Living the dream

Written by ProfitGuide Staff
Part 1: If you can’t take the heat…

Why do people open restaurants? Consider Simone Sterio-Risk. Nine years ago, she was a single mother, working as an ad salesperson in Toronto, when she decided she was tired of the big city’s hectic pace and relentless pursuit of money. So she moved back to her hometown of Thornbury, Ont., with her young daughter Arielle and opened a casual yet elegant dining spot, SiSi on Main. While establishing her new eatery took a lot of hard work, she found the time to fall in love with and marry a local man, and have a second child.

These days, Sterio-Risk starts work at SiSi at 4 p.m., after spending the day with her five-year-old son Ethan and looking after all the household chores — picking up the dry cleaning, paying the phone bill — that most wage slaves can’t help but neglect in the course of a nine-to-five workday. With half a dozen ski hills and hiking trails practically on her doorstep, she sometimes manages to sneak in a little skiing or hiking as well.

Once Sterio-Risk is at the restaurant, her job is a lot like hosting the perfect dinner party. She makes sure that each customer is greeted and his or her coat properly hung up. As people eat, she circulates, adjusting the music and the lighting to suit the crowd’s mood. When diners get up to leave, Sterio-Risk is quick to thank them for their patronage and wish them a good evening. “I enjoy taking care of people,” she says. And she enjoys the social swirl around her. “Whether the restaurant is busy or it’s quiet, it’s always a chance to meet new people.”

So there you have it — running a restaurant really can be a glamorous way to build a whole new life for yourself. But before you rush off to resign from your current job, let us offer a few words of caution. Operating a restaurant is not likely to be particularly profitable — in fact, the average restaurant makes a scant $33,750 a year in profit, according to the Canadian Restaurant and Foodservices Association. And there’s next to no growth in the industry: for every new restaurant that opens, another one closes. Even if you’re a successful restaurateur, you have to count on working 70- or even 100-hour weeks, especially in the crucial early years. “I’ve eaten my dinner under an infrared light [in the restaurant’s kitchen], standing up, for nine years,” Sterio-Risk says. And while her evening work schedule has made it possible for her to be a stay-at-home parent during the day, it also means that she doesn’t see much of her husband, Darrin. Most nights, she doesn’t get home until 11 p.m. or midnight. “Darrin stays with the kids at night — he comes home, I leave,” she says. “It’s not easy.”

No, but you can avoid many common pitfalls by following some simple advice. For starters, be picky when picking your location. No other factor is as important to your success. You ideally want to be in a spot with a lot of traffic and as little competition as possible, but rarely will you be able to find both features in the same space. In most cases, a new restaurant has to count on taking business away from existing establishments. To do that, you must offer something — a concept or a price level — that no other restaurant in the area has.

Each location has unique features. For instance, an eatery in a tourist hot spot will enjoy a constant stream of new people who are away from home and therefore have no choice but to eat out. Problem is, many tourist destinations are seasonal attractions and you have to be prepared to slog it out through the down months. Take Sterio-Risk’s situation. Thornbury is primarily a ski community, and her business drops off when the snow melts. Fortunately, her husband’s landscaping business is busy in spring and summer, and provides the family with a second income when the restaurant’s cash flow slows.

If there’s one misconception that’s common among wouldbe restaurateurs, it’s the notion that your dazzling culinary skills will guarantee you customers. Think again. While decent, reliable food is a necessity for a restaurant, great food doesn’t ensure you of a crowd or a profit. Doug Fisher, a former restaurateur who’s hired as a consultant by such foodservice heavyweights as McDonald’s Canada and Mandarin Chinese restaurants, says slicing and dicing vegetables is far less important than knowing how to trim the financial fat. “A chef may be a good cook,” Fisher says, “but being a good cook doesn’t mean you know how to deal with food costs and labor costs and wastage or how to deal with staff. Accountants make better restaurant operators than chefs.” Fisher’s advice? Concentrate on creating a pleasing atmosphere and offering good service. Those two selling points will go a lot further in attracting customers than a long list of elaborate entrées.

Speaking of customers, it pays to remember that it often takes months if not years to build a loyal clientele. So leave yourself a financial safety cushion. Fisher has seen many cases of people who borrowed heavily to start their dream restaurant, only to find themselves unable to keep up with the loan payments when the first few months of operation didn’t prove as lucrative as they hoped. To protect yourself, he advises scrimping and saving until you have at least 50% of your estimated startup costs. That means if your business plan estimates first-year costs of $300,000, you should have at least $150,000 in cash before you start. For help with your plan, get the Canadian Restaurant and Foodservices Association’s startup kit. For $60 (order online at crfa.ca), you get a directory of suppliers, a rundown of the costs associated with running a restaurant, a reference guide and more.

If this all sounds like a lot of preparation before you serve your first meal, you’re quite right. But keep your long-term goals in mind. Opening a restaurant isn’t likely to make you a millionaire or even close. It will involve endless hours of hard work. But it can allow you an independence that few other businesses can.

While Sterio-Risk doesn’t want to boast about her profits or her critical success — SiSi on Main has made the pages of the foodies’ bible Where to Eat in Canada for the past two years — she credits the restaurant with allowing her to live in a place that she loves, in a style that suits her and her family. “I’m giving myself a reason to be here and to be able to make a living,” she says. “When I walked Arielle to school, I could walk through a beautiful small town, through orchards. Now it’s exactly the same with Ethan. It’s 10 years later, and I’m so happy that I’m in the same scenario that allows me to do that with him.”


From the February/March 2004 issue.

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Originally appeared on PROFITguide.com