B&B startup lecturer, says, “Keep in mind, however, that the bed and breakfast is not a high-income industry. This is not a business you go into to make a lot of money. You can make a profit, and many of your personal expenses are semi-covered. But it’s a lifestyle decision. You’ll make your real profit when you sell.”

How to Decide

Startup businesses can be tricky. You have to sort out between facts and figures, myths and misdirections.

First, make a list of everything you like and dislike about the food service industry. This will help you sort out your preferences. If, for instance, you have a preference for lifestyle over money, then a B&B business would be more satisfying than a food truck business. If, on the other hand, you want a fast-track to huge profits, from 6 to 7 figures a year, then you might want to open up a restaurant.

Next, do your research. This doesn’t just mean gathering up industry statistics, but also talking to business owners to grasp the reality behind the numbers.

Finally, commit to your choice. Unless you commit, you will drop out when the going gets rough. You won’t experience good fortune you envision because success sometimes hides behind a crisis.

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Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.

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