Why Start a Business?

Anyone watch "The Restaurant Man".... first time for me, great show
Its about people who set up business - restaurant/food industry, set in UK.

Anyway, got me thinking how many people actually romanticise about becoming/owning a business, without really understanding the risks, hard work, long hours, stress, blood sweat and tears and perhaps if they did know they would never do it.

The couple that were featured last night decided to start up/operate a Country Pub serving great pub food etc. had no clue whatsoever, they made some major mistakes, but eventually managed to pull it together and started to make a profit after a few months.

They even thought they could hold down their day jobs while operating the Pub. Obviously this did not work. One became the chef and the other behind the bar serving beer etc.

Apparently most new businesses in the food industry (UK) don't survive because they run out of money in the first 6 months.





MTR

 

Food business is tough. My friend who runs a well known eatery gave up a lot to be in the business but he's doing really well I think, opening branches atm. His hair literally turned white after a year in it. Issues with staffing etc. I would consider investing in it but not working in it.

 

This.

I grew up wanting my own business - I kept hearing about not trading your time, owning an asset, making lots of money, being your own boss, etc.

After I became self-employed, I realized that nobody talks about the stress and sleepless nights; the lack of social life due to pressure on income; the effect of all the stress and long hours on your family/personal life.

Now, more than ever, when people say things like, "Why earn 60k in a job when you can make 200k in a business," I feel like shaking them into realization. A job is stable income, there's no stress that you'll wake up tomorrow with it all gone. A job is 9-5, maybe 8-7; a business is constant. A job gives you freedom to do stuff outside of work: have fun times with your family and friends, take time off, etc. A job gives you a lot of benefits on top of that "low" salary.

Though I don't regret what I've done, I wish that when I'd decided to not have a 9-to-5, I'd really understood the downsides of not "working for the man," - there were just not enough people talking about it. There are no news segments or tv shows on failed entreprenuers, or on the stress and difficulties of starting a business.

 

Food industry is tough gig.

You can be a good chef but may not have business skills.

I guess that goes with any profession.

 

I got stressed just watching them trying to juggle it all.

They did not even test the food/menu prior to opening night, disaster because it was not up to scratch.

 

Yes, I have been told, I guess if you get it right you end up with a chain of restuarants.

The Host of the show owns and operates a number of successful restaurants in UK, the first mistake he identified was the fact that the food was too expensive for the market they were targeting. They basically decided that they would provide upmarket cuisine yet it was mainly elderly people in the area that could not/or would not pay these prices. Fortunately they got this at the end.

 

Watch this show, I think its on every week

I hear you, loud and clear.
But you don't know what you don't know, and good on you for giving it a go anyway.

MTR

 

I've got it pretty easy I'll admit, I run a business which my father started some 28 years ago. Being in manufacturing in the current climate things can be stressing at times but overall pretty cruisey, we have a pretty good name around Adelaide.

But I know it was hard for the old boy back in the day starting things up. He had 5 kids under 10 when he took the jump, had to do big hours and didn't pull a wage for himself for a long long time. He figured he had to do it though it's the only way to live comfortably with 5 kids, and he put us all through private schools etc. It's been good to see him over the past few years slow down, spend a bit of cash on himself (big boat, holiday house etc) and he's doing the final jump into retirement next year.

 

Firstly, I think people who buy rather than start a business are often just buying a job.

Also, some people are wired differently than others. Not necessarily rightly or wrongly, just different - either employee or business owner.

For myself, when working in both property management and IT support, I always had suggestions on how things could be ran / done differently. I now have that opportunity.

Couldn't see myself running a restaurant gig though!

 

I think one of the big problems is that for a large majority they are not really a business owner, they are self employed. To me being a business owner means that you don't do the actual work that earns the money..

In most instances you need to be self employed before you are a business owner, that is you need to work in the business doing the work that makes the money. Unfortunately at the self employed stage you then need to do a lot of the business side as well, eg the marketing, accounting, cash flow control, hiring and managing staff. This is why you work so many hours at the self employed stage, you are doing 8 hours of work as a self employee in the business a day and then it might take you another 4- 8 hours a day to do the accounting, managing etc.

I think you make it to business owner stage when you have developed it to the stage where you are unnecessary in the day to day operations of the business and really only look after the big picture stuff.

Then on to an investor stage where you have almost no involvement in the business, it is completely managed and run and all you do is ensure that the person (eg MD or CEO) that reports to you keeps it running well.

Some people do being self employed really well, they get to the stage were they are earning enough from their self employment that they don't have cashflow stress and they can pay others to do all the extra bits. But if a lot of self employed people looked at how many hours they do and calculated what their actual hourly rate of pay is they would be horrified. (aside from the early years of a business when it has to be done).

 

I guess the trick to owning your own business is to get it to the stage where others can run it for you. There will always be a level of involvement but if you can get it to a strange where you do have more time for yourself than a 9-5 plus the extra income, that is the end goal.

Easier said than done though, I am not yet at that point and not sure if with my current business I ever will be. Am constantly looking for an opportunity to create a model that will provide this.

 

Each week you see at the auctions the entire contents of food businesses that did not work out from the spoons up too the cooking equipment refrigerators A/C ducted units,some people make a good living buying and re selling that s/h equipment,for eveyone that goes bust anyone takes their place..

 

Curious, how old is he?

 

What industry may I ask?

 

Well said....."easier said than done", if it were that easy everyone would doing it, I guess not too many get to this level

 

I think the reasons are several:
1. It is hard for many people to delegate (no one can do it as well as me, I am the face of the business etc)
2. The self employed stage can be so all consuming that no time is made to work on progress, development and how you will get to the next stage.
3. It costs money, you have to pay someone to do what you were doing.

 

58, but working is his life its going to be a struggle to get him to leave. He was ment to retire pre gfc but that shook his plans up a lot (our turnover halved overnight almost)

 

Definately a lot different to what people think looking from the outside. I went from a white collar professional to being involved in the food industry. Was a huge smack in the face once reality kicked in. The day to day dramas are never ending. Whether it's failing equipment or staff not showing up. My hair went quite grey for my age very quickly.
The actual work is only half the story. The other half is the running of the business. This is the part that makes the hair grey.
People from the outside say 'why don't you put a manager and let them make all the money for you?'. If only it was that simple. It's a pretty specialised industry depending on what kind of business you have. My business is very old school in the food that we sell. Old English freshly cut potatoes etc. Expensive equipment with special ways to use them. One mistake could mean thousands of dollars to fix. I manage staff on a daily basis and I am constantly correcting the way they use the equipment. How on earth could I not be here and expect that everything will be fine?

You spend years getting a business running at a certain efficiency and at a certain level of profitability. Anything that might jeopardise those things will make you think again if you want to simply put in a manager and not be around. Same goes for the value of your business. You spend alot of late nights and countless hours to push your business to a certain height and value.

Maybe in a different industry you can appoint a manager and they can look after things for you while your not there. But in my line of work, if you're not there the place isn't being run the same and if it's a long term thing, it's only a matter of time before profits, quality and the value of your business have plummeted.
Not saying it's all doom and gloom, there are positives as well but anyone thinking of getting involved with food best be well equipped with what's ahead because although money can be made, it isn't for everyone.

 

I agree York, I'm also a believer in being in there and getting your hands dirty within the business. My business is completely automated, in fact it ran itself for 5 years while I was off doing other things I considered a passion. Motivational speaking etc...

I've tried it both ways and find that it runs 10,000% better with a business owner driving it. Not only profit wise but growth, fine tuning, addition of other services, creativity, visibility.

Yes it's hard work, I can identify with every single thing you are saying here.

 

These people did start up a new business, it was their baby.

However, they had no experience in this industry, other than one partner was a great cook.