Getting into restaurant investment?

[hongda]

I was wondering if anybody had any ideas or connections for investments in the restaurant business, preferably in the pacific northwest.

[pastrygirl]

If you have money and are looking to invest, I could use some for a pastry shop, and my brother in law wants to open an Indian restaurant. We're in Seattle, but of course I am much more qualified and will be more successful than my BIL, so you should give me all your money. We'll do chocolates, breakfast pastry, a few sandwiches, maybe some prepared desserts.

As for finding people to invest...don't know much 'bout that

[jackal10]

"How do you make a small fortune in restaurants"

"Start with a large one"

Restaurants are not usually good investments, especially in times of recession. At best they are marginally profitable. People invest in restaurants for emotional not financial reasons. Restaurants are capital intensive, labor intensive, top end limited and fickle.

That said you can invest in the restaurant's real-estate, and use the restaurant to keep it warm. That implies owning the freehold or at least a long lease. Oh and an improving property market, which is not now.

Edited June 14, 2009 by jackal10 (log)

[hongda]

I'm looking to invest. I know the return is usually bad to horrible, but the idea intrigues me quite a bit.

[pastrygirl]

I'm looking to invest.  I know the return is usually bad to horrible, but the idea intrigues me quite a bit.

←

Do you have a specific idea of what type of restaurant you are looking to invest in?

I'm serious about pastry, the main thing holding me back is the intimidation factor of finding money to start up. PM me with your ideas about what you want if a chocolate/pastry shop interests you.

[tsquare]

I know a couple of restaurantless chefs (having sold a respectfully successful place last year) who would love to talk to you if you are serious. Plenty of opportunity right now - lots of real estate, I imagine lots of used equipment, and always plenty of people looking to open a new place.

[RobertCollins]

I'm a retired Electrical contractor in Seattle.

Some years ago I was at a construction management seminar and the presenter, a Dr. Fails, asked, "What is it about you contractors, as soon as you finally start making money in the second riskiest business, you go invest in a restaurant or bar, the first."

I'd invest in an apartment house, good time now too.

Good Luck

[pastrygirl]

"What is it about you contractors, as soon as you finally start making money in the second riskiest business, you go invest in a restaurant or bar, the first."

←

Alcohol and coffee both have a much higher profit margin than food, so bars and coffee shops might be a bit less risky than a more traditional restaurant.

[Edward J]

Hongda, If I may make a sugestion.

Work in a restaurant--any restaurant, first.

Not after you've made a commitment, but before.

Work the front end, work the back end, know the animal well before you commit.

The second suggestion is to have a good look at a used food equipment store. Not to buy anything, but to look and listen. Whatever you see was bought for cents on the dollar, and marked up minimum of 100%.

It's a very sobering experience

[tsquare]

I didn't read this as though he (assuming here) wants to work in the place, just invest. You know, like all those people in the dot.com boom - who put money in and got to play grand host to their friends, help the restaurant scene grow, and really push the uptick in chef run restaurants. Got to love silent partners, even the not so quiet ones!

[hongda]

Thanks for the suggestions. I'm not quite ready to sink all my investments in a restaurant, but as tsquare put it, help the restaurant scene grow. I have worked in a restaurant. Worked for about 7 years as dishwasher, busboy, cook, waiter.... Went and became an engineer, but I have the restaurant bug every once in a while. I'll keep my ears open.