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Food sells and people will always come back for good food. Food is the most secure business as you know customers have to come back for more. The downside is that food prices are higher than ever and the competition for restaurants is fierce and hard.
When putting money in a business that is about selling food, you should think about location. The more people that travels next to the restaurant the more likely you are to have more clients and higher profits. From an investment standpoint alone without thinking to much about the staff, the food type and the quality (burger bar or french cuisine) location is the prime target as well as size of the location. A prime spot located in the center of a big city that is also big has potential to become a huge attraction for tourists, recurring clients (if the quality is good) and simply because many people goes to the center of cities to shop. Keep in mind, although you front a lot of money into a restaurant the return does not have to come back as fast as you are used to in other situations. The staff, the long opening hours, the rent, the purchase of food is costly, and it can take up to 6 months to establish well in the community to get people coming back. Although the business itself is secured for sure if the location is in place. All you have to focus on secondly is the food quality (chef) and the serving standard (the waitress). If all this is met you are guaranteed a good return of investment and money the rest of your life. |
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Everyone does have to eat, but the restaurant business is a nasty one and most restaurant owners have a very hard time staying in business for very long. At least in this area they do. I would suggest doing alot of research about demographics in each area and patterns before opening a restaurant and making a huge investment. While it can be insanely profitable, you may also be paying off your mistake for years.
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Food business is an avenue where it seemed that lots of money can be made from it. That's why there are a lot of new restaurants and a lot of them that went under. It only seemed easy, as in life, when it comes to earn money and if you are doing it, then only you willl know how difficult it gets.
But if you still think that money can be made in this line, find a trusted partner who are good in cooking and get your friends to taste out the food that he is cooking. It is only then you should plough your money into one after hearing all the feedbacks. |
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I think that right now is a really bad time to invest in a restaurant. Food prices are high, gas prices are high, electric prices are rising... It'd be really hard to make money investing in a restaurant right now.
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Restaurant investing is pretty scary in this economy, but no one ever made progress without taking any risks, right?!
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Having my own restaurant has always been a dream of me but it involves a large amount of initial capital and knowledge of the market. That's why it is so difficult.
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It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. - Warren Buffett |
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The problem with investing in a restaurant today is that food prices are rising and there's the possibility of increased restrictions in the future.
I know several local pizza places are worried about going out of business. The price of flour has skyrocketed, and their customers are already complaining about prices. They are very worried about financial survival. In addition, at least in California, it's actually becoming law in some places not to serve trans fats, and on the news yesterday was a community outlawing fast food restaurants within a certain distance of a school. With the public concern over obesity increasing, things may not be as ripe in the restaurant market in the future. We have to eat, yes, but my pizza treats are no longer a regular part of my life, and that's strictly because of the increase in pricing. |
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