OCCOM FOOLISHNESS Strikes again! New Restaurant opening soon

Reply Thu 24 Mar, 2005 06:15 pm
Okay, so all my life I've heard that 9 out of 10 restaurants fail in their first 2 years and that you should never, ever, go into business with your friends. So my best friend and I have decided to go into the restaurant business together. Shocked

A little background so you don't think I'm totally whacked. As kids, while I was waiting tables, my partner became the fastest line-cook I ever seen. Next he went to the Culinary Institute of America in NY (probably the finest school of it's kind). Since then he has spent time as a route salesman for the leading food purveyor, turned around a smaller restaurant as head chef... then moved into Sou and then head chef at an enormous lodge and is currently the corporate chef for a 10 store chain. My point is, he's very, very qualified.

That makes one of us. Rolling Eyes Now I've been in several businesses as some of you know, and generally my strength is in streamlining productivity with a "one right way" simplicity that boosts sales numbers while eliminating the problems and hassles that stem from inconsistency. I've little doubt that I can train and maintain a meticulous staff for the front of the house that will learn to embrace the methodical rigidity of a system that 'once upon a time' earned me a 23.5% tip average while serving excellent food in a spotless, classy environment.

I'm smart enough to know that those are the easy parts and little else. Come April 12th my partner and I will shadow the existing Chef and General Manager for a week before replacing them. Both are being moved to another one of the current owner's other restaurants, so they should be extremely helpful. Our theory is to first learn their system and menu so we don't fix anything that isn't broken during a ramp up period while building and testing the new menu and postpone the grand opening until we're sure we've got our sh!t together. Why not make some of the bigger mistakes before changing the name?

So, as those of you who've done this probably realize by now, I have no idea what I'm doing!

The current owners are carrying the financing so have a vested interest in our success. They are being as cooperative as possible in making this a smooth transition. Thankfully, they have this property under it's own corporation so we can purchase it lock, stock and barrel as a whole instead of having to set up all new accounts with purveyors and whatnot. They'll simply pay their bills off prior to the take over date, and then we'll just replace the personal guarantees. Does that make sense?

Today, we applied for a fresh LLC to be taxed as a Sub S that we'll eventually shove the entire business into. This way we're able to establish new relationships immediately and absorb pieces of the existing business incrementally. This should save a little money and hassle as there are some things up June. Does that make sense? Now comes the hard part. What the heck am I supposed to do about licenses? (HELP!) Can I use the existing ones, or do I need a new:

State unemployment #
State ID#
Sales Tax#
Sales Permit
Sellers Permit
Unemployment Insurance.
ETC Ad Nauseum

Does anyone know where I can find a check list and answers to these and other questions about startup requirements? I don't recall when I last felt so ignorant. Rolling Eyes
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Reply Thu 24 Mar, 2005 06:30 pm
Sounds like you have a good plan, I take it the existing restaurant is well established? Best of luck to you.
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Reply Thu 24 Mar, 2005 06:31 pm
Well congratulations and good luck with your new venture
Bill. I guess the most important thing would be the liquor
license. Wink And you cannot use existing Licenses if you're
buying the new business. In addition to the permits and
licenses you already mentioned, you need:

Tax ID # is also required
Workers Comp Insurance
Business Insurance
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Reply Thu 24 Mar, 2005 06:31 pm
I voted yes at least half in jest and half because I've heard the same statistics. But I think your chances are better than the statistics... and wish you well and some fun while you're at it.

However, do read Kitchen Confidential by Anthony Bourdain if you haven't already...
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Reply Thu 24 Mar, 2005 06:44 pm
Bill- I don't know diddlysquat about starting a business, but if I were looking for advice, I would start here:


I've little doubt that I can train and maintain a meticulous staff for the front of the house that will learn to embrace the methodical rigidity of a system that 'once upon a time' earned me a 23.5% tip average while serving excellent food in a spotless, classy environment.

Do you REALLY think that it was "the methodical rigidity of a system" that got you 23.5% tips? Laughing :wink:

It is not be a bad idea to invest in a couple of hours of a business attorney's time.

Hey, good luck in your new business venture! Very Happy
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Reply Thu 24 Mar, 2005 07:10 pm
Thanks sublime and CJ... By tax ID, do you mean the new EIN for the new corp? I haven't read that Osso, but have added it to my "to read" list!

Phoenix32890 wrote:
Do you REALLY think that it was "the methodical rigidity of a system" that got you 23.5% tips? Laughing :wink:
Perhaps not 100% :wink:, but that's how I'll sell it to my staff. I've always credited this unbelievably precise German woman who managed the floor at a VERY large fine dining room of an exclusive lodge. Her precision and intolerance for deviation was the backbone of the smoothest large-scale operation I've ever seen... and I've always been one to copy what works. Having been "in the biz", I seldom comment about it, but it is very rare to have a "perfect" dining experience these days, at any price. I aim to change this. Smile I've already opened your resource, thanks!

Anyone familiar with "Optimum Control Restaurant Software" by TracRite Software INC.? I heard that's what the big boys use to keep track of everything... and it looks pretty damn comprehensive so far.
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Reply Thu 24 Mar, 2005 08:58 pm
I voted for number 3. http://img.photobucket.com/albums/v37/heavens_just_a_kiss_away/11_1_206.gif

I think you will do fantastic! I'm not just sayin' that cause I think you're special, either. You seem to have a good business sense about you. You certainly have the smarts.

You'll have to give me more info when you get all settled in and running good. I do have long weekends from time to time. Would be worth the trip to check you out ....errrr....I mean - to check the restaurant out. http://img.photobucket.com/albums/v37/heavens_just_a_kiss_away/notme.gif

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Reply Thu 24 Mar, 2005 09:08 pm
While in the throes of romance romance, do check out Bourdain. You may hate him, in fact I assume so, but I'd be surprised if you didn't finish the book. I would guess Thomas Keller wouldn't be a Bourdain fan either, but I have faint memories that in a later book they met and didn't kill each other, I think Bourdain went to one of Keller's 32 portion meals.. don't trust my memory though.
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Reply Fri 25 Mar, 2005 08:09 am
I am on the side of not knowing diddly about opening a business... but
after reading your outline, I would TRULY be surprised if you dont do very well!
I have heard also that friends and work dont mix. I believe that is for those who ' just want to work with friends' and not people like you who have friends that are a true asset to what you want to accomplish.
Occom Foolishness? I dont see it . :-)
I see a well thought out, very secure plan !
Business smarts, yeah, you got 'em!
Go for the gusto!
Best ... BEST of luck to you!!
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Reply Fri 25 Mar, 2005 08:51 am
I think you know a lot more than you think you do. Getting it and (keeping it) up and running is the important part of starting a business. Don't let all the technicalities of incorporation and bookkeeping hold you back. Find a good lawyer and a good accountant and let them handle that. (Or you could use the method my husband uses, affectionately titled the "when they want their money, they'll come to you" method.) You do what you know how to do and everything will be just fine. You and your partner have a an ideal relationship as each of you is very good at what you do and neither of you does the same thing. Also, it appears you trust each other so will not step on each other's toes. The key question to ask yourself, and from your post it appears the answer is yes, is would you still be in business with this person were he not your friend.

I will go out on a limb and say that the restaurants that fail early do so because the people running them don't know anything about the restaurant business (it looks so easy from the outside). That's not a problem you are going to have.

Best of luck to you. Owning your own business is truly the American Dream.
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Reply Fri 25 Mar, 2005 08:52 am
We're talking about favorite cows on another thread.
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Reply Fri 25 Mar, 2005 08:56 am
Good luck on the restaurant Bill.

It never hurts to have a CIA trained chef.
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Reply Fri 25 Mar, 2005 09:03 am
CIA is where it's at. Can't wait to come down and check it out ...for the benefit of A2k voyeurs of course.
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Reply Fri 25 Mar, 2005 09:07 am
Bill, you may already know all of this but it seems like an informative Wisconsin site.


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Reply Fri 25 Mar, 2005 10:33 am
Good instincts Osso... I rarely fail to finish a book I've started whether I like it or not... but I have to admit I didn't know who Thomas Keller was before looking him up. Embarrassed But then I don't know why you can't get a special bit for a Milwaukee drill instead of blowing $500 on a beurre mixer either. <shrugs> (lucky thing I don't have to know that stuff!).

Love that whistling guy Brooklyn (Laughing) and rest assured you'll be the first to know when I'm settled in and running good! Oh, and my place is well worth checking out. :wink:

Thanks for the Vote of confidence you guys. You are correct FreeDuck; trust and confidence in each other has been absolute for nearly two decades. We've worked together plenty and neither are prone to overreaction. We always shared laughs at those who panic "in the weeds". Properly trained people simply move as quick as they can and do things in the most logical order until things cool off. Time flies when you're having fun!

panzade wrote:
CIA is where it's at. Can't wait to come down and check it out ...for the benefit of A2k voyeurs of course.
North of Milwaukee Panz, I moved but you're just as welcome! Gotta keep the lid on precisely where a bit longer so the existing staff doesn't bug out.

BBB- great document! Menasha is just a bit further North so I'm sure that's similar enough for the checklist I was seeking! Thanks you guys.
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Reply Fri 25 Mar, 2005 10:37 am
Bill, make sure, that any money you give into the S-Corp
you declare as loan. Make a lenders agreement and also
make a contract with any spouses (since S-Corp. ties into
your private tax return), that they're exempt from the
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Reply Fri 25 Mar, 2005 10:43 am
Rooting for ya!
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Reply Fri 25 Mar, 2005 11:14 am
When the winter winds come off the Lake. I'll be there.
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Reply Fri 25 Mar, 2005 11:15 am
Good luck O'Bill. I've started several small businesses for myself (and for others), and operated a Coffee House several years back. Wife is getting ready to open another next month....

"Tax ID" usually mean FEIN, but there might also be a State # for you to get.

You gotta transfer everything from the current ownership to your new LLC. I assume your Purchase Agreement did the lion's share of that, and all equipment and inventory has been accounted for. Getting the help of a business attorney might be helpful. Having a good accountant is essential.

Be sure to sign everything in the capacity of your title with the LLC. You want to avoid personal liability if you can.

I'm all in favor of good software to make things easier. Not familiar with restaurant specific software. I like QuickBooks for general accounting, and most accountants can work with it.

This appears to be a good site for you to peruse:

Also, like osso suggested, local (city) regulations will also apply, so I would check the local code/ordinances as well.

I voted #3. Gotta get Brooke to help you out my man. :wink:
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Lady J
Reply Fri 25 Mar, 2005 12:54 pm
Congratulations, Bill!! How exciting for you and your partner! Smile I owned a small retail business, but that was many years ago and I would at this time, just follow the great advice already given about checking out the local, city, county and state ordinances/requirements for owning a restaurant. And Ticomaya's expertise and experience regarding a good business attorney and business CPA sound ideal. Smile

I am very, very happy for you and I know you will have great success!
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