The Not-So-Glamourous Life of a Restaurateur

<figure id="attachment_38388" aria-describedby="caption-attachment-38388" style="width: 226px" class="wp-caption alignright"><a href="http://laprensa-sandiego.org/stories/working-with-family-good-or-bad/at…; rel="attachment wp-att-38388"><img loading="lazy" class="size-medium wp-image-38388" src="/sites/default/files/2017/01/Headshot-Professional-11-226x300.jpg" alt="Eduardo Landeros MBA" width="226" height="300" srcset="https://dev-laprensa.pantheonsite.io/wp-content/uploads/2017/01/Headsho… 226w, https://dev-laprensa.pantheonsite.io/wp-content/uploads/2017/01/Headsho… 773w" sizes="(max-width: 226px) 100vw, 226px"></a><figcaption id="caption-attachment-38388" class="wp-caption-text">Eduardo Landeros MBA</figcaption></figure>
As a small business consultant, I have always worked with businesses from various industries but  the restaurant industry always seems to be the most popular. 
Maybe restaurants are popular among entrepreneurs because everybody likes good food and some people have an inner chef inside them or maybe because people simply like to go out to nice restaurants; it is hard to say. 
In my opinion, many entrepreneurs are inclined to open a restaurant because it might seem easy to do and they probably feel they can do it better than others.  How many times have we heard somebody say things like  “my grandmother’s recipe is the best”, “my mom makes better tamales,” or “I know the best taco place.” 
At the end of the day, it’s all very subjective and everybody’s got different taste buds.  Some are more sensitive than others.  But the key is, if you plan on opening a restaurant, to cater to all tastes and find a style that most people like, such as Mexican food, sushi, American, or Chinese food and give it a twist; make it a little bit different than the competition. 
But running a restaurant is far from easy.  I’ve read statistics that state that 60 percent of new restaurants will not make it to their second year and 80 percent will not survive over five years.  In my experience, I can say that a lot of people fail in this industry not because their food is bad but it is mostly because they don’t understand how to run a business. 
I teach business and accounting classes at various institutions and colleges and I always tell my students that business owners need to wear a lot of hats.  As a business owner you need to know a little bit about accounting, marketing, customer service, legal requirements, permits, taxes, human resources, among many other things. This is important because many restaurant owners go into the business because they like to cook, not necessarily because they’d like to manage a business.  And this is where the problems begin. 
In my career as a consultant I was hired a few years ago to value and sell a Mexican restaurant and Sports Bar in Chula Vista.  I lived in the area and was already familiar with the restaurant, so it was an easy thing for me to do.  I liked the restaurant, the food and its ambiance so it came naturally to me when it came to selling it.  Long story short, I liked it so much that I ended up buying it myself; I became a restaurateur overnight.  While I don’t regret my decision, because it’s been profitable, running  a restaurant has not been easy. 
One of the things I didn’t realize was the amount of work a restaurant demands. I had my consulting business and it was fairly easy to manage.  I worked from home, where I received from one to five checks a month (so the accounting was fairly simple). I hardly did any marketing in my accounting business and I was the face of the business so I was in total control. 
As soon as I took over the restaurant, I saw the vast differences between these two entities.  First, I had to deal with so many legal requirements and permits that the paperwork made my head spin.  You need a license to operate a food establishment from the County Health Department, a license to sell alcohol from the State, clear fire Inspections, follow landlord requirements and rules, licensing agreements with music organizations (if you want to play music), business license from the City, live entertainment permits, and the list goes on and on.  Aside from that, I had to deal with 25 employees and make sure we were compliant with the State’s Employment Development Department. I was now worrying about I-9s, W4s, applications, job postings, screenings, employee posters, employee manuals, labor laws, etc. 
The Accounting was a different animal in itself.  I now had more than 25 vendors to pay regularly, track daily transactions in our Point of Sale system, compare cost percentages, collect sales tax (which you have to comply and pay on a monthly basis to the State), deal with payroll, reconcile 10 page bank statements from three different accounts and a handle a merchant services account for our credit card processing. 
And we haven’t even began to talk about the quality of the food or customer service or the constant need to repair equipment or hire more people because the turnover in this industry is huge. 
A few months before I took on this journey, I attended a business workshop where a manager of some of San Diego’s most upscale eateries spoke to us about the business. One of the things he said was “I spent most of my time trying to convince people not to open restaurants”.  In retrospect, I should have listened to him.